Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / Mini Series: Pleasant State’s Co-Founder Ami Bateman Takes Us on the Journey of an Equity Crowdfunding Campaign (Live!) (Part 1)

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Mini Series: Pleasant State’s Co-Founder Ami Bateman Takes Us on the Journey of an Equity Crowdfunding Campaign (Live!) (Part 1) · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

• 0:00
  This is Amy Bateman for Female Startup Club.
• 0:12
  Hello everyone and welcome back to the show. It's Dune here, your host and hype girl. If you've just found us, we are so grateful and so happy to have you here. Every week on the Female Startup Club podcast, I interview some of the world's most successful founders and women in business to understand their blueprint to success. And today you're going to meet a fellow Aussie, Amy Bateman.
• 0:37
  Amy is the co-founder of Australia's first Just Add Water non-toxic cleaning company, Pleasant State. And this is the first in a mini-series where we take you through Amy's journey in starting Pleasant State right through to their just-launched equity crowdfunding campaign. And it is so interesting. We're talking about the challenges that we still very much face as women entering the fundraising scene and what she's learned trying to access more capital to scale their booming business.
• 1:07
  If you've ever thought about an equity crowdfunding campaign for your business, this is worth grabbing a notepad and pen for. And just one last thing before we get into this episode, and while I have you here, I just want to give you some hype girl energy to get out there and start posting on TikTok today.
• 1:24
  A few weeks ago, I shared something completely left of field to my usual content online. Very personal, kind of gross, and it has just exploded. I'm talking millions of views, thousands of followers, hundreds of new subscribers, press, and even syndication across other platforms. And it really just reminded me that the power of TikTok is still just so crazy and so here for everyone to access. Yeah.
• 1:52
  It's free to use. It's just a time investment and it's so worth it. So go check out the video on my account and then DM me if you want to learn more about TikTok because I'm thinking about putting together some TikTok assets to help you kickstart your journey too. Alrighty, let's do this. This is Amy for Female Startup Club.
• 2:12
  Amy, hi, welcome to the Female Startup Club podcast. Hi, Dune, so excited to be here. Sian Murray, my co-founder and I are massive fans of the Female Startup Club, so I can't believe this is happening.
• 2:25
  Oh my God, I love this for us. Big week for you. How are you feeling? Yeah, pretty good, believe it or not. We have launched our equity crowdfunding campaign on virtual. We worked really hard to get to this point, but really excited that it launched successfully. We didn't have any major technical issues, which often happens when you launch things. I'm sure you know all about that.
• 2:50
  So we finally nailed that. And yeah, just so excited to see the support we're getting from our community already. Oh my gosh, I'm so excited for you. And I'm so excited to dig into all things relating to the campaign. But as you know, or as you probably know, I love to start at the very beginning to understand more about your entrepreneurial journey. So where do you like to start your story?
• 3:13
  Depending on the audience, I probably start in different spots. But I would say I've always challenged the status quo. I don't like rules. I'm always asking why. I'm sure that was extremely challenging for my parents.
• 3:29
  I was also brought up as a tomboy. So I never really thought about my gender. I never thought that as a woman, I couldn't do anything. My dad raised me to be really tough. So I played every sport as super competitive. That didn't always serve me well at school, but I've learned that competitiveness is actually an asset in life. So, yeah, I think from an early age, just I always challenge things. And so that sort of supported me in my entrepreneurial journey. Yeah.
• 3:56
  My dad always had issues with authority and I think I picked that up from him. That wasn't necessarily a good thing in my career days because I would always say I'm not, I say I'm unemployable, honestly. So I was lucky to have...
• 4:14
  I was lucky to have bosses who thankfully understood that and just, you know, I knew what had to happen and they would let me go and do it. So as long as I was in jobs where I was solving big problems and on big projects and learning new subject matter and working with people who were really values aligned with me, that was really important.
• 4:36
  I would find in my career if I came across people or on projects that just ethically weren't aligned with me or I just felt it wasn't right, that's the point at which I would kind of in that organisation decide that was probably the end of my journey. But I'd say I was extremely entrepreneurial.
• 4:54
  in these businesses. So always designing new ways of doing things, always looking for how technology could be leveraged to make things more efficient and to make quality better. I am a massive nerd and I'm happy to say that. So I just am obsessed with frameworks and using that to understand the world. A lot of people do get frustrated by that because I'm like, oh yeah, this framework explains that.
• 5:18
  So, yeah, I leveraged my commerce degree. I majored in psychology through my commerce, which has helped me to understand people and myself. I've worked in HR, marketing, sustainability, health and safety, risk technology for some of Australia's biggest organisations, including Ernst & Young.
• 5:40
  advising and working with McDonald's, NAB, IAG, Australia Post, big federal government departments. And that to me was really frustrating. I thought, you know, Amy, why don't you just focus? Why can't you just do one thing? I also did my MBA, hoping that, you know, maybe I'd find my spot as a general manager or CEO. But,
• 5:59
  Yeah, within a year or two, I decided I needed to learn something more. And I guess when I started Pleasant State one day, I'm literally sitting there. I think we were about to launch our first crowdfunding campaign, Dune, which was our pre-order campaign. And just I had this profound sense of, oh, I was meant to go on this journey. I was meant to do all of these things to get to this point. And all things that I thought were weaknesses were actually strengths at the end of the day because I understand governance.
• 6:29
  understand risk. I understand finance. I tried to avoid the marketing bit. But what I would say is every day I'm in marketing now. So you can't avoid that. But, you know, I understood ops. So that being a real generalist and there's evidence to suggest being a generalist is of greater benefit as you start to build a business. So I hope that's enough detail.
• 6:53
  I love that. What was the light bulb moment for Pleasant State specifically? Like why this company? Why then I'm thinking 2020, maybe 2019 when you were getting started with the idea, maybe earlier? I'm not sure. Yeah. What was that light bulb moment for you?
• 7:10
  In late 2019, I'd been suffering chronic headaches. So I'd had headaches for over two years on a daily basis. I don't know if you've ever had a headache. You know, just for one day, that's bad enough. So it was extremely chronic. And I'd been working with healthcare professionals and doctors, and we determined that my indoor environment was extremely toxic. But I'm not the only one. And so as I embarked on this journey, I had to eradicate plastics and toxins from my home.
• 7:38
  And, you know, at that time, I got a call from a friend. I was literally laying on the couch at home. I almost didn't answer the call because my headache was really chronic. I remember there were bushfires raging throughout Australia. So that was the time when we had really bad bushfires. I'm super depressed. I have a headache. Australia's on fire, like the world's burning down for sure.
• 7:57
  And I get this call from a friend and we just started discussing Just Add Water cleaning products as a solution to not only my health issues, but this environmental catastrophe that I feel at the time we were facing. And I discovered that Just Add Water cleaning products are made up of 95% water. So we're just transporting all this water around that we can get from a tap. Only about 5% are active ingredients. Yeah.
• 8:22
  And as I looked into it, I realised those active ingredients are full of toxins, fragrances, all these sorts of things that were actually making my indoor home environment worse. So it was just this light bulb moment, like, why doesn't this solution exist here? Yeah.
• 8:38
  And I started looking at what was available and could I bring it in? Could I package it differently? So rather than plastic, because plastic is contributing to indoor air pollution and is a toxin itself. Like, could I make it without plastic? What solutions are there? Can I import it? And I realised there just wasn't a healthy, sustainable or effective solution available overseas and definitely not in Australia.
• 9:01
  So it's the one I have a lot of ideas, but it's the one that just wouldn't leave me. And so I think after two weeks, all right, I've got to like, I've really seriously got to look into this. And I just made a decision one day that that's it. I'm going to go make it. And I thought, if anyone can do it, it's me. I don't know why I believe that. I just solve big problems.
• 9:20
  And once I commit to something, I deliver. So yeah, I decided I'm just going to go make it. I'm going to make Australia's first just-out-water cleaning solution. And I'm going to build a better type of business while I do that.
• 9:34
  So what did that look like for you? You know, what are the early steps? How are you, what's R&D like for something like this? Like, how do you start? Do you find a chemist? What's happening? What's happening at the end of 2019? There are so many good stories in that. I approach it like any problem, which is what are all the questions that I have? And so literally, I just start writing a list of questions I have to solve. And then I think about in my network, who are the people that can help me solve that?
• 10:03
  Or who in my network can help me get onto the right person to solve that. So I'm really not, once I decide I'm going to do something, I'm not afraid to just, I shouldn't say hassle, but contact my network and see if they can help me.
• 10:18
  And honestly, I almost failed chemistry at school. So again, back to this, I don't know why I thought I'd be able to do this. It just didn't seem like it was going to be that hard. And so I had, you're right, the very first person was a chemist. I didn't even know what type of chemist I needed. So I called, I had a mate who was a doctor and he was married or dating a woman who was a compound pharmacist. We also call pharmacists chemists.
• 10:44
  So I thought, okay, well, I have a feeling that's not the right chemist, but maybe she'll know. So I had a chat with her. I said, this is what I want to make. And I said, I'm pretty sure I'm not the right person, but maybe you've got some tips. And she did. She told me I needed a formulation chemist. And she also talked about the importance of making sure that whatever we formulate, there's a manufacturing solution that exists. Really great advice. I didn't listen to it. What does that mean? Can we unpack that for a second? Oh, 100%. So
• 11:13
  When you think of cleaning solutions, the standard approach is in liquid form and hence why it's predominantly water based. So they ship it around diluted. The active ingredients still come in liquid form. So that manufacturing processes exist to make a product in liquid form and obviously to fill the bottles. So that's a traditional manufacturing approach.
• 11:35
  Other ways, so say you extract the water, other ways that you can create Just Add Water products is still in liquid form. So that's still easy. There's a manufacturing process that exists for that. But then you can start to look at powders, tablets, which is tablet pressing, or in our case, we use a Just Add Water bar. And we call it a bar because of our manufacturing process is extrusion.
• 12:00
  So then you start to look at, well, what manufacturing processes exist in the location that we want to manufacture? And we were intent on manufacturing in Australia. That was really important to us to create jobs during COVID, but also as part of our commitment to be a really ethical business.
• 12:16
  So, you know, what I just had to start to look to see, and this was part of the problem solving, is there a manufacturing business? And it's called contract manufacturing. I didn't know this at the time. But is there anyone that will manufacture what we're trying to do?
• 12:32
  In Australia, the manufacturing industry at the time was just shocking. I would call businesses. The number wouldn't even dial through and say it was no longer available. I would leave a message only for them to never return my call. And so I'd hassle. If I did get on, they wouldn't call me back. And then if they did give me time, they'd say, we don't manufacture in that form and we're not interested. Yeah.
• 12:57
  And so then I would go into conversations with UK, come back. So anyway, at the end of the day, we developed something hoping there was extrusion because our chemist was convinced that extrusion manufacturing existed, which it did, but no one had ever imagined.
• 13:15
  manufactured cleaning products in this form, tablet form, manufacturing form, powder form in Australia until we did it. And so at the end of the day, as ideal as it was to try to find a manufacturing process that existed, it just didn't. So we had to create it. And we were really lucky that three people formed their own company to do that for us. Oh, wow. Okay, so that's what I was about to get to was do you have your own manufacturing process
• 13:42
  supply chain situation. So that means, so wait, how did you convince three people to start their own manufacturing thing for your business? And who are they? That's amazing. Yeah, super interesting question. So the typical approach in this space, and probably with any beauty product, you might know about this yourself. You probably, you've spoken to heaps of people. So
• 14:07
  If you want to formulate something, you typically go to a contract manufacturer and you tell them the types of things that you want in your formula. So for us, it had to be effective, had to be non-toxic. So no artificial fragrances, no petrochemical based ingredients, vegan, cruelty free. The list is very long. It had to be without water, which is referred to as anhydrous.
• 14:30
  And yes, all these ethical considerations. So you kind of come up with your laundry list and they then take formulas that they have on shelf and tweak that. And then they tend to own the intellectual property. So you'll pay royalties or a license fee. I think sometimes you can buy it outright. I understand that's quite expensive and when you're at startup phase, really prohibitive.
• 14:51
  The first person I spoke to, and this is like it's all related, but I managed to get in front of two formulation chemists one day at a contract manufacturer that was quite local. And two of the people who now support us were actually also in that meeting. And so the way that we've managed to get buy-in for an idea that was so new and novel always comes back to our why. And I was super clear, you know, we're here to save the world. We're building a different type of business.
• 15:21
  a business that balances people, planet and profits. And at the same time, we're going to clean up this plastic situation. So by removing plastic and introducing a zero waste solution, and we're going to help people's lives at the same time. And I was so passionate about that. And that was really clear. So I always started with our why. That's way bigger than the product. And everyone has always bought into that. So that meeting resulted in
• 15:46
  me being able to form a relationship with the chemist directly because that contract manufacturer wasn't interested in the end. So I negotiated to have a direct relationship with the formulation chemist and we own our formulas outright. Again, so unique. And then the two people that were supporting that business, they're involved. And a third guy who had plastic extrusion experience. And they actually came to me after our second manufacturer
• 16:16
  two months out from the date we'd committed to shipping our products to our crowdfunders. 15, we had close to 1500 of them. We had no manufacturing solution. We considered doing it in-house. We're literally going to buy kitchen, like just think commercial kitchen equipment and mix it and maybe extrude with like a sausage extrude. These were all things that we were
• 16:38
  Yeah, we were just so lucky. The plastic extrusion manufacturer came to me and he put forward a proposal. He said, I would like to do this. I have the experience and we're going to do it all at risk. So they invested in all of the innovation and R&D to get it up. We were a little bit late, but honestly, what they pulled off in that time was really incredible. And we're just so grateful for our formulation chemist help and also our manufacturers.
• 17:05
  That is so interesting and so cool. Gosh. Let's talk about the money piece for the beginning. I know you did a crowdfund kind of like pre-order thing, but even before that, what was the money piece in terms of the capital that you and Sian were putting in? Was it savings? Was it a loan? Where are we at in terms of that piece of the puzzle? Yeah, definitely. All right, I'll cast my memory back three years. All right, so Sian and I met...
• 17:35
  literally for coffee in Noosa just before the COVID lockdowns and said, we're going to give this a crack. We then agreed we would, when things went into lockdown, both of us lost big contracts or Sian had a number of contracts that she lost. And so we're like, that's it, we're going to go all in. Let's do this properly.
• 17:56
  And what, I guess I'm starting there because there were a range of benefits that we were entitled to, which really made it available for us to commit fully. One is we were both eligible for JobKeeper, which was just so helpful, you know, for 18 months,
• 18:12
  we were able to still pay ourselves between $3,000 to, I think it dropped to about $2,000 a month. So that we were able to live off that. So that's just the one bit. It's not like we quit with no money. That's really important. We were able to live off that, noting that definitely that was a reduction in my lifestyle that I was really willing to make. Yeah. And for anyone outside of Australia, that's the government package that they were giving people at the
• 18:38
  Correct. And that was to ensure that people remained in jobs. So it was money that they gave to their company to pass on to employees so that they weren't cutting jobs. We were self-employed and hence we were able to justify that. The second was there were all these additional concessions. So the government was giving effectively $20,000 to businesses to stay in business. So we leveraged that.
• 19:00
  The business that I had at the time, I actually spun that off to provide, I guess, the initial capital to invest in the intellectual property. So we're talking brand. We invested heavily in building our brand.
• 19:13
  And also formulation. And so that entity spun it off. I had money sitting in that cash and profit, which I just was able to feed into Pleasant State. So that was really an advantage. So that probably got us through the first sort of six months.
• 19:31
  So let's say I had probably 50, 60 odd K that I had in that business. We had the 20 K from the government. Sian and I were living off JobKeeper, so not making money. We also were able to negotiate a whole range of good deals with people. So branding agency was like an at risk fee. They really wanted to work with us. So we talked about a fee based on how successful we were through our crowdfunding team.
• 19:56
  Oh, that's cool. So always like think what, you know, people who want you to succeed, they're often willing to negotiate different deals, especially if they really want to work with you. So I was always comfortable to say, okay, you know, and they were super keen to work with us. It's sort of, all right, I can't, I really can't pay you the money you deserve. And they rightfully deserve that money. Yeah.
• 20:18
  But what what can you do? Here are some ideas I have. You know, you I don't think I proposed equity at that stage, but was really a we pay you a portion. But depending what we hit on our crowdfunding, we could do this. And I presented a number of options and then we just had a discussion about it.
• 20:35
  The third was our bottle manufacturing. So we had to produce 20,000 units in our first run, which, oh gosh, like even I can think back to that day, I'm on the bed saying to my partner, I can't believe I'm about to sign this contract for 20,000 glass bottles. It was significant sum of money. I didn't know how I was going to get it. How much money was that ish ballpark? That first round was about $80,000. Yeah. Yeah. So yeah.
• 21:03
  Again, we, this and like the deal that I negotiated with them was I, some people applaud me for this. But the standard terms, you pay 70% to the factory up front before they even produce. That'll take them maybe two to three months to produce. Then it's on the water for about a month. And then you pay the remaining 30% when it lands. So before you've even sold it, unless you're doing pre-orders, you've paid 100%.
• 21:31
  The deal that we negotiated was we pay 50% 30 days end of month after it arrives on our doorstep. So say it lands mid-month, we don't have to pay for another 45 days
• 21:48
  That was the 50%. Then we negotiated to pay the remainder in instalments over 12 months. And to this day... That's amazing. To this day, our broker continues to extend extremely favourable terms, which allows us... That's a really important source of capital. Delaying that cash outlay is so critical. And I think it's one that's often overlooked. Yeah.
• 22:11
  by early stage businesses. But if you can manage that cash flow carefully, you can really get, do good things. What do you think it was that made that deal happen? Like, was it the pitch? Was it the vision of what you were doing? What, like, how did he do that? Like, how, how did that happen?
• 22:29
  Yeah. So my, my key broker is a woman in Sydney. Again, I think it was a pitch. I would always go in with a little pitch about this is the problem and this is what we're going to do. And I was just so convinced it was going to happen. And anyone who didn't want to partner with us is crazy. And I would never say that to them, but I, I was just so convinced this had to happen. And this was why.
• 22:53
  Oh my God, I love that. And then they just really believed in it. And then they're like, then they wanted to work with us so badly that it came, I don't know, they just were so willing to come to the party to negotiate. And to this day, they're still massive partners of ours. And I'm so grateful. So those sort of terms helped us get to that point. We had the crowdfunding. So our target was $54,000. We raised $87,000. So that was really important capital that we put into the bottles.
• 23:23
  But at the same time, definitely, I probably personally, I'd say before we even got to shipping products, we would have invested about $250K into building brand, IP, all the marketing to run our crowdfunding. We broke even on our crowdfunding in terms of ad spend and, you know, covering the cost of the product. But, yeah, there's been constant injection
• 23:50
  injections by myself and my partner, Sian. And we have two other co-founders who helped launch the business who have put some money in from time to time.
• 23:59
  So for the timeline to paint the picture, we're talking sometime mid, early to mid 2020 is when you launched the crowdfunding campaign to kind of spread the word, create awareness, get your first customers, many first customers. I think you said 1500. What else are you doing around that time to kind of get the word out? Or is that it? You were just going full on crowdfunding campaign. And would you recommend this now looking back? Yeah.
• 24:29
  If you ask me the end of a campaign, I would always say, oh, my gosh, never. But, yes, let me take a step back in terms of the time frame. So late 2019, yeah.
• 24:41
  kind of came across the idea of the product, thought it would be a good idea. February, I meet with Sian and convince her, like, let's go into this. March 2020, COVID happens, we commit fully. I want us to get to market as quickly as we can. And to me, that was launching a brand. So I
• 25:03
  startup principles. So go back to, you know, the lean business canvas, MVP, minimum viable product. So I was like, let's
• 25:12
  Without spending too much, let's launch a brand and build interest. So we did that 1 June 2020. So Feb to 1 June, we built our brand. We did extensive customer research. We knew we were onto something with the brand, the name, the product, the price, the communication pillars. We knew we were onto a winner because we invested in customer research to begin with. As I said, they even dictated the price.
• 25:36
  One June launched the brand. That entire campaign we'd mapped out, we were going to crowdfund. So we knew that was coming and everything we did was all in the lead up to the crowdfund, which launched in August 2020 of that year. So that was June, July.
• 25:52
  two and a bit month sort of campaign purely to get database leads, noting that that's what we would use to launch the crowdfund. We had a target of we wanted to have 10,000 leaves before we launched our crowdfund. We actually launched with only 3,000.
• 26:09
  Would not recommend that because what that meant is even though those first couple of days were really good and we're excited, look to it, we hit the valley. They call it, is it the valley of death? Very quickly. Something like that. Yes. And so and I brought the team together. They call it a burning platform in management. I basically said if we do not secure our minimum, that's it. The business doesn't go ahead. So this was our way to test. You know, we knew from market research the idea was good.
• 26:39
  People told us they were going to pay. We knew the brand was good. This next phase was really about saying, are they actually going to pay? And if they weren't going to pay and we weren't going to hit that minimum, then for us, it was walk away. This business isn't viable. We don't have the product market fit. Again, a term I didn't know at that stage.
• 26:58
  I think that's such a key point that you've just said there, because I think a lot of the time, especially when you're in that early phase where you're so passionate, you've already committed money, you're really deep. And so you can, of course, get in that state of inertia and you're going along and you're going on, but you're holding on and you're not prepared to be able to walk away. But it's actually a very key thing that founders should remember is sometimes it's not
• 27:28
  or maybe cut your losses and walk away from it. Yeah, definitely doing. I'm going to bring in my management frameworks again, but the bias is called escalating commitment. And it's a really common bias that we have as individuals and organisations make, which is this view, when you're assessing a project, you look at how much you've already put into it, like in terms of time, money, energy, and that you use that information to inform your steps forward.
• 27:56
  But actually, at any point in time, you have to look at all of that time, money and investment has sunk. It's gone. You're never going to get it back. That next phase isn't going to get it back for you. So you always kind of have to treat it as day zero and say, all right, ignoring all that based on the available data that we have and our plan going forward, are we going to make it or not? And what's it going to take? And are we willing to do that or invest in that? And so that we've always made decisions like that. We have to ignore what's already put into it.
• 28:25
  Is there a pathway forward and does that look like a viable one? Love that. I want to talk more about, you know, kind of what happened from the end of the campaign. You've realized that you do have a viable business here. You're onto something very special. That next phase of kind of growing outside of the campaign and kind of really...
• 28:46
  starting to flourish? Because, you know, for me, I mean, I've known you for a couple of years now. It just seems like you've gone from strength to strength, leaping forward, constantly growing. You've won millions of awards and all these amazing things. So I'd love to hear kind of like just a bit about that time of getting outside the crowdfunding campaign and to a wider national audience in Australia. Or were you international already by that point? I forget. Yeah.
• 29:13
  Yeah, well, really interesting tidbit about our campaign. So it started off strong, died really quickly, and we knew we'd made a really big mistake. And this is what launched us into opening up globally, very briefly, which was we initially started with a really strong discount and we used that to drive kind of this FOMO or this need to invest quickly before we removed the discount. Yeah.
• 29:41
  But the moment we removed that discount, it no longer looked attractive because people were taking a really big risk on us. So what we did is we made a decision mid-campaign to basically launch the campaign again. And the way we did that is we said, we're launching internationally. We're going to the UK. And so we were part of this incubator and we had someone who recommended that. So we said, we're launching to the UK and we're offering 40% off again. Okay.
• 30:05
  So we could reintroduce the discount as part of this global launch. So for a period of time, we did open ourselves up to the UK.
• 30:13
  We've always been in New Zealand. We decided to pull back the UK because we actually didn't get much interest from the UK, but it was a way for us to refresh the campaign. So we're Australian in New Zealand. We focused heavily on the Australian market to date. I love that you're like, you go from strength to strength because when you're in the business, it really doesn't feel that way, I've got to be honest. There's been lots of ups and downs,
• 30:40
  um we've had yes definitely just so fortunate for the recognition that we've received because like you know doing doing a good thing while building a business um it gets a lot of attention which you know it should and that's the way business should be done but okay post campaign that ran for six weeks we then had the money we'd already committed i think mid-campaign we
• 31:04
  So they were landing sort of towards the end of the year. At that stage at Gain, I was just managing like a project. So it was like, all right,
• 31:13
  We need the bottles to land here. We need our manufacturing formulations finalised by this stage. We were running a whole lot of really unique lead gen campaigns at that time. So we always get our customers to actually test our products before we launch them. And we tend to get leads at a really cheap cost. We're talking sort of 30 cents.
• 31:34
  per lead when we do these giveaway campaigns. So we get 100 Australians to sign up to test our product for free. We use that to collect data on is our product comparing as well compared to the competitors or better. I'm glad to say it always is. If it's not, we won't launch it.
• 31:53
  But at the same time, we collect user-generated feedback. We get reviews. So by the time we launch, we have lots of content that we can use. So this is a common model. So we're very customer-centric. We're always asking our customers, what products do you want next? What should we name it? What do you think about the colors? Who wants to test it? Give us feedback on the testing. And then we launch. And this is like a common formula. We do this for every single product. So that's happening behind the scenes.
• 32:22
  You know, at the time we were managing all of our Facebook ads, so Sian was doing that.
• 32:28
  We did go through a period of outsourcing that to Facebook ad agencies, they call it the meta now. We never had success with that. And particularly with the iOS changes, that was a really, honestly, like super hard period for us as a direct to consumer business. It was quite reliant on Facebook ads. I'd say only in the last couple of months have we got on top of that. And so I feel there's been this long period post that change where,
• 32:56
  I felt that the business actually hasn't changed much and moving from sort of a million half a mil revenue business to a million sort of tracking at daily average sales that would make us a million dollar business has been really hard and I don't know about doing you probably hear this more than me I've heard like there's rumors that probably that that period that hurdle getting to the million sort of average day sales business is really hard and that's no lie that that was a
• 33:26
  We, yeah, again, I've just, we manage it as a project every day. We actually leverage agile project methodology in our business. So using Asana. Can you break that down? Definitely. So agile project methodology is about breaking down your work into like smaller chunks. So we kind of work on, we probably work on one week. I'd like to get it to two weeks sprints.
• 33:50
  which is where we say, okay, in this two-week period, these are all the things that we have to achieve. Break that down into really clear tasks for each team member. On a daily basis, we meet as a team for about 15 minutes and just talk through our priorities, make sure that they haven't shifted. People get to ask questions about what's holding them up. And then we kind of go away and do our thing and only communicate through Asana directly.
• 34:13
  means we're super efficient. Everyone knows what's happening. And we're calling our pickpacker is in that meeting, our graphic designer is in that meeting. So we all know what's happening. And this means we move really quickly and we can change priorities quickly without losing, I guess, oversight of what the end goal is. And so that's, I think, perhaps that's why we've been able to move quickly and we continue to do so. Yeah.
• 34:38
  Something that I hear a lot from early stage founders, especially in that beginning phase where maybe it's only a founder or two founders working together and there's so many different things to do and there's so many channels and we're constantly being told you need to do TikTok, you need to do Instagram, but you should also be doing YouTube and you should also be doing this. Where is it like important for you to spend time in those early days and how has that led to like your biggest kind of revenue drivers now? Really good question. And look, we've
• 35:06
  definitely fell prey to that whole, we need to be doing this, we need to be doing that. And don't get me wrong, I think there's still an element of that from time to time, but we stop and we focus and we're really clear on doing that one thing. I would always say, where are your customers? Like you need to know your customers intimately and we do and that's an area we invest in and continue to invest in. So we know what platforms they're on.
• 35:33
  We know what TV they watch. We know where they shop. And so then you've got to cater it to those particular platforms. And our view is that to be focused and do well in a few of those is better than to do a poor job in a lot. And we've learnt that from experience too.
• 35:55
  So we know that our customers are easily influenced by social media. To date, they've predominantly been on Instagram. We've played with Pinterest and TikTok. We just, we struggled to get really good data to prove that, or that the attributions were correct. So we're always making data-led decisions and making sure that the data is there to support those decisions. And if it's not good enough, then we're like, all right, it's not, we can't prove that this is really working for us.
• 36:24
  influencer seeding, massive one for us. We have a goal of, I think it's 10 a week. We see 10. Yeah, and that's a KPI of ours, 10 a week. We send them out without any obligation. So there's no requirement that people post. But if they want to, they do. So we get heaps of good content there.
• 36:43
  Our email database, the lead generation campaigns that I talked about where we give away product for free. We build our databases really quickly. We just did the Dyson. So we had a couple of Dyson, one Dyson to give away. I've still got one at home. Shana and I have been a bit of a discussion about who's going to keep that one. But I think we had 14,000 leads came in from the Dyson campaign.
• 37:10
  Now, they're not all quality leads and we think a lot of them was put up on a giveaway page. And so a lot came from overseas. So that's just a reminder to limit to make sure they're local leads. But all these things, anything where we can get people into our database for a low cost so that we can really nurture them to convert them to customer, we focus a lot of time on. So, yeah, giveaways, collaborations, things.
• 37:37
  Influencer Seeding, our product giveaway, that's a big one.
• 37:42
  And then using email to really drive conversions. Weirdly, that's dropped off a bit lately. So it's an area we need to focus on again. But these last few months now that we feel we're doing a good job with our Facebook ads, we decided to focus and just say, all right, if we just change this one variable, right, just purely Facebook ads, what impact does that have? And so we want to kind of nail that before we move on to the next, which will be our email. Yeah.
• 38:08
  And so improving that again, and then just kind of stack them on top of each other. So we know what's working rather than trying to do it all and not knowing which one's doing what's like, all right, what's the one to two that we should focus on in this next 90 days? We get that right. We move on in the next 90 days. What's the next big one or two focus? Love that.
• 38:30
  I want to shift gears a little bit and start talking about where you're at today, the campaign, the equity crowdfunding campaign. You and I have spoken a lot about, you know, the state of funding specifically for women, specifically in Australia and the problems that we often face. I know you're very well versed in this area. I'd love to talk about.
• 38:51
  When you went to do, I think it was last year, you went to do a fundraise and kind of your experience there and how that leads us into today's equity crowdfunding campaign. Amazing. Love talking about this. Yes, and I've had my first hand experience.
• 39:07
  I'll probably take a step back and talk. So 10 years ago, when I was doing my MBA, I did a subject on entrepreneurship. And I was like, I was really fascinated. The professor kept inviting entrepreneurs in to speak, predominantly male.
• 39:24
  And then this one class, there was one woman and she, her story was the same as the men, to be honest. Like she talked about the risk she was taking and how the ride is really wild. You have like ups and downs and she's put her house on the line effectively. And then after the class, I just remember the chatter about her was so different to, there was another guy who'd gone bankrupt a couple of times and they all thought he was a hero and
• 39:51
  Right. They thought it was amazing, like his courage. And yet when she told a similar story, the judgment was so extreme. I remember just them thinking she wasn't she wasn't cut out for it. She wasn't going to make it. You know, she you know, obviously the risks she was taking weren't paying off. And I was just like gobsmacked. And so that was the first, I guess, time I really saw how female versus male entrepreneurs are treated. Yeah.
• 40:19
  And so off the back of that, again, this is back to never doing what I'm told to do or wanting to do things differently. Our lecturer wanted us to write a paper on something and I thought that was really boring.
• 40:29
  And instead, I wanted to go and explore female entrepreneurs and specifically accessing venture capital, because she talked a lot about that in her speech, how it's difficult to access capital. And so given the observations I'd seen of how she was treated, I wanted to open this up and understand what's going on for other female entrepreneurs. And is there something about behaviours or stereotypes that's playing into that? So I did. I went off and I got to interview people.
• 40:57
  a few women, including the founder of Red Balloon. And I was really embarrassed after my meeting with her because she said to me, she's like, you know what, men, after I speak, men contact me and they say, I need you to help me to do this. They're very specific. And she's like, and I help them to do that. And she said, women come to me and they want to talk about all the barriers and challenges that face women. And she just said, I don't think there's any.
• 41:23
  like there were none the only challenge I've had is that I had um you know I had children and that took me out for a time and I was like whoa okay um and so after that I'm like I'm going to ignore my gender this is not really an issue um but at that time I was writing the paper and what the research showed um so at the time 4.4 roughly don't
• 41:43
  quote me on these figures, we're talking 10 years here, 4% of venture capital globally was going to female-founded businesses. The major barriers that came up or challenges that came up through my research were stereotypes. And I think this was at play in that classroom, so stereotypes. The stereotype of a male is that they're competent and confident and competitive and capable. All these traits that you require to be successful in business are,
• 42:11
  then the opposite of a stereotype means you've got the opposite. So the opposite of a man is a woman, the opposite of competitive and risk-taking and capable is like soft and weak and people-focused and not risk-taking and not capable. And so already we're dealing with this stereotype, like as a woman we're in this box. And so, you know, all of those traits are not really good traits for business and it's hard to get out of that. So that's one really big one.
• 42:41
  And we can't change that. Like that's not something we can do.
• 42:46
  And so I'll get back to, well, what can we do? The other one is a lot of the businesses that women are building are not attractive to venture capital. So they're lifestyle businesses. We're solving problems that men probably don't care about. Or we're creating products that they don't care about. So they don't want to fund it. And I see that all the time through Pleasant State. I'll talk about our new proposition, like ethical. We create ethical products that make home care a form of self-care. And men are like, what?
• 43:14
  What does that even mean? Men don't even know what our products do. They're like, so where do you use a bathroom cleaner? This is not all men, by the way, but we do get these questions. Whereas women, I tell them that proposition, they're like, that's amazing. So we're building businesses that venture capital and they're predominantly still men. They're holding the capital that they are not interested in.
• 43:36
  The research also showed we don't like to take risk with other people's money. And so we're afraid to take on capital to grow our business at risk of losing it. And so I think that's a big one. And this comes back to our financial literacy point that you and I speak about and how important that is and that we need to...
• 43:58
  you know, forget that we've been told we're not good with money and that we shouldn't look at it. We've really got to lean into that. We've got to get really comfortable with money. And once you're comfortable with the money and the finances and understand how you can leverage other people's money through debt, capital, revenue, financing, then you start to be more comfortable to take on people's money. All right. Because you have a comfort with money and talking about finances and that that's just super critical for women. Yeah.
• 44:25
  I think they're the key ones, stereotypes, the type of businesses we build and our comfort with taking other people's money and leveraging that to grow. I think I'll stop there. They're the three key points.
• 44:40
  So as a result, I guess I established this market, the way this venture capital market is not geared for women. So I made a decision at that point. If I wanted to build a business one day, I wouldn't take on venture capital. Why would I go into a system that,
• 44:57
  that isn't created to support me as a woman because of my stereotype and these traits. I'm already judged that doesn't like the type of business that I'm building, you know, but obviously I need money. And so for a really long time, I just knew I wasn't going to take on VC. In fact,
• 45:16
  Like right at the beginning, we always said we're going to be employee and customer owned always. We wanted to create a business that gives back to the people that actually help build value in our business. Like, I don't know. I just love this idea that our customers own us and our employees own us. They're the people that should benefit from our business, not just from our products.
• 45:35
  But sometimes ego can get in the way. Like you look out there and you're fed this message like your business would be attractive to VC. Why don't you consider impact VCs, right? They're investing differently. Like you'd probably be really attractive to them.
• 45:51
  And then you hear all the stories about, you know, the successful businesses raising this money and because I'm competitive and like I think I should be able to do it. It seemed like a bit of a challenge. And in my mind, I'm like, all right, well, if anyone can do it, I can do it. And let's like people are telling me I should give it a crack. Let's give it a crack. But I entered into in August, September, we did go out to market to see if there was interest from the Impact VC world.
• 46:21
  Thank you.
• 46:22
  I felt sick about it. I was probably getting headaches. I did not want to do it. Like I just remember dragging my heels for so long, but I'm like, all right, well, I've been told we should do it. This, you know, if I can, if anyone can do it, I can do it. Like this, this is a good challenge. And we did it. And, you know, despite having a really like what I consider to be a really good business, really strong community, we've got huge success. Like we were leading in the sustainability space.
• 46:52
  award winners, Telstra women business women. Telstra winners, not even women. They actually got rid of the women's awards. So this is out of 20,000 nominations, we won Queensland Sustainability Award for Telstra, which is huge. From the Prime Minister. Yeah, we've had an all- B Corp certified. Exactly. All these things. The things. What the heck? Exactly. It's like, all right, what else do I need to do? What else?
• 47:20
  do as women do we need to do to be attractive I feel like you also hear a lot of women say okay I've gone and had these conversations they say come back when you have traction okay now you're coming back you've got the traction you've got awards you've got grant funding you've got a successful crowdfunding campaign you've got real customers you've got data everything's data led you've got customer research what the fuck seriously what the fuck
• 47:50
  So I was getting meetings with really amazing VCs and people and yeah, that was my experience. They're like, wow, congratulations, like you've built an amazing brand, Tick.
• 48:06
  Your results are phenomenal for your early stage. Congratulations on what you've done with your crowdfunding and bootstrapping, right? So we'd crowdfunded, bootstrapped, use non-bank funding, revenue funding, and really favourable supplier terms to get to this point and hold out.
• 48:24
  awesome feedback, but they didn't, what I felt is, I didn't feel that they really understood the strength of a brand and how important that was and the value that should be placed on brand. Because predominantly they were investing in tech businesses.
• 48:42
  right? The second is B2B. B2B SaaS. Exactly. I felt that the understanding of lifetime value for a consumer product business is extremely different to SaaS. And it's still an area we were learning. So I have to take some responsibility for perhaps not always communicating that effectively. But they're very different lifetime value for a SaaS model versus a consumer
• 49:11
  So the metrics they're using to assess us to tech businesses are really different. And then the types of returns, you know, for every new customer, that acquisition cost, particularly at an early stage, is higher. And so some of them wait to make sure that you have more traction. So that customer acquisition cost is lower. So that kind of made sense to me. But what I realized at the end of the day, one day I walked in to Sian and I said,
• 49:38
  I'm done. We're not doing this anymore. It was after I went to the SBE. So SBE is, they're called Springboard in the US. So your US listeners would know Springboard. They set up in Australia, rebranded to SBE. They support female founders who are building highly scalable global businesses. And Shana and I are really fortunate to be in the global program now. Yeah.
• 50:00
  I didn't know about them until I went to this event. But when I was there, I'm like, that's it. We have to be involved in that. At their 10-year reunion, they had just released a report that was run by Deloitte, which looked at the state of capital in Australia. Of the $10 billion invested into, $10 billion VC invested in 20, I think it's 2022. Hopefully I'm not getting my years wrong.
• 50:25
  99.3%, I want to say that again, 99.3% went to male founded businesses. We often talk about it the other way. So the report said 0.7% went to female founders. I don't know why, but it doesn't sound as bad as when you say 99.3% went to male founded businesses. You know, I mentioned before when I was in that meeting with the red balloon woman and
• 50:54
  you know, she said, forget your gender, ignore it. I actually did. I ignored it. I got on, I cracked on. I'm like, forget my gender, just do a good job. It'll work out. When I realized that that stuff, we're at 0.7% versus 10 years ago, when we're at 4% globally, I know the global figure, I think it's about, is it 2.3% currently? It's dropped again. And again, it always drops
• 51:24
  But it was at that moment during when I heard that stat again, I realized that we have a very big problem and I can no longer ignore my gender and stop trying to raise capital in systems that are not set up for us like that. Why would you do that to yourself? So I walked into Sian when I had that realization and said, that's it. We're stopping. I am not we're not raising money this way because we're not going to.
• 51:50
  Like, and yet hats off to the women who managed to achieve it. They, I know that the journey that they go through is just as hard and gruelling, like a death, it's like upsetting. I also think that.
• 52:07
  The state of Australia is also behind America. When we look at like the women that I speak to on the show who have gone down the venture capital funding, America seems to be kind of, I mean, it's not good, but there are more VC companies that back specifically CPG brands. Whereas in Australia, you know, last week I'm at business school doing this angel investing thing. It's great, amazing, whatever. It's very one-dimensional business.
• 52:34
  every VC we heard from, and there were 15 speakers over the three days, it was B2B SaaS, nothing else. Nothing else. Literally nothing else in Australia. And I was like, but what do you mean? ASOP just sold for $2.5 billion. Product-based business. What are you talking about? Anyway, let's not go there. So, okay, let's talk about the equity crowdfunding campaign
• 52:59
  today. Excellent. Super exciting. Yesterday, I'm sorry, on the what date? 16th of May, we launched our equity crowdfunding on virtual. So this time around, we're giving our community the opportunity to actually purchase shares in our business. And hopefully if we're a big success, they'll benefit from that.
• 53:20
  You know, this is an approach that really resonates with my values. I mentioned I, like I set out to build Pleasant State to be a customer employee, community owned business. And when we went down the other path, that really didn't feel right. This feels so right. I held off from doing the equity crowdfunding when it first launched because the types of multiples that businesses were getting on their revenue. So that's just multiplying their revenue at this current time.
• 53:45
  and, you know, say it's 10 times multiple, then you work out their valuation. When it first started, because you're approaching non-people who aren't really experienced in investing, so a lot of your customers and stuff, they don't really understand what
• 54:00
  necessarily that that multiple has an implication for their future investment. But you know, you were seeing multiples in the hundreds, sixty nines, like ridiculous multiples that you would just never get through other mechanisms, whether that's angel investment or VC. And so I held off because I didn't think that was really ethical.
• 54:19
  to go to market at those sorts of multiples and have people invest because we always do things the right way even if it's the hard way we could have got way more money and given up way less percent of the company but that's not right and so this this is an opportunity now the multiples are right and they're more aligned with the broader way that the capital markets are working so now is the right time this is the right approach and we're just so excited to give
• 54:49
  Oh my gosh, I'm so excited for you. How does it work? Like what is virtual? Like what's the process for anyone who's like, fuck yeah, I want to get involved in that?
• 54:59
  So, Birchall was set up when the legislation changed in Australia, allowing anyone to invest in small, they call them small cap businesses. So, before this, you could only invest through the stock exchange in big listed companies. But when the legislation changed, it really, I guess, it kind of democratises ownership in smaller businesses. So, Birchall set up this platform where they could profile Australia's most interesting and innovative brands and allow everyday people to invest in.
• 55:28
  in our case for as little as $250. So that's like, you know, for many people that might be a dress or whatever that might be. So it's not no longer a meal. Yeah. A restaurant meal. I'm definitely not spending that on meals these days. Maybe, maybe in the future. I mean, it's pretty out there when you go to the restaurants, you can spend a lot of money very easily. That is true. When I'm earning non-job keeper again.
• 55:55
  I will keep that in mind. But yes, you're right. It might be a meal. So, you know, no longer do you have to invest 10K or more and pass all these sophisticated means tests to be able to invest, which is really cool because that's a way that people can invest in different ways.
• 56:13
  in my opinion. And so the way it happens is virtual has a really interesting approach. So there's a three week stage, which is expression of interest phase. And that's all people have to do is they go on to virtual, they find say pleasant state, and they fill in a really short form, which says, yes, I'm interested in investing. I'm like an individual investor. Yeah.
• 56:38
  I'm interested to invest $250 to $999 or $2,500 to $4,999. So you just, it's kind of an intent to invest. And there's a video and a profile page. So that's the information that you have available to you at that stage. You don't have to hand over any money. So you're not, and it's not a contract. You're not forced into actually investing online.
• 57:02
  What's then done with that information is they have a whole lot of data and they look to say, well, Pleasant State, yes, you're likely to have a successful raise. And the minimum you should target, which you're highly likely to achieve, is this. And this is your maximum target. So our minimum, say it could be half a mil. Maybe our maximum will be two mil.
• 57:22
  And so then after that three-week period, anyone who expressed interest in the first three weeks is invited to invest over a two-day period. So that's where you officially say, yes, I'm going to invest and this is the exact amount. At that stage, over that two-day period, everyone has access to an offer document which has full details of our financials and our business strategy and what we've achieved to date. So it's about a 40-page document that's,
• 57:50
  and, you know, can ask more questions of myself and the team. And so that runs for two days. It could run longer if we don't hit our minimum, but say we hit our minimum, then is open publicly and is open for up to another three weeks. So people who didn't express interest then have the opportunity to invest. But there have been cases where...
• 58:11
  If you don't express interest in that three-week period, businesses can raise up to their maximum and so you don't have the opportunity post that if you haven't expressed interest to invest in the business.
• 58:24
  Got it. Oh my gosh. I'm so excited. I'm so excited to, for anyone listening, we're going to do a mini series about this. So we're going to be tuning back in with Amy in a couple of weeks to see how it's going. You're going to learn a lot more. We're going to see what's happened in that time. It's going to be documented in real time. I guess we could say. I'm so excited.
• 58:44
  I'm so excited. This is so cool. I want to, before we get into the six quick questions, I want to ask you, what is your key piece of advice or recommendation to other early stage entrepreneurs and small business owners who are listening to this episode about building a business?
• 59:05
  Know your customer, like intimately and lean on them to answer all your business questions. That's one. The other is you need to lean into the financials and educate yourself. If you weren't fortunate, like Dune and I, to be taught that growing up, you need to lean in and become financially literate and invest in that heavily. Love that. Love it.
• 59:34
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 59:59
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 1:00:21
  As always, please do subscribe, rate and review the show and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.
• 1:00:37
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 1:01:02
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 1:01:24
  As always, please do subscribe, rate and review the show and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.