As we walk the halls of our Midtown Manhattan coworking space we feel that end of year rush. It’s a combination of reflection on past achievements, productive energy to cram in more year-end accomplishments, and excitement for what’s to come – after vacation.
Here’s a breakdown of the Workville pulse we’re feeling. We paired Workville’s entrepreneur sentiments with examples from two of the greatest success stories of 2018: Halo Top and theSkimm.
Part I: FINANCE 101
Normally it’s bad manners to talk about money. End of the year though, let’s talk money. In addition to the executive team taking stock of financial performance, investments, future operating costs, growth potential, Workville companies include all of their employees in end of year reviews. They do this because transparency between executives and the team creates a sense of pride in the common goal. Employees like having ownership of their work and understanding how their work contributes to the big picture. So why not empower your team by including them in a big picture review.
Understanding the financial performance sets the team up for success. If shifts are being made to the roster, transparency and expectation setting pave the way for an agile company in which change is exhilarating. In the case of clients, if the previous year was spent managing difficult client relationships with little ROI, this is the natural time to part ways. It frees up your team to form new relationships and strengthen existing relationships with inspiring clients. It’s rewarding to go above and beyond for great clients; your bottom line will reap the benefits of this as well.
In the case of employees, it is common for scaling companies to pivot overtime, and the type of talent you need may shift with the new goals. When considering how to motivate the team, consider that people want to be proud of their work and to feel successful. Foster a team you can set-up for success and if the job has changed beyond someone’s interest or achievable skill level – set them free by having a candid conversation. Transparency with the team is the best way to find and retain the right employees. We refer you to a Workville fan-favorite book about management style, Moneyball. Billy Bean has a few tricks up his sleeve when it comes to managing the roster of a major disruptor.
Halo Top & theSkimm exemplify Finance 101 plus a few what not to do’s.
Named two of the greatest disruptors of 2018, Halo Top and theSkimm had a risky ride to achieving noteworthy profits. Halo Top was founded in 2013; by 2015 Halo Top’s founder, Justin Woolverton was $150,000 in debt with an interest rate over 24.9%. When it came to goal setting for 2016 he had one thing in mind, this was the year to either make it or break-it. Halo Top crowd-funded $1 million, reviewed the ROI of every decision ever made and started 2016 with a ferocious drive to succeed in 16 months or less (the time it would take for the money to run out). Using 20/20 hindsight from lessons learned, the team was scrappy and bullish in their decision making. Pleased with the taste and value of their low-calorie ice cream, they focused their goals on streamlining ad spend, improving packaging, and increasing distribution to increase market share. Woolverton leveraged existing relationships, “persuading stores to discount their slotting fees and then using those savings on ads to drive traffic to those specific stores. [In Woolverton’s words] ‘I quickly figured out I could spend $150 on an in-store demonstration, or I could spend that on targeted ads that cost 10 cents per eyeball. You drive a lot more traffic doing it that way.’ He bought hyper-targeted Facebook and Instagram ads aimed at people who liked ice cream and healthy foods and lived in the ZIP codes immediately surrounding the store locations.” (Inc.)
Fast forward to 2017, Halo Top achieved over $342.2 million in sales. In 2018 their valuation was reported to be over $2 billion. Woolverton and Halo Top’s President/COO, Douglas Bouton, maintain majority control of the company. They will not actually disclose the valuation discussed with private equity firms, but we do know that they are eating into the market share at a rate no one would have expected at the start of 2016. In only two years they are 5% of the U.S. ice cream market and they continue to roll out new flavors as well as new product lines, including dairy-free options. Brands like Ben and Jerry’s are hopping on the bandwagon with their own version of Halo Top while major companies like Unilever are courting Halo Top with buyout offers. Globally, ice cream is over a $55 billion industry. We’re willing to bet that Halo Top’s 2019 goals include leveraging their current financial situation to scale internationally.
In a similar story, theSkimm founders Carly Zakin and Danielle Weisberg started their newsletter company in 2012, from their couch. Roommates at the time, they had a combined $4,000 in savings (which is equal in value to a New York minute). They quickly went into debt, though they will not disclose how much. Early fundraising efforts were of little avail. As Zakin explained in a Business Insider article “We made a list of all of the investors, angels, and seed funds, and we would turn anyone who said ‘no’ red — then the whole list was completely red.” It was time to pivot quickly. The duo assessed their opportunities and weaknesses. Their vision for a pithy email newsletter was clear, and based on their peer group alone, they know the market was there. Articulating this into a clear, scalable plan was the biggest challenge. It was time to change their pitch while simultaneously forge ahead without funding. TheSkimm’s first newsletter was circulated to everyone in their address book, their friends’ address books (Facebook privacy settings were even looser then, so they were able to download friends of friends email addresses), and to the news anchors at their former employer NBC. Initial email circulation had 5,500 names, 800 of which opted in. One news anchor opted in, Hoda Kotb. After the fourth newsletter, Hoda was such a fan she gave theSkimm a shout-out on The Today show. Thanks to that one shout-out, readership grew to a few thousand readers nationwide, almost overnight. Momentum continued to grow; in less than 18 months readership grew to 100,000 and the founders raised over $1 million.
TheSkimm allocated their initial funding to hiring talent. They needed a team that could accelerate growth. Their goal was acquiring 1 million readers in one year. To achieve fast growth, they focused on hiring for a culture of “zero-drama, zero-ego”. Their motto is that nobody is too senior nor too junior to do something. TheSkimm hit the 1 million readership mark in less than six months.
With over 7 million readers in 2018, theSkimm now has advertisers and investors knocking down their door. Valued at $55 million, their current investor lineup includes big names like Google Ventures, 21st Century Fox, RRE, Homebrew, and Spanx founder Sara Blakely. For 2019 we project theSkimm will continue expanding their lifestyle category and perhaps license products as well?
Risking debt and bad credit is not a best practice we recommend. In fact, it’s something Workville’s entrepreneurial members strongly advise against. In terms of a case study though, Halo Top and theSkimm exemplify how powerful a financial review is for driving smart change and goal setting.
Part II: LET’S TALK ABOUT YOU
The entrepreneurs in our coworking space are confident go-getters with an unwavering focus for achieving their vision. Patience with the process is one of the most profound characteristics of an entrepreneur, so first and foremost, give credit where credit is due: your conviction and your work ethic.
Another common characteristic of Workville’s members is that they are humble, down-to-earth, quick to say thank you. They are grateful for the opportunity to stay their course, and for the entourage that helps them stay the course. Everyone from their team, their clients, their workspace peers, to their family and friends are along for the ride. Workville’s entrepreneurs make it clear that success is a team effort by giving credit and saying thank you to their entourage too. Take stock of your accomplishments and the collective team accomplishments.
It takes leadership skills to be a successful entrepreneur – to articulately convey and execute your vision while inspiring the team to do the same. Consider the examples of our case studies Halo Top and theSkimm. Halo Top’s founders went through too-many-to count iterations before perfecting the flavor and texture of their low-calorie ice cream. Woolverton had a Goldilocks-like fanatical approach to taste testing and experimenting until his ice cream formula was just right; never giving into doubt. Even today, if you ask Woolverton what his job entails, he will tell you, albeit with a smile and a bit of irony, that the core function of his job is “tasting ice cream”. Even on the hardest workday, he is grateful to be building his passion into a global company. His passion translates to the consumer too. Halo Top’s low-calorie deliciousness flipped the script on the norms for eating ice cream. Instead of being self-consciousness about downing a $6 pint in one sitting, consumers now brag about it. The packaging literally says “Stop When You Hit the Bottom”. Also, instead of reserving a pint of ice cream for that special occasion or as a scoop per night, consumers eat Halo Top at a Woolverton rate, buying a pint for almost every night. Retailers scramble to keep Halo Top in stock.
Moving on to theSkimm example, Zakin and Weissberg were able to engage the sought after millennial audience because they inherently understand this demographic – they are millennials. They noticed many of their peers wanted to keep up with current affairs but did not want to read an RSS feed or watch TV news. There was a void, a need for a forum to connect with millennials based on millenial behavioral patterns. Zakin and Weissberg understood the big behavioral change with their peer group is the morning routing – using the phone for an alarm clock, correlating to checking email immediately after waking up. The phone was also becoming “me time” when one can absorb information on their own time.
The value of theSkimm’s email newsletter is that it engages the reader in their natural rhythms and in their conversational tone. Early investors did not understand; rejecting the idea that a newsletter could garner interest over email because “email was dead”. As the founders comically note though, investors sent these rejections over email, so clearly, email was not dead. (Business Insider)
TheSkimm’s email newsletter has a loyal reader base that trusts them as the resource for all current affairs. In 2016 TheSkimm branched out into politics with the No Excuses campaign: “theSkimm’s nonpartisan campaign aiming to get 100,000 people to vote…Because democracy.” During the October 2018 midterm elections, The No Excuses campaign accounted for registering 110,000 voters, 95,000 of whom were women. According to a Harvard poll, the October 2018 midterm election had a historically high turnout for millennials and the largest for that age group in 32 years. It all started over email. Newspapers like the NY Times and the Wall Street are now vying for a piece of the email newsletter market share theSkimm created.
In all of our examples, these entrepreneurs personify the conviction, work-ethic, go-getter spirit and gratitude it takes to succeed. They never deter from their vision. They are agile with the process. They use finance as a benchmark for goal setting and for making the necessary changes. To summarize, choose your lane and have the conviction that you will be the best in your lane. Stay humble by thanking the entourage that is there with you for the ride.
May your 2019 achievements be filled with teamwork, friends, family, and happiness. Cheers to what’s to come!
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