← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
601: The Couple Who Built a 9-FIGURE Brand While Working Full-Time Jobs | Natalie Holloway
00:57:38
Natalie Holloway turned a $5,000 side hustle into Bala — a globally recognized fitness brand worn by millions and backed by Mark Cuban and Maria Sharapova.
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A
Hey, founder fam. I want to talk to you about something super exciting. We're officially partnered with Omnisend, the email marketing and SMS platform built specifically for e commerce founders. We've been recommending Omnisend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling to seven figures, it really helps you automate your marketing and get real results. Did you know on average OMNISEND customers make $68 for every $1 they spend, which is an insanely good return. And because you're part of the founder community, you get 50% off your first three months with the code. Founder50. Just head to omnisend.com founder without the e to get started. All right, now let's jump back into the show.
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B
Welcome back to the Founder Podcast.
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A
What if I told you that the same year a founder scaled from 2 million to 20 million in revenue, they also came within inches of bankruptcy and had to lay off 90% of their team just to survive? Well, today's guest, Natalie Holloway is the co founder of Bala, the nine figure wellness brand that revolutionized wearable weights and became a household name. They started with just $5,000, shipping 75,000 units from their garage while working full time advertising jobs. Natalie and her husband Max turned a simple yoga class frustration into one of the most recognizable fitness brands of the decade. But what most people don't know is the brutal reality behind the Instagram worthy success story. So in this raw and honest conversation.
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B
You'Re going to learn how to bootstrap.
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A
A physical product business from $5,000 to nine figures while working full time jobs, the critical mistakes they made when scaling too fast, and the frameworks for rebuilding a profitable business after near bankruptcy.
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C
Hear the stories, learn the proven methods and excel. Accelerate your growth and future through entrepreneurship.
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B
Welcome to the Founder podcast with Nathan Chan. Natalie, welcome to the Founder podcast. The first question that I wanted to ask you is what led you and Max to create BALA after being burnt out from your previous career?
- [02:20]
C
So Max and I, as you said, we were, we were burnt out because we were working in Advertising in LA at an agency called 72 and Sunny and we were truly, it was pre Covid. We were burning the midnight oil, you know, basically eating dinner at the office, you know, being at the office till 10, 11 at night and then having to go back the next morning for a meeting. And this was just like months and years on end. So, so we got burnt out and we had just started dating and so we kind of romanticized this idea of the gap year, but later in life, you know, we were late 20s, not right after. Right after college. And so let's. We said, let's quit our jobs, let's travel, and let's get jobs when we return. We kind of just didn't overthink it. We said, what's the worst thing that could happen? Worst case, we kind of go, you know, one. One step down in our career, but we get jobs again in advertising. So we went off on that journey, and we were doing a yoga class. And at the time, I was very into incorporating weights into my yoga class because I felt like it's the perfect workout. It's a blend of strength training mixed with a flow. And so we were doing a yoga class, and it was far too easy. We wanted to sweat, and there was no sweat happening. So it was right after that that we started brainstorming, how could we have made that class harder? And we landed on wristed ankle weights, which existed, but it's. They existed in a way in which they were from the 80s, neoprene, not cute at all. No one even used them. So we were brainstorming. We said, why is this? Why did this tool totally, like, leave the market? No one uses these, but really, you should be seeing girls wearing wrist weights, like, on their walks or at Equinox to get a little bit more of a workout in. So that was the idea behind it. And Max, who is our product designer, and he's literally my husband and co founder, has designed every product that we have. It just kind of came to him, and he drew it out right there. And we were like, huh, maybe we're on to something. Let's do this.
- [04:40]
B
And so what happened next? You guys famously started this company with $5,000. You got. We've got a lot to unpack. You've been on Shark Tank, you know, near. Near failure. Laid off, whole team. Like, you've got some crazy stories now. Nine figure business. What happened next? Like. Like $5,000. Like, what was the. Like, what was the MOQ like? Talk me through that piece, because everyone always wants to know, like, how do you start?
- [05:11]
C
Yeah, I think. I mean, it definitely wasn't straightforward. We had no idea what we were doing. Our secret sauce. I believe everybody has an unfair advantage. Our unfair advantage was we knew, you know, marketing and branding and how to produce a shoot and tell a story. So that was our. That's what we did know. But what we didn't know was anything about product development, running a business, anything else. So we set Back to the US About a year later. And we just started. We just said, let's do a side hustle. Like, let's make a little bit of extra money while we get back into advertising. Got jobs again. We were in New York this time, got jobs in New York at advertising agencies. And in the background, we were just working on Balla and seeing if it could be a thing and if we could get this product to life. And so we just started every. Our product approach was really just to, like, take steps every day and see what happened. And all the while we were working a 9 to 5, if not like a 9 to 8, because I already talked about advertising and how. How hard that was at the time probably still is. So we were working advertising and just treating it as a side hustle. And we just prototyped the product for about a year. I ended up going to China right before we launched. And the MOQ was. I think it was $40,000. And that's the next step was like, how do we get $40,000? We launched a Kickstarter and we got the money, and then we just started selling the product. And for two years we had other jobs. We had our advertising job. So we truly bootstrapped it for the first two years. And then we can talk about Shark Tank. I'm sure we will. But then we quit our jobs pretty much right before we aired on Shark Tank. And that's. Things got crazy.
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B
Yeah. Okay, so from our research, it costs you guys $5,000 to launch the brand. What did you spend those $5,000 on?
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C
So it was probably about $4,000 on the prototype and then the next thousand and might have been a little bit more than that, you know, over the next several months. But producing a shoot, like my sister shot it, probably for free and maybe paying a model a couple hundred dollars. And Max built our website. So everything was really, really bare bones. And we spent little to no money to get it at least live. And then from there, we pretty much funded the business with selling the product. Sell, sell two, buy one more. It just kind of went like that.
- [07:58]
B
Got you. And talk me through the manufacturer. Like, how did you find someone to produce your prototype? And you know, did you produce it in China to begin with? Like, talk us through that piece. Because a lot of people find that as a real barrier as well.
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C
I think that's a huge barrier. And this. It's really hard because you don't know if you've been to the factories. Like, you're just sending money into online and hoping that they Produce your product. Like, it's. It's very. A scary thing. So we actually had a connection that at least started the conversation in China. Max's family's in the toy industry, and so his uncles knew a toy factory, and that toy factory pointed us in the right direction and actually developed our first prototype. And then we moved it to another factory. But that was. That was a tough. Even having someone we knew who produced toys, it was still like, where do we go? How do we start getting this thing made? You know, because then you have to think about the materials and where you should source those materials and then how you manufacture it and what creative they need to do. So. So it's. There were a lot of unknowns, and again, I think we, We. We figured it out by just taking steps every day and just letting it. The path, like, lead us to the answer.
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B
And when it comes to the prototyping phase, that it sounds like from your husband's sketching it on a napkin and the. And. And like, working out what that first product was to actually getting the prototype, having it ready. Launching the Kickstarter, it sounds like that took you guys about a year or so, right?
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C
Yeah, yeah. I think from prototype, probably a little over a year. From prototype to launching on Shopify, Little over a year.
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B
Yep. Okay, so then you did the Kickstarter. Tell me about that. You raised $40,000. That was your first form of validation? Or did you speak to customers, people in the space, like, how did you know you were onto something where you guys still weren't sure until you launched the Kickstarter?
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C
Well, we launched the Kickstarter and we still didn't know what. What we had unlocked. Like, we still didn't. I. I believed it was going to be something cool, but I don't think I believed how big it could be at that point yet. I think that came a lot later with a lot more validation. But we believed that people wanted it and understood it enough to, like, keep going from the Kickstarter. And I think it probably was months later when we were getting in goop or free people or I would be at a trade show and we'd hand them the product and people literally would light up. And that's when we realized how big it could get. But I think until then, it was really, like a slow burn. Like, do you like this? Like, we just, you know, we didn't find our people yet. And I think putting anything out into the world is scary. And you second guess yourself the whole time. Like, I didn't even post it on my own social media because I was like, so scared of putting it out into the world. Even though the Kickstarter was live, I still was like, I'm going to keep this, like, to myself a little bit.
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B
Yeah, I can, I can really resonate with that. I remember when I launched Founder, I was the exact same. Like, I launched this magazine, didn't know anything about business or entrepreneurship, and I kept it quiet, like I told a couple of my really close friends, but I didn't post about it because I was embarrassed and I was nervous and I was scared of what other people would think of me. And I, I really appreciate you sharing that because I think sometimes it's quite freeing to hear that because sometimes you look at super successful founders and think, oh, they're so fearless. You know, they have so much courage. But it's just these micro steps that eventually lead you to where you are right now. But it's not, you know, always from the start. So much confidence. I know this is going to work and you don't care what other people think and you're not worried about failure and, you know, you're struggling and there's times you're thinking about giving up. Like that part is all those things that people from the outside, it looks like you might not face. We all face it. It's being human, right?
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C
Yeah, I think it's also, it's just, it's cool when you, you know, get a lot of comments or a lot of traction on something, but that's never the case when you first launch something. So it is scary to be like, putting yourself out there and wondering if people will like it or hate it or judge you. And it's funny that you had that same feeling. I'm sure anyone who's put themselves out there can relate.
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B
So does that mean you didn't have a Kickstarter launch party?
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C
I kept it like, I was like, this is just going to go out to the public, not to my friends. And then I think along the, the, the journey of the Kickstarter, we started to need people to purchase it and then I really had to like blast it out. But no, we didn't. We had a Shark Tank party, but that's way more exciting.
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B
Yeah. Okay, that's interesting. So we've done a successful Kickstarter campaign, Early Days Founder. I took all the best interviews, all the most popular interviews, and put it into a coffee table book. Now we don't sell.
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C
That's.
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B
Yeah, we don't sell anymore, but we sold. At least I think 10,000 copies now for the Kickstarter. I think we sold maybe a thousand or something. So we raised a couple hundred thousand dollars. And a big part, they say in the Kickstarter Playbook, is if you want to get on the trending page, you have a party with, you know, friends, family, customers, and then when you launch, you get everyone to purchase. So then it trends. Like that's. That's part of the Go to playbook. You know what I mean? That's why I asked, did you have a party?
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C
Well, that's really great to know now. But also it was, you know, I mean, we didn't have any money, so you have to have money to have a party. And at that stage, we didn't. So we were really more like emailing people. But I think if I launched a Kickstarter again, now I know what to do.
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B
Yeah, there you go. Okay, so you had this Kickstarter. You raised $40,000 at that stage. You still didn't know you were onto something or you kind of did. But what happened next? Because you were, for the first two years, you hand shipped 75,000 units from your garage, which is crazy. Like, I've started a physical product brand, and I. I don't run anymore. We sold it. But I remember the early days. Healthish. It was fun to hand produce the. To. To hand package the product, write your little note, and you get orders in. It's really exciting. But it does get to a point where you just like, oh, my God, I don't want to do it. I'm over it. But, like, we probably did that for the first.
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A
Maybe.
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B
I'd say 6 to 10, 10,000 tops. But 75,000 in two years? That's crazy. We probably did, yeah, 10,000 plus before we started.
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C
Yeah, it's insane. I mean, I look back on that time, I think it's just. I didn't know, and I also now I'm surrounded by, you know, other people building businesses, and I feel like there's a phone call away to ask what the next thing to do is. But at that time, I really. I really didn't know anybody who had their own business. And so I was. I was really just figuring out. I thought this is what we were supposed to do. But looking back, it was insane. We were shipping with the help of, like, my sister and maybe a few other people, like, shipping for like, five hours a day from our back garage at this point in Hollywood. And it was insane because we were literally shipping to complex retailers like Bloomingdale's. And free people. And I should have called that earlier and switched to a warehouse. But I think in our mind, a warehouse was so expensive and unknown, and again, I didn't have any peers to look to that I could get advice about this. And so we just kept doing it. And then it was Shark Tank, where we go, this is about to blow up. We can't do this any longer. So we actually shipped all of the Shark Tank orders, and that was our last bit before our warehouse was up and running.
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B
Yeah. Okay, so tell me about Shark Tank. What happened there?
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C
Shark Tank was crazy. We got a call from. I applied one day. I was just in, like, let's go mode and just doing as much as I could every single day. And so I did this little online application. When you start a business, especially if it's a product business, everyone says you should go on Shark Tank. I'm sure people said it to you when you had your business, but. So it was one of those times. And I said, okay, I'm just gonna apply. And I applied. The producers called me. We were in the running. We had a few calls for, I believe, season 10, and then we got dropped, and we didn't know why. So we were super bummed. And they said, okay, we. We might call you for future season. And by the way, we can't tell you why. And it was probably four, five to six months later that they did call us, and they said, it's a new season of Shark Tank. We think you guys would be great. And so that's when we started getting on, you know, weekly calls with the producers, and you're kind of actively pitching to get on the show. And then we. We, you know, had our fateful day where all five sharks wanted in, and it was still the most craziest day ever.
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B
And you raised money from Mark and eventually Maria Sharapova as well. Why'd you go for Mark and how much did you raise? And also at that time, what was your revenue?
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C
Yeah, so they got. Okay, so our revenue going on the show, it was year two, so I think first year was like two to $300,000. Year two jumped to $2.1 million. Um, but really, like, just grassroots, it took off sort of thing. And that's when we went on the show and all, I guess, all five Sharks that said, this is a good deal. And Maria Sharapova was the guest shark. And since she's an athlete and a fashionista, it was, I think, validation for the other sharks to say, oh, if she likes this, this Must be good. And so we went into it wanting Mark and Maria to be our dream team. And somehow we walked away with them, them doing it. And we got $900,000 for 30% of the company.
- [19:05]
B
Okay, and tell me about, Take me back to. Like you said, it was the most craziest day ever. Why?
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C
I think to that point, at that point I, you know, I had not been public speaking a lot. I, you know, we're year two of this business and it has become so important to us and we're about to pitch on live TV in front of like five billionaires. And I think that was very intimidating to pitch. You know, we had this like cheesy skit that we memorized and we're just kind of waiting backstage on the lot for us, for them to tell us at any moment or up. And there's no like redos, there's no editing. It's just straight up, you're in there, you're in the tank for an hour and they're going to drill you about your business, your baby. And so that was really scary because we didn't know what they were going to say. I mean, we thought they'd pick us apart and say, oh, anyone could copy this or just anything that they could say. And we, we didn't know what the reaction would be. So we went in there and we could tell they were vibing with it. And that energy, I think, really fueled us for that hour long interview where, you know, when, when you can tell somebody's into what you're saying, you feel more confident. And I think that really helped with our confidence during the pitch and being able to answer their sharky questions because we also never raised money to date. Like, we, the language was different to us. So being peppered, you know, essentially by like investors with all of this language that of course we prepared for, but it was new to us, so it was terrifying.
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B
Yeah, I can imagine. I've had quite a few friends that have been on Shark Tank. I had a similar story to you. When Shark Tank first come to Australia, I auditioned, the producers said they love me. I went for founder. Like I went trying to get on Shark Tank for Founder the magazine. At the time we were just a magazine and podcast. And yeah, I didn't get on. But one thing I will tell you, and this is just that I know and you know this and I'm sure a lot of people do, a lot of the deals don't actually go through after due diligence. All of that stuff. Yours actually did a Lot don't go through. Yeah, yeah. So. So tell me what happened next. How long. How long between shooting to it airing and then take me back to your launch party then, like, what happened?
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C
Our launch party? Well, Max and I eloped, actually, probably pretty much a month before BALA existed in the world on Shopify. And so it was kind of like the wedding we had, we never had. Like, all of our friends and family were there. The Shark Tank party, it was like, the most exciting moment because it was just this, like, moment of hope and opportunity because we're. Our brand was being put out there to the world. You know, millions and millions of people tune into that and continue to. So the Shark Tank party was really fun. And I would imagine, like, as close to our wedding as we could get. And then I forgot the other question that you asked.
- [22:29]
B
Yeah, so. So take me back to that day. Like, it aired. Yeah. This party, all your friends, like, what happened to sales? Were you worried about getting a bad edit? Because that. That was one thing I was worried about. Like, you just never know because sometimes. Sometimes they. You. They really. They really put you in a bad light, too. You got to be careful.
- [22:50]
C
Yeah, I think. I mean, I know it's reality tv. I know they want to make it look, you know, dramatic or sad. They want you to cry, like, so I knew that going in that they could make us look dumb or something. But I think we were happy with the edit. We were excited immediately. You know, it airs on the east coast and then the West Coast. So the east coast aired, and we just saw, like, almost sold out. I think we sold out on Amazon, and we were, like, padded with inventory. So, like, more people than we could have ever imagined on our website. And we sold out on Amazon. And then the west coast airing happened, and we had sold out on DTC at that point. So the orders were just flowing in. And I think it was really crazy and exciting to see. That was February 28th of 2020, two weeks before the world shut down because of COVID So what happened next is what we never could have expected. We aired on Shark Tank. Great. Two weeks later, world shuts down. Literally. All of my friends say their last public outing was our Shark Tank party. And then everyone was sheltering, sheltering in place. And there was a scarcity of toilet paper and workout appointments. So we were on the radar. I mean, even now, people have stories of trying to get balla because we were notoriously sold out that entire year. Product would land, it would sell out. Product would land, it would sell out. And that was. That was, like, I always say, that year, it was the perfect storm of putting us on the map between Covid and Shark Tank, because it's. We had the. The media moment, and then Covid hit.
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B
Yeah, I remember how hard it was to get gym equipment. You're on Facebook, Marketplace, like, all this kind of stuff. Like, it was so rare, so scarce. It was back orders everywhere. It was crazy. It was crazy. So, yeah, the timing couldn't have been better. So you guys went from 2 million to 20 million in about one year, right?
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C
Yep, in about one year.
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B
How'd you manage that?
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C
We were not prepared for that. We had to grow up quite quickly in business, and we had to start hiring people, and we had to start understanding how much inventory we needed. We. We had a many years of a struggle getting the right amount of inventory in, and we grew quite quickly, and we were just. We were not prepared, and we were just taking it day by day. We were very excited and working really hard. My son was also born during that time, so it was a wild time.
- [25:49]
B
And we all thought it would continue forever. Hey, it was a. Like, in terms of that. In terms of the sales, I don't know about you, but a lot of my friends and everyone, you know, everyone just scaled up and hired and, yeah, we all thought it was just gonna, like, just keep booming. Like, I don't know why. Like, I remember thinking, you know, I don't know. And then it just kept going.
- [26:10]
C
And like, yeah, everyone thought that, I think. And then. Then you have the post Covid dip, especially in fitness, because everybody then started seeing a decline. And when you're planning for, you know, 20% growth, even if you're just planning for 20% growth and you miss that mark and you maybe have 20% dip, which is what happened us. It's detrimental to the business, especially because we were bootstrapped. We were not funded, and we hired way too quickly and scaled to, like, a team of 30. And then it became a pretty dramatic situation. And I think that you. You kind of saw that across the fitness industry, but across many industries, you saw that, like, there were just massive layoffs. I don't know why we all thought the growth would just continue like that.
- [27:00]
B
Yeah, yeah, so. So you had the COVID boom, grew the business rapidly, and then you had a near bankruptcy. And we talked about this offline, where this is something that a lot of founders don't talk about enough or aren't as candid. And there's this story out there in the marketplace where, you know, People think that if your business is growing, it's just always up and it's not necessarily linear. So what happened? So you had this big Covid boom. We all thought, you know, me included, with founder and online education, that was another area that massively boomed, right? I had people coming to me on my Facebook that I hadn't worked with. These people I worked with in my day job, like a decade ago saying, hey, I know what you do. A founder, like, I'm interested in your membership, one of your programs to help me start an ecom brand or something. And I'm like, okay, wow, why now? And they're like, well, now's the perfect time. There's nothing to do. Like, no better time. Like, people are bored, right? So people are bored. They're either trying to learn skill up or they're wanting to work out. Like. Like, you know, like, it was a perfect storm. So I went through, you know, not as deep journey as you did, but talk. Talk me through what happened next.
- [28:24]
C
So we, as I said, scaled up and I think planned for a growth year. And it was a slight dip. It wasn't even a crazy dip, but a slight dip. And we were not prepared for the business to normalize like that. Our everyone on our, you know, our inventory planner, we bought against the growth. So already, you know, we're over skis on inventory and then hired against the growth. So now we have this massive team that we need to fund. And it got. It got scary quite quickly, and we ended up having to do a couple rounds of layoffs. And after that, we went all the way down to three people on the team, myself and my husband included. So it went from 30 people, you know, operating this machine, down to three people. And that just meant we were literally back to doing everything. And it was a really dark time because, I mean, Max and I, we were. We were young leaders. Whenever we started, we didn't know what we were doing. We were doing the very best that we could, and there were just a lot. There was a huge learning curve. And going back to that really, you know, lean team having to do everything again, it just felt like such a fail. Like, it felt like, did we just fail? We just, like, ruined this business. Like, we are the only ones to blame. So it was a really dark, dark time. And this was in 2022. So this is about, you know, we're three years past it, but it was tough.
- [30:00]
B
Yeah. Wow. And so, so you said you did multiple rounds, so you probably started, I'd say, like mid-2021. That's when the market started to shift a little, and then the markets really kind of turned. I'd say early 2022 and then mid-2022. So. So you did. So did multiple rounds of layoffs happened over a year period? Like six months and six months. Is that what happens? Or revenue decline? What did it decline?
- [30:28]
C
Probably about a year. A year or less. Because I think came a point where we were like, we need to lay off everybody. And it was like, quite quick, quickly. So probably like, yeah, within a year time.
- [30:40]
B
Yep. Okay, so you did the first round, how many people? What was revenue? Then the second round, how many people? Oh, we know how many people. But the first round, how many people? And what was the revenue and what did it drop to?
- [30:53]
C
I think it went probably from. I don't have this exact, but probably 21 to 18 or something. Like it was a couple million short. But that's. That's the team cost. Right right there. You know, so it just became. And customer acquisition costs were going up. I mean, it was. It was really a dire situation for us. And so we probably did about, I would say, three rounds of layoffs, probably about six to eight people each time. And I think each round we thought, okay, let's. Let's keep the team intact and like, see if we can right size the ship. And it just was not working. So we completely scraped the business to the. Almost the beginning, and we rebuilt from there, and we came back so much stronger. Having done everything the wrong way to then learn the right way. It was like rebuilding a new business.
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B
And what was. What was like Mark saying at the time or Maria, like, that would have been scary and such a daunting thing to say, like, what happened there?
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C
I think they were. I think they were telling us to. Mark is. He has great advice, and he's always maybe like, conservative with the advice, like, he'll tell us not to take a huge retail PO or not to buy such inventory. He wants us thinking about the future and how this could impact us. And just because it sounds great to get a $1 million PO with a new retailer, it might not be the right call, because you need to make sure there's a market fit. So his advice at that time was probably, you're doing the right thing by cutting the team. And I think it helped that it wasn't just us. It was the entire landscape. You weren't. The headlines were everyone was laying off. And it was. So it became quite clear what we needed to. Because those are the. I mean, the cut we Cut meta completely as well. So we any. We just looked at our P and L and we looked at it, I mean, probably multiple times a week, every week, just looking for anything that we could scrape off. You know, why did we spend $500 there? What's this subscription like? We were looking at every single line item at that point, and the. The line items that were the most costly were the team and, you know, meta spend. So we cut meta spend and we had to cut the team because we had looked everywhere else for the savings, and it just wasn't there.
- [33:32]
B
Wow. What did you. What was your meta spend? What'd you cut it from to two down to like, you shut down to zero. What was it from?
- [33:38]
C
I mean, at that point, maybe a hundred thousand a month. It wasn't. It wasn't crazy. We had a. I think we saw it a. Okay, customer acquisition costs, but we. We needed every dollar that we made to be spent against our debt that we incurred. And so every dollar mattered. And so that meant cutting photo shoots, our ad spend, like, truly going back to the beginning.
- [34:07]
B
Wow, that must have been so tough.
- [34:10]
C
Like, I went through a little bit of a depression after that because we were just. It was bad. It just. You felt like you totally failed. You know, we were responsible for these people's lives, and we then had to fire them. It was. It was pretty bad. Yeah. Did not feel good.
- [34:30]
B
And so what did revenue drop to by that stage after you cut the spend? Everything. Because a lot of the time we all look at, you know, Evan, everyone has the headlines like, you know, this much in revenue, and then a lot of it can be bolstered just by spending money on ads, you know, all these different things. So what did it drop to that?
- [34:50]
C
Was that 17 or 18 figure, probably the next year? Was that 17 or 18 million? So, you know, you're going from 21 to 17 or 18. But that. That delta, that's. That's what hurt us.
- [35:05]
B
Yeah. Wow. And you'd think most people looking from the outside, 17, 18 million a year, you'd think, wow, okay, the business would be doing really well still. You know what I mean? Like, that's what people would think from the outside. Right.
- [35:17]
C
I think when you've already essentially spent the money on inventory. So it was. We had the inventory for the next year to be a 25, $30 million business, and instead we weren't doing that. So we had all of our cash tied up in inventory. So you literally just don't have money to run the business. And so we had an Inventory issue. And we had already spent on the team, so there was that as well. So, you know, we had that team for a year, year and a half or whatever the time was. And so you've already been spending that money. Essentially you've already spent the money. So now, now it's all catch up and trying to pay back the debt.
- [36:02]
B
Did you consider raising more money? Like was that on the table or the cards? Like that obviously was an option. But what made you just kind of go, you know what, we're gonna, we're gonna rebuild from scratch and learn from all these lessons. Like talk me through that because that obviously would have went through your mind. And a lot of founders do do that, right? During tough times.
- [36:24]
C
Yeah, we definitely did consider, we actually did try to raise money and it was the worst, again, the worst possible time to raise money. So we were a little late, later stage for people and we just weren't in that sweet spot at the time. And no one, when you raise against like a decline, the valuation that we were going to be given was horrible. You know, 1x revenue or something or 2x revenue. And it's just we, I don't even think we want. We just didn't. We tried to raise at a certain point and then we were just like, it's not the right time. Let's just like, let's bootstrap this thing again and rebuild. I think we both just felt like if we would have raised the valuation would have been horrible and we would have probably lost a ton of our equity and just wasn't the right, right call and wasn't the right time. Nobody was getting. If you were raising money, you were raising it on, you know, on pennies on the dollar. So it wasn't, wasn't an option.
- [37:30]
B
So you and Max obviously kind of went back to almost ground zero. What, what was the plan from there. But I can, yeah, obviously it has a great story. Tell, tell us what happened. Right.
- [37:43]
C
We, the plan was at. We were okay with things slipping through the cracks and the plan was back to the basics. Since all of a sudden you have three people doing the role of what was once a 30 person team. Like it's not physically possible. And so we did anything we could, but we said it's okay if things slip through the cracks. We kind of need to go back to the basics. We, you know, we couldn't buy a ton of inventory because again, our money was like tied up in existing SKUs. So we kind of just said we had these mantras and it was like Give ourselves grace. And we gave ourselves grace on everything. And we, we said, this is going to be like a slow rise again. We really actually did not know what would happen years later. There was no telling. But what we did know is we didn't want to go out of business. So we were just, you know, holding on and we still, it was also very confusing because the business was still loved and we really did have a good business. You mentioned it. The revenue was still there. Like people still loved the brand. We knew it's not like people stopped loving the brand. And that was the issue. The issue was like we had a down year and that that's what hurt us. So we just kept rebuilding and kept the excitement up. You know, consumers had no, no idea this was going on because we were still, you know, an exciting brand, launching new products and things like that. But behind the scenes we were kind of just playing catch up and really rebuilding. But when we rebuilt, we rebuilt with such an eye on profitability from day one. And that is part of like, of who we are today. And I think it, it really allowed us to build a strong business rebuild, you know, so, yeah, and look, you.
- [39:36]
B
Guys have grown pretty fast since, right? Like it's, it's not like you haven't slowed down. Obviously you had a bit of a speed hump and you would say a bit of a detour, but you guys are, you know, a nine figure a year brand now. And you've got over 20 products across your portfolio under the brand. You've got 20 more in the next 18 months. You're also writing a book as well. Like you got a lot of good stuff going on. So there. So are you grateful now that this happened?
- [40:14]
C
I am very grateful. I tell myself that every day. I mean, it was hard and it was a struggle, but now I'm like, I get to enjoy a little more. And I'm grateful it happened because I think it really just taught us, I mean, to keep an eye on every dollar always and never like, you know, lose sight of a certain category of the business, even if you have, you know, ahead of in a certain area of the business, like keep your eye on the ball. And so while I'm able to not fully be in the weeds, I just like keep my eye on every channel of the business and make sure I understand what's going on so that we never kind of make the mistakes that we already made.
- [41:02]
B
Yeah. Thank you for sharing. And you guys have had a lot of copycats with your products as well. Tell me how you've worked through that because that's something that a lot of people care like a lot of people, I think early stage founders, I don't know personally, I don't know why, but it's a big thing around protecting your idea, worrying about being copied. Maybe it's because of the Facebook movie. I forget what it's called with what happened with Mark Zuckerberg, I'm not, I'm not sure.
- [41:31]
C
But social network.
- [41:32]
B
Yes, social network. But from one thing I do find is like a lot of people are really big on protecting their id, not letting anyone know, worrying other people are going to copy it before they've launched.
- [41:45]
C
Totally. And I think I hear that too. And I feel like you still have to put it out there, but you also do have to protect it. For us, it's tough because we have. If you look on Amazon, you'll see so many counterfeits. And these are, these are products that like, like Max drew out himself. And so it's really, really frustrating to see. Like in other countries there's like replicas of the Bala brand, but they call it, you know, something else. And so it's really, it's really disheartening to see that, but I think it's part of it. And you just have to remember to innovate. We always say just continue to innovate and continue to win on brand and that's the way that you'll win because unfortunately it's part of it. I know you had the same issue with Healthish and it's so disheartening, but I think if you put your energy into getting all worked up about it, it just, it takes away from the energy you could be spending on innovating or building your community. And so that's where we try to put all of our energy. And so I think I don't even try to look, look at the counterfeits unless we're going to actually sue them, because we can. But we don't want to be wrapped up in lawsuits all day either. So that's my, my ethos around it is just, you know, don't look and keep innovating and building community. But I will say that if you can, it's important to protect your IP because we got, we have patents on most of our products and while we don't want to be tied up in lawsuits all the time, it is helpful because if we want to sue somebody for straight up copying us, we can. So I think if you can get a patent, you definitely should, and you should definitely copy Trademark things. So, you know, basic IP is necessary.
- [43:42]
B
Yeah, I agree. That was a mistake I made with Healthish. I had a bit of an ego, and I was at a few. Through a phase where, like, I felt like everything I touched turned to gold. And it was like a little side business and, you know, just like, was like, oh, who cares? Like, my friend said, yeah, it'll be copied everywhere. I said, I don't care. I don't care. I'm really focused on founder, this kind of stuff.
- [44:04]
C
And let them.
- [44:05]
B
Yeah, they did, and it was silly. I should. I should have at least got a trademark the design. I couldn't trademark the concept, but I should have trademarked the design. Um, but there's also a period where you can, like, it has to be out in the marketplace before you can trademark the design. So I'm always like, a lot of people that we work with and help start brands or grow brands, we always say, like, look, this is not legal advice, but from our experience, validate your product first, get a little bit of traction, no matter how small. Then you spend all this money on the legal side to protect it. Right. But you. You really don't know until you launch. Right?
- [44:47]
C
Yeah. I mean, and truly, I think that's. That's legit. But there is that time period. So you want to make sure that you at least, like, apply for the patent first. But I know if you have, you know, $5,000, you don't want to spend it all on a patent. But if you think it's going to be good, you should. Your product, though, I feel like even if you would have patented the design, you don't want to spend that much money just tied up in lawsuits anyway. And it's so easy to recreate that. So it's just this catch 22, and you gotta, like, you know, find the right balance, I think.
- [45:21]
B
Yeah, 100%. So, like with Healthish, we did not popular. We. We did not come up with the idea to have time markers on water bottles to remind you when to drink. They were already there. All we did was popularize the concept, make the design really cool. And now there's so many copycats. Now there's all these different variations. We just popularized the concept. But, yeah, I agree with you. Right. You're 100% right. We probably couldn't. I don't even think we could have patented the concept. We just popularized it. But we could have trademarked the design. But at the same time, there's so many copycats. Like, so, yeah, you get caught up there's nothing you can do. Like. Well, there is things you can do, but sometimes when you're in other jurisdictions and all these different things. I've got friends that, like, for the most part, yeah, they, they tell me the same thing. Right. It's, it's, it's, it's. It's difficult to chase. I'm sure you guys have had to protect, though, and you have to protect. Right. That's really important. I've had to protect the founder branch before where there's people that have done silly things. Right. So I think it's just part of business, but it's a, a level of, I guess, maturity as your brand grows and you have to protect it. So I want to talk about, I guess, co founding with Max. Then I want to talk about your book as well and what compelled you to write it. So co founding a company with your significant other does add a unique dynamic. I co founded a company, the company that I had to exit with my significant other. We're not together anymore, and that was a big strain on our relationship.
- [47:06]
C
Oh.
- [47:08]
B
So that's, that's an interesting dynamic that I'd like to just touch on for people.
- [47:14]
C
I think that's interesting that you aren't together. I could see that because it's. It's tough. Like, you know, all I mentioned that Max and I got married, and then I think about one month later, Balla launched on Shopify. So, like, Balla has been a part of our relationship, our whole relationship, and it's kind of all we know. We only know to work together. Like, it would be weird to not for me to not work with him. It's like, what are you doing all day? You know, I want to know. But I will say it's. It's tough. And we had periods, especially when we talk about the layoffs, like, where we were, you know, disagreeing with each other a lot. And that became really hostile and a tough work environment. But we realized that the best way to combat that is to stay in our own swim lanes. So the way that works best for us is like, we're almost never in the same meeting. He runs with his area of the business, I run with my area of the business. We feel we can do twice as much work that way. And we, like, he owns product or legal, and I own operations and marketing and so on. And we pretty much divvy up the business, special projects, whatever it is, one of us is spearheading it. And then we just run, run, run with that. And we have a third person who is our CBO Chief Brand Officer. And I think in that I don't know if you agree with, there's like a theory of the power of three that I was just talking to another founder about. And there's something interesting about having three people at the helm and splitting it up between three people, because you really can punch above your weight. So we found that that really works and evens us out too, because there's certain things that Max and Brooke can work on, or I, you know, Max and I don't have to work with everything together at all times. And I think that's. That's helpful.
- [49:14]
B
Yeah, look, that makes sense. Um, I definitely can see the power of three. And also there's a reason, like, why Combinator. These guys are super smart. They. That's why they recommend that you need three co founders.
- [49:28]
C
Oh, really? I've never heard that. I need to look into that.
- [49:31]
B
All right, so let's talk about brand collabs. Right? You've. You've collaborated with Spanx, Summer Fridays, Emilio Pucci, Brandy. But let's talk about Spanx. Like, how did that come about? Why did you do that?
- [49:46]
C
Yeah, I mean, we. We love our brand collaborations at Balla. I think it's become like a core part of our business at this point. It's a way to keep the customer really engaged, get them excited, and ex get something that's unexpected and for fitness. Fitness can really play well with a lot of categories, which I don't think we realized when we launch the brand. But now it's great because you can work with, like, you know, from skin care to a yoga brand to really, any brand needs a wellness fitness component. So it's allowed our partnership lens to be quite wide. So Spanx was our most recent one that was really exciting. And it came about. I don't remember how we were connected. It always comes about in a unique way. It feels like were meant to collaborate with the person that we are aligned with because they have each come to us in such a unique way, almost like a sign. But Spanx, we were connected. And I think they had a really cool active line that they were launching. And we decided to collaborate and do custom colors, custom products, and it was really exciting, amazing launch events, and, you know, every touch point was. Was great. So that was our recent launch, but we have a lot more fun stuff coming up. This is our Spanx bangle, but we did a lot of other products too.
- [51:14]
B
And for you, you're working on a lot now, or you always have been. It's pretty impressive. Even, even the growth right when to. To rebuild from where you were to now like you five times revenue, top line obviously maintained like really had a strong focus on profit as well within the space of three, four years. It's pretty impressive. So you work on a book. Tell me about what compelled you to write a book.
- [51:38]
C
So I have been working on the brand for eight years Bala and as you know we've gone through this crazy roller coaster ride and it feels like my whole goal the last two years was to get it set up where it, you know, is a well oiled machine. And obviously it's not there yet but I become obsessed with the idea of like, you know, me kind of moving out of the day to day and all by while setting up amazing systems where it like, you know, it can't run itself. But you know what I mean, trying to like get it there as much as we can, creating systems that we're not revisiting. And that kind of left room for the second part of what I believe my career will be, which will be like mentoring other brand founders. And I think it's a natural evolution. You know, you've done it, you built the brand, now it's time to coach. It's kind of like when you're, if you're an athlete, when you can no longer do that, you move on to coaching. And I feel like there's that natural inclination and I'm always getting hit up to mentor people or to just ask questions and I don't have the bandwidth for that. So I was like, I want to start putting content out there that helps other people. And I think the first pass at that was a book because I said let's make the ball a playbook. Like I want to tell people in a physical, you know, I can, I want to talk hear about your magazine too, but in a physical, tangible thing that they can take away. I wanted people to have the ball of playbook. And it's not just like a ball of story. It's basically like here's the mistakes we made, here's what we did right. And I'm trying to save you from doing that as well. And so I think it's, you know, it's the playbook, it's the toolkit for other founders to take.
- [53:32]
B
Yeah, it's really cool. Look, I've been able to give back along the journey which has been awesome because the education, coaching is a big part of our business because a lot of people come to us. At first it was like, how do we Interview successful founders, tell their stories, build this media arm of the business. But then over time, people like, oh, how do we learn further? And built this amazing platform with Founder plus and of our coaching programs and all sorts of things. But it is really rewarding to be able to help founders grow faster and be able to help them avoid the pitfalls and the things that you have faced. And, and it's, it's, it's so incredible when you share something or you share an experience and people go out and they implement or they take note and they, you know, take on your lesson and your experiences and then they get wins. Like it's such an amazing feeling. Like that's where the real gold is to be able to truly impact somebody and, and change their life significantly. I have so many stories of people that have come through our programs or our education that have really changed their trajectory for their family and their life and their business and their customers through some of the work that we've done. And I think that's something that is part of the hero's journey, right? You, you know, you have this grand, like that's how all Disney movies are made, right through this following the, you know, Joseph Campbell story, right? Like the hero's journey, like call to arms, you know, you call to action. Like, you know, you, you've got this crazy dream and vision. You build something and then, you know, you have some success or whatnot. And then you go through these really tough times, right? It is part of. And then you want to give back and you want to share your story and give back and help others. And I think that's part of the entrepreneurial journey of giving back. So that's really cool that you're doing that. And we are at time. We've been speaking for quite some time. It doesn't feel like an hour. But it has been so awesome to connect with you, Natalie. And thank you so much for being so like thank you so much for being so open and honest and vulnerable and just real about what it takes to build a super successful business. And congratulations on all your success.
- [55:57]
C
Thank you. You too. I'm excited. I want to dive into Yalls platform. Is it mostly for early stage? I mean I know all about it on Instagram and stuff but like the coaching is it all early stage look?
- [56:07]
B
Mainly early stage focused, but we are starting to build more for post launch and growth and scale. So because we've got some really incredible founders that are going to help us really help people with all sorts of things like Facebook ads, like aggressive scaling and growth and Black Friday campaigns. Like, we're doing some really cool stuff in that space, so mainly early stage, but we're starting to pivot more into really helping founders grow ecom brands as well. Like, there's some cool stuff we're cooking up.
- [56:43]
C
Yeah, I feel like late stage would be cool too. There's probably some space for that. That's awesome.
- [56:49]
B
Yeah, 100%. So. Well, look, we'll wrap there. Thank you so much for your time. It was great to connect. And if you ever find yourself in Melbourne, I'd love to connect further. And when I'm next in la, I'd love to connect further too.
- [57:02]
C
I'd love that.
- [57:03]
A
Hey guys, if you love this episode, you've got to check out my interview with Davey Fogarty on how he finds trends in under capitalized markets and turns them into multi million dollar businesses.
- [57:14]
C
I'm generally looking for trends globally. We find trends that haven't been kind of capitalized in certain markets or in certain marketing channels.
- [57:23]
B
Yes.
- [57:24]
C
And then we also obviously add our flair to it. You need to differentiate your product.