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

Shaan and Sam are joined by DTC brand founder, Craig Clemens. Craig talks about how he got his start, how to launch a new product, and a bunch of ideas for potential businesses.

Who is Craig Clemens? 🦛

  • Craig is a creator of direct-to-consumer (DTC) brands in which he partners with top experts and influencers to create products. His company has 900 team members, 400 of which are in customer support.
  • They’re constantly creating new brands and shutting brands that don’t work.

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. Eben’s dating ebook 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 he emails ✉️

  • Craig likes to say his brands have 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. Craig 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, Craig limits the size of their mailing list.

How to launch a product 🚀

  • Craig breaks down his 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. Craig’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.
  • 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”.

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 Craig’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, Craig’s strategies can work too well. One of their brand’s, 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 Craig’s hit rate?: Rarely do they 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: An incubator 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. 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.
  • Craig’s company 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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