005: Sold for $10m less than 3 years after starting with $1k, their online tea business grew 700% each year thanks to getting into influencer marketing late 2013 before it was big (Tim Polmear)Jan 26, 2020
In mid-2013, using $1,000 start-up capital, Tim and his wife Bec founded Flat Tummy Tea (FTT). The online-only business sells a tea which helps 18 – 35 year old women reduce bloating. After Bec tried some competing products at the time, none worked and were more aimed at helping weight-loss – not digestion and bloating.
This cast has many great lessons on why marketing, according to the late Peter Drucker, is one of only two things that create value in a business (the other is innovation). Upon launching FTT they repositioned, or created a sub-cateory of tea, to one for digestion and bloating. Tim also speaks a lot about discovering influencer marketing in late 2013 and double-downing on it, years before it became one of the key online marketing methods. Working with influencers like all the Kardashians, this marketing decision added millions to their exit price.
This cast covers:
- sold in 2016, for $10m to a Canadian company, 2.5 – 3 years after starting;
- 700% annual sales growth;
- Australia was the launch market, USA is now the majority of sales;
- very big profit margins and great cash flows;
- started with $1k, no bank finance or other investors just the husband-and-wife founders;
- launched within three months of idea, which came from Bec experiencing the problem they ended up solving for hundreds of thousands of customers;
- main stress was flat-lining growth over some months;
- biggest stress was selling the business, but not much he would do differently;
- advice on doing a big exit, make sure all parties are winning;
- worked hard on getting the right team and in the right seats, and the right culture;
- going against his gut, didn’t spread themselves on too many marketing methods – focused hard on influencers marketing;
- 1.7m Instagram followers now;
- mindset shift was to be less conservative, more aggressive;
- habit he recommends building is to work ON the business, not IN it ;
- focus on what’s working and not, and what customers want;
- invested heavily in mentors and networking;
- professional development invests an hour a day on podcasts in idle / dead time;
- hardest thing in business is the management of people – the bigger the business gets and faster growth, the more important management and culture is;
- he would tell himself on day one to know your ‘Why’, your vision and the number you are happy to exit with.
Music from https://filmmusic.io “Cold Funk” by Kevin MacLeod (https://incompetech.com). License: CC BY (http://creativecommons.org/licenses/by/4.0/)