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Building a $100M Company in 2 Years with Native Co-founder and CEO, Moiz Ali

Co-Founder and CEO, Moiz Ali built Native from scratch – and fast. Hear Moiz talk about how a frugal mindset, fueled double digit growth year over year, and lead to a $100M acquisition in only 2 years.

Sam Parr: Okay. So this is the next speaker, as one of the folks I’m most excited to hear from because we actually started our businesses in the same office and his name is Moiz Ali and he has a company called Native. And what they do is they sell deodorant. But I was actually in the room when Moiz was starting this business and he would order all of these deodorants and smack a label on them and we would all try them. And sometimes they would turn our armpits green and it was like … And then we all learned how to do Facebook ads together.

And this was like the most scrappy thing that I’ve ever seen. And two years later, it was doing something like $30 or $40 million a year in revenue and was acquired for $100 million, two years after we were in that one room working together and it’s significantly larger now. And Moiz is one of the most interesting founders I’ve ever talked to because he is brutally honest and straight to the point. And so he started talking about his journey and I think you’re really going to dig it and find it exciting, so let’s get up for Moiz Ali.

Moiz Ali: Okay. My name is Moiz and I am the founder of Native. If you guys aren’t familiar with Native, Native is a direct to consumer personal care company. We sell safe, effective, nontoxic personal care products that consumers use in the bathroom every day. When I launched the business in 2015, I’d always tell people that we’re the Honest Co. for adults.

Now I tell people that Honest is the Native for babies. But if you’re not familiar with Native, today we sell deodorant and body wash and toothpaste and bar soap. And we sell those products through a number of channels. We sell on our own website. We sell at target and at Walmart and at Walgreens. But for the first two and a half years of the business, we sold one product and one product only, which was Native deodorant. We sold it through one channel, which was our own website. And we sold it in one country, which was the United States. And this is really the story of what Sam preluded to, which is how we got to $100 million in about two and a half years. I wish it was two years, but it’s a little bit longer than that. And this is the timeline of the business. So we bought the domain name in July 2015. We started selling products about a week and a half later. We raised about $500,000 over the course of the life of the business. The first 50,000 came a few months after we launched, the next 250K came in April 2016. And then we ended up raising $200,000 later down the line. 

But in June 2016. We hired our first employee. By November 2016, we had our first million dollar month and then about a year later, P&G acquired the business for 100 million. And I still remember the process when we were trying to sell the business. I texted our first investor, he’s this Chinese guy named to [Wai Goh 00:00:03:02] and he wasn’t aware of the process or that we were trying to sell the business and we were really far along the line with P&G at that point. And so I texted him and I said, “Hey Wai, I need to chat with you, do you have a few minutes today?” And he’s like, “Is this urgent?” And I was like, “Yeah, I need you to sign some docs and tell you what we’re doing with the business.” So he’s like, he texted me back, he’s like, “Call me in 15 minutes.” I called him up and I was like, “Hey Wai, we turned your 50K into $1 million in about two years. We’re going to sell this business to Proctor and Gamble. Everyone’s super excited about this.”

And I’ll never forget his response. He’s like, “The reason I asked you whether this was urgent is because my wife just gave birth to our first child a few hours ago, but this is the best news I’ve heard all day.” I’ll never forget that he said that. But in reality Native started like I imagine a lot of other businesses. It started in my brother’s living room actually, and this was the first day we had any orders. We launched the business on Product Hunt and I remember handwriting thank you notes to all of the customers. And then I tweeted this out to Product Hunt and to Ryan Hoover, who ran Product Hunt at the time. And in reality, only the first five pages of this are thank you notes. The rest are just blank sheets of paper.

                        I wanted our business to look like it had a huge launch but it did not. And then we started shipping it out on our dining room table as well. So I would pack these orders, sometimes I’d call Task Rabbits to help me. And then I would walk down like the three blocks to the local post office and just drop these boxes off. And they’re like, what are you doing here with this many boxes, with this many packages? And I would do this on a daily basis. I would run the business in the morning and then the evenings, I would actually pack these boxes and ship them out.

And then this is how Native was made in 2016, so we were really young business and it was made on another dining room table across the country, with a couple people pouring the deodorant by hand. And we had this explosive growth that happened in 2016. So I think in January 2016, we were probably doing about 50,000 in revenue month. By November 2016, we had hit $1 million. And so we grew the business about 20 X over the course of those 11 months. And these two people could not keep up with all of that demand. And so we had a lot more dining room tables. We went from producing, I remember in December 2015, we were producing about 500 units of deodorant a week. At some point in 2017, we were producing 21,000 a day. And so that was just insane growth. And today I’ve certainly lost track of how many we make per day. But now we have actual machines that do the job and create a much more consistent product.

But the history of Native is a history of incredibly fast growth. In 2016, we were getting our feet wet. In 2017, we really saw some explosive growth and we’ve continued that growth in 2018 and 2019. And people always ask me, they’re like Moiz, how did Native grow so fast? You raised $500,000 over the course of the life of the business, which isn’t a huge sum of money, although it’s not nothing. And you were able to exit the business in 28 months for $100 million. How did this happen?

And the reality is this, it was just a maniacal focus on the consumer and that’s what we cared about. And when we say a maniacal focus on the consumer, I mean three things. I mean, from a marketing perspective, a product perspective and an experience perspective.

From a marketing perspective, we did a lot of things right and a lot of things wrong. We were really good at Facebook ads and Facebook ads became a key engine to our growth. So this is an example of how we would AB test Facebook ads. Women’s Health once called us a miracle and Buzzfeed calls us life changing.

To be honest, I’m not sure if you’re legally allowed to use those things in Facebook ads, but we did it anyway because we had nothing to lose. And so we’d run these two Facebook ads to see what worked better. And I’d love to take a quick quiz. Who thinks the Buzzfeed Facebook ad did better than the Women’s Health Facebook ads? Can we get a show of hands?

Okay, so either most of you are not responding or believe that the Women’s Health ad did better. It was actually the Buzzfeed ad and there’s a tiny clue in these photos and it’s the social reactions to the ads. So the Buzzfeed ad had 3000 reactions. The Women’s Health had 1.1 thousand reactions. And so we obviously spent more money on the Buzzfeed ad and it was doing better. But we did this with thousands of ads on a really consistent basis and I remember our employees would come to me and they’re like, or they’d be like, don’t talk to Moiz right now. He’s looking at his Facebook ads and doesn’t want to be bothered. I ran these ads by myself until 2019, actually. We also did a great job with marketing and using our consumers as an engine to tell other people about our business. And personally, I take Amazon reviews and even reviews on people’s websites with a grain of salt because I understand that those can be faked.

And so what we did is we asked our consumers or our customers to take video reviews of them using Native deodorant or talking about Native deodorant at home. And so we have hundreds of these reviews. People would take these videos with their iPhone, they’re very authentic. They talk about how Native changed their lives or the lives of one of their loved ones. And we’d use these reviews as marketing collateral on Facebook ads. We’d use them on our website to test whether watching one of these reviews would make you more likely to purchase Native.

And so we really used our consumers as another engine to grow the business. And finally, we leveraged as much media as we could get and initially we were really bad about this. When I started the business, I’d reach out to publications all the time and say, “Hey, can you write about the new deodorant business that I’m launching?”

And editors at Time and Hello Giggles and Thrillist and Women’s Health would be like, “Deodorant isn’t a very sexy topic to talk about.” And so they pass on it all the time. And so what we did once was we launched a rose scented deodorant and we did it on the first day of summer 2016, and we said, one of my friends was talking about rose and I was like, oh, why don’t we just create a Rose, a scented deodorant? And the day that we launched it, every single publication you could possibly imagine reached out to us. We sold out in the first three hours of launching a product. We were in Thrillist and Women’s Health and the New York Times and Racked and Time and on Good Morning America and The Today Show, all because we had released this crazy novelty product that we thought wouldn’t go anywhere. And so of course we started launching rose deodorant every year and we started doing more fun scents. So we launch a pumpkin spice latte deodorant every year and we try and make the deodorant look a lot like a Starbucks cup. And then we launch a candy cane deodorant during the winter as well. And not only are these things really fun to do for us as a team, to try and create one of these crazy scents, but they’re also really great from a PR perspective. And finally, our marketing didn’t stop when it came to customer acquisition. We weren’t just trying to get people to be aware of our website. We actually did a lot of AB testing on our site itself. So this was one of the tests that we ran. And what we did is we tested what would happen when you clicked add to cart and we showed you this pop up.

So if you were going to buy Native coconut and vanilla, which is by far and away our bestselling scent, we thought, okay, what happens if you’re buying an individual unit? And we try and get you to subscribe and say, hey, if you subscribe you can save $2 on a bar. And personally, I don’t love popups and I get annoyed by them, as I imagine a lot of you do as well. But we found two things when we ran this test.

Not only are you more likely to subscribe to Native deodorant if we offer this pop up to you, which makes a lot of sense, but you’re also more likely to purchase Native deodorant overall. You’re more likely to complete checkout, if we show you this popup, than if we don’t show you this pop up. And that’s a really crazy idea. And when we looked at the stats, I think we ran this test twice actually because I didn’t believe it the first time. When we realized that this was the case, I was like, I know nothing about eCommerce. I did not expect this to win. I wasn’t a big fan of testing this and I was wrong. Not only are you more likely to subscribe, but you’re more likely to make a purchase overall. And that really blew my mind and it made me realize that, hey, even though I’ve been in this industry for seven years now, there’s a ton of learning that happens every day and the customer life cycle is constantly evolving.

The other thing that we were really good at was product. I’m not sure how many of you, if any of you were really Native customers or if any of you are. But when we launched Native, we launched with what turned out to be a pretty mediocre product. We had an average rating of about four stars. We had about a 25% repeat purchase rate over the course of four months, both of which were okay. But weren’t going to lead to us building a really strong business. And so we became aware of that really quickly. Look, for the first 11 months of the business, I was the only person working at Native and the customer service complaints were loud and it made me, it was really clear what I needed to do, which was to improve the formula. And so what we did was we started sending out samples, like we’d only get 30, 40 customers a day, but the customers that had a conversation with us and weren’t mean about our product not being good, I would send them free samples and I’d say, Hey, this is a new formula that we’re thinking about coming out with. We’d love to get your feedback on it. And so we did that a bunch until we launched a new formula in May 2016, and that was really a tipping point for the business. we had a four star average rating and about a 25% repeat purchase rate and we basically increased those substantially. We got to a 4.7 star average rating and our repeat purchase rate is now North of 50%. and once that happened, it had a real snowball impact on the business.

We realized that the business was going to be much larger thAn when we launched it. And today, this photo is from me testing out different samples of deodorant to see whether they stained clothes. I would rub one sample on one side of a shirt, another sample on another side of the shirt, run it through a washer and dryer to see whether our deodorant was staining clothes. And today, we do this type of iteration at a much larger scale. We’ll actually AB test our products. So we’ll send the Sams of the world, one formula and Michelles of the world and other formula. We’ll look at their reviews six weeks after they make a purchase, we’ll look at their repeat purchase rates 12 to 18 weeks after they make a purchase and we’ll say, hey, you know what? We’re testing the size of a baking soda particle in our deodorant and it turns out that Sams of the world give us a higher review and they’re more likely to buy again as well.

And so a smaller size baking soda particle makes sense as compared to a larger size baking soda particle. And so to be honest, the business doesn’t really, we don’t really explain this well to consumers. There’s a lot of science that goes behind how we made an incredible deodorant. Our reviews are much better than they used to be back then, but our brand stands for this idea that we’re very approachable, but there was a lot of science that goes behind it. And back then, we were doing a lot of testing to determine what really resonated with consumers.And this is one of the, we turned those reviews that consumers write on our site into Facebook ads as well. This was one that we created early on and it was the first one I think I created and it was really fun and we used these fun fantastic reviews from consumers as Facebook ads as well.The other thing I think that we were really good at was making the customer experience really special. And so if you buy deodorant from the behemoths who sell deodorant, which are Unilever and Procter and Gamble, and you have a bad experience, there’s a 1-800 number you can call. I have no idea who picks up the phone on the other end of that if you call. I’ve tried calling a couple of times and it’s just been a terrible experience.

And we wanted the opposite of that, we wanted to build a really special experience for our consumers. And so the first way that that started was having really fun touch points. One of the things that we did was we sent out this email whenever you made a purchase of Native, and this email is really fun. It talks about how we’re Playing Party in the USA because you made a purchase. It talks about how we’re popping bottles of champagne and then when our package actually ships, we sent another email like this and we say we’ve polished your deodorant. The same person who is responsible for polishing the Queen’s jewels in London is in San Francisco polishing your deodorant and we’re going to sky write your name over the golden gate bridge.

And so the reason that we did this was because we wanted you to know that there was another human on our side of things. If you purchase from Native, it’s not like purchasing from a large behemoth. There are human beings on this side of things and if there’s an issue, we will solve it and we’re just like you and that we want to have a fun time and that we don’t want to take things too seriously. And deodorant is certainly not a product that you should take too seriously.

This is one of the cards that we put in nearly every box of Native that goes out. I don’t remember where we got this quote from now, but we’ve probably sent it out 10 million times at this point. It’s really what we stand for and how we think about products and what we should create, which is, “Take care of your body, it’s the only place you have to live.”

The other way that I think we’re really good is with our customer service. We’re really human about it and we own our mistakes. So I think everyone’s had the experience of calling up Comcast or Time Warner or United or American airlines and having a robot talk to you, who doesn’t have the authority to make any decisions.

Our customer service staff is really empowered to do the right thing and to make good decisions on behalf of our consumers. We want them to own that relationship and we want to be human alongside consumers. So if we ship you the wrong package, we’re not going to blame you. We’re going to apologize for our mistake and ship you a new package. And I think the best way to think about this is what would you want as a consumer, when you order it from a brand? That’s how we want to empower our customer service representatives and that’s also how we want to treat our customers.

And I think that experience has really shown, and before I get to the slide, I’ll tell you, when we were selling our business, it was really obvious how differently we thought about consumers than how bigger brands thought about consumers. We chatted with Unilever and P&G, alongside a host of other companies were looking to acquire us. And every one of them would refer to customers as retailers. They’d say, our customer is Target. Our customer is Walmart, our customers is Walgreens.

That’s just not the way we thought of things. We thought the customer is the person who the product and they’re the person that we have to delight. What we care about is how we satisfy and delight our customers. And those are the end users of products and not the retailers who are the channel to get that product to end users.

I think that’s really clear or it became really clear once we did these word clouds of reviews. So if you look at the reviews of like Old Spice or Secret, they’re really utilitarian. Secret works and is fresh. Old Spice is strong and lasts. Tom’s of Maine does not have good reviews, reapply and ineffective. And P&G’s lawyers have told me multiple times, I can’t talk about Tom’s of Maine. But the one thing I’ll say is if you use Tom’s of Maine, you should switch to Native. It’s a far superior product.

But if you look at the reviews that Native has, both from our website and from Amazon, they’re much more emotional. They talk about how our product is unbelievable or they’re in love with it. They’re amazed with it. It’s a miracle or godsend. And the reason that this is the case is because we worked really hard to create an emotional connection with consumers and not just a utilitarian one.

We didn’t want you to buy Native and be like, great, I’m using a deodorant, I’m set to the rest of the day. We wanted that brand to resonate with who you were in the morning. And I think the way we knew that we were on the right path or doing that was because these reviews were really emotional and not just utilitarian.

And so today, the way I think about our business has tripled or quadrupled since the acquisition. We’re a much larger business today than we were when we sold the business. We had eight people on our team. A bunch of those people are still at Native today. Today we have about 20 people at the team. The way I think about our brand, and I remember saying this even pre-acquisition, is that we have the opportunity to build an iconic American brand that can last generations.

When Tide laundry detergent launched, it launched in 1945, it became the number one selling laundry detergent in 1948. For the last 75 years, it has not lost that mantle. And when I think of Tide, I think of my mother doing my laundry when I was a kid after running around and getting my clothes dirty with grass stains and going to soccer practice.

And whenever I use Tide to do my laundry today, I still think about my mother doing my laundry and that’s the way I think about Native or that’s the way that Native can become. Native can be passed from mothers to daughters or even daughters to mothers. And it can become this iconic household brand that stands for not just family, but also good health and wellness. And that’s the trajectory that we’re on.

And doing that requires a lot of things going right. It requires us launching into new categories in a really great way. It requires us launching into new channels. We can’t just sell on our own website any longer. We’re selling really well at target. In fact, Native coconut and vanilla is the number one selling deodorant skew at target over the last 52 weeks. We have to continue blowing it at our retailers, including Walmart and Walgreens and the new retailers that are coming along in December and in January and February and March.

And we have to do this internationally as well. The deodorant category is about a $3 billion category in the United States. It’s a lot smaller than people realize. We’re north of 3% of that category already and we’ve built that business profitably. But we have to do that in other geographies where it’s much harder to get people to use a stick deodorant. In the UK and much of Europe, they use spray deodorants. How do we launch new categories or new products within the categories that we’re at, in a really exceptional way to continue the momentum that we’re on?

In any case, when people talk to me about my business or when they talk to me about Native, I say the most important thing that I did or the thing that I thought I did right was I got my hands really dirty. For the first year of the business, I was the only person at the business. I was doing customer service, I was doing operations, I was doing marketing. And as the business continued to grow, we hired exceptional leaders in all of those places.

We had exceptional people doing customer service who were really empowered to make the right decision and love the brand. We had operations people who were really great at making sure that we were saving money and had product to our consumers in hands in time. But all of that happened I thought, because I got my hands dirty and really understood the business well.

When our operations person had an issue, I’d experienced that issue in the past. When our customer service person had an issue and brought it to me, I’d experienced that customer service issue in the past. And so the best advice I can give entrepreneurs is don’t try and disconnect yourself from your customers. Keep that connection as tight as possible and really get your hands dirty.

Anyway, this is me. If you want to follow what I have to say, which is not very much or you want to reach out to me. This is how you can get in touch with me. Thanks so much.

Sam Parr: Thank you so much, Moiz. We have been getting questions while you’ve been educating everybody about Native. We’ll start with the very top one. What’s your take of this new wave of startups being more transparent with the revenue expenses? You have been pretty open and transparent about your exit, the growth of the company publicly. What’s your take on that?

Moiz Ali: Yeah, I can tell you when we were, well before we had sold, we were incredibly quiet about all of those numbers and I think it really depends on a founder mentality. I remember once when we were running the business, between November and December, we didn’t grow our standard 20% and one of our employees was like, “Oh God, I think we’ve plateaued.”

And I was like, okay, this is why I keep things quiet. I’ve got enough pressure that I put on myself to achieve great numbers and great growth and I don’t thrive in an environment where other people are putting that pressure on me. I thrive in an environment where I put that pressure on myself. So we were really quiet early on.

And today I think we’re a little bit better about it. And today it’s certainly not a one man show. There are 20 people at the company and all of them are really exceptional. And so I think what you should do is whatever fits you as a founder. If you’re a founder and you thrive on that external validation or that external pressure, great, go do that. And if you don’t, don’t do it. And for me, I didn’t at the time that Native was independent and so we really didn’t do that early on.

Sam Parr: Did anyone catch that 20 employees? That’s efficient, to say the least. So this was by far the most up-voted. What made you pick deodorant? Some say it’s a non appealing product. I think you might say differently, but just start as a business.

Moiz Ali: Sure. I’ll say there’s probably a few reasons. One, my sister got pregnant and at the time that she was pregnant, she was using Dove and I couldn’t read the back of it and I was like, this isn’t good. I used to be an attorney. I virtually speak Latin and I can’t pronounce one of the words on the back of this thing.

And that was my personal experience as well. I’d been using Axe deodorant my entire life until I switched to Native. And I remember buying it at Duane Reed in New York and being like, this stays on my body for 23 hours and 45 minutes every day. I put it on after I take a shower and ideally, it remains on until I take my next shower. And if that’s the case, I should probably should be able to tell these, pronounce some of the ingredients on the back of this thing.

And so that was sort of the impetus of starting. Sam talked about how we were working out at the same coworking space. When I was there, the coworking space was called the Founders Dojo, which is a ridiculous name. But when I was at the dojo, I’d ask people, I’d be like, what are you guys using for deodorant? And of the eight people there, seven of them were using [inaudible 00:25:18]. Several of them were using different types of products, whether it be a non aluminum based antiperspirant or coconut oil or nothing at all. And those people were, it was very obvious they were using nothing at all.

And so I was like, you know what, it seems like other people actually have this problem as well and maybe it’s just not talked about. And so that’s where it came about. But I’ll tell you, it’s a non appealing product today. Every day that I turn around there’s five new deodorant startups behind us. And we turned a non appealing category into an appealing category. And so it may seem not appealing at the time, but you can turn that around really quickly.

Sam Parr: Love it. So going to do the second one. You have three months to sell your business. What are you going to do to get the highest valuation possible?

Moiz Ali: Yeah, that’s a great question. Look, if you’re in that instance, it really depends on what you want. If you’re just optimizing for valuation and cash up front, hire an investment banker. Have them talk to a bunch of different people and find out which companies are willing to pay you the most money and sign that deal.

I think for me it was a little bit different and P&G’s offer was not the highest. I wanted to work at the company when I left. And so I wanted to make sure that I was working with people that I would really enjoy working with. And P&G gave me that type of feeling in a way that other people didn’t. And it also promised me a lot of autonomy, that I’d be able to run the business the way I wanted to run it.

And I got the impression from other potential aquirers, that was not the case. And so it’s really a function of optimize what you want and if you want to leave the day after acquisition, great, optimize for cash or optimize for valuation. And if you want to stay there or want to do something else, cash may not be the only consideration that you care about. And that makes it a more difficult conversation. But if you’re looking for cash and how do you optimize valuation, just hire an investment banker, they’ll talk to 75 guys and bring you 75 different offers.

Sam Parr: Did you hire a banker?

Moiz Ali: We did, yeah.

Sam Parr: Awesome. Last question here, so I just hinted at the efficiency of 20 people today. When you exited you were at eight. Can you break down how you recruited? It sounds like you had just an absolute team of all stars. How did you find those people?

Moiz Ali: Yeah, great question. To be honest, I don’t remember. A lot of people hired people for the company and so I’m not sure however it found people. I mean, we definitely did LinkedIn ads. We definitely did Craigslist ads and we definitely tried to reach out to our own network, all of which are really good, but even then, you’re only going to get the quality of employee in terms of the authority that you grant up.

All of the eight people that we hired could be terrible employee, would be terrible employees if you gave them no authority and no autonomy. When we hired them, we empowered them to make really good decisions and have a huge impact on the brand. I tell people like, look, if you’re trying to save $100,000 this year on whatever you’re doing, don’t do that. We can find lower hanging fruit that’ll yield more bang for our buck.

People were really good at what they did and we gave them more and more authority as they showed more and more ability. Steve Jobs has this great quote, and he says, “We don’t hire people and tell them what to do. We hire them so they can tell us what to do.” And that was really the way we thought about it.

Sam Parr: Awesome. Well, let’s give a round of applause to Moiz. Thank you so much.

Moiz Ali: Thanks.