If I Had 12 Months to Make $10M - This Is My Plan

In 2018, I started one of the world's fastest growing online businesses. We made millions of dollars in sales and helped a lot of people. Let me take you back to where it all began. It was late 2017 and I was at a crossroads. At 23 years old, I was living with my parents and I had just failed university and a string of businesses and I had zero dollars in my bank account. All I ever wanted at this point was to be a millionaire and I was very close to giving up, questioning all of my abilities, wondering if I had what it really takes to be successful. I'd sit there at night watching people on YouTube, wondering if I was smart enough to become rich. And one day, I was scrolling through Facebook and I came across a post that changed my life forever. It was a mum who was making weighted blankets for her autistic child and there was a lot of hype around it. There were so many comments saying, where can I get this? Where can I get this? But unfortunately, she wasn't selling. So after some research, I found that there was actual scientific evidence supporting the benefits of weighted blankets for anxiety and sleeping. I thought I could be on to something here and the science actually backed me up. Even though I was honestly down and out from so many of my other business failures, I decided to give this business thing just like one more shot. If it failed, I'd go back and I would never launch another business. I would just go back to videography and just travel the world. So the first thing I did was I went on to Alibaba to look for my supplier, but I couldn't find any listings that even mentioned weighted blankets. And it turns out that this was actually a good sign. I was very, very early to the trend. If nobody was manufacturing them, nobody was actually selling them. And because of the Facebook post, I already knew there was demand. So using all of the money that I had left, and I was just doing some videography clients here and there, just funneling it in, I managed to get this beautiful sample of a seven kilo weighted blanket from China. It was great. It was stunning. I honestly couldn't afford a full order at this stage because I was just so broke from like all my last failures. I then had to get my mum and my girlfriend and my neighbour's child to actually model the blankets around the house. I couldn't afford an actual model or a photo shoot. And I was just taking photos. And then I just set up a basic Shopify store. I launched the store on a Saturday night and set up like the worst Facebook ads you've ever seen, not knowing how it was going to go. And also knowing that if I didn't get any traction initially, I was just going to run out of like money in a few days. Within a few hours, I just heard that Shopify, ka-ching. Instantly, it was just complete relief. It just kept coming in, ka-ching, ka-ching, ka-ching. And we did over $1,000 very, very quickly for a month pre-order, meaning that we didn't have the product, but we were going to ship it in a month. And people were still willing to purchase now and wait. This was just a huge validation. I remember thinking, OK, I'm going to be an overnight success. In our first year, we made over $10 million in sales and $1.5 million in profit. The second year, that number grew to $2.5 million in profit. It was a crazy feeling trying to launch businesses for six years straight, constantly falling short, then suddenly this happening. What really just, yeah, it felt like overnight. We scaled quickly, hiring an amazing team, overtaking our competitors, achieving the number one spot on Google for weighted blanket. And we really kind of became synonymous with the product. People would say, oh, I'm going to get a calming blanket rather than a weighted blanket. We were also helping people. We had amazing reviews. I started to dream even bigger, thinking about how big I could take business. I got an offer to sell the business for over $10 million. But then around October 2020, upward trajectory just completely took a sharp downturn and everything changed. Next 12 months, our profits plummeted. We went from like one month we made $500,000 to losing over like a million dollars in a year. Because of that, you know, we learned so much from these failures. It was only when I took a really hard look at my business that I was able to pinpoint these three major mistakes that I made. If you're an inspiring entrepreneur or just trying to scale your business, this is just really important that you listen to what I'm about to say, because I don't want you making the same mistakes again. So the first mistake that I made was allowing hype and greed to turn me into a poor manager. When you start making a lot of money, something really funny happens. Suddenly you get really afraid of losing it. You think you're going to be happy, but you're actually just scared. A common thing that entrepreneurs do in this situation is they try to repeat this initial success in another secondary business. They use the rationale that if business A gets taken away from them, at least they'll have business B making money. Now, this logic is so flawed. What it does is make suboptimal decisions with your time and resources. Now, I took this even further. I launched over 10 brands after climbing blankets, which meant that I would spend at maximum one hour focusing on climbing blankets a week. And I was making millions of dollars. I was ignoring the need for tight financial control and clear cost centers for each brand. I allowed each business and their financials just to all merge into one big mess under one account. It was hard to even know if we were making money because I wasn't sure who was working on what. I also hired aggressively and expanded our team to about 100 people. I was just so focused on the bottom line as a whole across all the brands. So I was ignoring climbing blankets. Communication then just became so complex. Tracking output was challenging. Motivating a large team was way harder than I thought as well. Now, keep in mind, this was my first successful business. And these were the first people that I ever hired. And the main mistake that I think I made here was nobody in the company was properly incentivized, whether calming blankets lived or died or thrived. And I failed to realize also that the beauty of e-commerce is that they can stay late. You can hire VAs. You don't need to hire full time employees. And they can work on a fractional basis. The final thing to summarize is a David Sachs quote, which is the benefits of synergies are hypothetical, but the benefits of focus are immediate. We lacked focus and paid the price. We ended up restructuring our entire organization and each business became its own entity with dedicated teams and clear profit centers. This is how it should have been set up for the beginning, but it was just too late. Now, the second mistake was not having a basic product strategy. We expanded into new brands, new products without a clear strategy, launching variations of the weighted blanket, such as like a hand woven weighted blanket, silver iron weighted blanket, bamboo weighted blanket would keep our customers just constantly coming back. This approach just didn't work. It diluted our brand and confused our customers. We just also moved far too quickly, not giving each product drop a proper process. You see, each product that you drop on e-commerce should have a clear, unique selling proposition that creates the ability to acquire new customers at a profitable acquisition cost on Facebook. In my current successful brands, we do this very well. We spend so much time thinking and planning about new products. Then crazily, Kmart, my brand, the Udi, entered the market as a cheaper alternative. Yeah, I know what you're thinking. It's pretty stupid that I started competing with my own brand. They focused on a lower cost product, making it possible to sell a cheaper product using their massive size and brand strength. The problem was the Udi was also using the same marketing channels as Carving Blanket, so it was even worse than Kmart. Udi ended up becoming probably the number one seller of weighted blankets in Australia. But this comes back down to product. Our initial product strategy didn't provide the long-term leverage we needed, and our only defense was our brand and our high-quality product. The results, customers just kind of flocked to this lower end of the market. Our brand just wasn't strong enough to retain customers, and we lost a significant market share. We didn't have a clear product flywheel, like Udi, where we create different variations of the Udis and drop them month on month. I realized that we probably should have had unique painted products or licensed designs so that people like Kmart would have to stock us. Or better yet, if we had really beautiful and unique products, our revenue would have climbed, and we could have even just created our own beautiful stores. Now, this brings me to our third mistake that we failed to do, and this was planning on multiple fronts, but mainly inventory. In e-commerce, stuffing up your inventory levels can send you bankrupt. We launched too many products without proper inventory forecasting in place, which meant that all of our money was sitting into inventory. In the mess of rapidly scaling, we began selling out of our top sellers of calming blankets, and we didn't even notice. So we were forced to advertise our non-top sellers, and these had very, very bad customer acquisition costs, and it also really ruined our brand image as well. We then had to clear a lot of this inventory at a loss so that we could restock on our good inventory. Even during peak COVID times, when demand was high, we were still unprofitable because we couldn't get our top selling products in stock. Pair this with the supply chain crisis that happened, iOS 14.5 with rising acquisition costs, and suppliers were taking forever as well. We just couldn't get our inventory under control. So why am I sharing this story? Because I want you to succeed by learning from my mistakes. Trust me, successful people fail even more than unsuccessful people. Anything that I kind of want you to take away, it's these six important lessons that I learned from this failure. First, don't scale faster. Rapid expansion can lead to inefficiencies and increased risk. Instead, growth should be sustainable and well-managed. Second, define a clear financial reporting and strategic plan. If you're unsure about your financial health, don't hesitate bringing a fractional C-level employee like a CFO to get things cleared up. Next, focus on product and market diversification. Even though our initial product strategy worked, it wasn't defensible in the long run. We should have developed these unique products and built a product flywheel, but there's always a kicker here. You don't want to do that too early or too late. Next is get your team structure up. Ensure clear roles and responsibilities while incentivizing those who have power in the business with financial reward. Next is recognize and act on issues quickly. Don't wait too long to pivot when something isn't working. The Pareto principle or the 80-20 rule is critical. Focus on the 20% of activities that drive 80% of your results. And lastly, this failure taught me the importance of focus and humility. Not every venture succeeds, but every failure is a lesson. So where is Calming Blankets now? Unfortunately, alongside with a lot of my other e-commerce brands that were ranging from small profits to very unprofitable, I decided to turn them all off. I now focus on the Udi, my investments, YouTube, and Daily Mentor. If you liked today's video, hit subscribe. And if there's anything you're struggling with on your business journey, just either join Daily Mentor or join the free e-commerce course. I'm here to help.