Transcript Synced · select any line to jump ▾ 0:00 Speaker: You're listening to a Day One FM show. 0:07 Speaker: Pick My Brain is the podcast where founders pitch me their startup and I try to give them some useful advice so they can connect better with potential co-founders, investors, media, and of course, customers. My name's Alan Jones and I was a founder myself for about 15 years, and after that, an angel investor for another 15 years. So yeah, old. Some of my ventures have been successful and some failed disastrously, But I like to think I've learned a thing or two along the way, and maybe some of that can help you. So if you'd like to learn how to tweak your pitch, subscribe to the Pick My Brain show now, wherever you like to listen to podcasts. 0:41 Joan Westenberg: Hello and welcome to the Unfunded Podcast. As always, I'm your host, tech writer Joan Westenberg, and with me today is Jess. Jess is the founder of Collabosaurus and most recently the Number 2 company. Welcome, Jess. 0:56 Speaker: Thank you. Thanks for having me. 0:58 Joan Westenberg: I'm excited to have you. We've been kind of thinking about doing a deep dive into the stuff you do, 'cause I know you're passionate about bootstrapping and you're passionate about this way of building a company. I'd love to just start with the story of Collabsaurus. How did you start that company and what happened? 1:14 Speaker: Sure. Well, oh my gosh, casting my mind back a while now, it was 2015 when I started. 1:21 Joan Westenberg: Pre-COVID. 1:22 Jess Ruhfus: I pre— well, pre-COVID. Yeah. Actually, 2014 is when I started building it, but it launched in 2015. 2015, and I had come from a background in fashion publicity and small business marketing education. And I just found we're working with so many small business clients who were wanting to do partnerships as part of their marketing plan, and they just couldn't secure them. And I think a lot of that came down to sending terrible pitches out and not knowing how to pitch properly, but also not knowing how to find the decision maker. Also, I think collabs it wasn't as talked about back then. You know, Instagram was kind of in its infancy. Like, this is going back a long way. 2:04 Joan Westenberg: Yep. 2:05 Jess Ruhfus: There was a lot of educating of, you know, the market we needed to do around partnerships. But I was personally trying to source partners for an event, a business event that I was pulling together for the company I was working for. And I just found it was just like bashing my head against the wall. It took so much time to find these contacts and then pitch it out and follow it up. And similar to PR and following up journalists, you know, it's like there's a lot of hustle involved. And I just thought, oh my gosh, Tinder's becoming really popular. Why doesn't something like this exist for brands to connect and do really cool marketing campaigns together? And so that's where the idea for Collabsaurus was born, and I launched it in April 2015 with a million and one mistakes, but we got there in the end. 2:51 Joan Westenberg: Uh, what was that launch process like? Did you— what was the MVP that you launched with? 2:56 Jess Ruhfus: Oh, great question because I wish I had done an MVP. I was not a startup head back then, so it was very much like, let's build it perfect and they will come mentality. So I way overspent on the first iteration of the platform. It was, it was a WordPress platform that was tricked out with a lot of widgets, a lot of plugins, but you know, I spent big with a branding agency and I just misspent the money like at the beginning. 3:26 Speaker: Absolutely. 3:26 Jess Ruhfus: Absolutely. I built it from the lens of this is something I need, and so I just assume everyone else will need. And I also understand this, so I built it with heaps of PR industry jargon, which was a big mistake. So it was talking a lot about like AVE, so advertising value equivalent, for example, which was like an industry term that publicists would use all the time for full-page advertising and the value of that. Little things like that. You know, I launched with this website and very quickly realized that the people actually signing up to the platform were small businesses, not PR agencies, small businesses who didn't quite understand the jargon and also didn't understand partnerships or collabs at all. So it was starting from scratch. And the launch process was our first 3 months, it was free. So the idea was getting people on board. It was completely free to sign up and make connections. And I ran a big Facebook ad campaign around it that, that flopped. That did not work for us at all. But what really worked was the organic, like Instagram, engaging with other brands and commenting and Facebook groups and things like that really helped Collabosaurus get off the ground. And then we introduced a subscription model and, and then started charging. 4:42 Joan Westenberg: So you were right there at the, the birth of what we now call the influencer culture. Is that fair to say? 4:49 Jess Ruhfus: Yes. I think influencers were just up and coming as well. I mean, Collabsaurus was very much the brand-to-brand collaboration and brand-to-brand partnership player. We didn't really dabble in the influencer space, but the influencer-to-brand connections and platforms out there like Tribe, for example, they were all up and coming as we were up and coming as well. And it was fantastic because they were doing educating of the market at the same time that we were, and it made similar kind of sense. You know, you partner with an influencer to reach new people. You can partner with a brand to reach more people as well. So that made it easy to talk about. 5:23 Joan Westenberg: So you said it was expensive to get the first product out the door. Where did that money come from? Was this a VC investment or was this— 5:31 Jess Ruhfus: No, we never took on VC investment. I never took on equity investment at all through the Colabosaurus journey. I borrowed some money from a family member, which I wouldn't recommend. That backfired later on and ended up costing me more money than it was worth. But at the time, that is how I afforded it. 5:48 Joan Westenberg: I want to hear that story if you, if you're comfortable telling it. But okay, so you had that, that initial investment from the friends and family round, built that product, you launched it, you started getting paid customers. What happened next? 6:01 Jess Ruhfus: I probably spent the first 4 years of the business trying to raise capital because I was in all of these networking circles with other tech founders and it was just what was done. Everyone was looking to raise VC capital and so I thought that's what I needed to do. And I assumed that, you know, I couldn't build any new features. I couldn't scale how we wanted to scale without investment capital. And so I spent 4 years in and out of investment meetings, creating pitch decks, following up, you know, doing all of that kind of stuff. And I remember in 2018, I got accepted into the Austrade Landing Pad program over in— 6:41 Joan Westenberg: Oh, I remember that. 6:42 Jess Ruhfus: Yeah. In San Francisco, and they have locations, sort of satellite locations all over. They have one in Beijing and Tel Aviv and stuff, but I applied for the San Francisco one thinking the US and San Francisco is where there's a lot of money, there's a lot of VCs, this is where I'm going to be able to secure capital. And I was hearing stories of people getting into taxis and, you know, sharing a taxi with a guy who was like, I'll give you $5 million, you know, type thing. 7:05 Joan Westenberg: Yeah. 7:06 Jess Ruhfus: And I was like, oh, this is amazing, you know, like, get me over there. So, I got accepted into this Landing Pad program and I went over there and did 3 months in San Francisco on my own dime, which was very expensive, in a share house, you know. 7:21 Joan Westenberg: Oh, wow. Yeah. 7:22 Jess Ruhfus: Working across 2 time zones to grow Klaviusaurus, but also trying to get investment for Klaviusaurus. And we signed Walmart as part of that trip. 7:31 Joan Westenberg: That's massive. 7:32 Jess Ruhfus: So huge and so exciting. And I remember coming home from that trip. Having not secured an investment, feeling so deflated. And because I'd abandoned— not completely abandoned, but kind of, um, not been able to spend as much time on the growth of Collabsaurus in Australia as I would have liked, you know, we really had lost subscribers in that time. So I came back from the US, um, in 2018 feeling so burnt out. I was really out of cash and a little bit out of hope for raising capital at that point. And I remember so many Australian investors, you know, who had kept me on the hook for years, basically hearing about this Walmart signing and hearing about the US and really wanting to meet up. And, you know, I had another round of meetings and things, and it would always be like the goalpost would change constantly. 8:23 Joan Westenberg: Always. Yeah, just keep shifting. 8:25 Jess Ruhfus: Yeah. Yes. It would be like, you know, we want to see you hit X amount of subscribers. So, I'd go and do that and then come back, and then they'd say, okay, well, We want to see your churn reduced by half. And so I'd go away and do that and then come back and they go, we want to see you sign a big client. So I went away and I signed Walmart and then I came back and they would say, great, we want to see you keep Walmart for 12 months and then let's speak again. And at that point I was like, toys out the pram. I'm so sick of being strung along in these meetings because it was so much of my time as well. And also so much of my— Yeah. Energy and like livelihood. I was relying on the whole thing. 9:02 Joan Westenberg: Fundraising is a full-time job, but you've also got to be a founder. 9:05 Jess Ruhfus: Yes. And I mean, I didn't have any backing really, so I didn't have staff to help me out. I was purely doing this on my own. And at the beginning of 2019, I almost closed the business because it felt like it was just never going to be able to raise capital, and, um, it just wasn't growing because I wasn't focused on it. It was so reliant on me. And I had this idea over in the US for a feature that later became the pitch portal where I had snuck myself into a networking event and ended up sitting next to the head marketer, I think for Gap clothing. 9:40 Joan Westenberg: Oh, awesome. 9:41 Jess Ruhfus: And we were chatting away and I mentioned what I did and she said, oh my gosh, partnerships, we love partnerships, you know, does it do XYZ? And I just lied through my teeth and said, yeah, you know, we can figure that out for you. You know, I was like, yeah, surely I could build a version of that really quickly. Myself. Basically, the idea was before this, Collabosaurus acted like a dating site for brands. You'd create like a dating profile, like your brand on there. It would get matched up against, you know, uh, at the time I can't even remember how many customers we had, but towards the end it was about 12,000 brands. And then you could swipe right or swipe left to connect with them. The Pitch Portal idea was like having a public like web page, landing page that other brands could pitch to collaborate with anyone, even if they're not using the Collabosaurus platform. It'll end up obviously going through the Collabosaurus platform and driving a bunch of leads. But for brands like The Iconic or Gap, who we worked with, they could have this landing page and so many brands wanted to collaborate with just Gap or just The Iconic, and then they could fill in this form. It would go through as like a pitch to that brand, and then that brand can either accept or decline. 10:50 Joan Westenberg: Mm-hmm. 10:51 Jess Ruhfus: And I had this idea for it, but I didn't have any money to build it. And I remember, you know, having a little mental breakdown to my partner and basically going, I think I'm going to close the business. Like, I can't afford it, you know, but, ah, this is such a great idea and I think it would really work. But I've also had a lot of shiny ideas before and it's not worked out. 11:11 Joan Westenberg: Mm-hmm. 11:11 Jess Ruhfus: And he was like, look, I think you should give it a shot. Like, you'll regret it if you don't. And so, I maxed out the last of my personal credit line. I think it was like $4,000 or something. I remember the pitch portal looked so terrible because I just mocked it up myself and I'm no designer. Gabe did as much work in HTML and everything as possible before I gave it to a developer to code it into the website. And then ASOS signed up and then Channel 10 signed up and Gritty Pretty signed up and Olay signed up because of this pitch portal feature. 11:41 Joan Westenberg: Dude. 11:42 Jess Ruhfus: And like ASOS received something like, I think it was 600 pitches from brands within 4 weeks, which was absolutely amazing. 11:50 Joan Westenberg: Yeah. 11:51 Jess Ruhfus: Pretty much totally organic. And that sort of inch by inch clawed back the business in 2019. And I thought, you know what, stuff investment. I'm— if I'm going to give this one more shot, I'm going to put all of my attention and focus into actually growing the business, um, rather than spending 50% of my time on trying to raise capital. And then we bootstrapped it and scaled it from there. 12:14 Joan Westenberg: That, that is such a classic startup story. I love it. The, the $4,000 line of credit just to get rid of the line and getting that one light bulb moment. Did the VCs come knocking after things started to blow up? 12:26 Jess Ruhfus: No, they didn't. 12:27 Joan Westenberg: Really? 12:28 Jess Ruhfus: Yeah, no, they really didn't. I was surprised. I mean, I might have had a couple of emails from people wanting another meeting, but I think my mentality at that point was like, well, I've had 6 meetings with you at this point. I'm not spending another second. You know, it's sort of like you had your chance and then you've missed it. So, yeah. And also I really love having the control element. It was really nice. I didn't have to, you know, cross-check my decision-making with anyone or anything like that. So I really, really liked that in the end. 13:00 Joan Westenberg: So what happened next? You went up to an actual acquisition, is that right? 13:05 Jess Ruhfus: I did, yes. End of 2023. 13:07 Joan Westenberg: I mean, congrats, that's, that's massive. Was that a hard thing to do? Was it hard to let go of it in that sense? 13:13 Jess Ruhfus: Yeah, I think Collabsaurus is my first baby, you know, so I had a different kind of attachment to it. I also had to do a lot of work around, you know, my whole identity felt like it was just wrapped up in Collabsaurus. I was like Jess from Collabsaurus or Collabsaurus Jess. 13:29 Joan Westenberg: You were the company, right? 13:31 Jess Ruhfus: Exactly, yeah. What I was doing, what was driving sales, which was also creating a lot of founder-led content and stuff on social media, which, you know, helped, but it made it harder to sell, of course, because so much was tied to me and my personal brand. Well, actually what happened was we had a high net worth individual investor who was a friend of mine reach out wanting to invest. 13:56 Joan Westenberg: Yes. 13:57 Jess Ruhfus: And this was, I think, in 2021. And I was like, you know what, maybe it's time to look at this. And this is someone that I know, this is a friendly, this makes sense. And went down that route, that road, and I poached a GM and basically got some structures in place. And then ultimately that deal fell flat, unfortunately. Then I was just kind of stuck and I was just coasting. I wasn't doing anything innovative anymore. I wasn't doing anything creative anymore. The business was going well, it's profitable business. We had some great clients, but it was not in startup startup phase anymore. You know, I was, I was just working on managing the team and things like that, which I can do, but I wouldn't say is like my best skill set ever. Um, I would say my skill set's in the marketing kind of creative phase. 14:43 Joan Westenberg: Yeah. 14:44 Jess Ruhfus: I was kind of in a bit of a rut and a friend of mine mentioned that her parents were going to be away in France and we could use their house in the south of France. And I was like, let's go to France and have this trip away. And by this time I'd started Number 2 Co, which is a very bougie toilet fragrance company as a side hustle to prove out brand collaborations and partnerships using Klavisaurus. But it was just sort of happening in the background. Did this trip away, and I remember having a really stressful morning with Collabosaurus on emails and trying to put out some fires. And then a friend of mine went down to the beach, and we were sitting on these beach chairs having cocktails and, you know, chips and dip and everything. And the Shopify app on my phone was just going ka-ching, ka-ching, ka-ching, ka-ching, ka-ching. And she's going, "What's going on?" And I'm going, "I don't know. I don't know why. Like something's happened or someone's shared it and it's just gone nuts." And it just felt like such a universe sign that it was like, I just felt so drawn to that. I just see— saw so much opportunity in number 2. And I was like, I think where I've taken Collabosaurus to, it's like it'd be better off in someone else's hands who can kind of take it to that next stage and be that, you know, scale-up founder or leader for that business. And so that's where I made the decision. I went down the road of hiring a broker, uh, which was a mistake. And then, um, then I had another broker. That was also a mistake. I would say don't hire a broker, don't bother, you can do it yourself, especially if you like, uh, have 100% of the equity, which I did. And really, you know, an acquisition process is just like running any sales process. You have your list, you do your outreach, you know, you have your meetings and your follow-ups, and it's all about communicating value and understanding where the value lies for the acquirer. 16:31 Joan Westenberg: Yeah. 16:32 Jess Ruhfus: So yeah, it probably took about 2 years for it to be acquired. Um, in the end, we had a, like, probably about 5 companies get to due diligence stage. 16:42 Joan Westenberg: Can I ask, that, um, that slump that you got to, do you think that had anything to do with, with COVID and that whole period? 16:49 Jess Ruhfus: I think yes, I do think so. I think not for the typical reasons though that a lot of other businesses experienced. So COVID for Collabosaurus was incredibly fruital. So we saw at first we were working with brands like Frozen the Musical and Magic Mike and some really great live shows which were really impacted by COVID. Of course, I remember seeing those subscriptions drop off in, in March of 2020 and thinking, oh no, what's this going to mean for our business? But then we ended up quadrupling in that year because businesses were looking for ways to stay relevant and market their business without spending any cash, and Collabsaurus was absolutely the way to do that so cost-effectively. So we organically grew significantly in that year. What was happening behind the scenes though that really affected my mental health was hiring way too quickly in a scramble to try and meet the demand of this growth. 17:50 Speaker: Mm-hmm. 17:50 Jess Ruhfus: So I was hiring in a structure that reflected my experience in agency, which, uh, I definitely would never do again. I think I was just sort of thinking, oh, you just hire more people, you know, that's just how you solve this problem. You just hire, hire, hire, hire. 18:04 Joan Westenberg: It's a human problem you solve with humans. Yeah. 18:06 Jess Ruhfus: Yes, exactly. And so, um, I did all of that, and that was really stressful because I made some bad hiring choices. And also managing the team was a stressful thing for me. I think at one point I had 15 direct reports, which was just stupid. 18:22 Joan Westenberg: Oh my God, that is— that's so much. 18:24 Jess Ruhfus: It was so much. So yeah, and then I remember in 2021, I think it was, I had 3 staff members leave in 3 weeks, and it just made me completely reassess the whole thing, the whole structure. And I rebuilt with a very lean structure. Um, we had the exact same revenue but so much more profit. By doing that. So I think it was sort of a byproduct of, of all of that stress, but also the post-COVID slump, I suppose. We never went backwards in terms of sales, but we just weren't seeing the same level of growth we were seeing at a really sustained time period during COVID So I think it was sort of just like, what's happening in the market? How are we going to address this? And I was just exhausted. 19:10 Joan Westenberg: Yeah, I think, um, that's something I've heard from a lot of and particularly the unfunded startup founders that I've spoken to, is that personal slump during COVID of you're not, you don't have that venture capital safety net and the buck stops with you and you have all these people relying on you and your staff are scared because so much is unknown or uncertain and it lands on you. And I've just heard that, yeah, a lot of founders were exhausted after that whole period. 19:37 Jess Ruhfus: Mm. I wonder though, with VC funding, It like, because I think it is seen as a bit of a safety net, safety net. But I also know so many founders who are just in a perpetual state of raising. They're just, you know, they're running out of runway always, and so they're always trying to raise the next round, and it's just always a stress. So I don't know, it's sort of like both ways are hard, but I actually don't think one way is particularly harder than the other. It's just, they're just different paths, I think. The grass is always greener. You always go, oh yeah, that sounds like a great safety net. But I know plenty of founders who've been burned, but like in an equity partnership, for example, or with investors falling through at the last minute, and then they run out of runway and they can't keep the business alive. So yeah, it really depends on your risk appetite, I think, as well. 20:25 Joan Westenberg: Do you think you have a high risk appetite? 20:29 Jess Ruhfus: Uh, yes, I think I do. I mean, I think compared to my partner, he's very conservative. He's, he's very much a no man. And I'm like a yes woman. But, um, yeah, I think my, my risk appetite's definitely, um, pretty good. Although after everything with, uh, like after my experience with Collabosaurus, I would say I'm a lot more considered in a lot of decisions these days. It's backed up by like analytics and actually speaking to people rather than going, let's launch this really expensive platform just based off my own two cents. 21:04 Joan Westenberg: Yeah. 21:05 Jess Ruhfus: Yes. 21:06 Joan Westenberg: Number 2, I guess you could say, came out of Collabosaurus, but it's such a different thing to build. It, it's physical products. 21:14 Jess Ruhfus: Yeah. Yes, yes, totally. 21:17 Joan Westenberg: Was that a terrifying thing to do? I find the idea of launching physical products to be absolutely intimidating. This is just something I, I would not know where to start. 21:27 Jess Ruhfus: Yeah, it's definitely, uh, not as profitable as a model in server space and, and tech, that's for sure, but Oh my gosh, I'm learning so much. And I feel like I've been consulting on and helping product-based businesses, you know, my whole career. So it's always been— it's that grass is always greener thing. It's sort of like, oh, I'd love to have a product business. Like, how good would it be to be able to hand someone something physically rather than try and explain what like a Tinder for brands is, for example? But, um, it's been really, really interesting. I think though I've taken a lot of learnings from Collabosaurus. They're more related than you might think because things like, you know, the MVP ideology I really applied with No. 2. Our first batches were, you know, I mixed myself, like me and my family came together. 22:13 Joan Westenberg: Really? 22:13 Jess Ruhfus: Yes, and we like would mix these batches and bottle them and we did a few thousand ourselves in, 'cause our office was in like a warehouse, so it worked out really well. And that was just a test to see whether people would buy it. And then I remember it sold out within like 4 weeks, I think our first batch, and then We made the second batch, which was twice the size, and that sold out in, you know, a similar amount of time. And so I was thinking, okay, each just incrementally, that's when you go and get a manufacturer and you just do the smallest possible order quantity and go from there. But yeah, it was very test and measure and inch by inch and get a lot of feedback before I went all in on very expensive product runs. 22:52 Joan Westenberg: When did you go all in? 22:54 Jess Ruhfus: I went all in after the acquisition of Collabosaurus, I would say. So at the end of 2023, um, we settled the sale, um, in December 2023. And I took a couple of months off early 2024, which was fantastic, and I very much needed it. 23:09 Joan Westenberg: Good. Yeah. 23:10 Jess Ruhfus: And then in April, I think I went all in on, on number 2. So I'm full-time in that business now, running a toilet fragrance company. Who knew? 23:19 Joan Westenberg: I just think taking those learnings from a software company and applying them to hardware, it sounds like it's a really impossible task. Ask. But yeah, I guess the, um, the core learnings are the same, aren't they? 23:32 Jess Ruhfus: Absolutely. And the resilience is the same. Yeah, I mean, even with funding too, I, I don't think I would go after equity investment for number 2. I'm never saying never, like, but I don't think I'd go out and do, you know, a big like attempt at a raise, especially not with as much time as I spent on Collabosaurus for you over years of time. I think I'd approach it completely differently, but I also have a different network now too. So, you know, that helps too. It's amazing how beneficial and unexpected the network I gained from Collabosaurus has completely transitioned so easily into the— a great network for number 2 as well. I mean, everybody uses the bathroom. 24:18 Joan Westenberg: Yeah, I guess that's true. I guess that's true. I guess I kind of wanted to dive into that, that whole big picture of building Number 2. There's production, packaging, marketing, branding, social media marketing. That it's a massive enterprise to take on board. How have you approached that level of work? Is it a thing you're doing on your own and you're working a million hours a day, or are you building a team already? 24:49 Jess Ruhfus: That's a great question because I— that is actually something I'm approaching completely differently. So in the Collabosaurus learning phase of making the wrong structural decisions and then having to pare back and become way leaner, I think I've really tapped into what I enjoy doing and what I'm good at. And I really am way less hesitant to outsource the things I'm not good at because I know it can create value. And with approaching all of the different aspects of No. 2, I've gone with— it's mostly through the network. Like, we have a contract manufacturer who mix and fill the bottles. I have a supplier who organizes the packaging. I have a 3PL who does all of the fulfillment of our orders coming through. And then really my job becomes the marketing, the product development and innovation, the social media, things like that. Mm-hmm. So, and that is really leaning on what I'm best— like, where I can best serve the business. Um, I've just hired a virtual CFO, which is fantastic. I think, you know, the ability to hire incredible experts in a sort of fractional way is such a resource for startups now that I don't think really existed when I was building Collabosaurus in the early days. You know, I can— hit up people who are absolute experts in certain things and, you know, pay for an hour of their time, and that is worth so much. So for example, we're launching number 2 into the US market, and while I've been over to the US market for Collabosaurus, I am definitely under no illusions that I don't know what I'm doing launching a product. 26:33 Joan Westenberg: Yeah. 26:34 Jess Ruhfus: So for that, I hit up a friend of mine who is absolute expert in partnerships. She's an Aussie who's lived in New York for the last 20 years, has a lot of experience in product businesses and launching Australian product businesses over into, you know, retail relationships and things in the US. And so we have, you know, a 1-hour monthly call that I pay for, and it's just like the best advice and connections I could hope for. So I would ask people, even if you don't know if they do consulting, like ask people who you think have the knowledge or resources or skill set that you really need access to, and just ask them if they'd be open to, you know, a 1-hour call, um, that's, you know, paid for. It's absolutely worth its weight in gold. 27:19 Joan Westenberg: So you said that, um, when you initially came up with the Number 2 brand, it was partly an experiment to prove the power of brand collaborations. Yeah. 27:27 Jess Ruhfus: Yes. 27:28 Joan Westenberg: How has that worked for Number 2? Has that proven the thesis that you had? 27:33 Jess Ruhfus: Yes, it definitely did. So the reason I really wanted to do that is because Collabosaurus, uh, acts as, as a matchmaking platform for brands where the core function is you match and connect with the brand who you can offer, you know, equal value to. And we saw so many great connections happening in the back end. I was like, oh my God, The Iconic and Pinterest connected through Collabosaurus. Like, how cool is that? 27:58 Joan Westenberg: That's huge. 27:59 Jess Ruhfus: But I don't have the stats behind how much website traffic did that drive, how much emails, you know. So I was constantly reaching out to our thousands of customers trying to get those little data points and things that can help explain the value of collabs because— 28:17 Joan Westenberg: Yeah, what happens after Collabsaurus? 28:19 Jess Ruhfus: Yeah. Exactly. And it's really because of the Collabsaurus connection, but also what a limited edition product would drive in terms of value is quite different to what, you know, a core, like online course collaboration can drive in terms of value. You know, maybe one is online Shopify sales or increasing average order value, whereas the other one's really driving an email list growth. So it can be totally different depending on the brands and the type of collab. And so starting number 2, I mean, it was sharing one bathroom with two housemates during COVID lockdown. 28:54 Joan Westenberg: Yeah, give you the idea. 28:55 Jess Ruhfus: And I just hated everything on the market with synthetic fragrances. You're like loudly spraying this thing that then smells like tropical art, or shit dress, as one of our customers has called that. 29:06 Joan Westenberg: Yes. 29:07 Jess Ruhfus: So I wanted something bougie that looked beautiful but also was natural and wasn't loud and all that kind of thing. So that's where Number Two was born. And I started sort of making it just for friends and stuff initially, and then I was like, oh, this is really cool, maybe I can show how collaborations, uh, that we obviously source through Collabasaurus actually impact the growth of this brand. And that is how we sold out the first 3 times was through partnerships that we secured on the Klaviyo platform. We did various few things, like we did an event collaboration with Yotpo and Shopify with a bunch of, uh, I think they were all business owners in the room, some influencers as well, maybe 50 business owners. And we did a bathroom takeover where we put number 2, like heaps in the bathroom with a little sign that was like, please take one. But I stupidly didn't, um, I was like, okay, there's going to be 70 people at this event. I brought I brought maybe 50 bottles of No. 2 along because I just thought, I don't even know if this will work. Who's going to want to take a bathroom product? I don't know. Let's see. And it caused a frenzy. So out in the dining room, people going— some people had taken 2, people going, did you get one? Yeah. They were running off to the bathroom. So it created so much talk and hype, and I could see in the backend our website traffic increase. I could see new customers signing on immediately, like within the next couple of days, I could have those data points that could help prove out the case study of Collabosaurus and brand partnerships in general. We also did other collaborations, so we did like an artist collaboration on a gift box, and that really increased our average order value from like, you know, $50 to $150. So that's a huge impact in a product business, you know, when you're doing hundreds of orders. So yeah, I think I proved my point. 30:52 Joan Westenberg: Yeah, yeah. How much have, um, have influencers changed that, that brand collab kind of conversation? 31:02 Jess Ruhfus: Oh, great question. I think influence— the whole influencer landscape's changing a lot and changed a lot. I truly believe that people, like, everyone's an influencer, you know. You tell your 5 friends of anything that you come across that you think is really cool, and that is the most powerful influencing, I think, that people can do. But in terms of like traditional influencers who— or career influencers who, you know, post products all the time. I think where that is going is tied way more to affiliate-style structures because, yeah, the whole affiliate space I think is heating up and that's, and that's where that's going. But I think brand-to-brand collaborations, there'll always be a place for, you know, cross-promoting into each other's audiences and, and things like that. I don't think that brand-to-brand partnerships will go down the same road that influencer-to-brand partnerships are going down, but, you know, like anything I just think Meta advertising's becoming more saturated and more volatile than ever. 32:04 Joan Westenberg: Oh yeah. 32:05 Jess Ruhfus: In one way, it's very easy to grow a brand these days than it ever has been because you have social media, because you have, you know, the internet and emails and all that kind of thing. On the other hand, there's also a lot of saturation. You're competing against a lot of messages. So partnerships are a fantastic way to tap into, you know, an already like hardcore fan base around a business and community that you can cross-promote and actually create something valuable, whether it's whether it's a product or a service or a giveaway or a social media content series. Unyoked and Normal, the sexual wellness brand, did a fantastic collab recently. Yeah, it was an online course on connections. Did you see it? 32:46 Joan Westenberg: I did, yeah. I, um, I love the Normal guys. They are fantastic. What they do is incredible. 32:52 Jess Ruhfus: Yeah, they nail it. And they did this whole like email video series on like connecting with your partner and relationships, which was So clever, you know, it was talking to a broader conversation. People were super interested and then both brands really, you know, increased brand awareness, increased their email lists, were able to drive sales off the back of that. So that's a brilliant partnership in action. 33:13 Joan Westenberg: And have you been working with individual influencers at all on Number 2? 33:17 Jess Ruhfus: We've dabbled in influencer things for Number 2, but it's not really worked for us so far. I think the brand partnerships is definitely core to the brand's growth, but also a lot of guerrilla marketing. Um, I love love the challenge of, okay, how are you going to make the biggest possible impact for the smallest possible cost? And so guerrilla marketing is a great way to do that. Collaboration marketing is a great way to do that. I'm constantly taking over bathrooms. 33:43 Joan Westenberg: Yeah. 33:44 Jess Ruhfus: Doing things like that and gifting it out to people who, like interior designers, for example, or beautiful Airbnbs or boutique hotels, um, are often putting No. 2 in their bathrooms. And that's such a great way for us to meet people. And it's just doing the the small things that don't scale massively, but man, they have a huge impact and like big community-led growth. 34:08 Joan Westenberg: It's a topic that I feel like we're pretty comfortable talking about in Australia. Like, we all know what happens in the toilet, but, um, do you think that's going to be a more difficult conversation in the US? 34:20 Jess Ruhfus: Definitely. Great question. Yeah, definitely. I'm actually changing a lot of our or messaging for the US. And also even things like they don't say loo or toilet, they'll say restroom. 34:34 Joan Westenberg: Oh, really? 34:35 Jess Ruhfus: I didn't know that. Yeah, restroom, maybe bathroom, but typically only if there's a bath in the room. So, if it's like a public toilet, they would say it's a restroom, like a public restroom. So, little things like that I've definitely already had to change. But I think what's great about number 2 is like number 2 is a euphemism for poops. 34:55 Joan Westenberg: We all know it. 34:56 Jess Ruhfus: Yeah. Yeah. One of the key things the number 2 branding is that we don't use the word poo really in any of our messaging, or it's very not crass, it's more classy and chic. 35:07 Joan Westenberg: Yeah, I noted that. Yeah. 35:09 Jess Ruhfus: So that, you know, uh, serves the US market a little bit better. 35:13 Joan Westenberg: Yeah. You're still going to be continuing with the, I guess, the approach of being a direct-to-consumer brand? 35:20 Jess Ruhfus: Yes, we're pretty much 99% direct-to-consumer brand at the moment. I would love to ultimately partner with a handful of really key great retailers. I've got a few in mind. It's— anyone who runs a product business will understand the operational and like just the cash flow that you need to support that kind of thing. A lot of those retailers will have net 90 terms, which means that you don't get paid for 90 days and you have to put up like the cost of manufacturing that, like thousands of units of product. 35:53 Joan Westenberg: Yeah. 35:54 Jess Ruhfus: Well, even before the 90 days, so you have to have enough cash flow to like, you know, supply 6 months worth of stock without you seeing a dime. 36:03 Joan Westenberg: Yeah, yeah, that's— 36:06 Jess Ruhfus: I'll get there. 36:07 Joan Westenberg: That's a tough one. 36:08 Jess Ruhfus: Yeah. 36:10 Joan Westenberg: Um, and I guess the last question I had before we wrap, um, what advice do you have for any founders who are looking to bootstrap a company? Is there anything that you would just give them as like a, a sword and say, take this with you? 36:24 Jess Ruhfus: Yes, definitely. I actually do have 2 stats for you. I You have so much opportunity to grow without venture capital investment, and I would encourage any brand to look at or ask yourself the question, how would I do that? Even if you are going after VC capital, because it's always great to, uh, be self-aware and have a look at your structure and challenge yourself in that thinking of what would I do if I couldn't access VC funding. And you might just strike an idea like the pitch portal, for example, that could make you a lot of money and you can put that profit in your pocket because it's 100% yours in that instance. But I've got two stats for you. So Stacks is an Australian fitness wear brand. They are completely bootstrapped and they've bootstrapped to a $52 million business. 37:14 Joan Westenberg: That's huge. 37:15 Jess Ruhfus: There's also like the Oodie, for example, that's consistently doing 205,000 sales a day. So, and they're bootstrapped as well. I just think there's there's so many more case studies now of brilliant Australian brands who've been able to crack that bootstrapped business. And so I just want to like leave everyone like with the sword to pass on to everyone is that like you can do it. There's— I've been able to do it, you can do it too. Just challenge your thinking and don't feel like you have to do what everyone else is doing. Um, bootstrapping is a fantastic way to go and you may maintain and take control as well. 37:52 Joan Westenberg: Fantastic. Honestly, I could not put it better myself. That is great. That's the whole spirit of this podcast. So thank you for that. 37:58 Jess Ruhfus: I love that. Thank you. 37:59 Joan Westenberg: And thanks for being on the show, Jess. I appreciate it. 38:02 Jess Ruhfus: My pleasure. Thanks for having me.
