My best and worst investments year one of business
Money well spent and money I'll never get back
I say “year one” loosely. The truth is, I started investing in building a company in late 2021, but the investment didn’t feel tangible and noteworthy until 2023. The company launched in March of this year, so I’m only six months out the gate, but I feel the last 12 months are a good representation of the big and strategic (or perhaps not so strategic) investments in getting to launch.
One quick aside just for you, dear reader.
I realize you could be doing anything else right now. Scrolling IG or TikTok, reading a book, or diving into your email inbox, but you’re here! And I appreciate that.
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Okay, back to business. In lieu of sharing brand or product photos, which would feel too self-promotional, I’m including images of my teacup chihuahua rescue, Hopper, as a pallet cleanser between all the mistakes I’ve made. Enjoy!
Things I wasted money on:
Conferences
I’m not really sure why I felt I needed to go to conferences. I only attended a couple, like Horizons in New York and Microdose in Miami, but each probably cost me around $2,500 to attend between the ticket, flights, hotel, and food.
While I met some interesting people and heard interesting speakers, I don’t feel I gained tangible insights that either a.) could be converted into revenue for my business, or b.) couldn’t have been found and learned online for free.
*I was able to reconnect with some old colleagues and rekindle those relationships, which is great, but I could have done that by picking up the phone.
Merch
I hate even calling it that because we made really cool embroidered apparel, but the reality is that it’s hard to get substantial sales on branded apparel beyond family and friends, until you’ve built a community of loyalists who want to rep your brand.
Luckily, it sells quite well out of the apothecary and I should be through it all by the end of the year.
WeFunder
Where do I start. I should have backed out the minute I felt that we were not getting the support promised during onboarding. Red tape, surprise costs and changing requirements, buggy site issues, confusing money management practices, unresponsive team… nightmare. Too many unnecessary & costly challenges for a young startup to navigate. Decide for yourself but I need to share my story because it was the biggest money pit of 2023. Ironic given it’s a FUNDRAISING platform. If I can save even one founder from the headache and expense of using it, I’ll be happy for them.
Hiring a fractional CFO
This one I go back and forth on. Did I need guidance during contract / equity negotiations? Yes. Did I need mentorship throughout an (unsuccessful) fundraise? You betcha. And how about help setting up the financial infrastructure for the company? Absolutely.
But what were the tangible deliverables or value adds I walked away with? Contracting a fractional CFO did not protect me from WeFunder. It did not guarantee a successful fundraise. And the infrastructure or foundation was an uber complicated and detailed financial spreadsheet that I literally couldn’t even update because it was so complex. The projections were all way off, and I never ended up using it, despite having spent thousands of dollars on it.
I think I pulled the trigger on this too early. Yes, I needed some help with a handful of very specific milestones, but I probably could have gotten that guidance from my brother or another mentor and saved myself thousands.
Social Media
Hear me out. From roughly October of 2023 through March of 2024, I worked with a fabulous social media manager who created beautiful and smart content for the brand. She is extremely talented creator and strategist, and this is not a reflection of her work. I would recommend her to anyone looking for help with social.
I believe social media was one of my worst investments because we were shadow banned on IG beginning last summer. From that point on, virtually every dollar I’ve spent on social was wasted because our account simply cannot grow.
It didn’t matter if I did brand collabs, giveaways, or threw money at boosted posts. We’d only see the tiniest uptick in followership. I’m talking maybe 10 people.
For context, my company - which I’m intentionally not naming because I don’t want to seem like I’m self-promoting, that’s not what this post is about - is a wellbeauty CPG brand. We make topical and ingestible personal care products for inner and outer beauty using medicinal plants.
All of our ingredients are safe, legal, and have been used for millennia. We have three SKUs, and each one spotlights what I call an ancient GOAT; an ingredient that has been used since ancient times as a staple within a given society. Two out of three of these ancient GOATs are what got our IG account shadow banned and subsequently restricted.
Ancient GOAT #1: Kanna (Sceletium Tortuosum) is a succulent plant native to South Africa that was used by the oldest civilizations on earth, the San and Khoi tribes of the Karoo region, for its ability to enhance mood, improve stamina, suppress hunger and thirst, and encourage prosocial behaviors by eliciting feelings of empathy, joy, and optimism. Kanna is legal, non-habit forming, and safe for daily use.
Ancient GOAT #2: Blue Lotus (nymphaea caerulea) is a water lily that was deeply intertwined in Ancient Egyptian ritual and ceremony. When smoked (or consumed in a tea), it creates a beautiful sensation of deep relaxation. Some even report it to be an aphrodisiac, and a common side effect of Blue Lotus is lucid dreaming.
Our Blue Lotus product was the first SKU to drop. I whipped it up to start generating revenue pre launch while I waited for the two “hero” products to finish development.
Again, it is a legal, non-scheduled medicinal plant, but because it did not make the FDA's list as Generally Regarded As Safe, it has been blacklisted by Meta and big banks.
The FDA’s GRAS list is laughable when you see the things that did make the cut. Beyond that, the fact that things like Coca Cola, high fructose corn syrup, palm oil and hydrogenated vegetable oils (I could go on and on) are untouchable and unrestricted is a sign that the FDA / government doesn’t give a shit about what’s “good” for us.
I could take it a step further to say that big pharma is threatened by medicinal plants like Kanna, Blue Lotus, Rhodiola, etc. because they know how effective these plants are for physical, cognitive, and emotional health, but they can’t patten them.
Therefore, they need to do everything in their power, which is a lot, to prevent access to them. Big banks and big tech are on board with this, as they’re all in bed together, and do their best to block access to information and access to purchasing these healing plants.
With Meta now under investigation by the DEA, it has only gotten worse. The account is now restricted, and I’m going to have to start anew. It’s honestly tragic because we have so much beautiful, educational content that will never see the light of day, but that is the highly censored world we live in.
*In case you were interested, the ancient GOAT in our third SKU is Tremella, known as the beauty mushroom since ancient China for it’s ultra-hydrating properties and ability to promote plump, dewy, glowing skin. Luckily, the DEA, banks, and Meta have no issue with this face mist.
Lastly…
Inventory
Hindsight is 20/20. Had I known our ingestible Kanna-based SKU was going to be such an issue, I would have held onto the formula but held off on filling it and purchasing the inventory. Inventory was by and large the biggest expense to date, and I could have saved myself a lot of money and trouble by only launching our face mist (the Tremella one).
I had toyed with the idea of launching the face mist by itself, but was talked out of it (and talked myself out of it) for fear of losing the inner + outer beauty angle that is part of what makes the brand truly immersive.
Alas, the silver lining is that despite the issues with Meta, all three of our SKUs perform really well in retail and DTC, so those, plus my weekly newsletter (not this one), are my channels of choice.
My BEST investments this year:
Experts
Locking in a team of experts in operations, supply chain, product development and creative has resulted in beautiful products, formulas, website, and infrastructure for fulfillment.
Social media manager
While our growth on social was unfortunately restricted, I did learn a lot about content strategy and engaging customers from my social media manager. Social is not my strong suit, and having someone take that off of my plate and do it far more effectively than I could immensely improved my workflow and elevated the identity of the brand, even if not enough people have seen it!
Dropping a pre-launch SKU
Soft-launching a low-cost, short production product while our bottled products are under development allowed me to get out into the community to meet customers, and start doing events, pop-ups, and generating revenue. It also gave us a way to measure interest in our brand and get valuable customer feedback before we formally launched.
Sorry for the lack of brand imagery and the vagueness around the company I’m referring to. Again, I didn’t want this to feel self-promotional, even though I’m sort of shitting on myself and the bad decisions I made. Most of you are already familiar with my company, and those who aren’t could figure it out pretty easily.
Mistakes and money pits aside, I’m marching forward. CPG is an immensely challenging category. You have to worry about many more moving pieces than other business types, and despite it all I’m proud, knowing that 99% of people will never attempt what I, and other founders, are attempting. We have created beautiful, unique, efficacious wellbeauty products that deserve to been seen, and the path to reaching and serving that broader customer base is becoming clearer by the day (hopefully with fewer pitfalls along the way).
I hope this can help you or someone you know when it comes to deciding what is worth it and what’s not. If you have an early-stage founder friend who you think might benefit from reading this list, please forward this along. I’ve made this post free to read.
On a separate note,
I realize you could be doing anything else right now. Scrolling IG or TikTok, reading a book, or diving into your email inbox, but you’re here! And I appreciate that.
Substack runs on likes and comments, in other words, your engagement with this post. Please give this post a 💛 to support Mall Talk, and leave a comment if you feel compelled. This will help my little seedling newsletter to grow 🌱