Ten Years In The Making is a weekly podcast on how to effectively grow a startup.
Adam Robinson: Hi, Dave. With me is Dave Fink. He’s Founder and CEO of Postie. They have data-driven direct mail. Is that a good enough description? Sell into mid-market retail and enterprise retail. I’ll let you describe it.
Dave Fink: Yeah, yeah, I know, I mean, look, that was fine. Our elevator pitch should be a little longer. So, before you come in, work for us, we’ll need to tightening up the touch points. But yeah, we’re a technology platform that gives marketers the tools to manage direct mail, like they would any other digital channel. So, think about us as the Trade Desk of direct mail.
Adam Robinson: Rock and Roll.
Dave Fink: The ad manager of direct mail.
Adam Robinson: Yeah. And then you’re also a partner/investor in Science which Dollar Shave Club, FameBit, HelloSociety, DogVacay, Playhaven, MeUndies, blah, blah, blah, blah, blah, on and on. So, Dave and I wakesurf together. We got connected by Shelby over at Silversmith because they love these data businesses. And at lunch, Dave’s talking to me, well, we’re doing a rebrand right now. So, all these stories came back into my head, right?
So, Dave was talking to me about these legend founder brand guys. And it’s just like the Dollar Shave Club one, right? You saw that video. And you’re like, “Oh, that’s a great video.” It was one of the first viral of that type or whatever. And I don’t think I had an appreciation for how much of an amazing guy this guy was. So, can you just start with some of the stories about this experience with Dollar Shave Club? First of all, how did you get hooked up with them? And then what was the journey from watching all that play out?
Dave Fink: Yeah, I mean, it’s crazy to think that all happened in roughly four years, give or take a few weeks. It was the big screen movie version of what everyone fantasizes a startup is all about where things just work. That doesn’t mean it wasn’t hard work and there weren’t potholes and speed bumps along the way. But yeah, to go from a crazy idea to launch to a billion-dollar exit by one of the biggest holding companies in the history of the world in four years. Yeah, that just doesn’t happen, right?
Adam Robinson: Unbelievable.
Dave Fink: It really is. And I’ve certainly changed my perspective on lots of things ranging from the potential of scale, what it means to actually build a quality business and be a good marketer holistically, that I definitively didn’t have before that experience. So, yeah, I mean, to rewind a little bit, I spent the first 10, 12, 15 years of my career in marketing on the quantitative side of things and direct response and geeking out over data-driven approaches, testing, and optimizing. And I still believe in that. And that is an incredibly important part of what we all do.
But I think I was drinking the Kool-Aid a little much, just fixating on all of the micro-optimizations that go with landing page optimization and button colors and email subject lines, do you capitalize all four letters in free, do you put an exclamation point, do you do a data pen with first name in the opening of your communication, like all those things. Yeah, the number of words on a page, the width of a column, like all of those, the color eyes of a model on a hero image. And I’d still love that stuff. I love being able to not have to be right. It’s kind of like being a weatherman, you come up with a prediction and you’re only expecting to be right half the time, as long as you have a way to substantiate when you are right and when you are wrong, that’s your job.
Dollar Shave Club changed my perspective because that was the first time that I had a front-row seat to watching the launch of a brand and the power of telling a cohesive story and striking emotional chord in a market that made everything else easier. So, all of the quantitative marketing components still were very real in the lifespan of Dollar Shave Club. But the incremental gains and the sophistication that they were able to unlock was at such a high level because they did such a good job telling this challenger brand story, that it all of a sudden opened my eyes to the impact that brand and storytelling has in the success of building something that has staying power and scale, that just a focus on direct response tactics can’t do.
Adam Robinson: Right. So, what you learned was you were spending– I mean, not even you in particular. It’s just like, the previous worldview was 95% of your brain went to these optimizations. And it’s like, wait, if we actually just told the right people this hook that would infect them, it’s going to make this work five times as better, five times as well. It will eat up all of the Facebook spend that everyone else is trying to get because people will just gravitate to it virally.
Dave Fink: Yeah, and I don’t want it to be as blunt as it may sound because I do believe in quantitative tremendously, but it’s kind of the difference between getting consumers to care about your products and service and recognizing emotionally the value it’ll add to them and to experience their life versus leveraging a bunch of tactics to get them to without thinking about things just buy enough times. I was going to use the term trick, but it’s not even tricking, it’s just…
Adam Robinson: Sending a better email.
Dave Fink: Yeah, yeah, sending a better email versus sending the best email to a person who already cares and feels the pain point that you’re trying to solve and is already thinking about switching or converting. And look, I think the unique time and place that Dollar Shave Club was in was everybody knows what YouTube is right now and everybody knows what Facebook is right now. These are these ubiquitous things. I mean, we’ve gone beyond YouTube to Instagram reels and TikTok, but video is a thing, and storytelling through video is a thing.
And when Dollar Shave Club came on the scene, it was the first viral video. YouTube didn’t even have algorithms at that time, if I remember correctly, or it was like, front page is based on some editor at YouTube deciding what should be on the front page of YouTube. And so, there was much less noise. They created that genre, that playful speaking directly to the consumer, championing their cause, voice, and at the same time that YouTube was becoming YouTube and they were able to capture so much market share, so much distribution on YouTube, Facebook was just becoming Facebook.
So, lookalikes rolled out the same year that Facebook came on the scene. And so, having this blend of savvy quantitative markers that came from kind of a search world and this just really funny, clever, passionate, creative founder that had this vision for how you go up against the biggest, most dominant CPG brand in the world. The zeitgeist just was there to accelerate, Mike Dubin and Dollar Shave Club’s ability to tell that story on a big stage very fast. And you put it in perspective, like that video went live. That night, the site crashed. We missed out on hundreds of thousands of transactions.
It was all hands on deck. I think good fortune for Mike, he chose to launch Dollar Shave Club with Science as an incubator. So, we were able to pull in a whole bunch of tier-one engineers from other projects and businesses, worked all night, had to figure out how to blend outsourcing and staffing up just customer service to be able to not lose out on this tidal wave of interest. There was a lot of forgiveness because, again, they weren’t running tactics. They were telling an interesting story that just captured the heart of America.
And within a year, Mike was being called by every major media publication as the face of viral videos. He was being called to do lectures in every major university in the United States, let alone in foreign countries. He nailed it, and then we at Science, which was this tech studio incubator. I was getting called once a week from founder saying, “Hey, can you just help me do a viral video like Dollar Shave?” Which I was like, “Oh, sure.”
Adam Robinson: We’re not MrBeast.
Dave Fink: Yeah, I mean, seriously. But even MrBeast is able to do it because he has distribution. They just thought there was some formula for, just film 100 or a 10-second video and next thing you know, we’ll be generating tens of, if not hundreds of million dollars revenue. And it wasn’t that. It was Dollar Shave Club was an authentic brand story that just happened to come along at a time that they got disproportionate distribution through some really rapidly growing media channels.
Adam Robinson: What about the guy? Is he just like next level? Or he’s the brand guy?
Dave Fink: Yeah, there are crazy stories that I want to share on the air that when my partner at the time, Peter Pham, was taking him up and down Sand Hill Road, helping him raise rounds of funding and just the stories that they would have of just Mike’s brilliant humor, entertaining him through a really stressful situation. Anybody who’s fundraised knows, like no matter how good of a business you are, it’s a painful, stressful process.
And Mike, he’s a brilliant storyteller. He’s charming. He’s fun to be around. He’s clever. And that translated through the DNA of that company, but he scripted that video. He leveraged a friend who had some equipment to film that video. He starred in that video. And then, every major piece of content that came through the DSC marketing team, he had his fingerprint on. He didn’t move off or just focus on finance and leadership and management. He owned the brand through and through and he did it for many years at Unilever after the acquisition.
Adam Robinson: That’s awesome.
Dave Fink: Yeah, he’s the real deal.
Adam Robinson: Yeah, yeah, yeah. I mean, I love that. He’s so cool. So, it was like day one, did it even take a breather, it was just up into the right guy the whole time?
Dave Fink: Yeah, and it was up into the right. That doesn’t mean that the normal challenges that every business goes through, supply chain and logistics management and additional fundraising and management and hiring and personnel and team structures as they went from 10 people to 50, to 200, to 500, all those things are real manufacturing challenges with partners in a very small industry where there are 100 Razor Blade manufacturers. And I just hadn’t thought about it in a decade, it’s kind of crazy, but it was a whirlwind.
But with that being said, none of it mattered because they had a quality product and a brand that everybody wanted to be a part of and they were telling a story that was very authentic to them that they really believed in. And that means, all the problems that most moral companies have to deal with that maybe inflict more pain along the way, they were able to work through it.
Adam Robinson: So, how long does an accelerator stay involved in a company like that? What time frame were you, like, from pre-video, when were you guys– you know what I mean?
Dave Fink: Yeah, so Science was a little bit different of a beast. We came in the scene, 2010, 2011, something like that, when accelerators and incubators were the rage. That was the new hot business model. And it was more common to have these traditional accelerators where the accelerators give you 100 grand, maybe take 5%, 6% ownership in your business, put you through more of a structured class, almost like a boot camp for three months or six months, and then kind of kick you out, or do a pitch day and try and help you raise your seed right.
And then, Science went deeper. We loved being involved operationally. And so, we really saw ourselves as being co-founders in the businesses we partnered up with. So, we got involved very, very early stage. I’ll come back to specifics of DSC in a minute here. We’ve provided oftentimes more capital but more resources, so things like design, engineering, resources, technology that we had built to help platform e-commerce or marketplace or influencer marketing platforms.
There were a lot of hands of some of the brightest people in kind of the LA consumer technology scene that were on our team, financial help and certainly fundraising hands-on, not just here’s your pitch day, we’ll bring a bunch of investors in, but let’s work with you on your story, your pitch deck. Let’s work on your presentation. Let’s go set up meetings for you with the right set of investors and help you evaluate deals. You figure out how to create some competition. All of that happening.
So, companies typically stayed with us for longer, usually, some cases, several years. In Dollar Shave Club’s case, I believe it was about two years. And one of the things I love about this is, I think, I touched 75 startups during the six years I was a founding partner at Science, and one of the core differentiators between the businesses that were truly successful and those that didn’t really get there were that the ones that were successful, it was almost hardest to push out of the nest. And part of the reason is that they’re confident and they’re smart founders, like we’re getting a lot of value here. Why would you leave? Or we’re getting free rent even. Why would we go, like take out this rent?
Adam Robinson: Oh, you’re saying the most successful ones, you kind of ended up hanging on to the longest.
Dave Fink: Yeah, at one point, we’re like, look at Dubin and Adam Weber and Kevin Datoo. We’re like, “Guys, there’s no room for us in the building anymore. I think you’re ready to go. Get your own space.” And they’re like, “Okay, that makes sense.” But they took advantage of every opportunity, every resource available to them.
And then there are the companies where it’s like, I hate to say, but many of them, it was more about first-time founders playing the role of founder. And they’re like, I just want to raise my money and get my fancy office and put our signage on the side of the building. And those companies, more times than not, didn’t do so well.
Adam Robinson: Right. Yeah. Do you believe in sort of like– I was talking to Henrik Werdelin, who is a co-founder of BarkBox. And he also has this accelerator called Prehype, and they have 40, 50, I don’t know, probably close to 100 portfolio companies. And I was just having a catch-up with him five years ago or something like that. And he’s like, “Man, almost without exception, all of the businesses we have built that have started like this have stayed like this. And if they start like this, they kind of stay like this.” Do you have a view on that having seen so many startups?
Dave Fink: I think there could be some natural selection or natural bias in how the businesses are created. I don’t think there’s a definitive if something doesn’t take off, like a rocket ship, it’s shut it down, put a bullet in, and you’re gone. I think there are plenty of businesses out there that it took a while for them to figure things out. They went on pace. Maybe it was challenging to raise funding, maybe they just didn’t get product-market fit perfectly, but they were close.
Adam Robinson: Kind of on their way, yeah.
Dave Fink: Yeah. And then there are probably more businesses that I think that took off like this that hit a plateau and because maybe they captured one demand gen channel or one tactic for growth, but it wasn’t necessarily purely organic, or the TAM was not as big as they thought it was, or the markets moved so quickly. So, I’ve seen that a lot. I think within ensemble environment, whether it’s an incubator studio or whatnot, the way that it should work, and this is one of the challenges with the model and that it took me a while to learn, but if your product is incubation and you’re out there promising prospect founders that this is the most direct path, that there’s a way to de-risk, yeah, we’re going to help get you there and you onboard 10 businesses. And then one of them shows explosive growth and a ton of potential and you own the same percentage of each of those businesses, it doesn’t just make sense in order to maximize return capital that you would put as a disproportionate amount of attention on the business that’s working.
But what ends up happening is that if you do that, then you’re kind of abandoning those that aren’t working and that wasn’t really a fair trade. And oftentimes, what happens is like, we’re all arrogant. And so, we’re like, “Oh, we could help fix each of these businesses.” And so, you spend all this time working on the most challenged businesses. And that’s how venture works. In venture, we’re going to make a lot of bets, and then we’re going to spend all of our time and double down on those that are showing potential. And that’s the game. Incubation is different.
And what that sets up is, I think, a situation where the businesses that start out like that in an incubator or an accelerator has some discipline, all the good resources go into those rocket ships. And so, there’s self-perpetuating momentum because now, you have the smartest minds in the building, more resources, more attention, more mindshare put into the businesses that are working, and the ones that aren’t working get ignored. And maybe some of them could have been perfectly fine businesses or maybe would have hit a tipping point. I think, I don’t know if there’s a definitive one size fits all to that question, but I certainly think there’s some self-fulfilling prophecies in this world where you’re trying to spin up a bunch of businesses at the same time, not expecting all of them to be successful.
Adam Robinson: Right. Is this a game that people get rich doing?
Dave Fink: I haven’t seen.
Adam Robinson: Over the breadth of accelerators, is it something you would describe as people enter it, and they leave it with lower expectations than they came in with?
Dave Fink: I think that you see kind of two types of founding groups. And then one is the founder who made $100, $200, $500 million is motivated, isn’t really motivated to get back into the daily grind of operating a business but wants to be involved intellectually in startups. And when you’re an investor, you invest. And unless you’re starting your investment firm, you’re kind of writing checks to firms as LPs, and then you’re so far removed. Even when you’re investing out of your own balance sheet, you’re still not running the business. Founders don’t want you meddling. At best, they want you showing up when they need something.
Adam Robinson: It’s like, they don’t want to send updates.
Dave Fink: Yeah, yeah. And so, I think you have this group of people who were successful and they want to tinker and be involved. And then you have people who have not been successful yet, maybe they’re nervous or they don’t know how to run their own startup. They like the idea of being an investor, but they’re more operational. And so, they put together a group of people and they try to run a startup studio or whatnot.
I think the most successful ones are those like, I think it was Atomic up in the Bay Area, where they kind of all came together. Experienced guys started this kind of portfolio-type incubator startup studio. And then if I’m getting my startups right, the first successful is Hims out of Atomic, I believe.
Adam Robinson: And Dr. Squatch too.
Dave Fink: And that one looks like a runaway.
Adam Robinson: Dr. Squatch, I don’t know.
Dave Fink: What was it?
Adam Robinson: I thought maybe Dr. Squatch was out of there. I don’t remember though. But it was Hims for sure, and then they had a couple of software businesses because I met this guy, JP, who’s in Austin, who just moved here. He was the next-door guy. It was a tech platform where they were just buying your house with a click of a button.
Dave Fink: Opendoor.
Adam Robinson: Opendoor, yeah. And he spent two years at Atomic. He was running three of their software things. He said– I eavesdropped their conversation because everybody, it’s such a mysterious thing. “What was going on?” He’s like, “Garrett’s amazing.” He was even better than you think kind of thing.
Dave Fink: That’s awesome. Yeah, look, smart people do smart things more times than not, but I think even in that world, for at least a while, all the sharpest minds jumped into Hims because it was working. It was working at an extreme level. And there are probably other projects that stalled and maybe didn’t have to stall. But that’s the challenge, I think, of– you have to have discipline if you’re going to run a portfolio. There’s only so much time in a day. And so, from what I understand, I’m an outsider in that firm, for sure. But I think they probably got it right where they put your attention into what was working, maximize the return on value there, and then maybe jump back into the next one or the next few. Yeah, that’s…
Adam Robinson: For you, is building one company better than this portfolio sort of approach or whatever?
Dave Fink: They both have their merits. I’m certainly creating more value and an asset. I’ve missed the frenetic nature of being involved in so many different things all the time and constantly staying on what’s new and fresh. That was a really special time and place in my career. I miss being able to be a daily mentor and coach to lots of people and feel like I’m making impact in the life of founders. I do that every day now with my operational team here. And that’s probably where I get the most value these days. Yeah, that’s exactly about it and you learn.
Adam Robinson: Do you still have 21 direct reports, like the last time we talked?
Dave Fink: I have fewer but still way too many. We’re working on it. I think our VP of Marketing took over the SDR team, which is a big help, and they’re an awesome team. I actually really enjoy the one-on-one time I got with that crew, but I just couldn’t handle anymore. So, that took about six, seven reports off my plate. So, we’re in the teens somewhere. Hence, the bads that arise.
Adam Robinson: Yeah, right. I mean, so we just had a VP layer start two weeks ago and before that. There’s something about the human experience where right before something good happens, it’s literally the worst because it’s anything, but the pressure, I was going to explode. But I’m trying to figure out how for the first time, it’s like, okay, do I absolutely need to be on this call? If not, can someone just please figure out a way to inform me of what happened?
Dave Fink: Yeah, and I’ll tell you the other one that I’m not great at. So, the other skill that I’m getting better at is just being possessive of my time, not even just showing up for meetings, but I used to be late to everything, I’m still not great about it, but because I felt bad about shutting down a conversation if we were out of time. And even things like interviews when I’m interviewing someone, I feel like they should be able to ask me as many questions as I ask them and get to know. ..
Adam Robinson: So, one thing that I did, which I’m very proud of being this clever, did I tell you this? I made a series of 11 five-minute videos because we never hired anybody. And I was like, we’re going to hire 40 people in the next six weeks. So, I made 11 five-minute videos about literally every part of why you would work here. Here’s our attitude about work-life balance. Here’s our attitude about remote work. Here’s our att– just the whole, like, here’s what’s going on today. Here’s our mission. Here’s who we sell to. Here’s the competitive landscape. Here’s why we’re going to crush it. Here’s the path to 100 million. And I’ll send it to you. My energy was really high, I was very amped up on this opportunity.
For instance, the VP of sales we got, he’s like, I made the mistake. So, we’d get a bite from the recruiter. And then she would send this link, she’d send something that said, here’s a five-minute video from Adam, just talking about– but it was 11 five-minute videos. So, the right person watches me talk about this for an hour. The best person watches all this other content I’m creating or whatever. And our VP of sales is like I made the mistake of watching those videos when I was on vacation in Mexico, I didn’t sleep that night. Right then, I decided I had to work for you guys.
And everybody, like I do this thing in the beginning. And we’re like, “And we’re live,” and I’d just start rambling or whatever. And they see the background because it’s the same one. Everybody I talk to does that to me, whatever. So, I’m fascinated with this using video in a smart way to do the job of like– because I was just like how could anyone possibly understand the complexity of why they should join us through two interviews, which is all we have time to do, right?
Dave Fink: No, look, I think it says a lot about you that you’re saying, I think, similar to what I was trying to express, it’s not hiring is a two-way street. It’s not just, hey, do you have the qualifications? Do we like you? It’s if we find the right candidates, how do we convince them that this is the right place for them? And you’re putting the time into that and effort. So, like you said, it’s not about that your time is too valuable to spend with a good candidate. It’s that even if you spend time with a good candidate, you’re not going to get…
Adam Robinson: Even in an hour, you don’t understand what is going on here, right?
Dave Fink: Yeah, yeah.
Adam Robinson: In your company too, it’s like data-driven direct mail. Dude, it’s a very complex landscape that you’re navigating. There are some serious questions that people have about it.
Dave Fink: Oh, yeah. Look, I mean, perfect example, so just today, I got brought into a second meeting, part second, part first meeting with one of our account executives who was prospecting and pitched a mid-sized digital native e-commerce brand, probably one you work with. And they got really excited, and their big initiative this year is that they’re going to be a flagship kind of kiosk at one of the big omnichannel retailers and rolling out in a thousand stores or something like that.
And so, they started realizing with some of the targeting capability and geofencing of direct mail that they could be bringing in some of their data, some of the retailer’s data, and this could be a real partnership. So, they set up a phone call today with the direct mail team, the marketing team at this omnichannel retailer, the partnership marketing team, and them and us. And it was like, they literally– everything they told us that they need and they envision, it was like they went to our website and saw everything that we did and then were teasing us almost.
They loved us. But we burned an hour like that and we didn’t even get to talk about our capabilities. It was just an hour of discovery on them, and them talking and sharing and us smiling and validating their needs and pain points. And you get to the end of– this is like the second hour already and we’re just starting the sales cycle. And you think about it, how are we going to get through all this, we got to get through a demo and bring it to life and talk about deep campaign structures and integration and this complex three-headed monster, but it’s a journey.
And on the opposite spectrum, you got to settle them as an opposite spectrum. We were just talking another part of how they do time management. Instead of doing one-on-ones with all of our salespeople, I do usually two to three-on-ones. And because I figured if we’re in a group of four, collectively, we’re going to have much better ideas than me just trying to answer all of their challenges, but one of the salespeople brought in a challenge of getting stuck in this one deal. And what came out of it is that their pitching decision-maker who’s now just trying to negotiate on price, but that decision-maker came in mid-sales cycle after we did discovery, after we did capabilities presentation, after we did the demo. They don’t even know what we do.
Adam Robinson: It’s just like banging you down, for the support of it, right?
Dave Fink: Totally, totally. So, the win was like, hey, he’s not sold. Let’s do discovery with him. Let’s see what his pain points are. Now, we’re in the room with the decision-maker.
Adam Robinson: Totally.
Dave Fink: Got to go back through probably two to three more meetings. That’s just how it works.
Adam Robinson: Totally. I mean, that’s one of the reasons why we’re focused below where you guys are focused. Seven-day sales cycle, 30-minute…
Dave Fink: Those aren’t easy either.
Adam Robinson: Boom.
Dave Fink: I mean, you may have a more digestible…
Adam Robinson: Yeah, it’s like the value proposition. It’s very straightforward. It’s like we put some scripts on, we give you some email addresses, we send out more abandoned carts through Klaviyo. Go and buy it, you’ll make a lot of money. If you don’t, quit in 60 days.
Dave Fink: It’s a good pitch.
Adam Robinson: Yeah, so I just have these vivid memories of these like, the Liquid Death stories. Can you just tell some of those? Because this is unbelievable. It’s so crazy to me that…
Dave Fink: I’m a total outsider on Liquid Death. Mike came into Science a couple of months after I transitioned out to start Postie. So, we were like ships passing in the night. I would have to do some research and get back to you. I can only speak from an outsider’s perspective. And then, certainly, I catch up high level with the founders that stuck around it at Science, but I don’t have the same stories. I just…
Adam Robinson: Right. But even the outsider stories are bananas.
Dave Fink: Brilliant.
Adam Robinson: So, what was news to me because my relationship with Liquid Death as I walked into Whole Foods and there was a pyramid of it and I was like, “That’s water? That’s f*cking genius.” You have a thousand water companies competing on purity, and then there’s this one that says it’s death in a can. I mean, it’s just like– and then you started telling me that pre-revenue or something, they brought Tony Hawk on board. He’s signing skate decks in blood. They’re auctioning off vials of his blood.
Dave Fink: So, that story, that’s the one that like– okay, so I almost liken it to an episode of the Family Guy. I’m not going to say I’m a huge TV guy, but there was a phase where I was told you got to watch Family Guy, you got to watch Family Guy, you got to watch Family Guy. And finally, I started watching it. And I wanted to not laugh.
Adam Robinson: Yeah, I know, it’s incredible. Yeah.
Dave Fink: Well, but the way they get you is, they hit you with a joke and it’s like a 6. And then later in the episode, they hit you with a similar joke, if not the same joke, and they get it to a 7, and they hit you over with it again, it’s like an 8, and then they get you with a 10. And finally, you lose it and you’re like, you win, you win. It’s funny. You’re committed. It’s amazing. And with Tony Hawk story, again, brilliant marketing, commoditized product. Differentiator is really the marketing. Sure, it’s the can, but it’s really the marketing.
Adam Robinson: Totally, a million percent, yeah.
Dave Fink: Yeah. And it’s like the Tony Hawk story is, hey, we’re going to get Tony Hawk as an influencer in our company, but instead of paying him to do a video skateboarding on some ramp and cracking a can of water and drinking it or whatever, they get Tony Hawk to sign a contract in blood, to donate vials of his blood, which they mixed with red dye, which they commissioned, whatever it was, 10 custom decks using that blood-infused red dye. And then they auctioned the decks off and the proceeds go to Tony Hawk’s foundation. That is so deep. Even my dog appreciates it.
Adam Robinson: Even the dog loves this story.
Dave Fink: I mean, that is so deep and so committed.
Adam Robinson: It’s incredible.
Dave Fink: And that’s them. They’re getting customers to get Liquid Death tattoos. They made drinking water fun. It’s similar to Dollar Shave Club’s journey. They just got people to want to be a part of a brand. And you look at all these categories that popped up over the last 10 years in D2C disruptive commerce and the mattress industry. We know the whole history so it’s not maybe as exciting to hold where things netted out, but I was really tight with the Casper mattress guys and that was a brand story. It would sure put a mattress in a box, but this founder story started as everybody talks about in the startup industry how sleep isn’t cool and whoever gets the least amount of sleep wins. And they realize that that’s crazy, like let’s be well rested and let’s go to work and be really productive all day and that’s the way that you slay dragons and you do disproportionately big things.
And I remember their launch, and they launched and oversold, and so, they looked and they were going to invest in customer service and they started shipping customers that they couldn’t fulfill mattresses on for weeks, air mattresses, with apology notes. And the customer satisfaction, NPS scores went through the roof. And the difference between that and the other mattress companies that found some hook and threw mattress in a box and get jammed Facebook ads and landing page optimization, you got people to care about it. They used to have videos of their delivery people on bikes in New York with baskets delivering mattresses.
Adam Robinson: That’s awesome. So, seeing Dollar Shave Club playout firsthand, did that carry over to Postie in any way?
Dave Fink: Yeah, I think so. I mean, look, certainly learning how to run fast-growth businesses through an absolute juggernaut did. Seeing the competencies that Mike Dubin had. Yeah, I’ve heard that story over and over again, didn’t really understand until later in my career, like investors recommending, hire people smarter than you. Make sure you’re the dumbest one in the room. And it sounded cliche, but Mike did an unbelievable job putting together just a killer executive team. And that was a lesson, there’s unquestionably, I needed to be in the weeds with people way smarter than me in their domains and make me stronger.
Look, we did things a little differently. Dollar Shave Club needed lots of capital to capitalize on what they did. And once you get on the hamster wheel venture, it’s a scary place. And we’re all seeing that now, in early 2023, as there’s been a venture market pullback dictated on contraction in public markets and what terminal values look like. And so, for me, I think it was a reminder that you got to focus on business model, you can’t rely on venture. I don’t want to be in a position where I’m stressed out of my mind regarding my next round of funding, regardless of the quality of the business. It’s more about building a quality business where the unit economics were.
And then, if it makes sense to raise capital, you raise capital. That was a story I learned, watching even the most successful D2C business that had a great outcome, kind of deal with as they went from pre-seed, seed, Series A, B, C, D, etc. I’m sure there are a million other stories, but they just kind of become…
Adam Robinson: Did you raise venture? You bootstrapped this?
Dave Fink: We did a seed round. We raised $3.5 million round back in 2017, and then had just operated it at breakeven or better. When we’re profitable, we invest that profit into the following year for growth. And yeah, we’ve been fortunate. Yeah, it’s limited some of the risk profile that we’ve been able to infuse into the business, but this has proven to be a business that doesn’t require the same level of risk profile that may be going after Gillette. Yeah, it requires.
Adam Robinson: And then direct mail as a channel, I mean, you’re in the middle of it, you’ve talked your book to some extent, but do you feel like it’s underappreciated? Why direct mail rather than push or SMS or something like that?
Dave Fink: Well, I don’t think it’s either. I would never be one to say, don’t run email, don’t run SMS, don’t run push. You should do it all. And in different businesses…
Adam Robinson: Yeah, but I guess, how did you find yourself being…
Dave Fink: Oh, why did I go into direct mail? Yeah. So, the reason we got to direct mail, it was just really organically. So, if you rewind to 2016 or so, that was peak Facebook, in many regards. They had hit their plateau in supply. There weren’t any more impressions being opened up. Everybody in the world was fighting to move away from traditional ad, had spent the past couple of years reallocating budgets into cracking Facebook, 85 cents in every dollar of digital media was going into the pockets of Facebook and Google, 40 cents in every dollar of venture was indirectly making its way into Facebook’s pocket. I mean, these were juggernauts.
And many, many businesses, both traditional and digital native were sitting in a world where they had a singular or demonstrative fail point in Facebook. If Facebook didn’t behave, the algorithm changed, the Facebook decided they were going to charge you differently, your business fell apart. And so, for us, we fell in love with the quantitative addressable attributes of social advertising. And we want to find other channels that we can apply it to. And certainly, like email, SMS, those are CRM channels. And there was no shortage of tools. Those are fine. It can always be better, but we didn’t have a problem with executing those channels.
But we needed more growth, top of funnel, how we activate our first-party data. And in digital where we went first, there just wasn’t anything. Like TikTok didn’t exist, it was ByteDance or DanceByte, whatever it’s called. Snap existed, but there were no ad plans. There just wasn’t anything big and scalable.
And so, we went back offline. And in offline, it was a reminder that all the smartest minds in digital marketing back in the late 90s, early 2000s, all came from direct mail because it’s a quantitative channel. And at that point, we got excited about the channel and just tried to execute it ourselves. And the difference between SMS, email, push was there were technologically advanced ways to do sophisticated things. In direct mail, it’s like picking up the phone and calling a print broker and saying, “Look, we want to buy a bunch of postcards.” And so, that was a good fly for folks like us.
And so, that just became the opportunity like, hey, if there was a tool that looked like the Trade Desk but for direct mail or Google ads, but for direct mail, GDN, whatever, would we be excited about the channel? And I think the answer for us was yes, unquestionably. So, that’s how we ended up there.
Adam Robinson: So, any interesting trends from where you sit for a Shopify Plus-type vendor, so just below mid-market, that they should be sort of paying attention to as it pertains to direct mail?
Dave Fink: Oh, as it pertains to direct mail, for sure. Look, there’s a time to invest in new channels. And that time, look, there’s still a world where you can do a lot with a little on Facebook and search, and certainly, email. And I highly, highly encourage and recommend that you start off, like those are great channels to learn. Even if they can’t be profitable for you, for whatever reason, your addressable market just isn’t engaging in Instagram or Facebook, you can still learn and iterate rapidly, but you’re going to hit a ceiling.
And that ceiling may come at $10 million ARR, it might come at $25 million ARR, it might come at $50 million ARR. It’s important to, I think, as quickly as possible, think not just about we’re business being built on Shopify, on the backs of Facebook. I think it’s really important to think we’re a brand that is bringing this product to market because we had a passion, there was a founder story, there was a pain point, there was a gap in the market to quality story, whatever that specific story is. And then you need to use that early data that you’re capturing on the light channels to understand, is your hypothesis and who your addressable market is accurate. And if it is, you need to think about what are the ways that you can engage those prospects and consumers with your organic, authentic message optimized for media because it’s just the only way to find efficiency.
And direct mail is a really powerful way to activate those same audiences that you’re reaching through your CRM, through digital channels, or through your demand gen channels in a more weighty way that makes your brand stand out. It’s just weightier than another Instagram newsfeed ad. So, the trend is really recognizing that you can leverage data just as effectively, just as successfully through direct mail as you can on any of your digital channels and just not be afraid of it. That’s how I probably think about it.
Adam Robinson: What’s the future of Postie?
Dave Fink: We get asked all the time, knowing that we started in digital and that we made our way into kind of recreating the way the world engaged in the direct mail, are we getting move away from direct mail? A big part of what we do is our big data science structure and platform, machine learning engine, and the models that we build in a more complicated, more expensive media channel like direct mail are crushing it. We have advertisers saying, “Hey, why can’t I run your models to help me with my digital CRM or to go acquire customers on Facebook or programmatic platform?” And we think about it from time to time.
But direct mail is a $50 billion space in the US. And we’ve captured very little of it. The vast majority of it is still done very clunky. I think it has a lot of advertisers that are still thinking like, I wish I didn’t have to do direct mail. I wish I could do all digital. And we think that that’s sad. It makes us sad. This is a great channel. When you rethink the way that you execute it and incorporate it, integrate it with the rest of the marketing stack, it totally removes all those friction points that doing direct mail traditionally does. So, I think we got a long road ahead of us, just continuous profitizing direct mail, even to those brands that are heavily relying on it, just helping to understand that there is a way to do it in 2023 that it looks very different and that it’s used very different goals.
Adam Robinson: Totally. Last question, if you weren’t doing direct mail, and you’re a Shopify Plus brand, what is the first thing that you would do? What is the first campaign? Is it like take your so-and-so and send this and that? Or what comes to mind?
Dave Fink: That’s a great question and I’ve been through that so many times, but it’s been six years since I was spending up a D2C brand, over six years. Look, the playbook that I was reading, certainly, it’s get branding search going, get Facebook and get content marketing going. And you certainly want to leverage if you have a story that’s resonating. You invest heavily in your media and social. If it’s not resonating, you’re not telling the right story or you’re missing product-market fit, even if you’re acquiring customers through your paid channels. You need both those things working together, right? It’s like Dollar Shave Club launching a video that drove more organic traffic to make it possibly a bot.
Very few brands are going to have that luxury, but if you can’t get placement in press, if you can’t get people or media and people talking about what you’re doing, yes, you can still buy your way into some product-market fit, but it’s going to be more expensive. So, I think you got to get that story right, you got to be– yep. And even building a quality company, hiring people, the way that you’re talking in your five-minute videos about why someone would want to work at your company, that translates through your marketing, your employee satisfaction, the creativity that your team is putting out there. So, you get the story right, you prove it out in some earned media and PR, and at the same time, you leverage kind of the ability to test them, optimize that message through social and promoted posts, digital content channels that you can dynamically spin up and down. That’s where I would start for sure.
Adam Robinson: Boom. Rock and roll, dude. Well, where can people find you, Mr. Fink, if they want to come learn about Postie or you?
Dave Fink: Yeah, so Postie, come to our site. We work hard on publishing content and case studies and all sorts of data at Postie.com, P-O-S-T-I-E dot-com. And the easiest way to reach me is LinkedIn, LinkedIn messenger. It’s easy for me to see who you are and what your angle is and you can see my background and drop me a note.
Adam Robinson: Dave, thank you. This has been awesome. I really appreciate it, man.
Dave Fink: Yeah, for sure.
In a world of social media, programmatic advertising and digital-first marketing, the direct mail market carries an old-school feel. But did you know that U.S. direct mail is a $50 billion market?
To dive into this lucrative-but-overlooked market, I grabbed some time with Dave Fink, the CEO and co-founder of Postie, a data and technology platform that helps clients run smart, data-driven direct mail campaigns.
In today’s episode, you’ll hear Dave share why direct mail is still a powerful avenue in the digital age, strategies for creating a direct mail campaign, and using direct mail to build a unique name for your brand.
Dave also shares his thoughts on accelerators and venture capital firms which he gleaned from investing in 75+ startups, including his first-hand experience with Dollar Shave Club, building effective branding for D2C businesses and the traits he’s seen from the most successful companies he’s invested with.
Key Takeaways with Dave Fink
- Dave's front-row seat to Dollar Shave Club's launch to 9-figure exit in 4 years.
- How Dollar Shave Club distinguished itself with an authentic brand story in the right media channels.
- The core differentiator between successful and unsuccessful businesses.
- The self-fulfilling prophecies in the accelerator world that creates business winners and losers.
- The two types of founding groups in accelerators — and which is the most successful.
- The merits of building one company vs. taking on a portfolio of companies.
- Strategies for convincing prospective employees to work for your company.
- Navigating nuanced sales cycles depending on the needs of your prospect.
- How D2C brands like Liquid Death, Dollar Shave Club and Casper made consumers want to be part of their brands.
- Prioritizing a quality business model over venture capital KPIs.
- Why Dave chose to get into direct mail in the digital age.
- Linking data with direct mail campaigns to make your brand stand out.
- Reasons for companies to consider the $50 billion direct mail space in the U.S.
- Where to start a D2C marketing playbook.
The Brilliant Marketing Behind the Liquid Death & Tony Hawk Collab with Dave Fink
Dave Fink Inspiring Quotes
- “If it’s not resonating, you’re not telling the right story or you’re missing product-market fit.” – Dave Fink
- “All the smartest minds in digital marketing back in the late 90s, early 2000s, all came from direct mail because it’s a quantitative channel.” – Dave Fink
- “Once you get on the hamster wheel of adventure, it’s a scary place.” – Dave Fink
- “Be well rested and go to work and be really productive all day … that’s the way that you slay dragons and you do disproportionately big things.” – Dave Fink
- “You have to have discipline if you’re going to run a portfolio. There’s only so much time in a day.” – Dave Fink
- Dave Fink on LinkedIn
- Dollar Shave Club
- BrandConnect (formerly FameBit)
- Shelby Herrington
- Peter Pham
- Michael Dubin
- Adam Weber
- Kevin Datoo
- Henrik Werdelin
- Liquid Death
- Tony Hawk
- The Trade Desk