← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
663: (Solo) More SKUs, More Problems — The Case for Going Deeper, Not Wider
00:13:23
When I started getting serious about e-commerce, I genuinely believed the more products you had, the more successful you'd be. More SKUs meant scaling. I was completely wrong.
Loading summary
Transcript1 lines
- [00:02]
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 one. $1 they spend, which is an insanely good return on investment. 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. Hey founder fam. Nathan here. Welcome back to another founder to Founder solo episodes. These are short, bite sized episodes where I share everything that I'm learning building founder for the past 13 years. So today I want to start with a confession. When I started to get serious about e commerce, I had this belief that the more products you had, the more successful you would be. And I thought that having a big product catalog meant having a big business. More customers have the opportunity to choose more things. And I thought having lots of SKUs was a sign we were scaling. I was completely wrong. And luckily I'd learned this lesson from interviewing a lot of other founders before I launched my own D2C brand and I built a seven figure brand from scratch and then I sold it. And that whole time we were essentially a one product company. So that brand was a company called Healthish and the product was a time marked water bottle with one simple feature. I want to tell you a story today and I want it to connect to one of the most insane brand growth stories I've seen in the past year or so. Because both these stories point to the same truth. You don't need a huge product range to build a massive business. You need one small solid hero product and offer done exceptionally well. So this episode is for every founder who is thinking about launching a second product line before the first one is fully optimized. It's for the founder who is adding skews because they're scared of being too one dimensional. It's for the founder who's over complicating their business when the real answer is to go deeper, not wider. Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder podcast with Nathan Chan. So I launched Healthish a few years ago now and it was off the back of our start and scale program which in the early days we created it with Greta and that's now host on the Founder plus platform. And we had many different ideas. And one thing that I noticed was this trend with drink bottles. I thought it was crazy how much people would spend on a drink bottle. And then I found this interesting statistic that millions of people are actually chronically dehydrated. And we found a product that was really clever to solve this problem where there were time markers on the bottle. And so I had a friend at the time who was the head of design at 99designs and I got him to come up with like a really cool design on, on the bot, like on this kind of shell of a bottle that we white labeled from a manufacturer that we found through Alibaba. And anyways, it worked. We started doing micro influencers product for post all my Instagram strategies, like the stuff that I know and it just, it blew up. And one of the worst things that we did was launch a glass version of the product. It didn't do well. Our original plastic bottle did really, really well. And here's the part that gets me. We were not only a water bottle brand, like not even close. There were hundreds of competitors. Hydro Flask Swell. All these established brands, bigger budgets, more resources. But we had something that they didn't have and that was a really strong solution to problem. And so the time markings weren't just a design feature. They were a behavior change tool. And that was the power of a hero product. It made people want to share and come back and buy more. And it wasn't just a product. It was a solution so clear and so specific that almost marketed itself. And this is where most founders go wrong. They launch their business, they launch their brand. And this is the key part. You need to launch a brand, you need to create a brand. You don't want to just launch a product, but your first product. You launch it, you get some early traction, revenue starts coming in and then the anxiety kicks in. What if this product runs out of steam? What if a competitor copies me? I need to diversify. I need more products. I can make more money. Then launch a second product, then a third, then a whole category. And it's kind of like, Right, more skews, more problems. And you're not really good at one thing. You're mediocre at five things. And here's the thing, you gotta launch more products. Don't get me wrong, but There's a time and a place and you can build a multi million, a million dollar brand, multimillion dollar brand with just one hero product. And I see this in the founder, operators, community. Founder comes in doing solid numbers with their hero product and it is crazy, right? Like, like they're doing really well and we help them with ads, we help them with creative, we help them with their offer, we help them scale. Just doing more of what's already working. And I always ask the same question. They want to launch another product and I say why? And the answer is almost always some version of fear. Fear that the hero product will not be enough. Fear that they are dependent on one thing. Fear that a competitor is going to come in and copy them. Fear that they're not going to be the first to get into that retail ch chain with epic distribution nationwide. But here's the truth. A competitor copying your product is not a reason to launch five new products. It's a reason to get so far ahead on your hero product that copying you becomes pointless. Go deeper on customer experience. Build a community. Get so many reviews and so much social proof that you own the category in the customer's mind. And that is how you defend a hero product, not by diluting your focus. So think about it from a customer's perspective. When you think of AG1, what do you think of one green powder? When you think of Liquid IV, what do you think of one hydration packet? When you think of Spanx, what do you think of one shapewear product? So these are brands that built empires off the back of one hero product. The product line expanded later but the foundation was always the one thing. Now I just recently interviewed Danny Young and his brand and the growth is absurd and they've taken this concept to an extreme and the numbers are genuinely hard to believe. So Ima, you've probably seen it. It's a supplement brand co founded by David Beckham. If you haven't listened to this interview, you have to. Guys, it is insane. It's episode 652 and this brand is doing $10 million a month. It is crazy. $10 million a month in their first 12 months. And Danny has built and sold multiple companies. He knows what he's doing. He co founded with David Beckham. They met through a mutual friend. They launched in late 2024. Within five months they'd shipped over 3 million servings to customers in 31 countries. In their first full quarter of sales they generated 5.7 million in revenue. And by month 11 they'd hit 1 million in annualized recurring revenue, $120 million in under a year on essentially one product that makes IMA the fastest growing supplement brand in history. And here's what Danny said about his product strategy. And this is a quote from this episode. He said, we are not a company that wants to launch 50 different products. We want to focus on doing a few things very well. And if we do not think something is best in class, we will not do it. One product, best in class. This is the whole strategy. Now, I know what some of you might, might be thinking. You're gonna go, oh, well, Nathan, they had David Beckham. Of course it grew fast. And yes, the Beckham partnership helped and I'm not going to pretend that it didn't. But here's the thing, right guys, they have been. There have been plenty of celebrity supplement brands that have flopped. The reason IMA worked was they had a unique mechanism which I talked about on another solo episode. They also just focused on one Hero product. They did so many things well, but this core part of their strategy is so important and Danny himself said it best. If this product did not work, David would not use it and neither would I. We built it for ourselves. Everything else came after. That's the Hero product mindset. Build something that genuinely solves a real problem, build it better than anyone else on the market, and then let the product do the talking. So how do you apply this to your own brand? Let me give you a simple framework. And how do you know whether you should expand or not? The first question to ask yourself is, what is the one problem my Hero product solves better than anything else on the market? Not two problems, not five. One. For Healthish, it was, I forgot to drink water throughout the day. The time markings solve that one feature. One problem. For ima, it was, I have to take too many supplements every day. One scoop solved that one product. One problem. If you cannot answer that question clearly and simply, you do not have a Hero product yet you have a product and that is a big difference. Second question. Have you gone as deep as you possibly can on this product before adding more? What I mean by that? Have you maxed out your email marketing? Have you built a strong retention and repeat purchase strategy? Have you tested every major ad creative angle? Have you optimized your packaging and unboxing experience? Have you built a community around the product? Have you gotten customer reviews and testimonials to really understand what people love about it? Most founders I talk to haven't done all these things. They're at maybe 40 to 50% of the potential for their Hero product and they're already thinking about launching something new. Don't do that. Go to 90% first. The third question is, does your marketing message lead with one thing? And this is where a lot of brands lose the plot. They try to communicate too many benefits at once. Our product is great for energy, gut, health and immunity and focus and sleep and recovery. And the customer hears nothing because there's too much noise. The best DTC brands I have seen have one clear, specific benefit. And they hammer that message relentlessly until it sticks. And once the customer is in the ecosystem, you can introduce them to the full range of benefits. But the hook is always the one thing. Now, I'm not saying you should never launch a second product. Obviously at some point expanding your product line makes sense. And Im8 have done that. Now, they've recently launched their second product. Right? But here is my rule of thumb. You are ready to expand when your Hero product has strong, consistent repeat purchase rates. And when your customer acquisition cost is predictable and profitable. When you have a real audience who trusts your brand, not just your product. And when you have operational capacity to launch something new without taking attention away from the thing that is already working. Eventually Healthish added glass bottle versions. And it was a mistake. We shouldn't have done it, to be honest. Very, very bad mistake. Right? So Ima, they launched a second product, a longevity focused supplement. But they waited until the Daily Ultimate Essentials was fully established and the brand had real credibility. And now Daily Essentials is still the hero. The second product is an upsell. It allows them to increase their AOV and ltv. It's not a pivot. So the right sequence is Hero product. First, prove the concept, build the audience, and then expand from a position of strength. All right, so guys, I want to zoom out for a second and talk about why simplicity actually is a competitive advantage in the DTC space right now. Because I think this is something that gets underestimated. We live in a world where attention is our scarcest resource. When you have one hero product, your operations are simpler. You're not managing five different supply chains, five different sets of packaging, five different inventory forecasts, five different SKUs. All this kind of stuff. Your business becomes so much more simpler. You have mental bandwidth to focus on what actually moves the needle. Customer experience, marketing community, the stuff that builds a brand that lasts. And I see founders in our community who are doing millions of dollars every single year in revenue with a core team of a few people. They have their fixed costs. They have a tight roster of freelancer creatives. Their margins are beautiful because they stayed focused. I can't stress this enough so let me bring this home guys. We sold tens and tens and tens of thousands of units from a simple idea because we stayed focused with healthish lesson from ima is this. One scoop per day can become 120 million dollar in annualized revenue in under a year. The product was not complicated. The strategy was not complicated. One problem, one solution executed at the highest level possible. So the lesson for you is this. Before you launch your next product, ask yourself whether you've truly maxed out the potential of the one you already have. All right guys, if you enjoyed this episode. If you are looking for a community to join of D2C founders that are all scaling up, you want help with Facebook ads and scaling your brand, make sure you go to founder.com forward/operators and apply. This community is crazy. It is so special what we're building, right? That's it from me. I'll see you in another episode.