We did a podcast! Nut and Noggin founder talks all things start ups and mental health with Sage
8 months ago
This is an extract from the Sage Sound Advice Podcast, which you can listen to here
This is the super-personal story of how ex-Red Bull marketeer Rachel Clark set up a new shampoo brand called Nut and Noggin to ‘look after our heads’ from her farmhouse table in 18 months after burning out from her corporate job and losing her father.
Despite manufacturers initially laughing at her, and finance not being her ‘zone of genius’, she skilfully grew the business with little startup capital to attract fans such as actresses Lily James and Kristin Scott Thomas.
Do you dream of starting a small business? Burned out or bored out by your job? Let us know in the comments below what business you would like to start up if you could quit your job – and what might be holding you back.
Don’t be put off by sceptical manufacturers
So what made you want to launch this business? I mean, was it about the sustainability angle? Was it about a great hair product? Tell us everything.
We set up the business – myself and a co-founder – and we’d both been writing about consumer products and beauty products for about 20 years.
Well, 40 years between us. Good God.
And I wanted to set up a business that gave back. So it was really inspired by the story behind brands like Toms and products that would give back with every sale.
And so kind of that’s where it started.
Sustainability was something that was really growing in people’s minds. We started going to see manufacturers and talking about shampoos, which is obviously a product for your head, which is where the mental health angle came from.
And they kind of looked at us… they thought we were bonkers because why would you want to go against a load of multinationals?
And they kind of looked at us as if we were crazy when we said, well, is it possible to live without plastic in these products?
We don’t want to create more plastic in the world.
So we had to come home with our tail between our legs, from several manufacturers, because they wanted a huge minimum order quantity.
And they just wanted to stick shampoo that was a basic formula and put it into lots of plastic bottles and just bring more plastic on to the market.
So we really didn’t feel that that was for us and for now as well for our friends and family when we were talking to them.
So yeah, that’s where the shampoo bar idea came up and that’s kind of where Nut and Noggin began.
Simplify your product and get it to market – don’t overspend or over ideate
As you say, shampoo is a really competitive and crowded market. So why was it shampoo? Of all the beauty things that you could have gone with, why was that the one?
Yeah. Well, that’s a good question.
So obviously, there’s just thousands of different brands and skews that you could start with. And we actually started off with this big idea about customisable shampoo, and we were going to get an app developed.
I had a friend of a friend who was working on Formula One technology, and he was able to create this phone app where you could kind of brush your phone over your hair.
And then it would tell you how healthy your hair is, which is still a great idea to be fair.
But it was so costly and just such a barrier to us actually getting started that we were like, hang on a minute, this customisable shampoo, there were other brands in the US doing it who had massive venture capital funding.
And we just didn’t.
So we were like, right, how do we make this as simple as possible, so that we can get a first product out there and test the marketplace and also create a sustainable brand that’s not going to add to all this plastic pollution that we’ve got such a massive issue with?
So that’s kind of how we got to shampoo and how we got to shampoo bars, specifically.
And then with the actual recipe, I suppose it’s a recipe for the shampoo bar. I mean, you mentioned how the system works.
You just go along to the manufacturer. You had to presumably formulate something from scratch. So how did you do that?
Yeah, it was a real journey, because I mean, there are shampoo bars out there, and obviously there’s really great brands like Lush, and they’ve done so much good work with creating plastic free brands and testing the marketplace.
And having lots of customers say that that’s what they want and where it’s going.
But the shampoo bars that we tried often had lots of sulfate to create lots of foam. So everyone’s kind of got used to all these bubbles and this lovely bubbly experience, but then it kind of strips your hair of all its natural oils.
So we knew we had to create something that didn’t leave us with scarecrow hair.
And that was something that we were both passionate about, just in terms of getting the right formula that we could get people to buy into, but also get people to repeat purchase.
People are never going to swap from a normal liquid shampoo if it’s not creating the right results. So it had to work, whatever we decided to launch with had to work.
But yeah, like you say, the manufacturers were kind of laughing at us and saying, well, we don’t have that formula at the moment.
But luckily, we came across a really small artisan manufacturer who was just developing some base formulas for shampoo bars that would be a little bit more natural and a lot less sulfates. Well, in fact, no sulfates.
We worked with them to develop something that would have some UK ingredients in as well. So the first shampoo bar that we’ve launched has actually got flaxseed oil in, which is really good for omega-3 and nourishing your hair.
And it’s also got British brewed beer. And beer has always been a bit of an old wives tale for adding shine.
But it’s actually quite well known that it does add shine because it helps your amino acids and builds the proteins that your hair relies on for shine.
So, we’ve added those ingredients in, and that’s kind of how we developed our own formula as well.
Turns out, corporate burn out and grief can be fuel for starting a small business
I want to talk about how you built the business and how you created the brand. But I want to go back just quickly.
Because you mentioned your previous life, your previous career, and I know from a previous chat with you that basically burnout was something that prompted you to start your own business.
Can you tell us about your former career and what happened that made you think, right, that’s it. I need something new.
That kind of sounded a bit of a paradox when you said, well, burnouts the thing that prompted you to start your own business. Because now looking back, I’m like, what was I thinking?
Because starting your own business is such a challenge in itself, but it’s a very different challenge because you’re working towards something that you’re really passionate about and that you’re 110% in every single day and ideally want something that is aligned with your own values and all of those things.
So I had many reasons why I kind of worked through the corporate career ladder for about 20 years working with lots of different multinationals and growing entrepreneurs and working with some amazing people and some growing businesses for other people.
But I got to the point where I’d kind of got as far as I could go I felt within corporate life and I was helping other entrepreneurs and entrepreneurial people grow their businesses.
And I’ve kind of got to the point where I thought, well, actually, I’m sure I could do this myself, if I’ve got all these skills that I’ve built up over all this time, but I’m not using them.
And then, I actually lost my father and he was kind of the reason why entrepreneurship was part of my DNA, if you like.
He was an entrepreneur himself and we lost him really suddenly.
I’d already been going on yoga retreats and helping me to understand how the mind works and all of those things.
So I had that as a background during that really incredibly tough period of grief and loss, but it really made me kind of galvanize what I’d already been feeling inside was let’s live a more aligned life with how you kind of want to live your life and it just shows you that life’s really short.
So that was kind of the trigger, I guess, that happened to make me actually do it and take the leap.
Did you feel that maybe you wanted to turn your grief into something constructive because often it can feel like an overwhelming emotion and just the act of channeling it into something, building something new can be quite cathartic?
It’s just like the rug’s pulled from under you and so everything that you’ve kind of built towards and think is really important, suddenly becomes totally re-evaluated.
And once you’re kind of processing those massive emotions and that kind of huge thing that’s going on in your life, absolutely.
It was really important for me.
It kind of flushed all that stuff away in terms of what I thought was important to me, how I wanted to live the rest of my life. It can be really life-affirming.
I think that it kind of creates this opportunity, in a way, to be able to move forward.
And also to be really brave with your decisions, because you realise that actually life, we’re not here forever and unless you make some big decisions that feel good and that really hit your own values and feel aligned, then that’s where you can really make some massive progress forward.
How do you solve burn out by being an entrepreneur? It’s possible, we promise
We were both laughing a moment ago at the irony of going from a really busy corporate life that’s approaching burnout and then starting a business and thinking that it might be less stressful, which, of course, it’s a different kind of stress, as you said, but it is still very stressful.
So how do you manage that pressure?
Yeah. It’s very interesting, because if you’re working primarily on your own, which obviously a lot of us have been doing over the last year, then it’s very much a personal mindset.
So I’m really careful about where I put my energy. And so I do my yoga and I try to do gratitude meditations when I remember, it doesn’t always happen.
But I try and create an intention for every day.
Can you give me some examples of your intentions?
I’m full of positive intentions.
There’s a really great book, actually. I think it’s called The One Thing, and it just focuses your mind because, obviously as an entrepreneur, you’ve got a hundred things that you could be doing every single day.
And this is more about working on the one thing that’s going to move the needle forward.
But yeah, intentions might be: today I’m going to feel calm and happy, or it might be today I’m going to speak to three people and feel connected.
So those are some of the things that I try to use.
There’s never a perfect time, we launched unexpectedly on Black Friday
Back to the business, right, before I get completely sidetracked because I could talk about this a long time.
So how did you get your first customer? Do you know who the first person was that bought a bar?
I do, I know exactly who it was.
It’s a friend, and it’s a guy as well. Probably about 98% of our customers are women, but he’d actually very kindly bought it for his wife.
Basically the product arrived the day before Black Friday 2019. My husband, we were chatting about it and he said, “You’re going to have to launch this weekend.”
And I was like, “Well, I don’t feel ready. I’m not ready.”
We had a thousand things to do on the website, and an email list, and marketing, and I thought, “Oh, my God, he’s right. We’re going to have to do it.”
So we actually launched inadvertently on Black Friday 2019, which was totally unplanned.
When we started getting customers, it was friends at first. I was like, “Oh, God, okay. This is everyone that we know.”
And then it was when we started seeing people that I didn’t actually know of coming through, I was like, “Oh, my God, this is actually going to sell. This is actually working. So far so good.”
So that was so exciting just to be able to know that people were responding to it and wanting to join in to get the shampoo bars, but also to give back.
So yeah, that was really exciting time. Very stressful as well.
When it’s not just your best mate buying 50 bars, it’s actually a complete stranger.
Exactly. I was still very disappointed with my mum. I said, “Where were you mum?” She didn’t even buy one that weekend. She went, “I thought you’d bring me one.”
Build your email subscriber base to ensure sales
What did you do to reach the strangers? Presumably you might have sent some emails or done some social media posts to your immediate network and your friends, but then how did you reach everyone else?
Yeah, it’s a great question.
So I’d researched it to within an inch of its life. How are we going to get the message out there? What’s working at the moment? Which of the brands are doing what?
So I’d heard, I think it was Tim Ferriss on his podcast, talking about the launch of Harry’s, which is a really cool shaving brand, men’s shaving brand.
And they’ve really taken on the likes of Gillette and they just did a great job in terms of launching it and marketing it.
And he actually shared the whole case study of what they did in the States, which was to create kind of a giveaway and to really build your email list before any sort of launch.
So I knew that email was going to be a really important way of communicating with our customers. And also, it’s just a really direct way to let people know what’s going on and give behind-the-scenes updates and things like that.
We’d grown an email list to about 600 names. Probably 100 were friends and family.
And then we asked for people to forward emails and if they knew of anyone else that they thought would be interested.
And we did a little giveaway, so we actually gave away a spa day, which obviously would be bang-on for our target audience.
So we launched to an email list, but it was a small, but perfectly formed one.
And then after that, it was very much trying to get some press and looking at things like Facebook and Instagram advertising as well.
And we kind of continue to do all that, but it’s… you can’t do everything on day one.
It’s expensive, isn’t it? Because social media adverts, it used to be pittance and now it can really just drain your entire marketing budget.
Absolutely, yeah. You have to be so careful not to just blow all your budget on social media.
So we’d go in sort of 90-day sprints, I call it, and we’ll look at… We’re very careful to not overspend on Facebook ads because we’ve already got quite a low average order value in terms of how much people are actually spending on shampoo.
It’s not a Cartier watch people are buying, for example.
Yeah, a Ferrari. So you’ve already got a lower spend and how much you can spend on your marketing, so you have to be really careful that it’s actually working and just making the most of your marketing books.
So yeah, absolutely. We’ve got to keep a real close eye on that.
Set your maximum social marketing spend based on your sales conversions
That’s interesting. So did you have a metric that you use, like the maximum spend per conversion?
Knowing how much your audience will spend in an average basket so that’s the maximum you can spend to convert?
Did you get as nitty gritty as that?
Yeah, absolutely. I’m not a finances person.
But I’ve quickly become one because when you’re looking at your stats and you’re looking at your sales versus your marketing spend, then all of a sudden you’re like, actually, how much profit is each, say, shampoo bar generating and how much do we have to spend on advertising or free product or influencers and things like that?
So yeah, we absolutely get totally nitty gritty on the cost per acquisition.
It’s an ongoing process, because obviously you don’t know what everything’s going to cost at first. You’ve got costs coming in left, right, and centre for design work, branding, website, as much as you can try and do yourself.
But yes, so it takes a while to kind of filter through and know what your actual profit margins are.
But yeah, it’s been a real baptism of fire in that respect in terms of getting the financials up to speed and being able to forecast for what we can do in future as well.
How to secure free PR and the holy grail of celebrity endorsement
But you’ve had some great free PR. Can you tell us about how you’ve got these celebrities shouting about Nut and Noggin.
It’s amazing, isn’t it? We have had some really fab people talking about Nut and Noggin.
So we actually got featured in press quite early on. So Vogue ran a piece on sustainability. We’ve been in Glamour magazine, Red magazine, Grazia.
Stylist did a stylist love song on Nut and Noggin, and people were really responding to, I think, A, our branding, but B, the story behind it.
So very much the fact that we give back to mental health charities that are helping young people and children, and people just love that.
So they were really kind of wanting to help us in that way.
But yeah, we often have customers who will recommend to others. It might be mums recommended to daughters, or sisters recommending to their best mate, which is obviously the best way to market a product, lots of word of mouth.
But we had a lady approach us on Instagram and she said, “Oh, my mum has got me onto this.” And she posted about it.
She said, “I absolutely love this new brand, Nut and Noggin.”
And it turned out she was a makeup artist and she was actually working with the amazing Dame Kristin Scott Thomas at the time, and so she tried it too.
And then she posted about us.
And then Lily James got involved and she said she’s going to order some. And it was kind of just this lovely, really natural organic way of getting the word out there.
So things like that often happen.
We’ve got a few other celebrities who use us too, and it’s stuff that you just can’t predict and you can’t plan, but it’s a really nice thing when it happens.
So how fast are you growing now? Can you share how quickly customers are coming on board?
Yeah, absolutely. We’re growing about 200% every month, so it’s a really exciting time.
A lot of that is word of mouth. So we’re really diligent about asking people for referrals.
So from the start, we’ve always had a refer-a-friend programme. So if you refer a friend, you both get 10% off your next purchase.
We kind of learned from the likes of even LinkedIn and some of the US brands that having a referral element can really help grow a brand quite quickly.
So that’s something we’ve really focused in on, and it seems to be working. And it’s sometimes really simple ideas and concepts can work the best.
So even though there’s kind of lots of shiny objects out there advertising and TikTok and all of these things that we could be doing, it’s kind of just learning that some things work better than others and going down that road instead of wasting lots of time on things that might look shiny and bright, but might not work so well.
Have you had any of those experiences where you’ve maybe put too much effort into something that ended up being a bit of a damp squib, any kind of nightmare moments?
I know it’s only been a couple of years, but anything you can share?
I mean, it wouldn’t be a nightmare. It would be probably a good nightmare.
But in lockdown one we sold out. Everyone was at home, everyone was on Facebook. We were running Facebook and Instagram ads.
We were getting lots of press and PR, and we sold out. We just hadn’t ordered enough. It was like, “Oh my God. Now what?”
It was a really nice problem to have, but at the same time, when you’ve never hit that challenge before, and obviously it was totally unprecedented what was going on at the time.
People were looking for lots of self-care tips and feel good brands. I think, speaking to other founders, lots of people have the same issue and other people were importing from China as well and that was hitting their businesses.
To sell out, I think that was probably the biggest challenge.
Luckily, there’s lots of ways you can get round that online now with online businesses. You can set pre-orders up.
It’s not always necessarily such a bad message that you sold out, because obviously everyone wants it. But yeah, at the time it was a massive challenge and it’s like, “How are we going to get more really quickly?” Because the manufacturer was already struggling to keep up with their orders as well.
So yeah, it was a challenge, but a good one.
Over communicate with your customers when things don’t go to plan
But what did you do then? What process did you follow?
When we realised it was going to happen, it was like, “Okay, we’re going to sell out.”
We’re not able to get our next restock in for, I think it was three and a half weeks, what can we do? Actually, you can set up pre-order managers where it’s like an app that you install.
We actually just communicated really well with our customer base on email and on social media. We’re like, “This is what’s happening. This is where we’re at. Thanks so much for all your support. You can still get product. It will be here in about three and a half weeks, we think.”
Just over-communicating with our people, really.
That was how we got through it. But having the pre-order app enabled on the website was a massive help as well.
It’s a great lesson and I love to hear how different founders, when they do come across a hairy situation, how they cope and how they turn it to their advantage and obviously selling out.
When you go to a website and it’s like this product is sold out but will be back in in a few weeks, you were like, “Oh my God, I must be back in three weeks if everyone wants this thing.”
Then you do, you turn it into an opportunity.
Yeah, absolutely. That’s kind of what we did.
How much does it cost to start a beauty business start up?
Do you mind sharing a little bit about how much it actually costs to get a business like this off the ground?
Because I’m sure a lot of people will be like, “Well, I’d love to start a business. I’ve got maybe £5k in savings. Would that do it?” Or I’ve got a bit more or a bit less.
How much did it cost you guys to get this going?
Yeah, please do ask that one.
Yeah, I’ve already explained that we started off with this fantasy idea of a clever app that we were going to have developed and a customisable shampoo.
So it was going to be like a different product for every single customer, and we put the pricing together for that and it was going to be about £100k. We soon backtracked and decided we could not afford that in any respect.
We actually didn’t want to take any outside investment early on because we wanted to prove that the concept was going to work.
It was very much, right, what savings do we have?
We’ve spent initially about £20,000, which I would say is really frugal. We did a lot ourselves in terms of creating the website, all the copywriting, all the marketing.
The branding we outsource, because I’d be rubbish at that.
We spent initially £20,000, obviously stock as well. It depends. You could start really small with a product and iterate from there, but we wanted to start with a bit of a bang.
But still that is really pretty frugal in terms of a small business startup fee for a consumer brand.
Would you say it’s really useful if you’re starting a business to make sure that whoever’s in the founding team, you have the skills in place already to cover a lot of those startup costs?
So you either have someone that is a great copywriter or knows about marketing or knows at least something to reduce the overhead at the beginning?
Our business is operations-led, but then it’s growth led in terms of marketing.
You could save yourself a whole lot of money if you’ve got either the ecommerce side of things or the marketing side of things or the operations side of things.
But as soon as you start going out there and trying to get agencies to help you, that’s when the cost can just spiral.
I’ve seen so many business owners get totally ripped off as well, which is frustrating.
You can do a lot yourself, but you really have to be in that able-to-grow mode yourself. My learning curve, even though I’ve got a marketing and PR background, was just huge.
It was like twice a day I was on Google or YouTube looking at how on earth do I do this?
That’s the brilliant thing about podcasts as well, is you can learn so much about other people’s businesses and where they’ve gone wrong, where they’ve got right, what’s working, what’s not.
You just didn’t have access to that 10 years ago.
It’s a brilliant time to be a founder if you’re willing to do all the work and grow it organically yourself at first.
I’m a full-time entrepreneur but my co-founder kept her day job
What’s the dynamic between you and your co-founder like? Do you have very specific roles? Is there much crossover?
Do you ever go to war with each other over anything?
No, we’re good friends. My co-founder actually has a full-time job anyway, but she really helps with things like content and ideas for new products and things like that.
We were very careful to be very specific about who does what and who gets involved with what. I do most of the everyday operations and marketing. I think it’s really important.
Having been in businesses with other people in the past as well, we were talking about this earlier, but it can be like a marriage so you have to be really careful with who you go in with, what their skill sets are, and just having other people that complement your skill set or have a different skill set to you.
Remove any friction right at the beginning.
Yeah. Although, I don’t think friction is necessarily a bad thing. It just depends how it’s handled.
Julien Callede, the founder of Made.com, said on a much earlier episode said that actually sometimes it’s good to have founders that you disagree with because it ends up with a much better decision because you really fight for what you believe in.
You have to take on someone else’s counsel and it ends up improving the final result. I thought that was quite interesting.
Yeah, I can believe that. I did listen to that one and it’s fascinating, because I think that they had four co-founders, didn’t they?
That’s a lot of people and a lot of ideas, but I think it’s just being really specific about who does what and who’s best at what as well, is how we’re using it anyway.
Investors will want their money back in a set time frame – factor that into your mental health
Rachel, you said you didn’t want to take on any outside investment at the beginning. You wanted to keep it very much your own venture. Is that changing?
I can imagine, with the pace of growth that you’re experiencing, that maybe you might have to take on some finance. What are you going to do in terms of external investment?
Yeah, that’s a really interesting question.
I don’t think we’ve discussed this before, but I actually did the filming for Dragons’ Den. Every season, they do about 100 founder entrepreneur interviews. Only about 70 get through.
We did it, we got there, and I didn’t fall flat on my face and I was quite pleased with myself.
But I didn’t get investment, but it was a really great experience just in terms of going through all the due diligence and meetings, obviously, the dragons as well, who were amazing and actually really friendly.
Are you going to be on TV?
We didn’t get on, but I was in touch with another couple of beauty founders, and they also went through the whole process and also didn’t get on, so I was like, “Oh, okay, I can solace myself with the fact that not everyone gets on.”
People keep ringing me now and they’re like, “Are you on? Are you on?”
You have to be really up to speed with all your financials, all your projections, all the things that it’s not my zone of genius, I would say.
But that whole process and even just going to think about going for investment is a really great thing for anyone to go through, so I would recommend it if anyone’s got the opportunity.
Now you’ve got your presentation style down pat, you’ve got your pitch deck. Would you look elsewhere? I suppose the question is, do you need money or would it just be nice to have some additional support maybe?
Yeah. That’s the thing. It’s this lovely idea of, “Oh yeah, let’s get investors on and we can go massive and we can go really quick.”
Or is it, “I want to build it a bit slower and see how we get to and make sure we’re profitable,” because there are so many founders out there who take on big investment and still don’t have a profitable business model.
So it’s really important to me, personally, just to make sure everything’s profitable and that we grow organically as opposed to going really big, taking venture capital, getting people in, and having that huge pressure as well.
We talked about mental health. It’s a really big call to have external investment and external investors who will want their money back in, it could be two years could be three years. So yeah, I think we’re doing the right thing at the right time for us.
Yeah, and it strikes me that Noggin is the kind of business as well that if you did need to raise money, crowdfunding would work so well because you have all these passionate fans.
Or something like shampoo bonds. You remember? There used to be chocolate bonds and shaving bonds and it’s just people buying into a business.
We have looked a little bit into crowdfunding, but Dragons’ Den came along and then we’re like, “Actually, let’s just focus on this.”
It’s not something we would definitely say no to at the moment, so that could be a really good way to get some money in as well.
If your business reflects your values, loyal customers will come
Rachel, tell me a bit about the mental health side. When someone buys a bar, what happens to that purchase money?
Tell me a bit more about why you’re so passionate about supporting mental health charities.
There’s a really cool quote that goes around on Instagram every now and again, and I think it’s something about when a person buys from a small business, someone does a little dance.
That actually does happen. That’s the first thing that happens with your purchase.
So that’s the first thing that happens with your purchase, but for our shampoo bars, £1 from every purchase goes to three different charities that we’re working with.
One of them is the fabulous Winston’s Wish, which is a national charity that was set up to help children and young people and also families going through grief.
So obviously that’s something that resonated with me hugely.
And then we also support a charity called the Yoga Therapy Foundation, who helps support young people facing grief, depression, and anxiety.
And that’s something that their founder is really passionate about.
And she says over the last 20 years, she’s had so many more young people coming to her with problems with depression and anxiety.
And then we also help a fab charity in Leeds called the Marketplace, which is also targeting young people who are facing difficult times. So that’s where our customers’ hard-earned money goes when it comes through to us.
YOU MIGHT ALSO LIKE: