This analysis focuses on the Tabs Sex Chocolate playbook for success in the DTC space and summarizes an interview with its TOP G founder, Oliver Brocato. He explains how he took revenue from 0 to $10M+ per year in 18 months. According to Semrush’s data, Tabs first received web traffic in February 2022. Brocato said that it took him about a year to finalize the product formula, source ingredients, secure a co-manufacturer, and find a packaging provider to bring the chocolate to market.
My goal is to summarize the key takeaways and action steps for my own business and share them with others for feedback.
- More important to know your distribution than your product, as it's about the potential to market it.
- Oliver invested in custom polycarbonate virgin molds for the chocolate to have tabs “t” on them, allowing the chocolate to easily break apart and be shared with a partner.
- They needed to get the polymailers for shipping out the packaging.
- Beyond the product there are more moving parts like
- Design + Development
- Customer Support
- The gensis of the idea started when his business partner saw a popular titktok video for Sex Chocolate that had 8M views and 2M likes
- The brand for that chocolate had no social media and not even a website
- So there was an incredible amount of potential and with his knowledge, skill set and background he knew he could execute on it.
- From idea to first sellable product was 11 months for him - so that’s R&D for supply chain, formulation, recipe, coman.
- Launch date was December 20th, 2021 - in first 3 weeks of business they sold out of their entire inventory
- Working with influencers did not scale well. For every 1000 people he reached out to only 10 wanted to collab and they wanted to charge exhorbitant rates. So he decide to do the content creation / andrew tate strategy
- Instead of influencer collabs he worked with 1 content creator, Ke, on a retainer basis and paid him a flat fee to make 1 tiktok a day for 30 days and he generated anywhere from $60,000 to $80,000 in revenue in the first 30 days.
- How to scale it - 2 options.
- Instead of bringing on a bunch of creators he created new accounts and assigned each creator their own account then hired talented creators to run and manage the accounts.
- TikTok democratized the ability to go viral so it wasn’t about how many followers you could get it was about your ability to create good content that hit the 4 you page.
- You no longer had to pay someone a crazy amount of money to reach their audience and tap into their distribution network.
- He sold out of all his inventory in first 3.5 weeks so then if he sold $80,000 in first month and sold out it means he had invested in $80,000 / 19.95 (which was the original price before he increased it to $29.99 because it had a higher CVR there) = 4000 units of inventory. Assuming it cost $5 for chocolate and box COGL then that would be $20,000 of cash invested. He claimed to have started the business with $30,000 (his bet on the business) so that was $10k left over and I believe he paid Ke $2-3k to promote his product for the first 30 days
- So from that first month he would have made back his $20k plus $56,800 in profit increasing his cash position to $76,800
- On January 15th, 2022 an influencer by the name of @maciawolf posted a tiktok about them and it got 6.6M views and 2M likes and in 1 day that video drove over $50,000 in revenue. He didn’t pay her to post the video she just did it organically. For their 2nd month of business they did $280,000 in revenue and a lot of that was in pre-orders.
- They decided to ship the inventory for packaging by sea container instead of by air because it was significantly cheaper but that was a huge mistake as the container got incredibly delayed and they were out of stock for like 3 months. And in that time they lost all of their momentum and fire and sales slowly declined.
- In April they finally had inventory again but it wasn’t so easy to gain momentum again - he says it’s a game of momentum
- Then November came and his revenue dropped by 40%. TikTok banned him. All his accounts got banned and then his co-founder dropped out to go back to school. Then he moved back home after having moved to Miami to live in a penthouse and focus on scaling the business.
- This even pushed him back 10 steps and had to pull himself out with the help of the first content creator Ke and his uncle and he started exercising again to get back in shape.
- Then he focused on building the best fucking team
- Email & SMS
- Conversion Rate Optimization
- Ad Creatives
- All of these coupled with moving into Q4 with holiday season, black friday, cyber monday things started to explode again
- He took a trip to Europe for 2 weeks in November 2022 to enjoy life and get back to a good mental state.
- Your mindset, life and general well being is so connected to your business.
- Most importantly is he crafted a team of ASSASSINS
- He started spending $100,000 on Instagram and twitter meme pages to promote his top performing videos for 24hrs and working with bigger influencers, more influencers, revamping the operations side. Doing new photoshoots, redesigning the entire website, bringing on a conversion rate optimization team and then they started taking off like a rocket ship.
Using the Amazon Product Opportunity Explorer
- 78,453/3 = 26,151 clicks per month - all the traffic is likely branded searches
Semrush data shows steady strong growth
Organic terms are mostly branded
No direct competitors yet
Focused on defending branded terms
- Get into international marketplaces - more than 40% of all of his traffic comes internationally and they currently only sell in the USA
- Diversify away from the D2C website - Move to Amazon, Etsy, Wholesale and retail shops, smoke shops, sex stores, convenience stores, gas stations
- Lastly he wants to break into paid advertising
- He wants to build out new products and extension lines since currently they are only a one product shop
- Looking at his performance on Amazon he is doing about 4000 units a month which is we assume is all the lower priced $29.99 price he’s making $120k/month on Amazon currently as of 8/5/2023. He listed his product there on May 6th, 2023. https://www.amazon.com/dp/B0BT28F6WH
- It is interesting to compare his branded queries vs Mr. Beasts Chocolate
- Took most popular and natural supplements for sex and put them into a great tasting chocolate that was a luxury experience. According to Amazon ingredients are “60% cocoa, Epimedium, Maca Root & DHEA”
- They invested heavily into building an amazing package - the packaging needs to look attractive in order to help them acquire a customer. The packaging & branding was inspired by Truff (super expensive high end hot sauce brand). Tabs box is very similar to theirs
- If the chocolate doesn’t deliver on it’s promise and give them a good experience then they’ll never reorder again.
- Worked with a food scientist and chocolatier to come up a chocolate that was impactful and also tasted good.
- He targeted Generation Z with "sex chocolate," which contained natural supplements sold in pill form and packaged in a unique way. By making these supplements luxurious and destigmatizing their use, he disrupted the pharmaceutical industry's traditional approach.
- TikTok democratizes the ability to go viral. He got up to 30-40 TikTok creators on retainer putting out 1-3 TikToks per day so they were pumping out a massive amount of content - eventually he switched everyone over to fully affiliate commission based model which lowered the downside of non-performers and rewarded top performers more. Only some of his creators have a small monthly retainer with commission.
- He doesn’t know what video will go viral but he does know that if they put out 50 videos a day then one of those will hit the algorithm. Instead of trying to find the needle in the haystack you just grab the whole haystack
- Controversial product with luxury feel engineered to go viral on TikTok
- Can you describe the essence of the product in 3 seconds? If so that will contribute greatly to your success.
- They’re not selling chocolate. They’re selling an experience and a mood and therefore the whole entire vibe needs to be spot on. Otherwise how do you justify selling 3 tiny 20grams of chocolate for $29.99.
- He’s not selling chocolate he’s selling you the best night of your life.
- Called hundreds of chocolate Co-manufacturers before finding the right one with a low MOQ
- Fixed costs of creating the tooling and cleaning it after each run stay consistent so Comans typically don’t want to do an order under $10,000 so 99.9% of the chocolate coman don’t want to touch you unless you’re doing big numbers. So from his research there were only 1-2 companies he found who were willing to do the low MOQ.
- The Coman they picked specialized in specialty chocolates like one brand that had beetroot and other superfoods in their chocolate or like a CBD chocolate
- They took supplements that promote sexual wellness and turned that into a luxury experience that was de-stigmatized, wasn’t taboo, and something people could be proud to share with their partner. Values that he defined from the start.
- Supply Chain
- 3 different supplement suppliers - each specialty supplement comes from it’s own vendor
- 1 chocolate Coman - chocolatier
- Custom virgin polycarbonate molds to create the look of the chocolate finished
- 1 box manufacturer based in China
- In total he says probably has 8 manufacturers and they have different lead times
- Started getting traffic on website Feb 2022. Doing over $10M in revenue for 2023. 40-45% net profit margin with over 1 billion organic views on TikTok
- Product Development
- Chocolate breaks in half which is intentional so each partner can get half of it. If you see it on video you don’t need to explain it.
- Don’t need a lot of text to explain it. In 3 seconds visually you’re able to grabble with the idea of sex chocolate.
- Only 3 chocolate squares per box was intentional. They could have put 50 or 100 chocolates into a box and have a massive bar. Instead they decided to go the opposite and do it very scarce. The reason being they wanted to create this luxury feel experience. By making it limited it creates this “vibe” & “feeling.”
- Every detail was very conscious and intentional - one core value of delivering a luxury experience and making every decision based off that.
- The box is part of the product
- Gold foil
- Socials are on the inside of the lid
- There’s an emoji under the chocolate when you pull it out
- You need to new customers through the door and give them an amazing experience if you want to get them to keep coming back
- The box requires a lot of manual labor - lead times were months to do them
- The box’s purposes is to be sexy enough to get someone to want to buy it and notice it
- Made in Salt Lake City Utah however on his amazon listing states “made in our fully FDA-compliant facility in North Venice, Florida”
- Only stuff made in China is the box and the chrome poly mailers which create an embryotic effect which traps the heat from coming into the chocolate because chocolate melts. Melting wasn’t something he thought about until the summer months came and customers were complaining left and right about the chocolate melting - this also negatively impacted his Amazon listing review rating.
- Then there’s the special plastic that wraps the chocolate that is a particular manufacturer
- For the customer acquisition
- It’s not about the chocolate or the experience
- It’s about whether it’s attractive (looks good). Is it something that I want to buy?
- They talked with 100s of suppliers and got down to 3-4 potential manufacturers. Found the box manufacturer on Alibaba
- Rather than building the product first and then trying to figure out how to market it started first with the marketing and then build the product to deliver it. Reverse engineer it from viral TikTok marketing. They saw a similar product on TikTok which was the genesis for Tabs
- A random chick posted a TikTok about it and it had 8M views & 2M likes.
- He does research on the brand and notices:
- They’re not being sold online
- They’re packaging and branding sucks
- They have no social media presence
- So to him it was “Holy shit there’s massive opportunity here. Clearly it can go viral and is an intrinsically viral product. If someone with the right background came in to execute they could make millions.”
- Build an Amazing Product & Amazing Customer Experience worth talking about that has the ability to go viral
- How do you build a product that’s going to go viral organically?
- Make something that’s controversial so people talk about it
Sales - Go To Market Strategy
- From the get go the focus was going to be going viral and get organic traffic on TikTok
- He was going to find as many micro influencers as possible, send them free product and then try to pay them some sort of small cash bonus
- TikTok has democratized the ability to go viral - doesn’t matter whether you have 500 or 500,000 followers for your video to go viral on TikTok
- The smaller guys if they make good content can hit the “For You” page and create something that goes viral so he’s able to stretch his marketing dollars substantially
- Initially started off micro influencer focused but this made it incredibly difficult to scale - for every 1000 emails sent only 30% would bother getting back to them. The vast majority of people who got back to him would ask for ridiculous rates
- A valid influencer has 50,000-200,000 followers and more important than their followers is that they create amazing quality content that hits the for you page and gets views and eyeballs
- In terms of thinking about ROI his question is what will the CPM be and he’s shooting for sub $1 CPM
- That model didn’t produce consistently growing sales - the influencer posts 1-2 times about your product then moves onto something else.
- He found a guy called Ke who wasn’t an influencer but was a content creator and paid him a flat $2000 fee to make 30 tiktoks about his brand, 1 tiktok a day and he ran the brand page “@tabs” and then by day 5 some video hit and blew up and so in that month he generated $70k-80k in sales - then he had his holy shit moment with his focus on this is the model we need to run.
- Instead of chasing after the next influencer to post about tabs he would just pay people to work for him to make content. Find good creators, get them on a retainer and then it was set and forget because you don’t have to reach out to 10,000 influencers every week anymore
- He was a new guy with no followers and just managed his tabs brand account and was the face of the tabs brand account and every day would make videos on behalf of his brand account.
- You cannot add more creators to the same account - they need to have their own separate account. A lot of the social media channels with the algorithm it starts to under their ethos, pattern and schedule, consistency and they will reward good creators. Social media platform wants retention. If you put too many creators on the same page it confuses the algorithm. The most successful tiktok accounts are hyper niche and hyper specific.
- They follow the same formula every time:
- Same thumbnail, story telling, closing, same frame - it follows a recipe and formula and tiktok and viewers love it.
- Instead of 20 creators on one account he diversified and had them set up their own separate individual accounts. He didn’t make the accounts for them because then tiktok would say that he was abusing the platform and then shadow ban him.
- He lets the creators make their own accounts with their own email and password and phone number. They make a new account.
- Then he gives them instructions - name the account some variation of tabs
- He has 100s of accounts but he doesn’t control any of them. He doesn’t want to control the content he wants to cast as a wide of a net as possible and hit as much scale as he can. He doesn’t want to be in charge of the TV show he wants to own the entire news channel. So his approach is he has 300 TV shows going on and doesn’t know which one will hit. It could be the: Pranksters, Grandparents, could be the model, the only fans hottie, etc. but he does know if he has enough content going out each day that one will hit and all he needs is one to hit in order to drive a lot of sales.
- Popular examples
Where do you find these content creators?
- He found them on twitter and leveraged his personal brand and own following to onboard them as a TikTok content creator for his brand.
- He wasn’t super picky. Do you have a phone and your limbs? Let’s work.
- His product is intrinsically viral that it doesn’t take a creative genius in order to push out good quality content with it. They don’t have to come up with a crazy script and story and concept in order to get views you just need to flash the product and then boom 2M views.
- How can I bring on as many creators as possible. Then he got referrals from other creators he was paying $1000 to $3000 a month and then have to do 1 upload a day. They have full creative control. Then when a video does go viral he sends that video to all his creators and tells them to remake it in their own style.
- With tiktok it’s not about reinventing the wheel. There’s no originality with tiktok. There’s no secret formula. If you see a viral hit remake it and chances are it will go viral again.
The question is how do we make a product that makes the process of creating viral content a lot easier? Which was the gensis of tabs. Actually what is more accurate is find something that already went viral on TikTok but just wasn’t converting that attention into sales and execute better on that. The viral tiktok of that sex chocolate brand never went anywhere because they didn’t see that information and jump on the opportunity so they missed out on achieving their full potential.
TikTok Sales Strategy
Most sales aren’t made with the viral video they are done by responding to all the comments on the video and selling hard there. Respond to comments from the original viral video with new TikTok videos and in those videos is where you sell and you sell hard.
- 1st punch = the creator makes a Viral Video and it’s all about how do I get eyeballs and seen - TikTok cheapest CPMs of all the platforms - so when creating videos you want to optimize for eyeballs and not for conversions. First video = How do I get eyeballs, how do I get seen
- 2nd punch = how do we optimize for conversions. Once a video goes viral. When you have a viral video a lot of people leave comments like:
- What is the product?
- How does it work?
- Is this real?
- Is it legit?
- Is it a scam?
- With these the original creator makes videos responding to comments from the original viral video and they’re new tiktok videos so with these TikTok actually retargets all the original viewers of the video. So video replies # 2,3,4,5,6,7,8 you can make as many as you want will remarket the original viewers of Viral Video 1 so it’s free retargeting/remarketing. In those retargeting videos is where you sell hard
- You address pain points
- You tell them where to shop
- Tell them to go to your store and buy it right now before you sell out.
- Video 2-20 is where the bulk of the sales will come
- He had a video that did 30M+ views which generated $40,000 of sales in that day. The follow up videos generated $130,000 in revenue the next day. For the next week they were ripping the responding to comments videos and that month they did close to 7 figures.
- The creator responds to comments from the original viral video with specific conversion focused product centric tiktoks that are focused on converting a viewer into a customer.
How to find content creators for your product?
Go to twitter and search
- TikTok creator
- They’ll tweet about UGC, the brands they work with, clients etc. that’s how they find clients
- High school kids, college kids, random people on twitter
He converted the monthly pay to a pure affiliate commission basis to mitigate his downside risk and he can weed out the weak. Anyone not worth their weight will just leave.
How to pay the sales force
Some are on full affiliate basis where they get 20% of all the revenue that they drive which they track with a UTM link in their bio and a trackable coupon/discount code.
Some it’s a hybrid model
A little bit of cash and then affiliate commission.
To setup the UTMs he used Social Snowball and he says shout out to Noah Tucker
They have a lot of viral content that’s super viral on tiktok and it’s saved into a google drive folder without the tiktok watermark. HD file format. Just use a tiktok downloader for that. So chances are that it will also go viral on Instagram Reels, YouTube Shorts, and other channels. So how do they take the content and reuse it on the other channels. Initially he had a VA reposting all the video content on multiple channels. The social media platforms are smart and realized that the accounts were all connected to one IP address and then banned and shutdown all the accounts.
So he created a discord similar to Andrew Tate model. His own discord channel called “Make Money Online” and it started with 5 members and now they have over 2500 members. There’s super clear instructions. He basically has them set up an Instagram, Facebook, & YouTube with some variation of Tabs and he gives them their profile picture and instructions on how to create the bio and then give them the content library of all the viral videos and then they are posting them all over the place. Then they use social snowball to track what kind of revenue they’re generating and it’s become a fucking machine for generating sales for them and it’s generated millions of dollars in revenue for them.
His thesis is if you have enough scale then you will win. The caveat is if you have a product that can go viral that’s necessary as well. If you’re selling a toaster that isn’t controversial then best of luck man. In relation to his discord group being his army of sales associates to repost the most viral content that hit on tiktok to other channels to get a commission. He doesn’t know why for one kid it went viral vs another kid.
Discord Community Around his Business with an affiliate opportunity
In the discord community he gamified it. There’s a gym channel where people are posting their gym selfies everyday. They give money to people each day randomly to keep retention in the community high and keep them excited to post. They get 20% of any sale that they drive. They do invite tournaments to grow the discord. It’s like it’s own mini marketing engine in and of itself.
The discord group grows through invite tournaments where the person who invites the most members gets $100. 2nd person gets $50 and 3rd person gets $25. He threw money at it because it was printing money for him which was one of the biggest levers.
Then he switched some tabs influencers to start promoting the discord group instead of the tabs chocolate product. Hey kid you want to make money online? Join this discord group and then they promote tabs indirectly. So he leveraged the organic content creators to funnel people into the discord.
Then they did shout out for shout out with discord groups that had similar followings.
Channel 1 is TikTok content. Then take the viral winners and give it a second life by blasting it across other social media channels through his few thousand affiliates in his discord. Then he puts paid ad spend behind all of them but not the traditional paid media like facebook, tiktok, snapchat, instagram ads. They pay meme pages with millions of followers to post their most viral content for 24 hours on instagram, twitter, snapchat you name it. There are networks of meme accounts that combined have 100’s of millions of followers. They pay the meme page owner to post their content organically and it’s already viral content so it gets a boost from their distribution network and it also goes viral because it’s a Reel. So they get a boost because of their 2M followers and then another boost because it’s a reel and it hits the algorithm and that does really well. For this the meme page owner gets $100-$2000 to do it depending on what their audience demographics are. And he says they spend 6 figures a month on memes. On instagram it’s reels and on twitter it’s tweets. There are twitter meme pages with millions of followers.
For twitter not directly linking to the store - these two are posted together.
- The paid tweet is a native integrated post with a viral video
- Tweet #2 is a reply to the viral tweet which is along the lines of “OMG I just discovered their website. It’s tabschocolate.com then it’s #partner”
- Has to not feel like an ad it’s not going to work so they try to keep it super native. Tabs wants to make it feel like the customer discovered them and that they are making the decision to buy it on their own accord.
When it feels native then people are more likely to send it to their friends vs it being an ad (people don’t want to send ads to their friends). And that’s why it works.
It’s hard to track their LTV. They only have 1 product and 1 line and so now it’s time to add new products he says. Flavors, new moods and SKUs all together. Maybe venture into CBD, Shrooms, sex toys he doesn’t know yet. Lots of avenues to take it.
Incentivizing 2nd, 3rd order with subscriptions. The purchase funnel flow is super important. Without all of the steps in his funnel they are looking at an AOV of $25. With all of the addons and boosts the AOV goes from $25 to $50 per order which is 100% increase and can squeeze out way more money from the consumer.
They started with incentivizing the total amount you buy when you get to the website.
- 1 box = $29.99
- 2 boxes = 7% discount + Free Shipping
- 3 boxes = 17% discount + free shipping
Later via split testing he tested the assumption of offering free shipping and found that it had no impact on conversion rates.
Then he added a subscription layer to it. If you add a subscription you also get 20% off your entire order. He found people opting for 2 or 3 boxes were now instead opting for 1 box with a subscription. So he asked “How do I get the best of both worlds? How do I incentivize the bundle at a higher AOV while also incentivizing the subscription without sacrificing one or the other. So instead of having that all on the product page what he does now is only a one time buy and they incentivize the 2 or 3 box package. Then they incentivize their “Melting Insurance”
It’s great because if the customer had a bad experience and received melted chocolate they would send them a replacement anyways. For the melting insurance there is a 80% take rate on it and there is no cost of goods with it, it’s free money for him.
When you get to the checkout page with Shopify Plus that’s when they push the subscription. By this time they’ve already bought the 2-3 boxes, the melting insurance. At this point the take rate is much better for subscription.
If you present too many things at once things get sacrificed. But if you build it in a very methodical way. After their purchase there is the post purchase “Hey do you want to add another box for 50% off?” they click buy and it gets added seemlessly.
They use a shopify app called “One Click Upsells” app so that they don’t have to put their information in all over again they are able to add it to their order and the order gets updated.
Then they land on the thank you page where there’s another upsell for another box for 50% off.
Then post purchase they get emails saying “Are you sure you don’t want to subscribe” if they didn’t subscribe already. “Hey upgrade your order to a subscription and save a lot of money.” Which is called a Drip Campaign.
At the end of the day:
- One store can get 100 visitors and squeeze out $50 out of them.
- Another store can get 100 visitors and have the same product and be different with all of these upsells and cross sales and squeeze $500 out of the same 100 visitors.
- At the end of the day the person able to squeeze the most amount of money out of customers will win long term while of course offering an amazing customer experience as well as being cognizant that they’ll return and have a good experience.
Originally they charged $19.99. There really was no competition or market so at the end of the day they got to create their own price. With other industries and markets you can’t charge too much or too little because customers have an anchor in their mind about what the product is worth.
They wanted to go the luxury premium route so he just pulled a number out of his ass. His competitors for the pill and powders was around $10. Pill isn’t a competitor. They sell an experience instead of a pill or powder. They don’t want to be pharmaceutical or taboo they want to sell something that is luxury, shared, that people are proud to take. Not like a sneaky pill. Enjoy it with your partner together.
Then he split tested new prices and when he increased price he saw an increase in conversions. He thought $19.99 was crazy to charge for 3 chocolates. Then when he increased the price more people were paying for it. Now they do split tests for pricing sending 20% of traffic to one price, 20% to another, etc. to start to hone in even further.
The greater scale you operate at the more leverage you have. Little optimizations add an extra 6 figures into your product. They are decreasing the weight of their box by 1 ounce which will save them over $300,000 this year. So if it is 1 ounce less they fall into a different shipping threshold. So that one ounce difference costs them $300,000 at their current run rate.
- Shopify & Shopify Plus (he pays $2000/month for it but he saves it on transaction fees) and Shopify apps
- Shopify App = One click upsells for post purchase upsells
- He uses Trello & Slack
- Social Snowball - they streamline the whole influencer and affiliate process.
- When a customer buys it creates an automatic coupon code for them that they can share with their friends and so whatever they buy then they’ll get 20% of it
- Influencer & affiliate marketing at scale
- Creating coupon codes is automatic and seemless for new affiliates.
- He wouldn’t have been able to run the 2000 affiliate discord group without Social Snowball
- Klaviyo for email
- He uses shopify analytics
- Google analytics
- He would recommend a triple whale attribution software if you run ads
- He would have a VA look at all the influencers and provide a summary at the end of each month
- Revenue they generated
- Commission they earned
- He would go through the sheet at the end of every month and then pay them out their commission
- Now he has a software that does all the view tracking & follower tracking for all the accounts in their network
- For him he just wants more creators, more affiliates, more scale then he knows he’ll make more money if he does that.
- Amazing text messaging platform called One Text they are revolutionizing text messaging game and are in YC
- They allow people to buy your product within the message. Press 1 if you want to buy it but now their card is vaulted in the one text messaging system and they can just press 1 and buy the product.
- TCPA guidelines state that in order to send a text message to a consumer they need to opt in twice. Because this is not marketing, it’s considered part of the same transaction as before they are able to send an abandoned card to every single customer who abandons on your site whether or not they opted into marketing. So if only 20% of visitors opt into the marketing then you can only send abandoned text messages to 20% of the people now it allows him to 5x that and send an abandoned cart message to all the people who abandoned their cart which adds a huge amount of revenue to his bottom line.
- He gets their phone numbers when they are filling in their information on shopify because it’s required but in order to text message market them they have to check a box allowing it on the site.
- There’s a clear path to success and it’s not rocket science
- It’s at bats. Keep going. Failure gets you closer to success. The more shots you take the more chances of success you’ll have
- It’s not about intelligence it’s about experience - the more experience you have in the space the sharper you become and that leads to training your intuition and subconscious
- The more experience you have the more you have pattern recognition so you know how to best navigate the situation and know what moves you need to make in order to cross the finish line
- Whereas a newbie falls into all the traps and landmines simply because of having less experience
- Biggest piece of advice is to get that experience and there is no shortcut you need to fail along the way
- Before tabs he had 20 other ventures and a lot of them were massive failures and ridiculous concepts but that’s part of the game and each one you get a lesson out of it and then everything starts to click.
- Experience you can take to any other business.
- 3 years of entrepreneurship you get the basic skills
- Best information - Y Combinator and Stanford have their content all online for free
- Building a personal brand is THE business
- If you have a personal following an average or even below average product will sell
- He has people texting him and saying that they want to work for free
- When building a business it’s the people in your business - your businesses value is the sum total of the average IQ of the people in your business. Attracting talent with a personal brand is huge.
- If you spend 4 years working on a business or anything you’ll be a millionaire after those 4 years if you stick it through and $250k in startup capital you’ll be a millionaire.
- The goal is to get good at something and be a killer in that space.
The Math / Financials
- In first year he sold $4M worth of sex chocolate. Assuming most people go for the middle order option with the 7% off price the average sales price per box of chocolate would be $27.89 so that’s 133,378 units or about 11,115 units per month
- He told his parents he would sell $1M in his first year so he beat that by $3M
- For 2023 he will sell over $10M worth of chocolate
- Being in the know - who’s a killer vs not a killer - he does not have any full time people on his team, everyone is either working as a contractor or agency basis. If performance isn’t good then they wouldn’t last.
- These types of people can have a team that can execute things underneath them to manage parts of his business for him.
- How many people core to his operation - he says 8-12. Trend that you can do a lot more with a few amount of people. The flex is having the fewest amount of employees as possible.
Taking the Leap
- He built in optionality by taking a gap year at college vs just dropping out completely
- When he first started tabs he was recruiting for a summer internship then decided not to take an internship then lived at home to work on tabs so he didn’t completely drop out of school but went part time student and took 2 classes then he decided to take a gap year
- He took the gap year.
- He moved to Miami during his gap year
- Moved to an apartment he couldn’t really afford in Miami and the company was growing month after month after month and he was reinvesting all of the money back into growth
- Then July happened and shit hit the fan
- He started getting banned on all his social media accounts
- Revenue fell dramatically
- His co-founder and partner who was supposed to be contributing became completely MIA
- His business partner told him he was going to go back to school despite his pledge to take a gap year with Oliver to help scale the business and by the way I’m going to start other businesses too and I’m going to do the bare minimum per our contract agreement and I think you should do the same.
- At this point he can’t afford the apartment that he’s in or food because all his money is tied up in buying 100’s of thousands of boxes and chocolate orders
- Sales are falling and he’s living in a penthouse in Miami
- He’s thinking what the fuck do I do now
- So he called up his academic advisor and said that he needed to go back to school but because he didn’t take an economics class to assimilate he had to wait a year to do that so he was forced into the gap year.
- So he ended up moving back home and was incredibly depressed. He was in Tampa now with his parents, alone, his co-founder left, company is tanking, his co-founder is back at school partying with his friends and having the time of his life.
- For a little bit he gave up hope and stopped working out, gained weight, he stopped seeing people, and stopped showering every day. It starts to permeate in every part of your life.
- At the same time it forced him to put his back against the wall and slowly he started to build things back
- Built a team
- Brought on some killers
- Moved into quarter 4 - black Friday, cyber Monday, Christmas and the holiday season soon after valentines day in Q1 things started to rebound and explode and after July they have been growing month after month after month where they are pushing million dollar months.
- First thing he did was travel for a month and half all over Europe and got excited about life again.
- His business went from $60,000/month in July to now pushing over $1M months
Mental Health Side
- If you’re not happy you won’t make good decisions
- How are you going to run an ecom brand if you’re not motivated to wake up in the morning
- For physical ecommerce the tempo is 2 weeks where you’re working hard and then 2 weeks where you’re waiting on things to come in. Things take time to get a sample, get shipped to the USA from China, etc.
- Amazon, Etsy, Walmart, gas stations, sex shops, convenience stores, and other channels
- Shroom chocolate brand
- Sex shop for Gen Z
- The mood - functional food brand
- He is going to dip his toes in the software space now
- 3-5X EBITDA - for ecommerce brands
- 10-20x revenue multiple for software - he thinks this has more potential
- Also really focused on building his personal brand
- 20,000 followers on twitters has been great to have on twitter
Education & Prior Experience
- He worked in growth for an app company and learned a lot there (HUGE)
- Understanding the process of growth hacking and then applying that to a product opportunity. The sales process / growth hacking process is more important than the product itself.
- He has a great network - had a friend who was a growth hacker who started the fidget spinner trend
- Parents - mom went to Harvard and dad worked in corporate finance
- Grew up in Westchester, NY
- With the internet now you can learn from the best minds at your finger tips
- No one is above the process of failing to get to success - you’re not going to go from 0 to millions instantly you can’t be above the process.
- Entrepreneurs are wired differently than employees - they get bored doing the same thing over and over again
- The only difference between Oliver’s dad and his friend’s dad was Oliver’s father worked in the business whereas his friend’s dad owned the business. Ownership is important.
- There’s a lot of waiting in ecommerce and physical products
- Couldn’t start photography until he got the packaging, and couldn’t get the packaging until they finished the design.
- So it happened over the span of 11 months but it wasn’t something he was grinding out day in and day out.
- It was grind for 2 weeks then wait to get this thing back. grind then wait a month to get the sample
- Drop shipping is a scam
- No LTV so you need to be profitable off the first acquisition
- When he acquires a customer he wants them coming back to buy more to have a high LTV.
- Legitimate brand should create a returning customer. When he acquires 1 customer he knows they’ll come back over the next 5 years 10-20 times (his assumption since he has only been in business about a year) which gives him margin to play with when he’s acquiring them in the beginning
- With a brand you’re building equity vs with a drop shipping business you’re just chasing the next quick buck
- Real wealth comes from the exit, not the cash flow. Every $1 you generate with a real brand you get to see 3-5x of that when you eventually exit and it could be more and not that they’re forcing it down their throat.
Most people start off trying to build the product and brand and then try to figure out how to market it. THIS IS KEY. Distribution/marketing plan > the product
Whereas I have a very clear understanding and background of TikTok and viral marketing… so I kind of reverse engineered it… I was like, how do I build a product that’s going to go viral, that lends itself to organically going viral? But really he found a product that went viral then engineered on top of that to ensure it would be even more viral.
It’s interesting to compare Tabs Chocolate strategy vs Ryze Superfoods.
Ryze is doing a big facebook/instagram ads push of their product whereas Tabs is pursuing the organic awareness approach with content creators making content for them. Ryze doesn’t have as controversial of a product and is creating ads more aimed at making women look slimmer so they are more weight loss ad oriented.
He pays the content creators a retainer and then commission on sales
Some have 10% off codes while others have 15% off codes
They use UTM links to know who is actually driving sales
Some Viral Tabs Videos - What are comparables of what goes Viral on TikTok
- 10.7M views - Video
- 6.3M views - Video
- 2.9M views - Video
- 1.9M views - Video
- 2.7M views - video
- 5.4M views - video
- 3.3M views - video
Things I don’t know about Tabs
- What are their box dimensions?
- He said they will optimize the box to remove 1 ounce so that they can save $300,000/year from this in shipping costs because they will be in a different shipping tier
- On Amazon since they do FBM (likely to avoid melted boxes) there’s no information on their box dimensions or what their FBA fee would be
Oliver shares the companies that have helped him to scale here:
Oliver's Tech Stack: Affiliate Marketing (referral) -
Email Automation -
Online store -
Text SMS Marketing (referral) -
Organization task tracking -
one click upsell -
There is also video content with Oliver on Instagram here: https://www.instagram.com/p/CqqgzxPvvKg/