Craft Growth Concepts - 7 Months In
We’re just getting started…
Welp, can confirm that setting up a new services business, even if it’s nearly identical to your old services business, isn’t some walk in the park. Paperwork, payroll, accounting, lawyers, dotting all the I’s and crossing all the T’s…fun stuff. After all that though, I’m pleased to announce the launch of Craft Growth Concepts, a fully integrated digital marketing and ecommerce agency targeted at startup and early stage ecommerce businesses trying to grow from 6- and 7-figure revenue to 8-figure annual sales. In short, my goal is to help new growth businesses realize their first $10+ million in annual revenue.
Why Now? Why Small-Business Digital Marketing & Ecommerce?
Great question. I often wake up thinking ”damn this is so hard, so ridiculously complex. Why did I choose to focus on this ecommerce niche? I’m lost…” If you’re a new brand, a small ecommerce shop, or taking your first forays into selling online, you have probably thought something similar at some point.
I’ll be honest, the challenge of finding product-market fit, building a solid tech stack, and driving profitability at the early-stage scale is immensely frustrating. But when going from 6 to 7, and then 8 figures, it’s possible to be more creative and take bigger risks than when you’re an established brand. When a new marketing channel or piece of creative works, it really works. Positive feedback in early-stage ecommerce is immediate and powerful. The systems available to modern digital marketers scale quickly when you find winners. Successes and failures happen fast, and despite the near constant challenges, the speed of this business is addicting.
I also like this business because good process, good systems, and good marketing show up almost real time in the data. And after more than seven years of working with small ecommerce businesses, I feel I’ve developed a repeatable framework and excellent data systems that drive success for small, growing ecommerce businesses.
The Ecommerce Landscape As of Q3 2023
After 18 months of salad days from the covid boom, ecommerce businesses are about 18 months into a period of reckoning. The tide continues to go out, more naked swimmers are being exposed. Profitable product-driven brands will live on, overleveraged brands, snake-oil salesmen, and vaporware marketers will pack it in.
Consumers will continue to become more discerning. Their attention spans will continue to shorten. Customers expect followthrough from the brands they support and the products they buy. If you say something…you better do it, because customer bullshit detectors have become hypersensitive. Since friction for leaving feedback or finding a replacement product/brand is all but non-existent, new brands today don’t get too many “whoopsies.” On the flip side of the coin though, I feel customers are more interested than ever in trying new brands with quality products. So I believe any brand that makes a product that solves a customer’s problem has a chance to make it.
Which leads me to my next point…
A more challenging macro environment and a more sophisticated customers make the playbook for success pretty straightforward.
Your product must be excellent.
Your operations have to scale.
Achieve #1 & #2 above, and you really only have to be decent to pretty good, with a desire to improve, at everything else — customer service, content, advertising, email, web development, forecasting etc. Implement a strong data & accountability culture, and you’ll achieve excellence in other areas as the business grows. But there is very little need to over index anywhere but #1 & #2 in the early days. Basically, have a strong foundation, stay focused on your strengths, grow into excellence and any small ecommerce brand will be on the right track.
What I’m Excited About Going Forward
Solving the content scaling problem for small businesses.
In these last 6 months, I’ve spent about 10x my normal time in design and editing software developing creative as the last 5 years combined. For me, 2023 feels like the year the content cycle went exponential, largely driven by new technologies in Meta Advertising.
You just need so…much…f&@king…creative to run successful digital advertising right now. Everyone I talk to laments the lack of enough good creative. They lament the challenges of producing good content at speed and scale.
Why so much lamenting? Because the new Meta & Google ad delivery algorithms hold so much potential to drive sales and achieve scale. When the right piece of content hits…you can 2x, 3x, even 4x your profitable spends overnight, but the hit rate is low. So you gotta grind through creative to find winners.
Unfortunately, a fundamental conflict exists between content demand and bandwidth across most companies. Small businesses feel this conflict acutely.
I wake up at night thinking about this problem. I’m investing both my time and dollars heavily into solutions to affordably scale content production. For me this starts with better creative-level reporting and deep creative research. From there my goal is to develop a data-based iterative process to develop new content. Then I’ll scale up design & production capabilities.
Ecommerce Arithmetic - Forecasting, Modeling and Budgeting Growth
Prior to 2023, I’ve always thought of digital marketing in a traditional budgeting sense. Build a spreadsheet, set some numbers, spend to those numbers. This year, I’ve gotten to work on some cool projects that have reset my thinking for budgeting, forecasting, modeling, and ultimately executing within ecommerce businesses.
This new way of thinking is really just a simple math problem that starts with the business’s P&L. On one side of the equation, you use the P&L to determine a per-order contribution margin that includes as many (and ideally all) business costs as possible. On the other end of the equation you figure out an all-in customer acquisition cost.
Now comes the easy part…use simple math to figure out how much of the contribution margin you’re willing to spend on customer acquisition (pro tip: the simple math should result in profitability). Then…spend to that number while consistently optimizing your marketing to scale sales within the parameters of that simple math equation. There is no budget with this approach, only limitations like available inventory or team bandwidth, which can all be solved as the brand scales (especially if the brand excels at operations.)
With this approach, it’s not uncommon to increase customer acquisition activity through your chosen digital marketing channels (though most commonly advertising) well beyond your expectations and any set budget.
This exercise unlocked so much for me. I realized quickly that my prior experience had trained me to think too small in some cases. When good ideas meet good math, small ecommerce businesses can grow at incredible rates.
Shopify Tech
Man, Shopify has been killing it over the last 6-12 months with so many incredible new features and functionality extensions. Additionally, I’ve discovered a couple new apps that I absolutely love. The Shopify stores I directly manage have never been more powerful, automated, and integrated into the larger brand technology stack…all without a crazy development investment. I’m insanely bullish on the Shopify platform in general. Here’s what I’m most excited about right now.
Mechanic App - With this app you can integrate & automate nearly any process or any other software with native Liquid code and javascript. I’m using it to automate fulfillment processes, trigger events in Klaviyo, pull better store data, and more. Love this app and the team that supports it.
Metafields & Metaobjects - Metafields launched last year, Metaobjects launched earlier in 2023. The possibilities with these two features feel almost limitless from a content and data management perspective. I find new creative ways to leverage these features to improve the content of the sites I manage…without needing to be some crazy dev work.
Shopify Bundles & Shopify Collabs - Ok, I’ll admit, at first glance these apps seemed a little weak given how much hype they had. But the deeper I dig into them, especially considering some of the content and development tools I just listed above, the more excited I get.
An Open Mind
Perhaps the most significant lesson I’ve learned over the last 6-8 months is to keep a more open mind when exploring strategy and tactics for early-stage ecommerce. I’ll admit, I had been stuck in my ways for a couple years, but my new approach is more of a “don’t knock it till you try it and the data tells you it doesn’t work.”
That doesn’t mean I’m a yes man for every idea that comes across my desk. I still carefully consider available bandwidth, expected impact, and ROI with any new idea. But I think the current environment rewards brands that focus and execute in a few core channels but responsibly test new ideas when the data is promising.
Fresh ideas I’m most excited about in the near term - influencer/affiliate (see Shopify Collabs above) and the UGC content influencers can create. I’ve been bearish on influencers for years, but with new available tech, and a new content reality for small brands, I finally think I understand the value prop for small businesses. My goal over the next 6 months is to develop a execution and test frameworks that can ultimately scale this channel without crushing small business bandwidth.
In Conclusion
By most measures, it’s been a challenging year, but I’m finding myself more motivated than ever. I’ve found more focus in my business and I feel more equipped to solve the big problems small ecommerce companies face. Additionally, Craft Growth Concepts has secured three incredible partners. I’ve worked with each of these partners for no less than 3 years. The trust is there on both sides of the relationship, which opens up the opportunity for testing and exploring new ideas to achieve growth. As a result, the playbook continues to improve to the mutual benefit of Craft Growth Concepts & my clients. The next phase is improving the efficiency of this playbook and scaling a little bit (but not too much 😉). Excited for the road ahead.
Stuff That’s Inspired Me The Last 6 Months
Podcasts
Limited Supply Podcast S3 Ep11: How the President of True Classic Is Disrupting DTC - Link to listen (spotify)
Ecommerce Playbook: How To Build New Revenue Peaks - Link to Listen (spotify)
Ecommerce Playbook: How To Scale Creative Ideation (Almost) Indefinitely - Link to Listen (spotify)
Newsletters
Lyn Alden’s Free Investment Newsletter - Link to Subscribe - A monthly analysis on the macro climate, investing, etc. It's a great product for staying connected to the world at large if you like the financial side.
Nice Ads.UK - Link To Subscribe - handy little ad inspo newsletter.
Really Good Emails - Link to Subscribe - all the email marketing inspiration you’d ever need.
