Shopify

How Bushbalm Grew From A $900 Side Hustle Into An 8 Figure Business

how-bushbalm-grew-from-a-$900-side-hustle-into-an-8-figure-business

Bushbalm is on track to make over $10 Million in sales this year—an impressive feat for a brand that started as a $900 side hustle. In Shopify’s first-ever miniseries, David Gaylord, CEO of Busbalm and Shopify’s Entrepreneur In Residence, shares his journey of building a successful skincare company. We dig deep into all areas of the business like marketing, finances, product development, and everything in between. Check out the first episode where Shopify’s COO Toby Shannan chats with David about all the lessons he’s learned along the way. 

For the full transcript of this episode, click here.

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The employee competition that inspired an 8 figure business 

Toby: I’m Toby Shannon, the Chief Operating Officer of Shopify, and I’m here with David Gaylord. So, tell everyone a little bit about yourself, your career at Shopify, and what Bushbalm is.

David: My journey at Shopify starts probably nine years ago now. Not as an employee, but two years before I became an employee, my family has a hardwood flooring store and they became a Shopify merchant. That was when the admin was still slime green at the time. I remember comparing Magento, I learned all of them. And then after I did that, I joined the company in the customer service role, so that would have been over six years ago now on your team. I think the company was 700 strong at that point and I joined Toby’s team. Slowly within the company I grew into roles and we started to work closer together. And four years ago I started Bushbalm with a partner who was also a Shopify employee. 

Toby: It shouldn’t be noted, too, that Shopify is super cool on people doing side hustles using our technology especially. Did you know you wanted to start a business or were you just trying to get better at doing your job?

David: The reason I joined Shopify, there were other places I could’ve applied and tried to get a job, but I wanted to join Shopify because I thought ecommerce was really interesting and up and coming at the time. Joining Shopify was amazing because I learned everything about ecommerce and marketing. The reason we started Bushbalm, was because Shopify had a business competition with Richard Branson externally and internally we did a build a business competition for employees. So, Bushbalm started from that competition.

A selection of Bushbalm’s oil, scrub, and electric trimmer.
When Shopify launched an internal Build a Business competition for its employees, David Gaylord started Bushbalm as a way to learn more about the platform. Bushbalm

Toby: Was it a $250 injection and what is Bushbalm?

David: It was $952 with the domain charge. Bushbalm originally started as a cosmetic product for freshening up down there, so it was all about scent. My business partner and his wife were on their honeymoon, and when he used a beard oil, he thought maybe we should create a product that you can use everywhere that smells nice. And it’s transitioned to more of a problem-solving skincare brand, so we focus on solving skin concerns that we believe the beauty industry is often ignored. So, think about ingrown hairs, razor burns, chafing, solving these things that people don’t see as big challenges but they’re really common. So that’s what Bushbalm’s morphed to. 

Toby: Can you talk a little bit about the scale of the business now? And where else do you sell beyond Shopify? 

David: We’ll probably do close to $10 to $12 million Canadian in revenue this year. 99% of it is on Shopify. We use another account for wholesale and even our wholesale business is mostly on Shopify. Mostly direct to consumer and none of it on mass retail, none of it on Amazon or anywhere else. It’s been all Shopify.

Toby: For a big chunk of that time, you were working directly with me. We worked a lot, like eight to 12 hours a day. How did you have time to do all this?

David: It was hectic, a lot of work. I was an operations lead for a year there, and what that meant was I worked on a lot of decks and we were presenting to different parts of the company, doing all kinds of internal public-facing stuff. My Bushbalm routine, which is not very healthy was that every morning I woke up at 6:30 am and I worked on Bushbalm until 8:00 am. And then I did tons of Bushbalm at night. My biggest Bushbalm day was Sundays for three to four hours.

Toby: You’re looking at 13 hours to 15 hours a week. And you’re able to build it like a multi-million dollar business. And what about your partner?

David: Tim also worked at Shopify and he left quite a bit earlier, and that helped in many ways. So, I focus on the marketing side and sales and he runs the back of the house. He fully left the company to do the supply chain about a year ago now. He went on pat leave, and then he ended up extending that. It was helpful when Tim did that because a part of running a side hustle and having a full-time job is it made us have trade-offs. A good example was the first year someone said, “You should do wholesale,” and we said, “You know what? No, because it’s too much work.”

Why Shopify is saving a seat for entrepreneurs at the table

Toby: So you’re still at Shopify, you’ve got this great business and we think it’s valuable to have a seat at the table for you as our Merchant In Residence, let’s unpack that. 

David: Bushbalm’s been growing and scaling and you in particular and a maybe 10 other teams at Shopify would come to me with quick questions, “Hey, as a merchant, what do you think of this? As a merchant, would you ever use something that does that?” So, those teams slowly became closer to me. Now, my role is the merchant in residence, I work a smaller amount of time on Shopify and when I was thinking of quitting Shopify, I told you, “I can’t do Shopify while also running a D2C of my own.” So, you said, “Well, why don’t you do your D2C business but also help Shopify along the way?” So, that’s what I do now.

Toby: I think what was always apparent to me is, and I don’t know if it was Bezos or someone talks about having an empty chair around the boardroom for the customer. One of the things that you continue to fulfill as the Merchant In Residence, is that voice of the merchant that’s always prevalent in every conversation. I think it’s a really healthy thing to have. My daughter used Shopify before and that was helpful, but not as much as I would have liked. I’m pretty out of touch with the product in ways that you are completely in touch with, and so I think it is really useful for the organization.

David: I think what I add to that is I can be very critical and very honest, and everyone still likes me for it. What I think is hidden and not part of the role, is me encouraging other people to experiment with the platform to try and use it. Because now, the more years I use Shopify, the more in tune I am with it. Even though I might be doing different things, I understand it way better than I ever did.

Toby: What did you learn from your role in Shopify during the time we that scaled the company from 700 to over 11,000 people? 

David: If you are someone who’s trying a side hustle for the first time, working at a company like Shopify was so valuable and in the areas that I didn’t expect. Like how to run a business operationally, I wouldn’t expect that to be helpful. All the leadership training you get at these big companies is phenomenal. And then HR, how to hire people, how to train people. Those things are very valuable for Bushbalm. The most valuable thing is just how to organize a company. Because my family business is a much smaller company so I never understood the departments or why they are needed. And then I worked at Shopify and I saw the work the finance team does. We might not have a person who’s a finance employee, but I know and appreciate the work they do. And then same with talent, we don’t have an HR person per se, but I know I have to be the HR person and I have to have the documents. You need to have these. Whereas, if I just went into Bushbalm, I wouldn’t understand all of those pieces, I’d say.

Continuously learning thanks to experiments—and failures 

Toby: What you are doing is the best attrition for us, someone who leaves us to start a $10 to $20 million company is probably as good as it gets. What can we learn from you?

David: I guess the one thing that I find Shopify does do well is understanding the use cases people have because there are so many and also knowing the things that I don’t think I need yet. Because two years ago, I didn’t understand that how important data would become for me, and now, data is becoming much more important and I’m starting to dig into it more. And the piece that Shopify has to somehow figure out is knowing what users need. I know Headless was announced and the new sections everywhere. So, it’s like getting ahead of the things I don’t know I need yet. So, for me, how do I give those to the company? It’s really hard.

 A bundle set from Bushbalm which includes oils, scrubs, and its trimmer.
Both Toby Shannon and David Gaylord attribute their growth to learning from failures and experiments. Bushbalm

David: The other piece of it is I think, Shopify and many of the employees are only aware of the very high level information, and it’s really hard to dig down into the detailed bits of what it’s to run a business on our platform. And a good example would be Facebook ads. Right now, I can tell you what’s going on and the nitty-gritty details, the struggle that many businesses are having, and I think Shopify needs to pull down the levels and see the nitty-gritty so then they see what they need to build. You just got to talk to a lot of merchants, essentially.

What Shopify needs to change for the sake of entrepreneurs 

Toby: If you had the proverbial magic wand, what’s the thing about Shopify you would change to make it better for your business?

David: There were a few things that I think a lot of people in my seat would say, one of which is landing pages. What happened three years ago at Bushbalm is landing pages in the apps and the software elsewhere wasn’t very good. So, with our Facebook ads or Google ads, every one of these ads is going to a landing page somewhere, and that landing page is much more aggressive and it’ll sell someone much better than our homepage or our collections page. So, those right now are arguably one of the most important pieces of our business because they make our engine run and our marketing work.

Toby: And you AB test each one, relentlessly I assume?

David: We’re building AB tests for almost every landing page, all the words on them. So, that right now is a huge thing that I wish I could do natively on Shopify. And I think with sections everywhere, it’ll change that. And I would pay for that. I currently pay for it elsewhere so I would pay much more for that in Shopify. So, a landing page is a big one. And then data is so challenging. And I’m working with Google Analytics and Google Optimize now is where you can AB test. But when I first started, data was pretty irrelevant, and now data is something that struggling with a lot.

Toby: And is that just have to do with your scale now, you’ve got so much stuff going on you need the data? Whereas, before, it was more of your intuition?

David: Early on, the only data that really mattered was like, can I get sales? I sell more? Whereas, now, we put a lot of money into a new product launch. So, a new product might cost us 300K to launch, and pretty quickly I want to know how many people are repeat buying and then how many people are repeat buying in other products and all of those metrics, just how much money do we get back at a certain point? Yeah. It’s a bit bigger now.

Perfecting the formula for scaling Bushbalm

Toby: For Bushbalm is it predicated on repeat buys, or is it upsell cross-sell? 

David: I think as a business, one of the most important metrics is repeat. If you don’t have a good repeat rate, you might not have a good business that’ll last. So, that’s a really important metric. We do spend a lot on advertising and then we know if we get them in the door and then we will have a good repeat rate. Then the question is will they buy other products that we’re introducing? Which is a new challenge.

Toby: Are you public with your customer acquisition costs?

David: Not really, depending on the channel, it ranges. So, as far as the business model, we’ll probably spend between, $16 and $30 on customer acquisition. Our model is to upsell and make sure people have what we call routines. So, generally, for a skin concern, we do have single products, but our goal is for healthy skin, you want to have a routine. So, for the customer, it’s good because they’ll be on a routine and it will be more subscription-based.

Toby: Do you have a subscription solution that maps to most customers’ routines?

David: There are many subscription players we can use now and Shopify is enabling it, which is great. We don’t have subscriptions built-in yet, but we’re planning on launching that later this year. This is the part where Shopify could help, I’m making these decisions of what I need to launch subscriptions, at some point, someone will tell me, I don’t know where it is or in Shopify, “Hey, you have a repeat rate of X percent and you have this metric and this metric. It looks like you’re a perfect business for subscriptions and you should launch here.”

Toby: Off the top of your head, do you know roughly what the repeat subscription rate is?

David: It’s a good question for us is how long does the bottle last? It’s a hard question to answer and we’ll dive into 100 accounts and look and make our assumption, but that’s a metric that doesn’t seem to exist.

 A model using a trimmer by Bushbalm
Expanding into electronic tools allowed Bushbalm to raise their customer LTV. Bushbalm

Toby: Let’s talk about the Cost of Customer Acquisition (CAC) and how to balance that with the Live Time Value (LTV) of customers.

David: I’ve learned a lot now about venture capital and how much money you get. And a lot of companies were raising huge amounts of money, and their key assumption was, “Oh, we know the LTV will be more because of this metric.” Whereas, a lot of them turn out not to be the case. It’s actually, interestingly enough, on Shopify last year, we launched bundles, so we just made bigger kits with more products in them and we doubled our LTV by doing that, it made a huge different.

Toby: And does your LTV go up every year? Have you noticed that?

David: We’ve seen LTV as we’ve launched more products gradually go up. And we’ve also launched for the first time, it was kind of a risk at the time, a trimmer, which has a much higher cart value. So, it was the cost of our old LTV.

Toby: Because it’s an actual device instead of a bottle full of product. So, are you making that work?

David: It’s going really well. It was a risk because we wondered if we can sell something that’s higher value? I was skeptical for a while, but it’s turned out.

How mentorship changed Bushbalm’s business forever 

Toby: What are a few critical things that new business owners should consider?

David: The one thing that I grew into slowly was mentorship in many ways, so working with yourself. You should chat a little bit about your entrepreneurship before Shopify.

Toby: So, I’ve been at Shopify for about 12 years. Before that, I was a serial entrepreneur. Most of the companies failed. That’s the nature of entrepreneurship. One of them that worked that people might know was a little kit that you spit in and you get DNA information. I helped a bunch of folks in Ottawa start that up 2003, the 23 and Me tests. So, that was successful. But I spent a long time starting things that didn’t work, and in fact, I found you learn equally from the things that don’t work as the ones that do.

David: On the mentorship side, you were a mentor for me for a long time as we worked together at Shopify, and the company encourages you to start your own business, do your own thing. And that, for me, as a person going through most of it for the first time, just having someone and a few other people to talk to helped a lot and alleviate the stress.

Toby: I had a similar relationship with a bunch of different people. People who invested in me early on, who helped me out immeasurably. I ended up hiring one of those people who ended up being both of our mentors, Roy. So, getting a good mentor, somebody to spitball ideas, tell you if you’re doing the wrong thing, and someone just to talk to who’s done it before is incredibly useful. I can’t recommend that enough.

David: And right now, I have another mentor who I meet with every week. We do breakfast now. And we talked about hiring. I don’t know if it’s your team you’re on, you get surrounded by people who, if everyone agrees, you all go the same direction, and then at breakfast, the question is someone who doesn’t agree, you hear a different opinion and that’s helped shape how we do things.

 A gift box filled with products from Bushbalm.
Mentorship and getting perspective from business owners from outside of the company allowed Bushbalm to problem solve while scaling. Bushbalm

Toby: Let’s talk about the Cost of Customer Acquisition (CAC) and how to balance that with the Live Time Value (LTV) of customers.

David: I’ve learned a lot now about venture capital and how much money you get. And a lot of companies were raising huge amounts of money, and their key assumption was, “Oh, we know the LTV will be more because of this metric.” Whereas, a lot of them turn out not to be the case.That’s when we do have. It’s actually, interestingly enough, on Shopify, one year, I think last year, we launched bundles, so we just made bigger kits with more products in them and we doubled our LTV by doing that, it made a huge different.

Toby: And does your LTV go up every year? Have you noticed that?

David: We’ve seen LTV as we’ve launched more products gradually go up. And we’ve also launched for the first time, it was kind of a risk at the time, a trimmer, which has a much higher cart value. So, it was the cost of our old LTV.

Toby: Because it’s an actual device instead of a bottle full of product. So, are you making that work?

David: It’s going really well. It was a risk because we thought can we sell something that’s higher value? I was skeptical for a while, but it’s turned out.

How mentorship changed Bushbalm’s business forever 

Toby: What are a few critical things that new business owners should consider?

David: The one thing that I grew into slowly was mentorship in many ways, so working with yourself. You should chat a little bit about your entrepreneurship before Shopify.

Toby: So, I’ve been at Shopify for about 12 years. Before that, I was a serial entrepreneur. Most of the companies failed. That’s the nature of entrepreneurship. One of them that worked that people might know was a little kit that you spit in and you get DNA information. I helped a bunch of folks in Ottawa start that up 2003, the 23 and Me tests. So, that was successful. But I spent a long time starting things that didn’t work, and in fact, I found you learn equally from the things that don’t work as the ones that do.

David: On the mentorship side, you were a mentor for me for a long time as we worked together at Shopify, and the company encourages you to start your own business, do your own thing. And that, for me, as a person going through most of it for the first time, just having someone and a few other people to talk to helped a lot and alleviate the stress.

Toby: I had a similar relationship with a bunch of different people. People who invested in me early on, who helped me out immeasurably. I ended up hiring one of those people who ended up being both of our mentors, Roy. So, getting a good mentor, somebody to spitball ideas, tell you if you’re doing the wrong thing, and someone just to talk to who’s done it before is incredibly useful. I can’t recommend that enough.

David: And right now, I have another mentor who I meet with every week. We do breakfast now. And we talked about hiring. I don’t know if it’s your team you’re on, you get surrounded by people who, if everyone agrees, you all go the same direction, and then at breakfast, the question is someone who doesn’t agree, you hear a different opinion and that’s helped shape how we do things. A model sits behind a selection of oil and scrubs along with a dry brush from Bushbalm.

Finding the right product-market fit took Bushbalm 4 years. But once they did, sales reached 7 figures. Bushbalm

David: We’re trying to launch a product every quarter. So you always have a cycle of products going on. So, yeah, right now we’re in a phase where I think we’re just excited to grow and get to diversifying our channels a little more because we’re big enough now to start doing that. We just want to build out the right team and then go from there.

Toby: For the journey from zero revenue to $10 million, what was the biggest impediment that you hit, and how did you get over it?

David: Probably the hardest thing is finding your market fit. So, for us, it’s pretty clear in the sales, if you go by actual years, first-year $2,500 in sales, second-year $32,000, third-year 112,000. Fourth-year we found product-market fit, we did $150,000, but we were sold out for six months. So, then, the next year, we did $1.8 million, and that was because we knew what sells to people and what our products solved.

Toby: And you started solving like logistics, supply chain, inventory.

David: So, as soon as you find out, “Okay, we know this is going to sell,” and we know, say, CAC of this, that’s when we could scale. To me, that’s the hardest challenge to overcome. If you sell out, you need a supply chain, but you might never sell out if you never find the product-market fit.

Toby: And how did you, how did you find product-market fit? Talk a little bit about that.

David: So, probably the best thing we ever did that almost anyone could do, is we did an Etsy show, but it could be your local market or whatever it is. And the best thing ever at the time was we just talked to a bunch of people. And then you heard the words that sold and the words that didn’t. People would come in and we’d say, “Oh, we’re here, we’re Bushbalm. We’re pubic oil,’ and people would go, “I don’t know, that’s a pass,” and they move on. And then over the weekend, we talked more and more, we came up with new words. And then by the end of the weekend, we said bikini line skincare, and people said, “Okay. I know exactly what that is.” Yeah. And then we’ve iterated and iterated. But yeah, just talking that weekend, we realized if we did an ad that said pubic oil or pubic hair, no one wanted it, but bikini line skincare is very positive. You can send a survey to people, but you’re reading it. As soon as you’re in front of someone, you hear their honest take, and that changes things.

Toby: It’s a little bit the same as merchant residence. Right? You’re sitting in the chair telling people the truth, it’s harder to ignore. You can ignore a survey where 10,000 people tell you something, but one person turns up their nose at what you’re building to make a difference.

David: Exactly. And the other thing, too, is a survey might tell you a story that you make up in your head. At Shopify and I can quickly say, “Oh, they probably read it this way,” and then they go, “Oh, maybe that’s something different.” Interpretation can be very different. 

Toby: Do you have any projections of revenue for the next three years?

David: I’d say the revenue of Bushbalm, just assume every year we’ll double for the next three, four years, that’s the plan.

Toby: You’ve worked with me long enough to know that every time a big number like revenue doubles, everything breaks. How are you thinking about all those things breaking?

David: The thing that’s breaking is product development and need to grow that quickly. And then the thing that’s also happening is technology’s breaking and a lot of it is not Shopify related. We’re running pretty smoothly on that front. It’s the data infrastructure around it. We have to get ERPs for mass retail. We have to now do more project management than ever. There are actual projects we’re doing that just don’t live in someone’s head. So, all of that technology is breaking us. There are so many systems we’ve got to go into. And then, there’s the fact that if we get to $20 million in revenue, our team’s going to be at least twice as big.

Crafting corporate culture and hiring for complementary skills

Toby: How big is the team now?

David: We’re six full-time employees and five or six consultants. We just hired another employee, but we’re about to hire probably two more by the end of the year. And then if all goes well on the sales side of it, we will grow that as fast as we possibly can.

 A model about to apply some cream from Bushbalm.
Hiring for complementary skills and crafting the culture will be of focus for David as he scales Bushbalm. Bushbalm

Toby: What’s the thing you think your worst at you’re going to hire for?

David: The thing I’m worse at, I would say, is getting an even better hold on the cosmetics and skincare and industry. Right now we’ve brought on a lot of consultants to really help us understand the industry better and what conferences or networking to invest in. So, that’s one piece. And then the marketing side, at one point I might not be smart enough is maybe my fear. And so far, I’ve made it work and we figured out and we’ve scaled. Facebook ads, email automation, Google ads, Snapchat ads, that’s my bread and butter, but at one point, maybe my level of knowledge isn’t enough in that area.

Toby: Tell us more about your team structure. 

David: I am the CEO and Tim is be CPO, so he’s in charge of product. And he’s hired someone on to help him right now, and then he needs at least one or two more people. In the early days, it was me, Tim, and Rachel. We were the three that came in. I worked full-time at Shopify and Rachel worked full-time at Bushbalm. She works in my apartment. She was in the living room and I was in the den. So, I was at Shopify doing my calls, I go for a coffee, and she and I would chat about business, Bushbalm, then I’d go back to Shopify. There was probably a good three months we did that We’ve recently gotten an office. So, there are five of us in the office every day working together. Now I think more about culture because before I didn’t understand it as much. Now it’s really, really important for how we build it. That’s probably one of my weaknesses, but luckily, I think there are other people on the team who it’s their greatest strength and I follow their lead in that way.

Toby: At Shopify, we like to think we are a culture of learning, curiosity, and risk-taking. Are you guys embracing some of those characteristics?

David: Especially on the failures and vulnerability. At Bushbalm, we have a Monday call every week, and generally, it’s what’s coming up, but also a lot of it’s learning what didn’t work the week before. Or people will ask like, “Hey, why do we do this?” And then I’ll have to say, “Oh, that was something I did three years ago that we should probably not do anymore because I made this mistake.” We often talk about the things that failed. Otherwise, people will just keep repeating them. We’re pretty good to be open like that. And at Shopify, there’s a lot of openness about failure, which is good.

Toby: What would you like to accomplish as Shopify’s merchant in residence?

David: For the next few years, one big piece would be education, and I think the team at Shopify does an excellent job with education for merchants. The only piece that I want to help accelerate in education is to get more into the tactics. So, you’ll see a few more sessions on Facebook ads and the structures and the learnings that we’ve had along the way. So, I would like to share more of that with merchants on Shopify or those thinking about using Shopify. Then the other piece is I love talking to the product teams. Over the years, it ebbs and flows with how much you love Shopify and how much you’re disappointed in Shopify, which I think is healthy. And right now, I am really excited about the roadmap, and I just want to be a part of nudging it in different ways or providing feedback to make Shopify’s products even better. And on this podcast, you’ll hear three or four different episodes on very tactical things, which I love to dive into. 

This originally appeared on Shopify and is made available here to cast a wider net of discovery.