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The Foundr Podcast with Nathan Chan
550: He Went From $0 to $50M Selling THIS Product | Mike Smith [VIDEO]
01:03:27
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- [00:00]
Nathan Chan
We trekked for a month along the border of Afghanistan and Tajikistan. Literally in the middle of nowhere. There'd be a beautiful turquoise lake at the head of the valley and it'd be covered in rubbish. And that's when I was like, this problem's actually way bigger than anyone realizes. I said to myself, I'm going to make this my life's mission now, to try and solve this global waste problem. To solve this big, complex problem, we need to just break it down into really bite sized chunks. And really all we have to do is two things. To be honest with you, it nearly killed me. 2am calls with factories in China, 10pm call in France, get in the car and drive to the central coast. It was one of the most stressful moments of my life. There's been multiple times in this business where I've nearly walked away. A lot of pressure, a lot of stress, and no clear path. But this project has just taught me to like, get punched in the guts. Take five minutes on the ground and then get up and dust yourself off and go again. Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the founder podcast with Nathan Chan.
- [01:03]
Mike
All right, well, Mike, thank you so much for coming down to our studio doing this. As I was saying offline, it's always awesome to do interviews in person. So talk us about this amazing business you've built, ZeroCo. How did you get started? You embarked on like an 18 month journey around the world before you. I kind of figured out this is the problem you want to solve. Band 0 car. So talk us through.
- [01:29]
Nathan Chan
Yeah, yeah, totally. Well, first of all, we make personal care and home cleaning products. So stuff you use every day at home, like hand wash and body wash and deodorant and shampoo and conditioner. And we deliver it to you in the world's first paper based refill. It's got 97% less plastic than anything you can buy at the shops or online. And then we use the proceeds from the sale of those products to go and fund ocean cleanups. So I've got a full time operation doing cleanups now. We've removed 45 million water bottles from the ocean.
- [01:53]
Mike
Wow.
- [01:54]
Nathan Chan
So that is. That's zero CO in a nutshell. And in terms of the journey to get here, as you said, like before Xerico, I had a previous business. It was a winemaking brand called Cake Wines. I sold it in 2018 and my now wife Alyssa and I decided we were going to take like a little mini retirement and go on this big crazy trip around the world and just forget about like startup life and business and the world for a while. And the brief of the trip was like, we want to go to the most wild, crazy places on the planet. And so we literally bought an atlas one day and started looking at the map for countries that we'd never heard of before. And then when we like found a country we never heard of, we started researching. We're like, what's the most crazy place within that crazy place that we could go to? And so we sketched this big overland trip around the world basically and ended up spending like 18 months trekking and hiking and living in a tent through some like crazy wild places. And it was during that trip that I became aware of the severity of the global waste problem. You know, like a couple of highlights. We, we trekked for a month along the border of Afghanistan and Tajikistan, like literally in the middle of nowhere in this, this place called the Wakan Valley. And it's where the Himalayas end and the Tian Shan Mountains begin. It's this. The valleys may be 100 meters wide. One side you've got 6,000 meter peaks, the other side you've got 5,000 meter peaks. That's Afghanistan. 50 meters away, that's Tajikistan. 50 met and we trekked for about a month through this valley and like literally middle of nowhere, no human civilization. And multiple times we'd kind of go up out of the valley into like a side valley and we'd be 4,000 meters above sea level and there'd be a beautiful turquoise lake at the head of the valley and it'd be covered in rubbish. And you just think, how's this stuff even getting there? And there were just moment after moment after moment on this trip in the middle of nowhere. And that's when I was like, holy crap. This problem's actually way bigger than I realized. And I think anyone realizes, right, because when you go to like dense population centers, busy cities and developing countries particularly, you see rubbish, right? And you expect to see rubbish. But when you go out literally into wilderness and you see it there, it, it really affected me, to be brutally honest. And it was during that trip that I just said, I, I'm going to try and do something about this problem. It feels like there's not enough people working on this problem. And as woefully unqualified as I was at the time and probably still am to this day, that's what I said to myself. I'm going to make this my life's mission now to try and Solve this global waste problem. And that's what I've been doing every day for the last four and a bit years.
- [04:34]
Mike
Yeah. So talk us through. So you come back from this trip. How'd you get started? Right. Because so many people, they start with a dream. They start the best way to start with a problem looking how do you, how do you solve this problem? But how do you work out the products? What was the first product? Talk me through.
- [04:54]
Nathan Chan
So when I came back I was completely agnostic about what the business was actually going to do. Like I guess the insight I came back with is to solve this big complex problem, we need to just break it down into really bite sized chunks, like at a very philosophical level to solve the global waste problem. And really all we have to do is two things. We have to reduce the amount of plastic that we're buying and throwing away in our homes because that's the source of the problem. And then we've got to go and get all of the plastic out of the ocean and rivers and beaches around the world. So I'm like, okay, that's what I'm going to do. I've got no idea like what the products are going to be or what the actual business is going to do, but it's going to do those two things. And so then I came back and I actually moved back in with my parents because I hadn't had a house for two years and I spunked all my money that I made selling my last business traveling around the world.
- [05:42]
Mike
You spent it all?
- [05:43]
Nathan Chan
Most of it. Not at all. Because I was overseas for like 18 months having a great time. And so then I moved back into my parents house. I was 35 at the time or something. Like literally moved back into my childhood bedroom. Yeah, I had a bit of cash left from the trip. All of that went into this business?
- [06:00]
Mike
Yep. Can you share how much?
- [06:02]
Nathan Chan
Yeah, it was about 100 grand.
- [06:03]
Mike
Yep. Okay.
- [06:04]
Nathan Chan
So I had 100 grand back left in the bank account.
- [06:06]
Mike
Yep.
- [06:06]
Nathan Chan
And I put it all in to start this business and I started going down to the supermarket was the first thing I did because I'm like, where's all this plastic coming from? It's coming from the supermarket. Let's. I'm just going to go and walk around the supermarket and like watch what people are buying and just get a bit of a feel for like where's all this plastic coming? And so then like the very first iteration was of the idea was I was going to try and build a food business that had reusable Packaging, Because I'm like, this is where the bulk of the plastic is coming from. So like a closed loop kind of model where you'd buy some food in a piece of packaging, you'd use it, you'd send the packaging back, it'd get cleaned and refilled. The more I looked into the food space, the more I realized, number one, the margins are terrible in food in supermarkets, going to be really hard to scale and make money. And then number two, like, the, the regulations around food packaging are wild for obvious reasons. Right? Yeah. And so it felt like it was going to be way too complex to solve the problem and scale from my bedroom, my childhood bedroom, with this, into that category. So then I started spending more time down the, like, far end of the supermarket, the last three aisles where all the personal care and home cleaning products are sold. Right. And that was my second big aha moment on this journey where I was like, oh my goodness, like, if you just look at these three aisles alone, it's floor to ceiling, wall to wall, single use plastic. And there's been basically no innovation in the category for decades. Right. From both a product and a packaging perspective. And so then I was like, okay, cool, I'm going to go and work out how to build a personal care and home cleaning brand and I'm going to solve the plastic problem in this category. So that was literally how it started.
- [07:37]
Mike
Yeah. And so you started that journey around 2019, correct. You did the Kickstarter campaign was around 2020, right?
- [07:47]
Nathan Chan
Yeah.
- [07:47]
Mike
Was that pre or post Covid.
- [07:50]
Nathan Chan
So the Kickstarter campaign itself was pre Covid.
- [07:53]
Mike
Okay.
- [07:53]
Nathan Chan
And then we got smashed by all of the stuff that was Covid.
- [07:58]
Mike
Yes.
- [07:58]
Nathan Chan
So I guess the context there was like the next kind of insight I had was what we're really trying to do here is build this community of people who care about the planet. Like, that's the heart and soul of this business that we're building. It's a community.
- [08:09]
Mike
Yes.
- [08:10]
Nathan Chan
And so I just said to myself, if we're trying to build a community, let's go and build a community from day one. Let's go out and do a crowdfunding campaign and tell people, this is the idea. We want you to be part of it. So that led us to doing a Kickstarter campaign. I'd never done one before, was a complete novice. It ended up being wildly successful. But then literally four months after we did our Kickstarter campaign, that thing called Covid happened. And I don't know if you can remember or the listeners can Remember? But those early days of COVID were crazy. Like, global supply chains just went into meltdown. We told all of our customers we'd be delivering in six months. And then all of our suppliers were like, you're not getting anything for at least 12 months. So we're like, okay, cool. And so that was one of the big learnings early on on this journey was around, like, building community and being radically transparent about the stuff that you're going through as a business. And so we just started communicating really, really clearly to all our customers, like, all the stuff that was going on and what we were doing to solve it. And it became this real kind of rallying cry for our community because they just like, totally rallied around us and got these big, complex problems that we were facing because of COVID So, yeah, then it ended up being a whole year until we first started shipping the product. So it wasn't until, like, late 2020 that we officially started getting product out into the world.
- [09:27]
Mike
Yeah. So there's a bit I want to unpack there. Because you didn't just do a crowdfunding campaign. This was the most successful crowdfunding campaign on Kickstarter in Australia for that year.
- [09:41]
Nathan Chan
It was. Yeah.
- [09:42]
Mike
And you raised basically three quarters of a million dollars. And it went gangbusters.
- [09:48]
Nathan Chan
It did.
- [09:49]
Mike
So if we rewind for a second, you had the hundred thousand that you put into the business. How did you find your manufacturer? How did you work out what products you went to market with? How long did that take? Talk us through that. Because that's the part that gets people so tripped up. And it's the part that is so intimidating. It's so scary.
- [10:14]
Nathan Chan
Yeah.
- [10:15]
Mike
Where'd you find your manufacturer? Talk us through that stuff.
- [10:18]
Nathan Chan
Yeah, yeah. So the first thing we did was we went and got a chemistry to, like, a formulator to start building the formulations. Because that's the start of everything. Right. Like, without amazing product, there's no point having a business. So I literally just started, like, trolling LinkedIn and the Internet and just, like, hunting for Australian formulators that had expertise in personal care. Had a bunch of meetings. A lot of them went nowhere. Ended up finding the right person.
- [10:44]
Mike
Yep.
- [10:44]
Nathan Chan
Which then led to a contract manufacturing relationship, basically. Um, so it was just a case of, like, trial and error and a hundred conversations. It's the classic kind of startup hustle mentality. Right. One door closes, you kick down the next door until you get a yes kind of thing. So that's basically how that all happened. And that. That was probably six months from Memory, like, just to get that process in place, get the formulator, get the manufacturer, and then it was another 12 months to do all of the product formulation and testing and whatever.
- [11:15]
Mike
Yeah. And how did you know which was the right manufacturer, chemist? Any lessons you can share there?
- [11:24]
Nathan Chan
Yeah. So I think one of the things that we did, I think, really well in the early days was we sat down and thought really, really hard about the type of business that we wanted to build and, like, built some really basic principles around each part of the business. I read the book Let My People Go Surfing by Yvonne Chouinad, founder of Patagonia.
- [11:41]
Mike
Yes.
- [11:41]
Nathan Chan
And that kind of became a bit of my bible for, like, how to just think strategically but keep it simple. And so we just wrote out some, like, core values around product and marketing and customer service and supply chain.
- [11:52]
Mike
Yes.
- [11:53]
Nathan Chan
And we just have leaned into those values throughout the whole time.
- [11:56]
Mike
Yes.
- [11:56]
Nathan Chan
And they helped us just really formulate a tight brief to a formulator, you know, and with us not knowing anything about product formulation, but we knew, like, these are the values that we want to build products around. So sustainability. No nasty products, no products that are bad for people or for the planet. Locally sourced, locally manufactured. So we knew, like, the values that we wanted to build around. And then it was a case of explaining that vision to a whole bunch of formulators until we found someone that got it, was aligned and could do what we wanted to do. Basically.
- [12:29]
Mike
Yes. And where did you end up finding your manufacturers to do the first run?
- [12:34]
Nathan Chan
Yeah, so they're in Australia, on the central coast of New South Wales, just north of Terry Wall.
- [12:39]
Mike
Yep.
- [12:40]
Nathan Chan
They had been. Were our contract manufacturer the first four years of our business. We've literally only just changed manufacturers now as a result of this new product innovation and pivot that we've been working on.
- [12:50]
Mike
Yes.
- [12:50]
Nathan Chan
And so that were great partners for us. They were very understanding that, like, hey, this is a little startup and we're just trying to get this thing off the ground. Yes. But then once we did this big Kickstarter, I think they started to get, you know, really buy into the vision of what we were trying to achieve, which was great. Like, the Kickstarter did a lot of good for us, other than just like, getting some funding and some customers in the door. It gave us some credibility, it gave investors confidence. Then come and invest in the business. It gave contract manufacturers some confidence. It just kind of built a level of confidence, I guess, around the business that most startups don't have when you're just starting out, you know, in Your bedroom and got a website and you're selling some stuff.
- [13:29]
Mike
Yeah, yeah. Yep. So talk me through, I guess you had the 100 grand. You. You found your chemist, you found your formulas, your manufacturer, what was your moq and what. How much money did you need to raise to go, you know what this. I'm on to something. And how long did it take to prepare the Kickstarter? Because a lot of. Like, I've interviewed the founder of Indiegogo, and I never forget what she said to me. It was kind of cool. So I was telling you offline, we raised a couple hundred grand for our Quick Kick Kickstarter product, which is just a coffee table book. And I did, like, some recon. So I. I did a crowdfunding magazine edition, and I interviewed some top campaigns just to learn. And I interviewed the founder of indiegogo.
- [14:17]
Nathan Chan
Yeah.
- [14:17]
Mike
And she said. And. And she was the one that actually, Indiegogo was the first to conceptualize crowdfunding. And then Kickstarter kind of came along and kind of took that headwind. But she said to me, the number one thing I can tell you, Nathan, is do not go on these crowdfunding platforms just to beg and to. And just to get. Try and get some money for your product. Let the community decide if your product needs to exist. Do not beg. And the market will tell you if it needs to exist. But in of that, you still need to be good at marketing.
- [14:49]
Nathan Chan
Right.
- [14:49]
Mike
Like a good crowdfunding campaign. From my experience, you need to spend at least three to six months to do it.
- [14:54]
Nathan Chan
Right.
- [14:54]
Mike
How long did it take you? Talk us through that, how much you need to raise? Like, talk those mechanics.
- [14:59]
Nathan Chan
Yeah. So I can't remember what our initial MOQs are.
- [15:02]
Mike
Yeah.
- [15:03]
Nathan Chan
But I had in my head, I needed a million bucks. That was the number that I knew I needed to get this off the ground, to get all the products built out, to get the website launched, to get this thing to market. Yeah. And I initially went and started talking to investors first. It was my first protocol. And turned down, turned down, turned down, turned down, turned down, turned down, turned down.
- [15:24]
Mike
Yeah.
- [15:25]
Nathan Chan
Which is then why we went and said, because the plan was we'll go get some investors first, then we'll go and do a crowdfunding campaign, and then we'll go and get some bigger investors. Once we've kind of proven out the concept and then not being able to get access to any kind of angel investors up front, we decided, okay, let's go and do the Kickstarter.
- [15:41]
Mike
Yep.
- [15:41]
Nathan Chan
I can't Remember exactly how long it took, but it wasn't a long time. It might have been three months or six months or something. And I was a complete novice. Like, I'd never done one before. I've never done one since. I've done one Kickstarter campaign. I am by no means an expert.
- [15:55]
Mike
At all, but it's all about the video, man.
- [15:57]
Nathan Chan
Yeah, it's about the story.
- [15:59]
Mike
Yes.
- [15:59]
Nathan Chan
Throughout the story. Right. And so again, we just had these really succinct principles that we were going to build this business around, and we just lent into that. And one of those is radical transparency. And so that was the guiding principle for this Kickstarter campaign. I just said, I'm going to go and film a video. I'm going to do it in my parents kitchen. I'm going to tell people who I am and this problem that I've uncovered and what I'm going to try and do to solve it. And I was just real and vulnerable and it wasn't like flashy. We weren't trying to do anything, you know, crazy production. It was. One of my friends shot it on his camera and it was just real. And I think it just resonated with people. And that was one of the key things that led to the success of the campaign.
- [16:38]
Mike
Yes.
- [16:39]
Nathan Chan
I think also there was a lot of luck involved. Right. And I think I always pay homage to luck because you need luck in any startup. Right. I think a lot of founders don't pay enough respect to how much of a role luck plays in your journey. And so for us, we launched our Kickstarter campaign literally a couple of weeks, weeks after the end of the first War on Waste TV series, which was the top rating TV show in Australia. We had no idea this show was happening at the time. And it just so happened that there was this massive national TV program on the ABC talking about this massive waste problem. And then a month later, we come along and be like, hey, you've heard about this waste problem. We're working on a solution. So we, we tapped in at the right moment where there was a cultural movement happening and no competitors. Like, there was nobody talking about the waste problem in our category when we launched this thing. So I think it was a combination of like, values and storytelling and luck, to be completely honest with you.
- [17:39]
Mike
Yeah. And so what was the minimum.
- [17:45]
Nathan Chan
That we set for the Kickstarter? Yeah, we set a target of 250.
- [17:49]
Mike
Yep. Okay, so you basically tripled. But then there's a post, right? There's a post, you know.
- [17:56]
Nathan Chan
Yeah, yeah.
- [17:56]
Mike
Your little fancy tricks with those tools and you little get litter a little bit more and then post, you know, people are still waiting in lose. He probably, I'd assume you probably actually ended up hitting a million dollar time.
- [18:07]
Nathan Chan
We did, yeah. So we had, I think from memory it was about seven and a half thousand customers.
- [18:12]
Mike
Yeah.
- [18:12]
Nathan Chan
That backed the Kickstarter.
- [18:13]
Mike
Yeah.
- [18:14]
Nathan Chan
And then because it ended up taking us 12 months to get to market, we actually had our website ready to go like six months in.
- [18:20]
Mike
Yes.
- [18:20]
Nathan Chan
So then we launched the website and had a pre sale for that next six months.
- [18:23]
Mike
Ye.
- [18:24]
Nathan Chan
And so I think when we launched we had about 12 and a half thousand orders at that stage. Is my fuzzy memory.
- [18:31]
Mike
Yes.
- [18:32]
Nathan Chan
Which brought with it all of its own challenges. Right. Like 12 and a half thousand orders to ship on day one. Yeah. So yeah, it was, it was quite a roller coaster. Those very. The early days of zero code.
- [18:43]
Mike
Yeah. Okay. And then so what products did you launch with? Did you have one hero product? What's your recommendations there? Did you have a range?
- [18:53]
Nathan Chan
That's such a good question. And it's something that I debate all almost every day on this journey. So we launched with, I think we had 10 products to launch because our whole hypothesis was we're going to go and try and solve this problem in your home, in as many places as possible. So we had things like laundry liquid and dish liquid and hand wash and body wash, multipurpose cleaner. We basically had like an essentials kit for the stuff you use almost every day in your bathroom, in your laundry and in your kitchen. And that was the box that we sold at Kickstarter. And there's pros and cons to having a bigger product range versus a smaller product range. Right. And I think what we found for us is that it enabled the business to scale really quickly because we had a bigger aov and also because the products that we make, you literally use them every day. It enables us to create a bigger lifetime value on the returning orders. But it also comes with a whole bunch of challenges. Right. Because you've got more products to manage, more SKUs to manage, more warehouse to manage, more raw materials to manage all that stuff. And you can't pay as much attention to 10 products as you can to one. Like it's just the nature of reality. Right. If you got one product, you focused on one product. So I don't know what the right answer is, to be honest. And if I had my time again, I don't know if I would have launched one product or 10 products. I debated Every single day.
- [20:12]
Mike
Yeah. But it all worked out.
- [20:14]
Nathan Chan
It all worked out.
- [20:15]
Mike
Yeah.
- [20:15]
Nathan Chan
Yeah.
- [20:16]
Mike
Okay, so you said that after the Kickstarter and the success, that's when you were able to, I guess, get investors to really start taking a little more seriously. Talk me through that process. How much did you end up raising on top of?
- [20:34]
Nathan Chan
Yeah. So then one of the tricky things with the Kickstarter was because it was so successful, it meant we actually needed more money to get it to market because we had to buy three times the amount of raw materials that we thought we were going to need. And so then I think after we'd done the Kickstarter, I reached back out to a whole bunch of investors that had said no previously. And now with some runs on the board, like a pretty good success story from one month of pre orders, those conversations totally changed. Right. And so then we were able to raise $1 million from an angel network.
- [21:13]
Mike
Yes.
- [21:14]
Nathan Chan
Who are still all the major shareholders of the business. They're on my board and that network here in Australia. In Australia, yeah. Yeah. From Adelaide, actually. Of all unusual places. So my previous wine business that I had was based out of Adelaide.
- [21:30]
Mike
Yes.
- [21:30]
Nathan Chan
I called a friend from the wine industry and said, do you know anyone, you know, investors that have invested in startups in your network? He introduced me to a guy called Rob chapman, who's the exe of St. George Bank. Yep. Based in Adelaide. I caught up with him for a coffee one morning in Sydney. We both happened to be in Sydney. He said, great, I love it. After half an hour, come to Adelaide and we'll. We'll put a table of people together and we'll try and raise a million bucks. And it was that simple. Like, we went down. We didn't even have a presentation. I just sat around a table like this.
- [22:01]
Mike
Yeah.
- [22:01]
Nathan Chan
And just talk to people about who I was, what my background was, the vision for the business, the success we'd had. And a week later, we had a million bucks. So it was just like, it was quite a crazy moment to have these two big things back to back. And then.
- [22:16]
Mike
Yeah.
- [22:16]
Nathan Chan
Then we were away, essentially.
- [22:18]
Mike
Yeah. So talk me through, I guess, those supply chain issues, like, how did you work through it? How did you keep your backers under control and happy? Like, dude, when I got into the crowdfunding community, I felt like I need to support other projects. And I supported a range of projects and I. All of them have been delivered except one, and they still send updates. So this is like, literally eight, nine years ago. It's coming on 10 years. It was a table. You saw in the. We have a nice table tennis table. It's a French table tennis table.
- [22:56]
Nathan Chan
Yeah. Okay.
- [22:57]
Mike
Competitor. Competitive. Like it's a competitive one.
- [23:00]
Nathan Chan
Great one.
- [23:01]
Mike
And I got a robot. I'm still waiting eight, nine years, Right? Insane. They are still sending updates.
- [23:08]
Nathan Chan
Yeah. Right.
- [23:09]
Mike
So how did, like, I know, I know how it can get. So how did you manage that? How did you work through those supply chain issues?
- [23:16]
Nathan Chan
Yeah, well, I think like the first thing with, with our backers we just leaned into this radical transparency thing. And to be honest with you, like before doing Xeroco, I never was the face of a business. I had two businesses previously and I was behind the scenes. I was just running the show. The brand lived its own life.
- [23:33]
Mike
Yeah.
- [23:34]
Nathan Chan
But when I started ZeroCo, I realized like, if we're going to build this community and it's all about doing good in the world, we're going to need a spokesperson to be the figurehead for this mission. Right. And so I reluctantly started putting myself out there on social media. I didn't even use social media myself personally. And I just started shooting videos and just being real. Right. And we lent into that when these issues started to happen around Covid. And it got to a point where I was just sending an email every single week to all of our backers and I just literally tell them, like, here's all the crap that went down this week, here's how I'm feeling, here's what we're doing. Oh, you know, I'll get back to you when the next crazy thing happens.
- [24:10]
Mike
Yeah.
- [24:11]
Nathan Chan
And it was really powerful learning because people, I started to know these people and they started to know me. And like there was an actual relationship that we built that was real. It wasn't like this faceless company that's doing this thing. It was just this guy living in his parents house trying to launch this thing. And so the more that we lent into that, the more we realized we were building a community, people were rallying around us. So that was the main thing for that. I just kept putting it all out there, like wearing my heart on my sleeve. And then with the supply chain stuff, to be honest with you, it nearly killed me. Like there were 2am calls with factories in China where we were making some stuff and then a 10pm call in France where we were making some stuff and then get in the car and drive to the central coast to oversee stuff and then testing products. And it was just, it was one of the most stressful moments of my life, to be honest. And because it had ballooned so quickly. Like, the volumes that we were talking about, the amount of product, it was all big scale stuff. And so, yeah, it was just literally a case of just kind of persevering, I think. Right. Like, just persevering and shoveling through the mud every day until you get to the nugget of gold. And then, you know, you get that little bit of gold and gives you adrenaline boost and you keep pushing, basically. So it was just. Yeah. Hard work and perseverance to get us there.
- [25:32]
Mike
Yeah. So after two years, you had a, you know, pretty loyal customer base of 70,000 people. That's pretty large. How have you continually fostered that? You've talked about radical transparency. Were there any tools that you used? A newsletter, a Facebook group, you know, a circle? Is there anything?
- [25:56]
Nathan Chan
Yeah, yeah, there was nothing, to be honest with you. It was just like all of the basic, simple stuff. So I would even once we launched, I continued to send an email to every customer once a month, just being like, hey, here's an update. Like, here's what we're working on. Just keeping people in the loop. I made sure that I was in socials a lot and just talking about the product, talking about the mission. And then probably like 12 months in, 18 months into the business, we really got serious about this cleanup. Ocean cleanup side of the business.
- [26:25]
Mike
Yes.
- [26:26]
Nathan Chan
Which at the start was something that we were just doing ourselves. Like, literally our initial team, we'd go to the beach and we do beach cleanups on the weekend. Yes. And then probably 18 months in, we're like, we want to get really, really serious about this part of our business. And that's when we started building our own team. Like, we started employing people to do cleanups. And then I started, like, going to all of these major cleanups and getting in front of the camera and showing people the scale of this problem. And the more that we've done that, the more people have gotten engaged. Because, like, some of the content that we're shooting now is brutally confronting, you know, like me waist deep in rubbish as far as the eye can see in a river that you can't see any water. And again, it's just like the more real and vulnerable we can be and just showing people this is the extent of the problem, and we care about it so much that I'm here doing it. Like, this is not just some face value thing that we do for marketing. Like, we're serious about solving this problem. I'm getting on a plane and traveling around the world, doing these Cleanups. And I just think a combination of all of those things has built this trust in this community around us. You know, we take our shareholders, we take customers to clean up. So we get people involved in these things and we just reinforce it. Like every time you buy one of our products, we are removing 10 water bottles from the ocean on your behalf. It's a really direct link and it took us a while to get to these 10 for one promise. To be honest, that wasn't part of the business model at the start.
- [27:51]
Mike
Yes.
- [27:52]
Nathan Chan
But since we've come to that articulation, it's just supercharged our messaging and our impact.
- [27:58]
Mike
So can you talk me through how you got to that? Yeah, because, like, I know a lot of people, like, sustainability is a massive, massive trend and the consumer is more interested in sustainability more than ever. And I once once met a really, really, really savvy founder where he, he's behind the scenes, but he's behind massive, massive brands. And he has a thing where every brand that he creates, there has to be an element of social good. It has to be good for the environment. Like, it has a really strong impact. Physical product, similar space.
- [28:32]
Nathan Chan
Yeah.
- [28:33]
Mike
And I asked him the question, like, you know what, why do you, you know, why do you do this? Is it a commercial thing and how does it all work out from a commercial side? And he said, like, look, honestly Nathan, what I found is one, it's just great to have some really strong purpose and why behind each brand that we create and it, and it makes it more fun and it's more impactful. But what we've also found is that the extra money that you spend on the administering or being able to deliver on that social good piece, it basically works itself out because you get a bit of a boost. Like, let's say it's an extra 10% cost, then you probably get an extra 10% boost in marketing. So it's net negative. Like it's neutral. So it's worthwhile doing. And why wouldn't you?
- [29:21]
Nathan Chan
Yeah, yeah.
- [29:21]
Mike
So talk me through that piece because like I said, a lot of brands are moving in that direction. Yeah. It's a big thing. Yeah.
- [29:29]
Nathan Chan
So the thinking, the thinking went like this. The first thing we did was we took a bit of a kind of purist approach to doing good and we said we don't want to do a profit model, which is what lots of, like, social enterprises do. They say, we'll donate x percent of profit to doing something. The reality of that is that most startups fail. Most startups don't ever generate a profit. And it just felt a bit disingenuous to me personally to be trading off that, knowing that I'm probably not going to get to profitability for three years.
- [30:01]
Mike
Yes.
- [30:02]
Nathan Chan
So we said what we're going to do is we're going to bake doing good into the cost of goods of our business. So there's literally a line item in our unit economics that is ocean cleanups. Yep. And, and that's kind of evolved over the years. And we weren't quite sure, like, how much should we actually be investing in these cleanups as. As we go? Because we weren't profitable. We weren't profitable for the first three years of our business. Right.
- [30:24]
Mike
Yeah.
- [30:25]
Nathan Chan
And we were just experimenting. We're like, let's go and see. Let's, let's put $50,000 into a kitty and see how much that gets us.
- [30:31]
Mike
Yep.
- [30:32]
Nathan Chan
Let's put $100,000 in into the next kitty and see how far that gets us. That's like last year we, we invested nearly $300,000 in cleanups.
- [30:39]
Mike
Yeah.
- [30:41]
Nathan Chan
And we were just, we were always like challenging ourselves, like, how much should we actually be? Like, what's the right number? And how do we build some kind of system and process around this? And so that's when we like probably 18 months in or probably two years in. Once we had some real data around how much does it cost to do a big scale cleanup, we're then able to like work backwards and just say, well, this is how many products we sold in the last 10 last 12 months. This is how much rubbish we collected in the last 12 months. We just worked out the maths between like sales versus cleanups and what we think we can continue to scale that. And that's where it landed on this 10 for 1 promise, which has simplified everything because the message is now literally every time you buy a Zero Co product, you are funding 10 water bottles being removed from the ocean. Every single product doesn't matter what the product is. Doesn't matter whether it's a $2 product or a $50 product. Every product, 10 water bottles removed.
- [31:32]
Mike
And you take that from your average order value.
- [31:33]
Nathan Chan
Of course, we just. Yeah, we take it from average order value.
- [31:35]
Mike
Yeah.
- [31:37]
Nathan Chan
And what it's allowed us to do is then just go and have a budget at the start of every year that we say, well, we're pretty much going to sell as much as we did last year. Like, we're a growing business. We're not going to sell less. Therefore we know this is how much money we're going to allocate to cleanups and we can go and build a full 12 month plan. All right, These are the projects we're going to go and do. And if sales exceed forecast, then we've got a kiddie that we can go and do more cleanups. Essentially.
- [32:00]
Mike
Yeah. Got you. And is there a reason that you didn't partner with another organization? You've actually built your own team?
- [32:07]
Nathan Chan
Yeah, well, we did to begin with, so. Well, to begin with, we're doing it ourselves. Then the next step was like, let's go and work with some not for profits.
- [32:13]
Mike
Yep.
- [32:14]
Nathan Chan
So we did some projects in Indonesia, we did some projects in Bali, and we did some projects in Egypt.
- [32:19]
Mike
Yep.
- [32:20]
Nathan Chan
And they were great. Like, we, we had a great relationship with all those people. We collected a bunch of rubbish. But what we found is that we were not getting the level of transparency that we were, were comfortable with. So things like even just being able to capture really good content at those cleanups and showing people like, this is the before, this is the after.
- [32:36]
Mike
Yes.
- [32:37]
Nathan Chan
And then getting really robust data around how much rubbish did we actually remove.
- [32:41]
Mike
Yes.
- [32:42]
Nathan Chan
On the promise to deliver on the promise.
- [32:44]
Mike
Yes.
- [32:44]
Nathan Chan
And so we like persevered with that for probably a year. And. And we just got to a point where like, if we're going to get really serious about this, we're going to be investing hundreds of thousands of dollars every year in this. We've got to go and do it ourselves.
- [32:55]
Mike
Yeah.
- [32:55]
Nathan Chan
And so then we literally went and built a team in the Philippines. So a full time team in the Philippines. Now 13 guys work for us.
- [33:01]
Mike
Yep.
- [33:02]
Nathan Chan
We're doing cleanups all the time in the Philippines.
- [33:04]
Mike
Yeah.
- [33:05]
Nathan Chan
And then this coming year, we're going to go and do our first big global cleanup projects as well. So we got one planned in Bosnia.
- [33:14]
Mike
Yep.
- [33:14]
Nathan Chan
We got one planned in Ghana. You got one planned in India and one in Central America. On top of our 8 to 10 monthly cleanups in the Philippines.
- [33:23]
Mike
Yeah.
- [33:24]
Nathan Chan
And some cleanups here in Australia as well. So next year the goal is we're going to try and remove 30 million water bottles from the ocean.
- [33:30]
Mike
Yeah. Wow.
- [33:31]
Nathan Chan
Which is as much as we've done in the last three years.
- [33:34]
Mike
Wow.
- [33:34]
Nathan Chan
So we're scaling this cleanup operation really, really quickly.
- [33:37]
Mike
Yeah. And it's one thing to clean up, but it's another thing to actually remove. That's, that's like, how does that work?
- [33:46]
Nathan Chan
Getting it out of there? Yeah, it's a great question.
- [33:49]
Mike
Yeah.
- [33:50]
Nathan Chan
And it depends on the location to be Completely honest. So when we're doing cleanups in Australia, it's beach cleanups. That's literally a team on the beach. Hands and shovels and rakes and bags, like it's, it's that primitive. And then in the Philippines, it's a case by case basis. So like sometimes we're in a river and so we'll have boats.
- [34:10]
Mike
Yes.
- [34:12]
Nathan Chan
Sometimes it'll be on a beach that's so crazy polluted that we'll have backhoes and excavators and dump trucks in there. Sometimes it's out in the ocean, we're in boats. We've done a couple in Sydney and like we've scuba dived to the bottom of Sydney Harbour and had a team down there scuba diving.
- [34:28]
Mike
Yes.
- [34:28]
Nathan Chan
So it's really like a case by case basis, but most of the time it's manual labor.
- [34:33]
Mike
Yeah. Got you. And where do you dispose of the rubbish?
- [34:36]
Nathan Chan
Yeah, that's also a bit of a case by case basis. So it depends on where we are and what facilities are available.
- [34:42]
Mike
Yes.
- [34:42]
Nathan Chan
So where we can we recycle what we can? Yes. Where we can't, it goes to landfill. And like, the brutal reality is some of these locations, particularly in the Philippines, will be on islands where there is no recycling facility on the entire island. And so our view when we go to those kind of locations is there's two options here. One, we leave it in the ocean where it's breaking down into microplastics and going into the food stream getting eaten by fish that get eaten by you. That's not cool. Or we take it out of there and we put it in a hole in the ground. And if they're the two options, then putting it in a hole in the ground is the least shit of those two options. So where we can we do what we can. Where we can't we do what we have to.
- [35:25]
Mike
Yeah.
- [35:25]
Nathan Chan
It is basically the truth of it.
- [35:27]
Mike
Yeah. Wow. That's crazy. So talk me through as the company has grown, how you've scaled your operations, because this business. Can you talk us through numbers or what can you share, like, the scale of this business? Because you guys are going super fast.
- [35:42]
Nathan Chan
Yeah. So we've actually gone through this crazy pivot over the last 18 months where we've, we've put the brakes on our growth, to be completely honest with you, as we've redeveloped our entire product range from the ground up and entirely new packaging system, which we can talk to if you want.
- [35:58]
Mike
Yeah, for sure.
- [35:59]
Nathan Chan
Yeah. Should we go? Yeah. Okay. So the first iteration of Xeroco was a closed loop model where you had a forever bottle that you keep at home and then a plastic refill pouch. We'd send you the pouch, you'd empty it into the bottle, you'd send the pouch back to us, we would clean it, refill it, and we'd send it out to another customer. That was the business model for the first two and a half years of the business. We then started to realize that the business had. Well, that supply chain had a whole bunch of fundamental flaws with it. We got some experts to come in, some environmental experts and some data experts to come in and pull this whole thing apart. And what we found was pretty shocking, to be completely honest with you. Like, it did a lot of good. We cleaned and refilled 250,000 pouches, pulled 20 million water bottles out of the ocean at that point. But what we found was that the carbon footprint of shipping empty pouches back to us, like every single order that we would send out, there'd be a reverse logistics piece to that. So double the carbon footprint.
- [36:56]
Mike
Yes.
- [36:56]
Nathan Chan
We were then running a purpose made facility to clean the pouches. We were using water to do that. That's got a carbon footprint and a water footprint. And then we found that only 43% of customers were sending their pouches back to us. So we built this system which was like perfect, in a perfect world. And we found that we live in an imperfect world. Even though we were providing free return shipping for everyone, it just became a job, right? A job to do. You got to go to the post office and send your pouches back. It was inconvenient. And so then at that point in time, we said, okay, we need to rethink this whole business model. We need to work out how do we make this even more convenient for the customer and better for the planet. So we went on this massive research and development project, working with companies all around the world, working with research institutions, working with university academics to try and build the most sustainable packaging system for liquid personal care and cleaning products. We're looking at seaweed and algae and hemp and mold and fibre and all of these crazy different materials. And where we've landed on is some Australian technology, which is a paper based refill. It's 97% less plastic. So instead of having a reverse logistics model, we send you the paper refill. It slides inside the bottle now so there's no decanting or pouring. It's really simple. And then when you're done, you can put it in your curbside recycling bin gets recycled. We've done all the testing. About 90% of the paper material in the refill can get extracted during a recycling process in Australia and get turned back into another product. So we basically rebuilt the whole thing. We also moved to concentrated formulations on some of our products. So instead of previously shipping two litres of laundry liquid around the country, we concentrated that product down into a 500 millimeter formula. Same number of washes, same performance, just with a quarter of the liquid. So Instead of shipping 2 liters, we're now shipping 500 mils, which is 75% less freight emissions. So we like, we pulled the whole business apart and we're like, what's all the stuff we've learned in two years? How do we make everything better? How do we make it better for the planet? Less plastic, less carbon emissions and more convenient for the customer. So we've been on that journey for like the last 18 months and we haven't. We've deliberately not been trying to scale the business, we've just been servicing our existing customers, getting this new product ready and it literally launched a couple a month ago. So, yeah, we've been in this crazy journey where, like, scaled really quick and then we put the brakes on deliberately and now we're literally just about to put the foot back on the. On the accelerator. We're going to be launching internationally next year, hopefully going into physical retail, like really doing all the things we set out to do at the start, but we're kind of blocked by this cumbersome supply chain that we built for ourselves. Yeah, yeah.
- [39:32]
Mike
So can you talk us through what numbers you could share around customers, revenue, how far you've taken the business?
- [39:39]
Nathan Chan
Yeah. So we are now at about 120,000 customers here in Australia that are purchasing from us today. It's 99% of our business is direct to customer through xeroco.com.
- [39:49]
Mike
Yeah.
- [39:49]
Nathan Chan
We have a few small retail relationships with independent retailers.
- [39:52]
Mike
Yep.
- [39:54]
Nathan Chan
But the plan is to radically scale the business and get into a lot more retailers. Pharmacy, supermarket, specialty retail, those kind of things.
- [40:02]
Mike
Yeah, yeah. And mainly Australian customer base at the moment.
- [40:07]
Nathan Chan
100% Australian.
- [40:08]
Mike
Yeah.
- [40:08]
Nathan Chan
So we're not shipping overseas. We're not. We're not running ads anywhere, we're not acquiring customers anywhere other than Australia.
- [40:13]
Mike
Yeah.
- [40:14]
Nathan Chan
The plan for next year is we're going to be launching into the European market. UK and Europe and then the US after that. North America.
- [40:22]
Mike
Yep. Got you. And you've raised 6 million from square Peg.
- [40:27]
Nathan Chan
Correct.
- [40:28]
Mike
Talk us through that strategic decision.
- [40:31]
Nathan Chan
Yeah. So I guess when we got to a point where the business was growing very quickly, we realized that if we want to take this in global, if we want to continue to grow this, we're going to need some more funding.
- [40:41]
Mike
Yep.
- [40:42]
Nathan Chan
We'd learned a lot from our Kickstarter days, we'd learn a lot from our first kind of angel investing round. And so we were very clear about the type of investor that we wanted and the type of money that we wanted to take into the business. And it needed to be completely values aligned and you know, patient capital with a, you know, long term horizon. Because I'm not building this thing to get rich and flogging in two years time. We're building this business to try and solve the global waste problem. And if it takes 30 years, it takes 30 years. If it takes 50 years, it takes 50 years. You know, my view is we're going to try and build a really successful, profitable business and the rest takes care of itself, basically. So with that in mind, we went and started talking to a whole bunch of investors and I think from the success that we'd had, we were able to open some doors into VC land, which was really awesome basically.
- [41:36]
Mike
Yeah, Square Peg's an interesting one because I think of them usually they're you know, local, well known, prominent Australian vc. For everyone listening, I always think of them as more tech correct focused. Yeah, yeah. And yeah, they, you know, invested in you guys. Was there any kind of learning curve or like.
- [41:55]
Nathan Chan
Yeah, I think, I think for them like the thing I've learned from having now worked with them, they've got a seat on my board.
- [42:02]
Mike
Yep.
- [42:03]
Nathan Chan
I've become really good friends with, with like a kind of principal investor there. And they invest in really good businesses. Right. And they invest in businesses that have got a great story and we've got a great story. Right. We had built a good business up to that point. We had a really great story which is we're going to try and save the world. Right. And so I think whilst historically I have invested in tech businesses, ultimately they invest in businesses that they believe can grow and become profitable and have a great story. So yeah, they've been an amazing partner, to be honest. I was a little bit hesitant about taking VC money, to be completely honest, because I'd never done it before with any of my previous businesses. You hear horror stories, you know, you hear of like disalignment between founders and VCs, you hear stories of founders getting kicked out of their businesses, all that stuff. And just at every turning point they've Been the exact opposite of that, which has been really amazing, to be honest.
- [42:57]
Mike
Yeah, yeah. It's one of those things. You, you hear those stories. But of course there's always another side of the table as well.
- [43:04]
Nathan Chan
Totally.
- [43:04]
Mike
Yeah.
- [43:05]
Nathan Chan
Founders don't just get kicked out because.
- [43:07]
Mike
They'Re doing a great job.
- [43:09]
Nathan Chan
It doesn't happen.
- [43:12]
Mike
Exactly, exactly. Like, you know, Steve Jobs and all these different stories, Right? Yeah, yeah. So I'm curious. Talk me through. I guess you, you mentioned something really interesting. You said that fundamentally this VC and this is a very, very well renowned vc. I'm pretty sure they were early stage Canva, right?
- [43:32]
Nathan Chan
Correct. I think so, yeah, yeah, yeah.
- [43:33]
Mike
I'm pretty sure they were early stage Canva. So talk me through. Like, you know, you said you guys have a good story. What, what advice would you give to founders that are watching this, working on their product, working on their business? How do you, like, like what, what advice would you have? Make sure you have a good story, you have an exceptional story and you're a very good storyteller.
- [43:56]
Nathan Chan
Thank you.
- [43:56]
Mike
Like, I'm sure plenty of people listening to this, even myself, really, really want to get behind what you're doing.
- [44:02]
Nathan Chan
Yeah, Yeah. I think it depends what stage of the journey you're at, I think. Right. And again, I'm not an expert here. I'm just, I'm just doing, I'm just living this, this journey in real time and putting it out there. I think. If you haven't started your business yet, are you thinking about starting your business? It's that classic case of find your why. Right. Like before you go and start anything, work out what you're actually really trying to do, what's the problem you're trying to solve. And try and solve a big important problem because they're easy for people to rally around. Right. Like if you're just going to make another widget that people don't really need, then you're going to have to manufacture some story around it and that's really hard and it's really, can be really disingenuous really quickly. Right. So I think if you're at the stage where you haven't yet started, try and try and solve a big problem that you can just. It's just a natural, organic story around. If you've already started and you're working on a big problem. Awesome. I think the next thing is to work out. How do you articulate that really succinctly? I think lots of founders and startups have a really difficult time explaining what they actually do. I'M always surprised when I go to like websites and I'll spend 10 minutes and I've got no idea what they actually like. What do you do particularly in tech and service? I find it all the time, what are you actually trying to sell me here? So I think just taking some time and I think about it like the pub test. Imagine you're just talking to your dad at the pub, like who's got no idea about the thing you're going into. How do you just explain it in layman's terms? Do that make it simple. Less is more. Don't get complicated. Just like 10 for one. Every product we sell, we collect 10 water bottles from the ocean. That's it. It's really simple. Yeah, yeah. And then I think just another thing like with founders, I think you have to decide whether you're going to be the face of it or some kind of a face of the business. And if you are, you have to lean into it. And then I just think a bunch of other tall poppy stuff in Australia, right, where you put yourself out there, you try and do something good, people are going to knock you for it. And so I had to learn the hard way just to be like ignore, delete, move on kind of thing because I know what I'm trying to do, I know why I'm trying to do it and so I'm just pushing ahead. But it can be confronting for founders when you put yourself out there in the public. But it doesn't mean you shouldn't. Yeah, I think that's the moral story. Doesn't mean you shouldn't.
- [46:29]
Mike
Yeah. And I think more than ever now there is not, I don't, I'm hesitant to call it a trend but it is becoming expected, right, that you know, somebody finds a brand, they're going to Google about the founder, the founder, the product, the brand. And more than ever now there's this movement of founder led brands. Yeah, right. You know, tick tock, right. Somebody taking you on that journey. Tick. Like showing the manufacturers, creating the product, getting feedback, taking people on the. There's, there's almost a playbook for it now. Ten years ago, five years ago, that wasn't really a thing.
- [47:13]
Nathan Chan
Yeah.
- [47:13]
Mike
You know what I mean? So, so more than ever I think the consumer is, is very interested in almost expecting to see who is the person behind it.
- [47:22]
Nathan Chan
Yeah. 100. And it makes sense, right. Because it's relationship builds relationships and it's real because like I think people are just so sick and tired of corporate bs, particularly in the sustainability space. Right. Like the world's biggest companies are the world's biggest polluters. And they're always talking about this thing they're going to do by 2050 and people like, stop, stop fucking BSing and show us what you're doing today. Like 2050 is irrelevant if you're not doing something today. And they're faceless companies and they're doing press releases and there's no accountability. These big, you know, big global behemoths. And so I think in the sustainability space, people want to see the real stuff and they want to see the people who are doing it and they want to see the work you're doing now. And so it can be really powerful if you do it, you know, authentically and, and for the right reasons.
- [48:11]
Mike
Yeah, yeah, no, I agree. So talk to me about setbacks, Any other challenges that you want to share, any good stories, we talked about stories, any crazy wild story, setbacks. You know, people might look at you, you know, you've got this awesome business, you're doing a lot of good for the world. You know, you raised a ton of money, you know, reinvented the business model. I know how painful that would have been. Yeah. You know, even for founder, we had to reinvent our business model. Moving to subscription membership, all these different things. I know how painful that is, but it's really looking like you guys are on the up. So talk me through like some.
- [48:55]
Nathan Chan
Yeah, I feel like ZeroCo has just been one perpetual setback after another, to be completely honest with you. Yeah, it's been the hardest business I've ever done in my life. We've picked a incredibly big and complex problem that doesn't have a silver bullet solution. We have been innovating at the bleeding edge of technology from day one, trying to do things that no one in the world has ever done, like this new paper based refill system we've just launched. I 100% now understand why Unilever or Procter and Gamble or one of these big global companies haven't done it. Because it's really hard. Like impossibly hard almost. And so like literally at every juncture of this business, we've been faced with these big cataclysmic choices to make and decisions. And you know, there's been multiple times in this business where I've nearly walked away, to be completely honest with you, because it's like a lot, like a lot of pressure, a lot of stress and no clear path. Like when we decided we're going to build this new paper packaging system. We didn't know it was going to be paper. We just knew that we didn't want it to be plastic, and we knew that it had to be better for the planet. And so, like, we spent two years going down rabbit hole after rabbit hole after rabbit hole, investing money, developing packaging solutions to have them end up not working out, you know, after 12 months of product testing on them. And so I think the, the. Probably the most important skill that I've learned on this journey has been perseverance. And I think I'm inherently a bit of a stubborn person, but this project has just taught me to, like, get punched in the guts and take five minutes on the ground and then get up and dust yourself off and go again. So, yeah, there's been so many things, like from the COVID thing at the very start of our business happening to investing, to building this business model, then deciding and uncovering that it's actually not the best solution for the planet. And there's got to be a better way to then exploring every possible opportunity under the sun, from technology that doesn't yet exist to now starting to ship these products to tens of thousands of customers around the country and things not going exactly according to plan because no one's ever filled up a papered cup with laundry liquid and shipped it around the world. Right. Like, it's never happened before. And so some days I just feel like, oh, my God, can. Can we just have like a normal standard business for the next couple of weeks where we just. We just. Everything's smooth and smooth sailing is all good. So. Yeah, there's been countless things that have gone wrong.
- [51:34]
Mike
Yeah, yeah. And that's the journey. You know, one of my mentors once said to me, like, if these things aren't happening to you, you're probably not pushing hard enough to agree.
- [51:43]
Nathan Chan
Yeah, totally. Yeah. I think that you need to, as a founder, get really comfortable with discomfort and being in a place where you are in over your head and you don't know what you're doing, because if you're not, you're not exploring all in every opportunity in front of you. Right. Because no one knows how to do something until you've done it. So, yeah.
- [52:02]
Mike
So the thing with your business is this balance of profit over purpose and having a sustainable model because you have to keep raising money. And you said you were losing money for a long time before you were profitable. Like, yeah, talk me through that balance. Because that, because that, that adds another layer of complexity into the cocktail which a of founders usually don't have. Totally. Like, yeah, yeah, yeah.
- [52:29]
Nathan Chan
So I, this is something I wrestle with every day of, like how much of my time and effort do I spend scaling up our cleanup operation and being intimately involved in that versus how much time do I spend and being intimately involved in scaling up our business? And they're intimately connected. Right. Because we need to sell products to solve the problem in people's homes. Because every time you buy a product, you're reducing waste at home, you're stopping at its source. But we also need to sell the products to fund the ocean cleanups. And so it's this perpetual, like, circle of interconnectedness. And I, to be honest with you, I have not found the right balance yet. To be honest. I think it ebbs and flows. Like there are times when we just need to knuckle down and focus on the product. Like the moment we're in right now, where we're shipping hundreds of thousands of products around the country for the first time to customers who've been waiting for a month because we had a pre order and we just got to focus relentlessly on like the customer experience and the product. Get that done. And then, you know, there'll be times where those things are humming and we can go and invest more time and effort in scaling the cleanup. So, yeah, it's a never ending challenge.
- [53:35]
Mike
Yeah. And when do you think or how do you think you'll find that right balance?
- [53:43]
Nathan Chan
Well, the goal that we're working towards is I've just built out a new senior leadership team in the business. I managed to convince some really experienced people from some awesome businesses that are much bigger than mine to jump ship and come and help me build this thing to the next stage. And the goal that we're working towards is I will be out of the day to day operations of the business. It might take 12 months for that to happen. And I'll be doing hopefully more of these things and going and talking to people about the problem that we're trying to solve, but also being at literally every single cleanup and trying to scale the content and get some virality around our cleanup stuff to spread the, spread the word, basically. So we're in this, we're in this interesting phase of me becoming more of a figurehead than, you know, the guy in the trenches doing customer service one day and then down at the production line, solving an issue on the production line and then all of those things that you do as a founder.
- [54:37]
Mike
Yeah, yeah.
- [54:37]
Nathan Chan
And so it's exciting, but also daunting.
- [54:39]
Mike
Yeah, no, I can understand that. I going through a similar transition. So talk me through, what is the.
- [54:44]
Nathan Chan
Next level for the business? Yeah, so we, the big goal here is we want to remove a billion water bottles from the Ocean. We're at 45 million today. So we've got some very hard numbers that we need to hit in order to get to that milestone. We've given ourselves a five year time frame to get to that billion bottle target that involves launching new products, launching new channels, so going into physical retail and then launching new markets. So they're the three things that we're going to be focused on. At the Moment we're in 120,000 homes in Australia. We need to be in a million. Right. Like there's no reason we shouldn't be. There's 10 million homes in Australia.
- [55:28]
Mike
Yeah.
- [55:28]
Nathan Chan
There's no reason 10 million, like 10% of those people, those homes, a million households shouldn't be concerned about this problem and wanting to be actively involved in the solution. So that's, that's the next big jump for us is how do we get into a million homes?
- [55:41]
Mike
Yeah, yeah. Still big focus on Australia or international.
- [55:44]
Nathan Chan
Yeah, it's. So we're going to be launching into the UK and Europe middle of next year.
- [55:50]
Mike
Yep.
- [55:51]
Nathan Chan
And I think we're just taking a test and learn approach.
- [55:53]
Mike
Right.
- [55:54]
Nathan Chan
We're going to launch, we're going to ship some product, we're going to run some ads and we're going to see what happens.
- [55:59]
Mike
Yep.
- [56:00]
Nathan Chan
But we know that the future for this business is global and I don't think we can get to the scale we want to get to in Australia alone. So. Yeah, no, yeah, yeah, it is a global strategy now.
- [56:15]
Mike
Yeah, yeah, yeah. And talk me through. I guess any founders that are watching this right now that want to create a more purpose led business, you know, with the, with a big part around sustainability. What advice would you give?
- [56:34]
Nathan Chan
That's a really good question. I think one of the things that I've been saying recently to people is just start. The reality of the sustainability space is that we face all of these mounting environmental problems around the world and the only way we're going to solve those is if we get more people involved in building the solutions. And so if you've got an idea that's going to do something to solve one of these myriad problems with the environment, just start. Because we need more people in the field today. And it doesn't matter if you don't have all the answers. I didn't have all the answers. I still don't have all the answers. But you just got to get started. Get start. Like, start small, start. Today is the sound bite.
- [57:20]
Mike
And talk me through sacrifices. Because, like, usually you would think that when somebody sells their business, even after traveling the world, you probably wouldn't go back to living at home with your parents at 35, with all due respect. Yeah, yeah, yeah. What sacrifices have you had to make up until this point to get where you are today?
- [57:46]
Nathan Chan
Well, I think the first thing was moving back in with my parents at a moment when people don't do that. At my age, I putting all of my life savings in that I had available, all the cash I had available. I had some other investments, but that was the cash I had available, putting all of that into the business. And then I've become a dad during this journey. So two years ago, I had a daughter, Tilly. Thank you. It's been an amazing, transformational experience. But, you know, as much as I try and be there for all of the moments, I'm not there for all the moments because I'm in the Philippines doing a cleanup, or I'm down in Melbourne with our team down here. And so the thing that I've learned over this last two years of the business in particular is there's only so many plates you can juggle, and the less plates you have, the better you can juggle those plates. And so for me, I've just said at this moment in my life, between now and when Tilly goes to school, I've got two plates, essentially, which is my business, and then my family, and that's all that I have time for. And so I don't do a lot of stuff outside of that. You know, my friendships have had to take a back seat to those two things. If I'm not at work, I'm at home playing with my daughter or being with my wife on the weekends. That's what I'm doing. So, like, I'm not sad about it. That's a conscious decision I've made, that they're the two most important things in my life for this next little period. And they're the two things that I'm going to focus all of my energy and effort on. And I think you just have to be brutal with your time as a founder, because that's the one thing. Like, there's only a finite amount of time, right? There's 24 hours in the day. Where are you going to spend it? You have to spend it on the things that are the most important to you. So, yeah, yeah.
- [59:26]
Mike
And you talk about time and time management. In the early days, what was that split like? What did that look like in terms.
- [59:33]
Nathan Chan
Of what I was doing in the business? To be honest, at the start, it was just all hands on deck and I was just doing whatever I needed to do that day. You know, excuse me. Sometimes it'll be customer service. Sometimes I'd be, you know, literally answering tickets in our in house customer service pool for a week if we hadn't an overflow. Sometimes I'd be at the factory dealing with factory issues, sometimes I'd be doing video editing and production stuff. It was just a mix of like whatever needed to be done, which I think is just, that's the nature of a startup. Right? When you're in that early phase, you just need to get your hands dirty with everything. And then as the business has evolved, it's become more and more time on product, particularly with our product development team and then these cleanups more recently. So they're kind of the big chunks of time that I'm spending now. As we've just started to relaunch, I'm spending a bit more time with the new marketing team. We basically rebuilt our whole marketing team as part of this relaunch of the business. So I'm spending a bit of. A bit more time there. Yeah, yeah.
- [60:40]
Mike
Awesome. Well, look, last question. Mike, what advice would you give to early stage E Com founders going on the journey? Any questions that you wanted me to ask that I didn't ask, Anything I didn't cover that you'd like me to cover, right?
- [60:58]
Nathan Chan
Yeah, I think, I think one piece of advice which I wish I had have gotten when I started this thing was getting to all of the tools on day one. Even the stuff that you don't think you know anything about or you'll never be able to know anything about, just get into it and just start learning from day one. So like meta ads and Google Analytics and whatever customer service platform you're using back into Shopify, like whatever your tech stack is, just get deep in all of it and just learn from day one. Because it took me 12 months to learn all of that stuff, you know, and looking back, if I had to just jumped in straight away, it would have probably sped up my learning journey. And so I think it's just like, learn, learn, learn, learn, learn, learn. Don't be afraid to ask, don't be afraid to jump in on stuff that you don't know how to do. Just try and learn as much as you can as quickly as you can.
- [61:45]
Mike
Well, thank you so much. We have to work towards wrapping up, but this has been an incredible interview. Thank you for coming down here, telling your story, and all the incredible work you're doing. Congratulations on your success thus far. Look forward to watching your journey from afar.
- [61:59]
Nathan Chan
Yeah, awesome. Thanks for having me.
- [62:00]
Mike
If you love this episode, make sure to check out my interview with Emma Grade on how solving a problem she was so passionate about led to the creation of Skims and Good American.
- [62:10]
Nathan Chan
And so I do think it's so much of it starts with, like, addressing things that bother you that you find, you know, you've got to create a solution for because, you know, at the end of the day, you've got to.
- [62:21]
Mike
Be passionate enough and sometimes crazy enough.
- [62:24]
Nathan Chan
To go round and round and round to actually solve a problem.