Selling Deodorant for $100M and How to Find Your Best Competitive Advantage | Moiz Ali on My First Million with Sam Parr and Shaan Puri 

Check out My First Million Podcast Episode Page & Show Notes

Key Takeaways

  • You don’t have to know exactly why your business works until well after it’s launched
    • “You can say ‘I don’t know’ or ‘the same as everyone else’ to all questions as long as you have that one thing” – Shaan Puri
    • Your business is going to change and evolve anyway, so don’t let anything prevent you from getting it started in the first place
  • “I don’t know anything about deodorant, but in six months, I’m going to know everything there is to know” – Moiz Ali
    • Nobody is an expert when they start! Apply this to any idea.
  • Every Direct to Consumer (D2C) business should know its customer acquisition cost (CAC)
    • And then, constantly improve on it! “If you’re completely divorced from customer feedback, you’re setting yourself up for disaster” – Moiz Ali
  • Ask more questions like this: How do you think about (blank)?
    • Responses will be more honest and open-ended rather than numeric and analytical
  • Feel good unconditionally, force the good out of the average
    • Think about the DMV. If you want five-star service, be a five-star customer.

Intro

  • Moiz Ali (@MoizAli) is an entrepreneur and former CEO of Native, a natural deodorant brand that is aluminum-free, paraben-free, vegan, and cruelty-free.
  • Moiz and Shaan explain how the right competitive advantage can turn a simple idea into a multi-million-dollar business venture.
  • Host: Shaan Puri (@ShaanVP), no Sam (@thesamparr) on this episode!

Native Deodorant

  • Raised $500,000 to start Native and sold it to Procter & Gamble for $100 million
  • Didn’t do any PR and kept success quiet for as long as possible:
    • Didn’t go around thumping their chest. If it failed, they wanted to fail quietly.
    • Was a early-mover in the natural deodorant space, and wanted to keep the competition pool small for as long as possible

Competitive Advantage

  • You don’t have to know exactly why your business works until well after it’s launched
    • It’s going to change and evolve anyway, so don’t let overthinking prevent you from getting started
    • Anecdote: Moiz tells a story about how they invited Native customers to answer questions about why they liked the product. Many liked the deodorant’s probiotics, but Native/Moiz didn’t know that that would be an advantage before asking.
    • “If you’re completely divorced from customer feedback, you’re setting yourself up for disaster—unless you’ve created a flywheel that you know exactly how it works” – Moiz Ali
  • “You can say ‘I don’t know’ or ‘the same as everyone else’ to all questions as long as you have that one thing” – Shaan Puri
    • Shaan explores the idea of repackaging an Indian-style chip into a bag that is more marketable to America
    • Same product, one change
  • Manscaped: “a simple plan executed well” – Shaan Puri
    • Rewording – they’ve created a product specifically for your balls, even though there’s not much innovation that differentiates this electric razor from one designed for your face
    • Branding – unique and attention-grabbing advertising, they have a billboard in NYC right now that is an upside-down heart emoji, which makes it look like testicles

Common D2C Mistakes

  • Over-hiring
    • The Goldman Sachs standard is $1 million in revenue per employee
  • Spending money on dumb things
    • A beautiful office doesn’t often have good ROI
  • Poor marketing
    • Every D2C company should know their customer acquisition cost (CAC)
    • “If you don’t know those numbers, you’re being grossly negligent with your business” – Moiz Ali

Curiosity

  • “I don’t know anything about deodorant, but in six months, I’m going to know everything there is know” – Moiz Ali
    • Nobody is an expert when they start!
  • General curiosity is lost on most people
    • Moiz tells a story of when he asked a hotel entrepreneur an hours worth of questions at a Super Bowl party, but that same person wasn’t even curious enough to ask why Moiz was also at the Super Bowl party
  • Ask more questions like this: How do you think about (blank)?
    • Responses will be more honest and open-ended rather than numeric and analytical

Moiz’s Investment Corner

  • Shopify’s motto is to ‘arm the rebels’, but it is giving us muskets in a war that is increasingly being fought with machine guns.
  • Moiz’s investment breakdown:
    • $10 million in private equity
    • $40 to $50 million in cash or short term bonds
    • $25 to $30 million in real estate
    • $10 million in real estate as an LP
    • $10 million in startup investments
    • $10 million in stock market
  • The current market environment has caused Moiz to be more reactive than proactive

Real Estate

  • “Everyone who bought in 2019, you look like a fucking genius” – Moiz Ali
  • Real Estate is the one market where Moiz has a true long term view
    • Doesn’t intend to ever sell, his children will inherit the real estate rental business
    • Slowed down from purchasing one unit a week to one unit a month until confirmation of market (in)stability – “If it crashes, no one will be more excited than me…I’ll quadruple down.” – Moiz Ali
  • Moiz bought most of his real estate through auction
    • This is risky but some of the best returns are made on hard-mode

Unconditional Goodness

  • If you want five-star service, be a five-star customer
    • Take the DMV for example. If you walk in with a good attitude, you’re more than likely going to encourage better service.
  • Feel good unconditionally, force the good out of the average
My First Million : , , , , , , , ,
Notes By Drew Waterstreet

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