How to build the highest level of community (there’s no software)

Happy Sunday!

If you're reading this, I hope you have a Feastables chocolate bar in your hand. If not, you can order one now on GoPuff and get it delivered within minutes!

For those of you who joined the Masala Capital rolling fund a few months ago, congrats on your investment into Feastables! The brand launched yesterday, and I'm grateful that the Sharma Brands team was able to play a part in bringing this brand to life. Feastables is a better-for-you snacks company launched by Mr. Beast with the goal of being healthy and accessible. More on this later!

BTW, if you were forwarded this email, please take 13 seconds to click here and subscribe! It's free & you'll join 24,000 readers every Sunday who run the world of CPG, either as investors or operators. 

This past week, I did a podcast with Ben Grynol, the Head of Growth at Levels Health. You may (or may not) have seen Levels in the wild with their continuous glucose monitors (CGMs) as they help everyday people like you and me track their glucose responses to certain activities, foods, drinks, sleep, alcohol, etc. The software + hardware combination and integration had me very bullish from the beginning and with their ~200,000 person waitlist, it seems I was right! But WTF was this podcast about?

The podcast was about an hour long and all about growth levers. When a brand launches today, there are different levers we can pull to drive traffic and eventually new customers to the brand. These include:

• Paid social

• Paid search

• Influencers/creators

• Organic social media

• Forums/communities

• Organically built community/word-of-mouth

• Out of home advertising

• Partnerships/integrations

• Earned media (PR, TV, podcast appearances, etc)

• Affiliates

• Customer UGC

• Newsletters

• SEO/content marketing

• etc.

Today, everyone loves to launch and then go straight to paid marketing as a means to get their first $10,000 or $100,000 in revenue. There are definitely some companies that are a great fit for this strategy, but 99% of companies should actually start with routes outside of paid marketing before turning that function on.

Haus is a great example. For the first year-ish of the companies existence, they didn't spend a dollar on paid marketing. They spent all their efforts on building FOMO (so you want to try it out), and then creating a world-class experience, driven by the product (so that you post or talk about it), which just creates a flywheel that has a ripple effect going out from each customer.

Kettle & Fire is another incredible success here. Instead of jumping right into Facebook ads, they started with retargeting site visitors who came in, and their "prospecting" was heavily focused on SEO. They leveraged their affiliate partners to incorporate backlinks to their site, building SEO juice back to Kettle and Fire for "bone broth" which worked.

Chamberlain Coffee, Last Crumb, Feastables, Poo~Pourri, Hint Water, and so many other well-loved brands all follow a similar playbook where they acquire their first chunk of customers through channels that aren't paid, and then later, of course, focus on paid. 

I point this out because I really believe it's important for this piece of the puzzle to be well-thought-out at the same time you think through how your product differs from the competition, the value props, benefits for consumers, etc. If you spend 2 years working on a world-class product only to launch and hand your business over to a paid media agency to scale, you won't do justice to the hard work put in. Paid marketing is always there, but I believe there are a lot of benefits in invalidating it through non-paid methods. 

The one that I spoke with Ben about that I really loved the most was what he calls the "head nod". When a Jeep owner sees another Jeep owner and gives the friendly head nod or wave. Or when a USC student or alumni sees one another around the world, there's a universal peace sign that gets thrown up signaling "Fight on". It's community at the core, but it's community at the highest level.

When you're at a gym and you're wearing Vuori and see someone else wearing Vuori clothing, you automatically feel a connection. When you meet someone for the first time and realize they also go to Soulcycle and you can talk for hours about why you both love it — it's the same thing. The highest level of "community" is the word of mouth/head nod.

As operators who look to move quickly, we're always looking for a consultant, an app, software, or an agency to help us get something done, but the community is one of those things that you can't just make happen overnight. It takes a mix of four key ingredients. 

1. Time

2. Consistency

3. Quality

4. Good intentions

If we look at Levels Health, they have spent the last 2 years focused on putting out some of the highest quality content around metabolic fitness, health, and tracking. They invested a good amount of money (and equity) to bring on credible advisors, do proper research and get it out in a way that's understandable to anyone who's curious or wants to learn. This article is a great example of that. Whether or not you ever become a paying customer of Levels, they don't care. Their intention from the beginning is to educate as many people as possible and get you to say, "This was great".

Another company in the same space that does an incredible job of this is Whoop. I actually found this out by Googling "What is HRV" a few months ago and then discovering a goldmine of content on their site. The trust that comes from the consistent high-quality content they put out is what will ultimately convert customers to become paid customers. The sales cycle might be longer, but it's a growth level that often also distributes a much higher lifetime value back to the company.

The beauty of great content with a consistent cadence is that it just takes one piece of content to be seen by the right person for it to blow up. I mean, that's how Justin Bieber was discovered — not CPG, but the formula works.

The 2 main punchlines I wanted to share this week are:

1. You don't need to spend absurd amounts of money on paid marketing to get started. There are tons of other growth levers you can play with to get your first set of customers. Even if you are a big company, or way past that $100k or maybe $100M mark, have you looked into other levers and building those out? If not, do so!

2. The "head nod" or word-of-mouth community isn't one that can be built by any software or agency, you have to invest in your customers, just like they made a decision to invest in you by buying your product. When someone truly feels comfortable in who they are with your product, they will never have a problem talking about it — it's on you to do what you can to get people comfortable with it. That could mean anything from going deeper on your values as a company to making sure your brand represents something great, that reflects well back on the person talking about it.

I hope this was helpful... on to some fun stuff!

Software of the Week:

Tydo — A world-class analytics engine for your business.

For brands/merchants: Tydo's Report Cards is a free product, that allows you to keep a pulse on your business, from your inbox. It's a simple Shopify app install (free), and you get a daily pulse with the option to click in and get more data out of it. Very soon, you'll be able to tap into an app-store-like marketplace of metrics, formulas, and integrations to enhance your data. But for today, you can get Report Cards!

For agencies: You can use Tydo's Portfolio product to see aggregated merchant data within seconds. You can compare brands individually or select specific categories to look at metrics like AOV, orders, revenue, CPA, ROAS, etc. Similar to Tydo for brands, you'll be able to tap into formulas and dashboard views in an app-store-like marketplace very soon.

Learn more about Tydo and get started by clicking here or visit tydo.com!

Brand of the Week:

Feastables — A simple & delicious snacks company that's accessible to everyone.

Normally that 4-ingredient high-quality dark chocolate bar at Whole Foods is ~$7. However, Jimmy aka Mr. Beast wanted to create something accessible to all that still had that high-quality touch of premium ingredients and great taste, so he launched the Mr. Beast Bar. 

Eventually, Feastables will be a snacks company on the shelf next to Doritos, Cheez Its, and Honey Nut Cheerios with a brand story shoppers love and know, and ingredients that better serve consumers.

You can try the Mr. Beast chocolate bars at Feastables.com or grab them for instant delivery on GoPuff today! My personal favorite is the Quinoa Crunch bar.

That's all for today! 

I hope you had an awesome weekend, got some time to relax, and you're excited for this upcoming week. Can you believe it's going to be February 1st? Who let this happen so fast?!

Get those 9 hours of sleep tonight, and have an incredible week!

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