We're kickstarting our D2C Multiverse series with Ronak Shah—Co-founder and CEO of Obvi.
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Obvi's Journey: How It All Began
Thank you so much for joining us, Ronak. I'm just gonna give a little brief introduction about you and then we'll jump right into the questions.
So, Ronak Shah is the CEO and co-founder of Obvi, an eight-figure collagen-focused supplement brand. Obvi was founded with one objective in mind: To present transparent products that deliver real results without sacrificing taste.
In addition to running Obvi, Ronak is also the co-founder of Ghost Three Media, a successful digital marketing agency for fitness and health brands.
So let's get started. Tell us a little bit about yourself and when was the aha moment for Obvi?
Absolutely. Well, first of all, Sara, thank you for having me and the whole mason team for having me and creating a platform for founders like us to share our stories.
So excited to jump in. Yeah, a little bit about me. I was an accounting major that turned into a founder of a women's collagen brand. Kind of an intricate journey of what I got to experience. I started off working for a D2C brand back in 2012 as a controller in the finance team.
It just piqued my interest of how people build startups and brands. And I always wanted to ask questions about finance and marketing. So, it turned into me asking questions, which then made me learn marketing and how to build a brand.
The first brand I worked at was a company called skinny.com.
It was a weight-loss tea company, and from there I learned so much we scaled it to nine figures. I left after 3.5 years after I ran both marketing and finance together. So it was a pretty interesting role. From there, I started my own marketing agency because I wanted to keep learning but work with other brands.
I worked with brands like Venus, Sparta Nutrition, Aloha—a few different health and wellness companies. And then finally, in 2019, I said:
"You know what? I'm done kind of building brands for others. I've gotten enough experience. Let me see if I can at least take a shot at it myself."
So myself and my two other partners started Obvi in June of 2019, and our aha moment was more: We believe that health and wellness doesn't need to be boring. We all find it boring and a pain to take because it's not fun or exciting to take. There's no fun flavors.
It's often stuff you have to just swallow and move on, or mix into a shake that you don't like to drink. And we said, well, what if we can spin it and say, “we create flavors that actually taste good, that you want to take and it's healthy for you.”
And that was our moment. If we can nail that, people will wake up taking Obvi and be excited.
Facebook Ads: Supercharging Early Brand Growth
I remember the first time I saw an Obvi ad on Instagram and I just love the colors and the brightness and how much fun it is. So that definitely comes through in everything that you're doing.
I appreciate that.
So, tell us about the early days of Obvi. Things like what type of growth channels you used, how have you grown since then?
Yeah. You know when we started Obvi, our biggest lever was Facebook. When we look at the different channels right now, unless you know organic marketing really well and can do that really well, I still believe Facebook is the leader in advertising.
Facebook, Instagram, right?
And that's where we started. We started spending a hundred dollars a day and we said, “until we make $300, we're not going to raise our budget.” And then we finally hit $300 after running some different tests and different ads on our first views. And our basic rule was, “until we get three X ROAS, we do not scale.”
So once we got to 300, we said, "all right, cool." Now we can spend $200 and $300. And so we kept scaling up. Today, we spend about $25,000 to $30,000 a day. It's been an interesting journey to see it unfold. It's a very structured way of growing.
But our early days were starting with very limited SKUs, only two SKUs, and running Facebook ads from day one.
Perfect. And how many SKUs are you at now?
Yeah, we're at like 30, 34 SKUs now.
Marketplaces vs D2C - Is There a “Right” Choice?
Wow, that's amazing. And you have your own online store and you also sell through marketplaces like Amazon, which do you think has the most value for your brand?
Yeah. I think value is kind of a tough question because they’re different.
There's value to both. Right?
So, Amazon is very valuable to us because there are people who will only shop on Amazon. I myself am one of those people. I have brands of my friends who I know I could support better on their website because they'll make more money.
But, I'll go buy it on Amazon. Because I want the convenience, it's easier, etc.
I believe Amazon and marketplaces serve to the customers who are predicated to buying there. So, it's very valuable to give them an option on the website end. I think it's super valuable to own your own data because you're able to own emails, phone numbers, third-party cookies. To basically say, I can go and do a lot more with these customers.
But the problem is with the website, you often have a lot of distractions, a lot of searching and browsing and this and that, whereas marketplaces, people only enter a marketplace with the intention to buy.
For sure. So, would you recommend marketplaces for early D2C companies?
I absolutely would.
My biggest point on that—I know there's different schools of thoughts here—is when you're early on in your brand, you need to have as much unpaid media as possible. And what a marketplace really is, is another place that can become a billboard for you. Right?
Let's say you're in a category that maybe has 30 or 40 or 50 other SKUs.
Now, if you are on page two of something in a marketplace and somebody stumbled upon your product for free, why wouldn't you want that visibility? You know? And so for us, we've been on marketplaces from day one because it just allows you to be in multiple places.
Don't worry so much about margin and losing money and this and that. I believe it's a place that gives you free media.
That's amazing. And in terms of that, marketplaces again are a great place to get that free visibility. People are coming with that intent to search. Do you recommend that D2C brands in early stages approach marketplaces first or start getting zero-party data on their e-commerce site?
Or is it a marriage of both?
Yeah, I think it's a marriage of both.
I think the media that you're gonna run is going to have a leakage into marketplaces.
So again, the reason why I like to be on both is:
Let's say you're running $500 worth of ads on Facebook. And let's just say that drives 500 visitors.
Now outta those 500 visitors, let's say you're gonna get 50 orders. Now, 50 orders is great, but what if I told you 10 of those orders would've never happened If you didn't have it on Amazon. Because 10 of those people found you on Facebook, went to your website, but then looked for it on Amazon because they wanted to read reviews.
What you're creating with marketplaces is a place where people can look and search for you and they're gonna do that anyway. It's the first thing we all do—read reviews and then we decide where we wanna buy.
So, I think being on there from day one is a super helpful to both platforms.
For sure. And then further to that, Amazon announced in January that they're opening up their click-to-buy button to integrate Prime shipping and everything into eCommerce stores. Do you have any opinions on that? Will you be integrating that into Obvi?
Yeah, so I think now you have to be careful, right?
When you start taking away from eCommerce, that's where I draw the line. I will not be integrating that mainly because I'm spending money to drive traffic to my website so I can get my higher margin.
If I drive that to Amazon now, that cost is going to probably be double. The cost to acquire that customer, plus I'm gonna lose margin. So I think, again, if people find their way to Amazon, I want to be there. But I don't need to push people to Amazon.
I think that defeats the purpose.
I really like that answer.
And I think that makes total sense, owning your audience with your website—that zero-party data is very important. It helps you optimize everything else that you're doing. So I really appreciate that answer. So, while we're talking about marketplaces and online stores, even in the vitamin and supplement world, there is so much choice.
When More Isn't Always Better: The Paradox of Choice
On your LinkedIn you talk about the paradox of choice, how when there are more choices introduced to customers, customers are less satisfied with products. Can you talk a little bit about that and how you've encountered that (or countered it) at Obvi?
Yeah, I think one thing that people are often looking for answers. If you're in the market for something that is going to help you have less acidity, you don't want 20 different options to choose from.
They can be the same product with 20 different flavors, for example. Because what will happen is now is, people are gonna say, “which flavor do I choose?” And if they choose the flavor, they're gonna say, “what if I don't like this flavor? Should I try a more simple flavor?”
The more questions you create on the journey to purchase, the more likely you are to have a drop off.
So, the paradoxic choices is this: We think giving more choices will create more optionality for people to buy from, right? I don't wanna miss out on anyone who wants cookies and cream, so I have to have a cookies and cream flavor.
I don't want anyone to miss out. What if they came searching for a mint chocolate chip? Well, I have to have that too now.
The problem is, for the few people that would want more, you're going to lose out on more people that will walk away because there are too many choices.
So, that's what the paradox of choice is. It's like you don't know if that's actually helping you by giving more or if it’s hurting you.
At one point, we had 25 flavors. We thought: Wow, this is great. This is great.
And when we read the data, we saw a higher drop off on conversion when the offering was 25 versus 10 or 15. And now even on our landing page, we've gone down to five and our conversion rates gone up almost 70 or 80% since we've done that.
It's really interesting.
So, do you still offer the 25 different flavors just packaged differently or have you scaled down to five?
So, what we've done is in our landing page we've offered just five. If you come to our website, which is more of an exploration, we offer everything.
How can brands stand out in the marketplace with this paradox of choice?
Yeah, I think the biggest thing in terms of standing out is: If you break down the reasons why someone buys, typically people look at price.
So being competitive in price is extremely important in today's economy. We're in a very tough economy. Inflation, post recession, whatever you want to call it. We have a ton of things going on, so you need to be price sensitive.
That's number one. Or at least competitive. Number two is another reason that people buy is the actual product formulation or creation. What stands out? What stands out in your product? For us, we're the only collagen that has vitamin C, vitamin E, calcium, iron, magnesium, and biotin.
So now we can tell people: Hey, check out our formula.
Typically people want to see that they're getting something that's a little bit better than the rest, So they want the best price, they want the best product.
Now the third reason that many people buy is they want to see results of others. Showcasing real, really good results, and showcasing really good testimony.
We have a community of 65,000 people that talk all day, every day. We literally tell people: Hey, if you're even thinking about buying Obvi, don't go to the website first. Go to the community and just talk to people. Or go to Trustpilot and read over 9,000 reviews.
Our whole goal is to showcase to people that don't take our word for it. We're the founders, we're obviously gonna tell you to buy. Don't listen to us. Listen to everyone else.
So that's been very, very helpful.
And in terms of kind of just thinking through, if you're a brand, think about price competitiveness. Think about why your product's better than the product next to it. And then think about how you’re showcasing testimony. It shouldn't just be on the bottom of your website with just customer reviews. You can't just rely on that.
Definitely! Obvi does a really great job of using user-generated content to promote the product.
Do you wanna talk more about the affiliate program and how that came to be?
So, the affiliate program's really cool. What we do is automatically sign-up anyone who buys. We also load up a $10 gift certificate for them.
What this does is it creates a little bit of a journey for them where they're like:
Okay, I just bought this product. I'm probably excited about it. I'm really looking forward to what's going to come out of this. And so, while they're waiting for the product, they're now being invited to join this affiliate program where we're saying, "Hey, if you're excited about this, tell your friends. By the way, we'll pay you if you tell your friends. And even before we'll pay you, here's $10 to go and enjoy on us."
Now you've been kind of married and brought into this program where we have 80,000 or 90,000 active affiliates. That is just people who are gonna sell for you and tell their friends about their experience.
Affiliate Programs - Yay or Nay?
And would you recommend affiliate programs to early stage D2C? When would you consider introducing an affiliate program to your business?
That's a very good question.
I don't think you do it early stage because it's something that feeds off of volume.
We have like a leaderboard. We have a place where people talk to each other in there. You want competition and when you're early stage, if you only have 50 people or a hundred people in there, it won't work as well.
I think it's a great place when you're mid stage about to approach seven figures or just getting into seven figures in revenue with that type of customer base.
For sure. So more kind of mid-market once you've established your business, once you have a bunch of customers that you can actually create community with. Because community is the ultimate goal.
And what other community-based initiatives does Obvi use to promote the brand?
I think the biggest piece we have is Facebook.
And in that Facebook group, we've funnelled every customer, any potential customer, our employees, our affiliates, everyone into this community.
That’s what we call our home base, which is, I think for us, probably our most powerful initiative.
So I'm gonna shift focus a little bit here and focus more on Obvi as a brand and building up Obvi.
Your mission to become the obvious choice in every household is amazing. However, there should be some roadblocks that every D2C brand faces. What are some challenges you've faced in scaling up the business?
We've had a tough time understanding how to diversify our revenue.
You know, we've done a good job scaling D2C. But with D2C revenue and scaling, you constantly have to spend and acquire to grow the funnel. Whereas if you look at retail or online marketplaces, there's a lot of organic foot traffic and organic growth that comes with it.
So, I'd say like our biggest challenge has been: If we ever want to look at how to get past a $50 million mark or $40 million mark, we know retail has to be the answer. We just don't know how to approach it because there's so many ways to fail in retail and we have a high fear of failure.
I feel like our challenge is, is we kind of feel a little stuck sometimes in just running a D2C brand. I dunno if that makes sense.
No, that does make sense. And eventually everyone wonders if they should expand into retail or not. Right? You grow big enough. It's another distribution channel. People get to go in, see the packaging, actually maybe even sample it in person. There are some benefits to retail that you don't necessarily get in eCommerce.
But then again, eCommerce has the data to support why it's such a great choice.
Merchandising: The Big Game Changer for D2C
Kind of touching on merchandising, since we're talking about potentially entering retail, but bringing it back to eCommerce in terms of visual merchandising, do you do anything on your website that you could potentially share with folks—product banners, badges, call out boxes, any of those types of tactics?
Yeah, we do a lot. I'll go through a few of them.
For us, one of the things that I think is very helpful, is when you come to any of our product pages we have a little video that pops up on the bottom right that is basically a lady talking about her of the experience.
Just a customer.
Her name's Amy Johnson, and she just says, “Hey. Here are the products I use, here's why I used it. Here's what's helpful. You should use it too.”
And if they go to another product, she's there again, guiding them about why to use this product. I think these videos—it's what we consume right now, right?
Mostly anyone watching this, or probably anyone even on this call—we probably spend at least an hour to two hours on TikTok consuming something a day, right? We're all guilty of it. So, if we are consuming that type of media, then shouldn't we also try and attract shoppers in a similar way?
How come everything leading up to the website is all video. Ads, even our commercials. But when we get to the website, it's all static.
So, we've started to do a lot more video implementation across the website. That's been number one. Number two is we've been really, really, really, focused on making our cart experience promoted towards a higher AOV.
We get people to spend the minimum, which is like $65, $70, but then we quickly tell them like, you are $5 or $10 away from one more thing.
You make it very approachable.
I see a lot of people do the gift bars or like gamified card, but they make the levels so far apart that it's like, oh, well I'm not even interested.
We make ours very close to each other, like $5 or $10 where you're like, I'll just go and buy these gummies that are $20.
Next thing is we also have a membership. So if you pay $129 to us at Obvi, we'll give you a membership to Obvi, which will give you 25% off the lifetime of your membership.
So, there's a lot of things that can generate good revenue, create good conversion rate, but also create a good experience for the customer.
For sure. And how did the of the membership program come to start?
I've seen subscriptions for vitamins, but I have not seen a membership for this type of thing except for in stores—in Canada we have Popeye's—where you can get a membership and you get some discounts.
The membership piece—it came out when a lot of customers would keep asking us: "is there any other time you're gonna run your 25% off sale?"
Because we only do it once a year, which is Black Friday. And customers are always like, you know what, I'll just wait until Black Friday. And then people will literally stock up for a year on Black Friday.
Our thought process was: Wait, what if we can actually make them pay for the 25% off?
So that's what we did.
We created a membership program. Basically, the only people who can access the sale year round are the ones who pay this lifetime membership fee. And then they obviously get a few other perks, like a free product, first to know about new launches.
I think it's been a good kind of launch for us.
That's a really interesting tactic and I do see more brands moving towards only offering sales at one point in the year and then sometimes not even offering discounts once a year and instead offering purchase incentives, like a bonus gift and the gift rotates.
What made you decide to stick to just Black Friday for discounts as well as the membership program?
You know, I think when it comes to discounts, we've all gotten into the habit of: If you come to my website, here's 10% off, or here's 15% off.
And we're just throwing this discount at them.
They haven't earned it.
They haven't even sometimes asked for it.
So we stripped that back. We don't do any discounts because we let the customers earn it.
If you have been in our pipeline, but haven't bought—call it six months or nine months or something—I may offer you a discount, but if you're just coming and exploring the brand, you don't need a discount.
So, we've typically stayed away from discounts.
Obviously, if you're buying a bundle or buying more or saving more, that's different. But if you're just here to kind of shop for one item, you don't need a discount. So, we've just naturally stayed away from it. And then Black Friday cause we want the revenue.
For sure one of the highest sales times of the year.
So much revenue happens during that weekend, or even I guess that month that some folks are promoting their Black Friday sales. So I can definitely see why that decision was made.
Unlocking Secrets: Little-Known Tactics to Boost Conversions
What other areas are you focusing on in terms of investments to your websites to try and increase conversions?
The other big piece is we're doing a lot of our traffic to landing pages instead of our website, which I think is important for us because we're able to manage and change different things on a landing page much quicker than we are able to change things on a website.
So even on landing page, we'll do different bundles and test out different offers.
We'll also do a money back guarantee, which, we only get about a 1% usage out of. So I always recommend that because it instils confidence.
15% of our customers buy now and pay later, which if you think about in this economy, it makes complete sense, right?
People don't have the money. So they're using payment options.
Another big thing that we do on a CRO level is when somebody comes to our website we're able to tag them with the products that they have viewed, and then we are actually able to show them a little popup when they do come back to our website.
Not an abandoned cart, but here are the products you viewed. Would you like to purchase?
Wow, that level of personalization must be so impactful because hyper-personalization is all the rage this year. Personalization everyone's been doing for the last little while, but hyper-personalization is definitely the goal. I'm going to pivot. We actually have a question from our livestream from Ash.
And Ash wants to know what was the journey to the first 100 customers? And then as a side note, also major love for all things you do at Obvi.
Thank you. I appreciate that, Ash.
The journey to the first hundred customers was pretty much the fact that we had only two skews. We laser focused on making sure that we created really good content around them.
So, our first two skews were fruity cereal and cocoa cereal. Before we even tried selling collagen and what it does, we basically said, look how incredible these flavors sound. Right?
And we sold people on flavor. We had fruity cereal and coco cereal flying from the sky and captured really cool content.
Our content was so much more important in terms of photography and videography than even our formulation initially, because the first hundred customers, you're just trying to scrape by and get people to the door. We trusted that our product will work well because we did a lot of R&D.
So initially we were like, you know what? We're not gonna sell them on the benefits.
We're gonna sell them on flavor and taste. And so we focus on that.
Again, from day one, I'm talking like the day we launched, we started Facebook ads. Ash—my partner Ash—he's a brilliant media buyer and that's what he did from day one.
And I think having a good media buying skillset is important when you're starting a brand. Because if you don't have that, you have to go pay for an agency and it becomes expensive.
For sure. On the media buying aspect, or even just any skills that you've learned, are there any resources that you use that you would like to share with other founders that they could leverage for their early stage D2C brands?
I think the one biggest tool that I feel like people don't talk about enough for use enough is Facebook Ad Library.
Facebook Ad Library literally is a cheat code to every brand. You can look up literally any brand, the content they're running, the copy that they wrote.
And you can see when they started the ad. So with that information, you can see if they're running something for a while, it's probably working, right? If they just started running something, maybe check back in two weeks and see if it's still running.
Otherwise, you can screenshot that and see, oh, well they stopped running this.
That's probably not gonna work.
There's a lot of inspiration you should be able to draw from it.
Founders' Wisdom: A Piece of Advice for D2C Brands
Awesome. And speaking of inspiration, we have a couple minutes left, so I'll leave you with this one last question. If you have any piece of advice for an early D2C brand just getting started, what is it?
If you're just getting started in today's climate, sit down with a notepad or your Notion or whatever and ask yourself:
What are five reasons someone should buy my product?
And don't just say, oh, it tastes good, or this or that.
Just actual five reasons why your product is better. Or why someone should buy.
Get even better, and really craft your entire strategy around that. I mean, I'm talking about your ad copy, your landing pages. Your pitch deck. It starts to become the pillars of your success, because right now we're in a world where there's no barrier to entry for new brands or new companies.
So there's a high competition mark, right?
So what your challenge right now is, is it's not even to capture a consumer's attention, it's to make sure there's loyalty between a customer once they do capture their attention.
To attract that, you need to have very strong reasonings. And if you don’t, spend some time rethinking what you can add or remove or change to find at least five very strong reasons for your product or service.
I love that. Thank you so much for leaving us with that sage wisdom as we wrap up the livestream course. Thank you so much Ronak for joining us. Everyone who joined us on the livestream, thank you again. Thanks Ash for that question. It's been so great to start off our D2C Multiverse conversation covering such a plethora of topics, but, definitely a lot of key learning points there.
And thank you so much everyone for joining, and we hope to see you next week at our next D2C Multiverse livestream. Give Obvi a follow if you're not following them already. And definitely check out mason and follow us on LinkedIn and Twitter. So have a great day everyone. Thank you so much.
Bye. Thank you. Thank you so much!