July 24, 2020

MFM #95 with Craig Clemens of Golden Hippo: The 9-Figure Company You’ve Never Heard Of

Shaan and Sam are joined by the founder of Golden Hippo, Craig Clemens this episode. Craig talks about Golden Hippo's brands, how he got his start, how to launch a new product, and a bunch of ideas for potential businesses.

What is Golden Hippo? 🦛

  • Craig is the co-founder of Golden Hippo, a creator of direct-to-consumer (DTC) brands that partners with top experts and influencers to create products. Since 2010, the company has spent over $1B in ad spend and grosses 9 figures in revenue. Golden Hippo has 900 team members, 400 of which are in customer support.
  • Golden Hippo is constantly creating new brands and shutting brands that don’t work.
  • The company’s most famous brand, Gundry MD, is in partnership with Dr. Steven Gundry — a renowned heart surgeon whose invention is used in 90% of all heart surgeries.
  • Dr. Gundry’s philosophy: Humans are a condominium for bacterias. If we take care of the bacteria in us, they will take care of their home (us).
  • The Dr. Gundry brand has about 50 SKUs, selling everything from digestive health supplements to coconut bars and coffee creamers. The brand provides information through its website, newsletter, and podcast.

Craig Clemens: From a 1.7 GPA to a 9 Figure Empire 📝 👉 💰

  • Craig barely graduated high school with a 1.7 GPA, and attended community college. He had random jobs like pizza delivery, waiting tables, and then telemarketing. His first telemarketing job was selling tools and supplies to farmers and auto shops.
  • Craig’s second telemarketing job was at a credit card merchant account company. Although he made good money his first year (~$40k), he moved to San Diego to be closer to friends and bounced around different sales roles, and never made as high a salary again. He was also $20k in debt to the IRS at the time and considers this a low point in his life.
  • Craig found a mentor, Eben Pagan (also known as David DeAngelo). Eben’s pick-up ebook “Double Your Dating”, was generating $70k/month at the time. Amazed by this, Craig left his sales job to work for Eben. Craig worked in a customer support role at first, making $3k/month.
  • Eben’s strategy consisted of email marketing through long-form, educational content. At its peak “Double Your Dating” generated $8m per year. Eben also launched a female-focused dating ebook, “Catch Him and Keep Him”. In 2004, both brands did $20m in combined sales. The company also sold dating CDs and DVDs on the backend to men and women. The ebook was more popular with women. CD and DVD offerings were more popular with men.
  • Eben eventually sold the dating company to top employees, and started Altitude: a company that teaches others how to make information-product businesses.
  • Craig became a master copywriter while working with Eben. He spent three years listening to people like Jack Trout, Al Ries, and Gary Halbert and considers this his real college education.
  • Book recommendations: “My Life in Advertising” and “Scientific Advertising

How Golden Hippo emails ✉️

  • Craig likes to say Golden Hippo has two offerings: education and products. “If people want just for the education and never buy anything, that’s fine,” Craig says.
  • Other companies grab emails and then sell on the backend. Golden Hippo only emails existing customers. They don’t do a lot of email capture.
  • The more people on your list, the harder it is to get into people’s real inbox. When emailing millions, Gmail starts sending emails to spam and other folders. For this reason, Golden Hippo limits the size of their mailing list.

How to launch a product 🚀

  • Craig breaks down Golden Hippo’s thought-process when launching a new product or brand. He explains how he would launch a hypothetical CBD product — a category he is bullish on, but won’t touch due to it’s gray federal legal status.
  • Always lead with education. Golden Hippo’s ads do so well because they provide something of value first: education. Look for spaces where there is an education opportunity and then provide it. Education cuts through the noise.
  • Facebook is the best network in the world to do initial testing because you can target so tightly. Other options: create a blog, do a sponsored post on sites like Well + Good or LA Times.
  • Use Facebook to target specific groups, like people with back pain or people who like animal pages (for pet CBD). Once you know how these targeted campaigns convert, try progressively broader audiences.
  • This strategy also applies to Google Ads. Start with a specific keyword and try to go broader. For example, if you’re selling CBD, go from “buy CBD for my dog’s anxiety during flights“ to eventually just converting for “CBD”.
Craig’s viral Twitter thread on what he’s learned spending $1B+ on ads

Questions for Craig 💬

  • How long to validate an idea?: “Nothing is more expensive than a campaign that just converts OK”,  because you can waste a lot of time chasing something that shows a little promise.  Shaan: Mediocrity is expensive and drains your time.
  • What metric signals success?: It depends on the model. For subscription businesses like Guthy Renker, it’s OK to lose money on every sale because they can make the money up within 8 months. With lower LTV models, money needs to be made back quicker.
  • Advice: Define your metric and go for a strikeout or a homerun.
  • Example of something that you didn’t expect to work?: For one of Golden Hippo’s heart health products, sales tripled when the ad image was changed from a heart to a foot. People with heart complications often have foot issues. The foot imagery in the ad resonated with customers more.
  • Sometimes, Golden Hippo’s strategies can work too well. One of their brand’s, Footmedics, couldn’t use foot imagery on several ad networks, because the websites didn’t want pictures of feet on them. “Websites want BMW ads because people watch the ad and stay on the site, no one wants a foot ad, where it’s ugly and people click and never return,” Craig says.
  • Gary Vaynechuk says forget your 20s, just grind and eventually it’ll work. Craig disagrees. Only chase things that show promise early.
  • What’s Golden Hippo’s hit rate?: Rarely does Golden Hippo create an unsuccessful product. Their success rate is usually 80% because they survey existing customers meticulously before launching. The success rate for creating a new brand is lower, around 60%.
  • How much does it cost to launch a new brand? $1m-$1.5m to launch a new brand. They have an in-house formulation team that works on all new brands.
  • They are looking to acquire consumer product brands, personal finance companies doing $1m-$20m.

VR for dogs? 🥽 🐶

  • 💡 Idea #1: Golden Hippo for personal brands. A company that helps thought-leaders, who aren’t great at marketing, create products such as courses.
  • Craig says companies like Mindvalley do this to an extent. They partner with authors and speakers and have created a “Netflix for personal development”. Mindvalley has 12m students and Sam estimates they do $70m in sales.
  • Sam compares the idea to Scribe Writing (formerly Book in a Box) by Tucker Max which helps anyone write a book.
  • 💡 Idea #2: Craig describes this idea as “an app that aggregates messages from all your messaging platforms as well as your email, calendar and to-do lists.” He envisions a gamified wheel-like design, with each wheel representing email, to-dos, etc.. The app gives you one task at a time, and archives messages and tasks as they are completed. Shaan: “Email is essentially a to-do list, why isn’t it designed as a to-do list or to work with a to-do list?”
  • 💡 Idea #3: VR for dogs. Craig envisions using VR to provide exercise for dogs, and notes that the technology is already available. Sam mentions how pet owners have high engagement and are willing to spend on their pets. Craig notes that one of Golden Hippo’s most popular brands, Dr. Marty, is in the pet food space. Celevity raised $10m for healthier dog food.

Is Silicon Valley doing it wrong? 💸

  • Craig is bearish on Silicon Valley’s DTC strategy. He worries that young DTC brands raise too much money and will have difficulties exiting.
  • Craig quotes Gary Vaynerchuk on DTC: “Most DTC brands are out of business, they just don’t know it”.
  • He disagrees with a lot of common DTC principles like needing to build a community, be omnichannel, and use influencer marketing. He notes the strategy can work (see Vital Proteins’ exit), but he doesn’t understand the strategy.
  • Golden Hippo is completely bootstrapped and was started with only $60k. Craig doesn’t rule out raising money in the future, but says he didn’t know it was an option when he first started.

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