The Picasso in my Head
- 11 September 2018
1. Tea Mogul
Like most writers, I am wholly unqualified to hand out life or business advice — but I’m going to do it anyway. Unlike most writers, I don’t just piggyback on the experiences of others — my insight has been shaped by my own first-hand experiences in business. Between January 2014 and August 2018, I owned a company called OMGTEA that sold detox tea products exclusively through an online store. The company was perhaps best described as an “Instabrand” — a company that uses influencers and online growth marketing strategies to tap into captive consumer markets that only exist on social media platforms. ...
- 24 September 2018
Running a business offers an insight that can’t be gained from reading books or watching documentaries or going to business school — sometimes you have to get your hands dirty if you want to truly understand something. The question I always get asked is why I didn’t pivot or otherwise change the business model to make the business work. It wasn’t simply because I was lazy. Don’t get me wrong, I am lazy; but, my laziness has never been about inaction — it has always been about finding alternate or more efficient ways of doing things. What attracted me to ecommerce was the idea that I might be able to execute something unconventional. ...
- 30 September 2018
I first took an interest in business when I was 12 years old. I found a copy of Richard Branson’s book Losing My Virginity on my parents’ bookshelf and read it from cover to cover. I was so inspired that I hunted down Branson’s address and wrote him a letter asking for advice about starting up a student magazine. While he didn’t give me advice, his secretary was kind enough to send me an autographed picture, which quickly became my most prized possession. ...
- 8 October 2018
4. Business school
“Finally,” I thought, “something I can actually execute! First thing’s first. I need a name.” In situations where there are few barriers to entry, naming and intellectual property assume an even greater importance. I needed something catchy that was easy to spell, easy to remember, and would rank well on Google. I played around with generic names like Skinny Tea or Teatox or Weight Loss Tea, but I knew that none of them would work. I needed a brand name — something that could be trademarked. Was I going to sell my products within New Zealand or would I have products that could also be sold internationally? ...
- 14 October 2018
Finding a reliable tea supplier was a challenging process. I didn’t think I would have much luck in New Zealand, so I started searching for suppliers in Australia. I typed in “tea supplier Australia” into Google and had my first search results. It looked like every website had been designed in the early 2000s — no price lists, no product pictures, nothing to indicate the size or quality of the business. The experience threw me. I was expecting to find polished and professionally designed websites. I had no idea how to differentiate between the companies. ...
- 27 October 2018
6. First-hand experiences
After a crash course in the basics of tea, I decided to focus my search on diuretic herbs. The goal was a reduction in bloating and improved digestive function, so my tea blend didn’t need to contain herbal laxatives to be effective. After working my way through a shortlist of herbs, my original blend essentially wrote itself - an oolong base with dandelion and lotus leaf for their collective diuretic properties, along with jasmine for flavour and hawthorn berry for colour. I was going to market my tea blend as a weight loss tea, but I had no idea if the tea was going to do anything. I was a snake oil salesman. ...
- 2 November 2018
I went to make myself a coffee and came back to my laptop. I opened Google Analytics. “Not long now and I should have my first visitor,” I thought to myself. As the thought was forming in my head, it happened. My first visitor. I almost leapt off my chair in excitement. I had been online for less than five minutes and someone was already on my website. “Is this how the internet works? If so, it’s amazing.” Ok, they were on the homepage for a few seconds and now they are on the product page. I sat there, transfixed, staring at the screen, waiting for movement. They have been on the product page a few minutes now. I guess there is a lot of information on the page. They are probably taking their time reading through everything. I know I would. A few more minutes passed. No movement. ...
- 11 November 2018
Late one night, after several glasses of Oban whisky, I stumbled across an Air Asia deal on Twitter — return flights to Hong Kong from Melbourne for A$299. It seemed like the perfect opportunity to head over to China in search of a teabag manufacturer. I didn’t like the fact that there was nothing to differentiate my products from anything my competitors were offering. We were all selling the same loose-leaf tea, marketed in the same way, to the same customers. I wanted something different. I wanted my business to stand out on social media. My hope was that I could have teabags made in China and that that would be enough of a differentiator. ...
- 25 November 2018
My plan was to spend two days at the Canton Fair and one additional day looking at other fairs, before making my way back to Hong Kong. I wanted to use the first day to get a better understanding of the scale of the fair and how to deal with exhibitors and the second day talking to suppliers. At around 2pm on the first day, I stumbled across a small area tucked away in a far corner of the last hall that contained a few rows of tea merchants. There were maybe 15 merchants in total. I had a vague idea of what I wanted, so I walked past each booth to see if any of the exhibitors had teabags displayed. My search was immediately narrowed down to three vendors. ...
- 9 December 2018
10. Thinking differently
Founders need to understand that businesses should be seen as investments first and start-up enterprises second. At the end of the day, a business can only survive if it makes money. What makes a good investment will change depending on the nature of a business. With consumer product businesses, there is a heavy initial outlay to purchase stock. This stock is then stored and sold over time for a profit. A very high risk-tolerance is required to engage in this business strategy. When money is invested in product stock, there is no way of recovering a single dollar until some of that stock is sold. When someone purchases shares in a publicly traded company, they aren’t exposed to the same level of risk. If the share price drops 15% overnight, they will lose 15% of their investment only if they choose to sell out of their position then and there. If they stay in their position, there is a very good chance that the price will return to the purchase price and move beyond that point in the future. As a business, when you spend $20,000 on product stock, you are down $20,000. You could stand to make $180,000 from your $20,000 in stock, which is a far greater return than many equity investments. However, there’s far greater risk involved. ...
- 18 December 2018
After a week in Hong Kong, I made my way back to New Zealand. As I waited patiently for the tea shipment to arrive, I tried to keep myself as busy as possible. I got into a routine of posting regularly on social media, packing orders, and taking care of customer service. It felt like the entrepreneurial phase of the business had come to an end and I now had to focus on the mundane task of running a small business. Within a few days, it started to feel much more like a job — a job I had very little interest in doing. Rather than concentrating on marketing and trying to drive up sales, I started to think about whether I even needed to be directly involved in the business. I liked the idea of setting up a business and selling a product that people could consume over and over, which would throw off cash for the foreseeable future. ...
- 28 December 2018
Employees with a stable income stay in a perpetual infant-like consumer state. They don’t know what they want and never think for themselves. When they see a new bike advertised at 40% off for one day only, they don’t stop and ask themselves whether they need a new bike. Instead, they fixate on the amount they stand to save by making the purchase. For just $720, they are able to purchase a bike that is usually priced at $1200, a saving of $480. Who wouldn’t want to save $480? Of course, the reality is that, unless they need the bike and were going to purchase it at the full retail price, they are not saving $480; instead, they are spending $720. The discounted amount doesn’t mean anything — it’s a number pulled out of thin air. The consumer is still spending $720 and the retailer is still making a profit. ...
- 7 January 2019
13. Shovels to miners
There are so many unknowns when it comes to creating and marketing ingestible products. Any time someone is asked to ingest something, there is a high level of trust involved. There are laws in place that provide guidance on how ingestible products should be labelled, how they should be stored, and how they should be shipped. While there are very few restrictions in place surrounding the marketing and storage of tea, I encountered a lot of pushback when I tried to promote my tea. Many of influencers I contacted and the marketing platforms I used seemed to be uncomfortable promoting any sort of ingestible product. ...
- 17 January 2019
14. Over and over
Since it is so difficult for most online stores to generate organic website traffic, I was immediately drawn to products that could be consumed over and over. If customers could buy something on an ongoing basis, it stood to reason that they would be more likely to come back without being prompted by advertising or direct marketing. Tea is fortunately one of those products. When one of my customers ran out of tea, they were able to type in “omgtea” into Google and be directed to the website. Repeat customers were vital for my business. My best customer ordered every single month and spent over $4000 on tea in three years. ...
- 27 January 2019
In the space of two years, influencer marketing went from a hobby, where popular people on social media would post about products in return for free samples, to a profession where fully-fledged influencers would demand thousands of dollars to post about product or brand. In 2013, an influencer with 50,000 followers on Instagram was charging, on average, less than $50 per post. Over time, the fees started to increase. By early 2015, that same class of influencer with 50,000 followers could make ten times what they were making just 12 months earlier. Influencers became so savvy that they would do group photos containing the products of several different brands and charge each brand hundreds of dollars for their efforts. ...
- 5 February 2019
After 18 months in business, I started to identify core weaknesses in my business model that couldn’t be changed. I didn’t have an annuity-payment type business. I had a business that threw off cash, but I always felt incredibly uncomfortable investing in stock. It’s difficult to explain, but no matter how well the business did, I still had doubts that I was going to be able to sell through my stock when it came time to reorder. If an influencer stopped posting, I would have to find another influencer who had an equally engaged audience. That wasn’t so easy. ...
- 18 February 2019
Despite the fact that I was selling a weight-loss product, I was clearly on a different ethical wavelength to a lot of other business owners in the industry. In the first few years of the teatox boom, most of my competitors utilised an effective form of social proof to generate sales - before-and-after photos. It’s much easier to sell a weight loss fantasy to potential customers when you can prove that your product works by showing just how well it has worked for other people. While the practice faced a lot of backlash in recent years for promoting an unhealthy body image, it was utilised to great effect for quite some time on most social media platforms. ...
- 26 February 2019
18. Meet Sophie
By the time my second shipment of tea arrived, I had arranged to have my stock stored at a third-party warehouse. The warehouse I contacted wasn’t in the business of order fulfilment, but they agreed to test it out. They allocated a member of their warehouse staff to pack orders when they had downtime from their other work. Third-party fulfilment is great for many reasons. For a few dollars an order, I no longer had to think about rubbish or worry about whether the courier company would turn up to collect orders, or spend hours of my time packing orders each day. Aside from the marketing and the customer service, the business was on autopilot. ...
- 4 March 2019
A few weeks after receiving my second shipment of tea, I designed new packaging and placed my third order. I wanted to make sure the new shipment arrived before I sold out of my existing stock. This time, Sophie was front-and-centre. She was the focal point on the front of the pouch and on each teabag wrapper. I wanted to remind customers about Sophie every time they had a touch-point with the brand. My brand strategy, for the first time, felt cohesive. ...
- 19 March 2019
The best businesses create something once and are able to sell that product or service an infinite number of times. This is why software and gaming companies make such great businesses — create something once, distribute it online, and sell it a million times to people all over the world. This idea of creating something once and selling it many times is what attracted me to fast-moving consumer products. Products like Red Bull or Big Mac or Coca-Cola, were all created a long time ago as single, standalone products. It’s amazing to think that, since the creation of each product, billions of units of each product have been sold and the products will continue to be sold each day, all over the world. When you don’t have to worry about the product, you can focus all of your time and resources on marketing in an attempt to boost sales. Having to constantly create or reinvent or reimagine products, makes it hard to gain any sort of traction. ...
- 24 March 2019
21. Twelve hundred dollars
With two products, my bundling strategy had started to take shape. As expected, my average sales price improved and the store’s conversions rose sharply. However, two products were never going to be enough. I knew I was going to need other products for the bundling strategy to take full effect. I had wanted to release vitamins and supplements for some time, but it was next to impossible to locate a suitable product that wasn’t already widely available at reasonable prices. To get the right price-point, I needed something entirely original. Since my first trip to Japan, I had always wanted to do something with matcha, but I couldn’t bring myself to sell it as a stand-alone powder. I personally hated the taste of matcha and couldn’t for the life of me understand why there were so many companies selling it. ...
- 27 March 2019
The ecommerce landscape changed dramatically during the four years I was in business. When I started OMGTEA, it was a different world. Facebook was a place to go to connect with friends and family, ecommerce was still in its infancy, and influencers were only too happy to accept products in exchange for posting. It was a more wholesome time. The future seemed so bright; and for a time, it was. The overwhelming shift towards online consumerism gave birth to a new type of business, the likes of which the world had never seen - the Instabrand. By utilising social media, it became possible to experience explosive growth and reach consumers all over the world. I was lucky enough to experience it first-hand. Despite everything, I was very conscious of how fragile the ecosystem was and the fact that it could all come crashing down at any moment. ...