The 6th of July 2019 is special to us, because we hit a big milestone. $1,000,000 in revenue. One million American dollars. You may think that since there are so many companies that have done it before us, that it is an easy task. It’s not. Not even remotely. But after 6 start-ups over the last 8 years, I’ve learned a thing or two about bootstrapping a company and being resourceful, so whether if you’re just getting started with a new business, if you’re well on your way already, or if you are contemplating getting started on that brilliant business idea that you’ve thought about for ages, I hope this article can be of help.
This is the two-part story of how AvalonKing – an automotive care brand – grew from $0 to $1,000,000 in 15 months and change, with $10,000 in starting capital. The first part will primarily be about our journey till we hit the milestone, while the second part will go through some of the things we learned along the way, and that hopefully can help you on your journey.
Our humble beginnings
It’s February 2018 and I just landed in Alicante, Spain to meet with my business partner, David. But before I get into that, let me give you a quick flashback of how David and I met, because it’s quite crazy. The short version is that we met through a Facebook Mastermind Group for Entrepreneurs and slowly gravitated towards each other due to similar business acumen. After talking through ideas for a few weeks, we got the idea for AvalonKing. A plane ride later, we met up in Düsseldorf with our laptops, a short business plan, and a few hours before my return flight back to Denmark. A few days later, we would form an LLC and be on our way. But that’s a story for another day.
Back to the story. So, the agenda for the meet-up is going over our finances and marketing initiatives, so we can creatively reach our audience without breaking the bank. Prior to meeting up, we had launched a promo video in our beta-stage of the company, just to feel things out and see if we could get people to bite before we had finalized everything. People didn’t really bite. To us, the video was good, because it showed what features our product has and it displayed a bit of lifestyle and coolness from amazing surroundings and, of course, nice cars. But as it so happens when you shoot blindly from the hip, you miss the target completely.
When we launched the business, we were fortunate enough to have a nice chunk of data from a previous business in the automotive niche. That was actually how we discovered the technology behind this new and trending product type, ceramic coating, which seemingly was somewhat of a revolution in the automotive DIY niche (Do it yourself), and would become our flagship product. If you don’t know what ceramic coating is, think car wax, but on steroids. The interesting thing we found with the technology in the automotive industry, was, that the point of entry for a consumer was very expensive and misunderstood, mainly because the majority of ceramic coatings were performed by professional detailers. To give you some reference, getting your vehicle detailed and ceramic coated will cost you $750 on the cheap side, and $2,000+ on the expensive side. Most people can’t justify those types of costs.
We were of the belief that things could be simplified in a way so everyone would be able to get great results and also made much more cost-effective if we dealt directly with the consumer and guided them through the entire process. So we ended up formulating and developing a new kit from scratch which was not only super user-friendly at any experience level, but also cost-effective and best of all, a really aesthetically pleasing and cool experience.
After going back and forth with scientists, laboratories, and manufacturers for months, we finally got the kit in our hands. We were so eager to get the product into people’s hands that a lot of our market analysis was subpar. We assumed that people would see what we saw, an amazing product with amazing features. Lo and behold, they didn’t. Let me explain why we were wrong, and why it was probably the best thing that ever happened to our business.
Understanding our audience
When selling something to consumers, you have to understand who they are, why they need what you have, and most importantly, how it’ll make them feel. There’s a saying among marketers, that goes like this, “You don’t sell the sausage, you sell the sizzle“. Stop for a second and read it out loud. You don’t sell the sausage, you sell the sizzle. It’s important to always keep in mind if you plan on selling anything to anyone.
You don’t sell the sausage, you sell the sizzle.
We had to figure out how to tell our audience why they needed this product and the benefits of it. Not the features, but the benefits. You may think, what’s the difference? Let me explain. A feature most often describes what a product does, and why it’s different from the competition. A benefit on the other hand describes how the product can help the audience, and how it’ll make them feel. Think about the last time you bought an iPhone or an Android smartphone. Did you buy it because of the new and faster processor or the slightly better camera? Probably not. You probably bought it because it made you feel good, right? Made you feel part of something.
So in order for us to have a deeper understanding of our audience, we went through our data, went through 3rd party market analysis data, surveyed people, and equipped with these answers, we put together personas that would resemble our audience segments. In order to resonate with someone, you have to think and talk the same way. You would probably feel pretty good about buying something, that a close friend of yours recommended, right?
In order to resonate with someone, you have to think and talk the same way. You would probably feel pretty good about buying something, which a close friend of yours recommended, right?
Having figured out who your audience is and how to talk to them, does not mean that you’re going to succeed, though. You still need a push to get you off the ground, which is where, unfortunately, most start-ups fail.
It was the same for us. Even though we now understood our audience better, it was still hard for us to turn visitors into customers, primarily because the product type was so new to everyone and there was a lot of skepticism around it. Usually, when you introduce something new to the market, there’s an educational aspect you have to consider, which is almost always a very expensive process. That said, if you can break through that phase, and create a new category, good things could be ahead.
Redefining our strategy
When we officially went live in April 2018, we were experimenting with a variety of initiatives. Facebook Ads, Google Ads, Instagram, YouTube, Quora. Then one day towards the end of the month, someone reviewed our product on their YouTube channel and the traffic from the video went crazy. From a steady 100-150 people visiting our site per day, we suddenly had 100 people on our site simultaneously, and sales started ticking in. By the time the day was over, our revenue had jumped to $1,704 from 1,475 visitors. We were amazed at how effective it was and soon realized that collaborating with YouTube influencers was a smart way to get our product in front of a large number of people. And because the audience of the respective content creator already trusted them, the educational part of our product had less of an impact. Think about when someone like Kylie Jenner introduces a new product to the Kylie Cosmetics line. Most often, her audience trusts her blindly, which makes it easier to sell something, even if it’s new and unproven to them.
The day after, our numbers increased even further, and we had our best sales day ever at $3,074. But what was more, we knew that this would be our way in. So we doubled down and focused on building relationships with influencers on YouTube, to get our product in front of as many people as possible. This phase was very slow and tedious, in large because we were a completely unknown brand, which made the influencers question us and our legitimacy. But slowly we picked up steam, and as more people reviewed our product, our credibility grew, which made it much easier to collaborate with them. It’s the same thing as when you look for validation out and about. For example, if you visit a new city and there are two restaurants next to each other. One is empty, and the other one is full. You’re almost always going to choose the one that’s full and validated, right? Anyway, we continued our repetitive process of reaching out to collaborate with influencers, but it wasn’t until October came around though before we really started pulling in numbers. From September to October, our revenue climbed from $20,733 to $78,325. A month-to-month increase of 277%, which we felt all the way through our bones. God dang, it felt good to pick up some hard-earned momentum.
Coming into our own
Over the last months of the quarter, we took a step back from the monotonous tasks of reaching out to influencers and instead started looking at the big picture and how we could scale the business holistically. Our approach was somewhat simple but effective. First, we reached out to a bunch of review sites and asked them to compare it to others. If they did end up liking the product, we would tell them about our Ambassador program which gave them a commission-based incentive to keep the product listed in their comparison articles. Also, we purely wanted to work with passionate content creators and drive engagement through cool projects without compromising the overall integrity of the creator’s vision and values. We found that the content creator’s viewers are really smart and know when the content is not organic and legit. Even though our revenue dipped a bit over these months, we knew it was the smart choice for future growth.
With these fundamental changes, alongside the hires of some key team players, we saw our revenue skyrocket in March to $121,388, and further to $172,584 the month after. And only a few months later, the $1MM milestone was obtained. We didn’t celebrate much, but we were happy. But to us, our focus had just gotten sharper, and the $1 million dollar mark was soon a distant goal in the past, with our eyes on the real goal. To grow the company into the biggest automotive care brand for DIY’ers in the world. Now, since the milestone, 1½ ago, we’ve grown tremendously and our vision, mission, and values have never been clearer.
We’re driven by a belief that anyone with a passion for autos, should be able to have great detailing and caring experiences with ease, through simplified guidance, and most of all, have fun doing so.
But it’s not written in stone, because if there’s one thing we’ve learned, it’s never to get complacent or static in your approach. Always adapt and evolve.
A lot of details have been left out in order to not turn this into a too lengthy article, but these are some of the vital parts of our come-up.
What I learned from all of this
Since then, I’ve gotten one question over and over again, “if you had to do it all over again, would you do it differently?”. To answer it simply, yes, I would. If I know what I know now, it would have been fewer nights in front of the computer, when almost every one of my friends was out partying or making babies at home, with their respective partner. But had we not gone through all of those experiences, we wouldn’t have been forced to stop and figure out how our audience thinks and talks, and we most certainly would not be where we are today. So the moral of the story is, you need to start from somewhere and draw experience from your wins and fails. No one has ever become successful without failing, and neither will you.
With that out of the way, let’s discuss how you can be on your way to the $1,000,000 mark as well. Here are four things that I believe are all very important to dictate early on, which is not emphasized enough. Granted they’re best suited for a remote-only company, but you can still adapt these to whatever business you want to.
Think about how you communicate
Since its inception, AvalonKing has been a fully distributed company, and all of our team members are working from home. That’s only possible if you trust your colleagues and their autonomy. It also means that since communication is mainly through text, everyone has to be concise and effective when it comes to writing.
Personally, I believe that one’s ability to communicate concisely is an extremely important skill and one that I constantly try to get better at. For example, this article on its own started as 5 pages of unorganized subjects in my notepad, as you can see below. Excuse my handwriting. 😉
And the same goes for communication with the team. Before I formalize anything, I brainstorm and strategize on how I should execute. How can I get my message/idea/point across concisely, without trying to perfect it into oblivion?
If I can get my messages across in a way that everyone on the team understands it in 5 minutes, regardless of their experience of certain areas, instead of 10 minutes, then our team of 10 people has effectively saved 50 minutes. Imagine how much extra time the team will have over an entire year, simply with a little extra effort on my side. There’s obviously balance to this, so you don’t go too crazy, but my point is clear; communicate as concisely as possible at all times.
Make plans, but understand that they are guesses
I often see fancy business plans, with extremely detailed budgets. And if planning things out in every intricate detail is what you love to do, knock yourself out. But understand that regardless of how much planning you do, things won’t go that way. They just won’t. At the end of the day, a business plan or a budget is merely a guess. An educated guess.
I’m not saying that you shouldn’t make plans, because you definitely need to, but holding on to an old business plan, with the information you had when you launched is simply not smart and have cost a lot of businesses to lock up shop. Being dynamic is one of the fundamental strengths that small companies have, over well-established ones, so don’t be afraid to change direction if that is what your business needs.
At the end of the day, a business plan or a budget is merely a guess. An educated guess.
When we started AvalonKing, our business plan was very rough on its own. Naturally, we only knew what we knew at that time, and as we grew as a business, our vision changed alongside it. Today, we have a blueprint of what our mission, vision, and values are. So don’t over plan things. Instead, make sure you have a solid understanding of what you want to do, and how you’re going to do it. And then execute the hell out of it.
Be unique, wholeheartedly
In today’s day and age, you have to stand for something. I’m not talking about seeing a cool phrase on your Instagram feed and then re-posting it. Nah, I’m talking about the change or solution to a problem that you want to do something about. Everyone wants to feel part of something, and by showing your true colors, you let the world know what you stand for. It doesn’t have to be grandiose in stature. Small does it too, and we all start out small anyway.
There’s a reason why you always hear the word, “target audience”, when discussing modern-day companies. That’s a product of catering to something or someone specific and sticking to it. You can’t successfully cater to everyone, so focus on what you do differently and why you do it that way. Chances are, if you do your homework well, someone else will buy into your vision.
For us, we saw how the entire automotive care industry mainly focused on experienced consumers/professionals and abandoned the idea of catering to the every-day people who just happen to care about their vehicle’s appearance. Instead of doing the same thing, we challenged the status quo and developed a kit that was entirely focused on simplifying the process, so everyone who tried our kit would be able to get the same results as an individual with a lifetime of experience in automotive detailing. And as we grow, we will continue to challenge the status quo, by making the most user-friendly products for a DIY’er, while creating an amazing experience around it. And that is empowerment at it’s finest.
There’s a reason why our customers review our product very close to a perfect score. It’s not because our product is necessarily the best for everyone, but you can be damn sure that it’s the best for the every-day DIY’ers.
So open your notepad and get started on writing down your ideas, so you can figure out how you can be different. And when you’ve got it, stand by it 100%.
Data is your friend
At AvalonKing, we go by the phrase, “if it can’t be tracked, it can’t be scaled”. So even if data is not your strong suit, make sure you have someone on your team that knows how to track visitors on your website, or even if you have a brick-and-mortar store. There are endless amounts of data available if you just know how to set it up and utilize it. You will be doing yourself an enormous disservice if you don’t, simply because your competitors most likely will.
Let’s illustrate it with these two fictional companies:
- The website, Diaper Palace, sells baby diapers. They advertise mainly on Facebook and Google Ads without being able to track their traffic. They are happy though because they profit $5 per case of diapers sold when all expenses have been paid.
- The website, Diapers ‘R Us, also sells baby diapers. They advertise mainly on Facebook and Google Ads too, but they track their visitors, so they are able to see that the majority of their customers are females from 25-35 years old. So they focus the majority of their advertising budget on that segment and are able to convert their visitors at a much higher rate, which in return means that they are able to profit $12 per case sold.
You may think that there’s not much data you can track in your business, but I guarantee you that there’s plenty if you just know where to look for it.
Here are some examples to give you some inspiration:
- When is your store’s traffic at its peak? Are you able to accommodate your visitors effectively?
- What pages are your visitors looking at before making a purchase? How many pages in total?
- For a brick-and-mortar store, what’s the most popular item on the menu, and what’s the second/third most bought item that can accompany it? Maybe you should upsell them or bundle them together for the total experience.
- How long does it take for people to order in your brick-and-mortar store? Could you simplify the experience or signage, so it feels less daunting as a newcomer in your store?
- How many of your customers are leaving their items in the cart at checkout? Maybe your prices are too high compared to your competitors, or you have not been able to answer the questions the visitor may have had.
- What traffic sources convert the best for you? Facebook, YouTube, Instagram, or something else? Double down on them! The same goes for brick-and-mortar stores, ask your customers where they heard of you from, and double down on what gets you the biggest reach while keeping your costs low.
- Use discounts/coupons as a means to get people back to your store again. Maybe it’s a card that grants them their 10th meal for free, or something else. Just make sure to track if it’s actually working and how many are using your initiatives.
Summing up
Building a business is not an easy task, and generally, it’s said that 9 out of 10 businesses fail. But don’t let that discourage you from going after your dreams. If you want it bad enough, you’ll get there at some point. Personally, I had to go through 6 start-ups, before I’ve gotten to a place professionally, that I’m really proud of.
Don’t be afraid to share your ideas with others to get feedback. An idea is nothing without execution, and if you’re afraid that they’re going to steal your idea and you won’t get started with your business idea, you were never serious enough to begin with. Instead, educate yourself, research, and plan how you’re going to get off the ground and start executing. There’s no plan greater than moving one foot ahead of the other and taking steps towards your goal. And I can guarantee you that you will regret not pursuing your dreams when you had the chance.
Today, AvalonKing has soared beyond what I thought was possible when we started, and we’re only scratching the surface, in large because of our amazing team. So draw from mine and other’s experiences and put yourself in a better position to succeed. At the end of the day, I’m just a regular guy from Denmark with no education or no special talent. I just want this really f*cking bad. So if I can do it, you sure as hell can too.
If you’re interested in our story, follow along our journey to become the biggest automotive DIY brand in the world within the next 5-10 years.
I’d love to hear from you, if this in any way helped you, or if you are facing difficulties with your start-up.
In my next article, I’ll go over how I found the other Co-Founder, David in the craziest of places, and why we’re a good fit. I’ll also go over what you should look for when finding one or more partners.
