The 4 Phases of DTC Growth

Hey everyone, 

Welcome back to another bite to chew on. 

You know - when you’re young you have a different perspective of the world. 

Your experience is limited. Your priorities are different. 

But things naturally shift as you grow and mature. 

Some things that seemed to matter a lot don’t anymore.

And some things that seemed distant and abstract, become real and important.

This is true of your business as well. 

When we started Obvi, all we had was a small founding team and an idea. 

And now our products are offered in Walmart. 

We have a Facebook community with over 99,000 members. 

Not to mention staff, suppliers, investors…

Today we want to share what we’ve learned about the phases of running a growing DTC business.

And how you can expect your priorities to shift as you evolve.

Phase 1 - Product market fit

Sales.

That is pretty much your first and last priority when you’re just starting out. 

If people don’t want what you’re offering, then none of the other stuff will matter. 

When you’re looking for product market fit, it’s important to be:

Lean.

Scrappy.

Agile.  

Because, as a founder, you’ll need to preserve cash, wear many hats, and respond to feedback as quickly as possible. 

In this phase, you’re just trying to test and prove your thesis. 

• Do people want what you’re offering?

• How much are they willing to pay?

• Who are your customers and what do they care about?

• What messaging resonates?

• Where can you find them?

Staffing, SOPs, financial projections - none of that stuff is relevant (yet). 

All that matters is that first Shopify cha-ching sound on your phone. And then it happening again. And again.

Unlike the other phases of brand growth,

This is the one where you need to get your hands dirty and do things that don’t scale. 

Respond to every customer email or question. 

Attend conventions, rallies, or anywhere you can find your target market and sell to them, face-to-face. 

Call purchasers and ask them why they bought. 

Make your own ads. Build your own site. Take your own photos and videos.  

Just get your stuff into market. 

Do it without spending tons of money.

And discover the fundamentals of what will make your product sell and your brand work.  

Phase 2 - Supply chain

Alright, so you’ve got traction.

You’re making sales on your site regularly. 

You’ve begun to understand what your audience wants and how to deliver it to them.

Maybe you’re even thinking about expanding your product line. 

Pretty soon your priority stack is going to have to expand from just making sales to managing supply. 

As your revenue grows, and as you add sales channels or new offerings,

You’ll need to ensure your supply chain is trustworthy.  

Robust.
Reliable. 

Redundant.

Because nothing can kill a young brand faster than an inability to keep things in stock. 

Here are some questions you’ll need to ask yourself in this phase - 

• Can your supplier(s) scale with you?

• How is your relationship with them?

• Do you have access to additional suppliers if needed?

Beyond being sure you can consistently make enough product to fulfill demand, you’ll also need to start thinking about the unsexy parts of logistics, like -

How to palletize and bulk ship your products. 

How your packaging will fare when it’s being shipped.

How long it takes to go from confirmed order to delivery. 

What warehouses or 3PL’s to work with.

How to track your inventory as it’s being made, moved around, and sold. 

As you grow, you’ll learn there are about a million ways a poorly developed or inefficient supply chain can hurt your business. 

From…

Spillage, damage, and loss

To suppliers missing deadlines or your 3PL nickel-and-diming you into oblivion.  

Which brings us to the next phase…

Phase 3 - Capital allocation and finance

At this point, you’ll need to get serious about your numbers. 

Checking the Shopify dashboard or 

Paying a bookkeeper to go through your receipts once a month isn’t going to cut it. 

If you’re making consistent sales.

And you’ve expanded your product offering.

Adding sales channels.

Hiring staff or vendors. 

And managing a supply chain. 

Your cash inflows and outflows will become seriously complex. 

Your priority stack has shifted again, pushing finance and capital allocation to the top. 

Because your business can descend into a fog of numbers if you don’t get your arms around… 

What you’re making.

What you’re spending.

What’s an investment vs. 

What’s an expense.

Forecasting becomes a vital factor in this phase. 

More inventory = bigger PO’s = bigger costs  = more risk.

You need to understand your business’s seasonality.

Know how best to align your marketing calendar with your cash flows and inventory 

To match the natural cycles of your market. 

Also, beyond your marketing spend ROI, you’ll need to understand ROIC - return on invested capital.

All sorts of things will threaten your focus at this phase. 

New opportunities. 

New regions.

New tools.

New marketing channels.

New products.

It will be tempting to chase every new shiny object as your brand grows - 

But this can mean trying to run in five different directions at once. 

Which actually becomes a tax on your operations and finances.

At this point your top priority becomes…

How to prioritize. 

Tool of the Week

Let’s talk about that for a second. 

Because running a DTC brand is a lot of work. 

Marketing. 

Finance. 

Ops. 

R&D.

ETC.

That’s why (after profit) the thing you’re probably always trying to optimize for is time. 

One thing we’ve learned the hard way at Obvi is that influencer marketing is super valuable but also super time-consuming. 

Anyone who has managed an influencer program will tell you - it’s like herding cats. 

Creator searches. 

Product seeding.

Content submissions. 

Creative briefs. 

At some point, all of this stuff gets messy when you’re doing it manually. Spreadsheets, emails, random creative files… 

Disentangling it all becomes a full-time job. 

So if your influencer marketing is a key part of your mix (and it should be), you need to find a way to increase its efficiency and lower its demands on your time.

This became a MAJOR pain point for us. 

So we onboarded SARAL to help get our influencer program back on track. 

It’s a platform that gets all of your influencer processes under one roof. Creator searches, seeding, tracking, management, all of it. 

It’s honestly worked incredibly well for us. 

We spend way less time sorting through communications and spreadsheets and have more time to do the stuff that really matters - 

You know, like finding partners that move the needle, analyzing their results, and doubling down. 

If you’re a founder or an operator, your time is your most precious commodity. 

SARAL gives that back to you AND helps you take your influencer marketing to the next level.

Back to it…

Phase 4 - Culture and Management  

You’ve got sales. 

And a supply chain. 

Your finances are as clear and transparent as possible. 

Now you have to figure out how to keep it all going at scale. 

In this phase, you’re priority is turning your company into a well-oiled machine. 

We know, we know…

When you were a single founder or tiny team, all that stuff about culture and team building probably seemed kind out there. 

Like motivational speaker or business consultant fluff. 

But management and culture will someday become your biggest priority as a CEO or company leader.

As you bolt on more partners and vendors 

And hire more staff

Your vision, mission, goals, and key processes MUST be clearly and confidently stated. 

And constantly reinforced. 

The possibility for miscommunication and conflict grows exponentially as you add team members. 

If you haven’t nailed down roles, expectations, and standard operating procedures to keep everyone on the same page - 

Then a lot of time and energy will be wasted on misunderstandings, bickering, and tasks falling through the cracks.

How do you avoid this?

You’ll need to develop ways to invite and act on feedback. 

And you’ll need to learn how to work on the business, rather than in it.

This is one of the biggest traps for founders and leaders as their company matures. 

Because at one point, maybe not too long ago, you had your hand in everything. 

You knew what everyone was doing, all the time.

You were the one to jump in and fight fires, whenever they would occur. 

But that doesn’t work forever. 

If everything runs through you at the top of the company. 

If you still are involved in the day-to-day of every department. 

If even your best, most trusted people have to wait for you to weigh in on everything…

Then you will become the choke point in your organization. 

You’ll cause frustration to your A players because they won’t feel empowered. 

You’ll also work 10 hours a day and never be able to take a vacation. 

Which will make you miserable. 

When you work for someone else, you need to become indispensable. 

The opposite is true when you are a founder or owner. 

Ideally, you build the machine so that you are completely replaceable from an operational standpoint. 

A strong executive operating system and culture can do that for you. 

Sum it up

Your priority stack starts with just one item on it - sales.

But it will quickly grow and shift with your business.

That’s not to say that sales are NOT a priority as you mature (that never goes away), just that other stuff will take the top position. 

When you’re a young company, everything seems like it will be solved by revenue and product market fit.

But, in truth, each phase of your business unlocks new challenges.

As a leader, you’ll need to find ways to manage your priority stack -to evolve yourself and your role so your brand company can continue to flourish.

One last thing…

We wanted to let you know about a webinar coming up on July 18th featuring me (Ron), Francesco Gatti of Opensend, and Eddie Maalouf of Bad Marketing. 

We’re going to dive into retention marketing for Shopify stores. Are you looking for strategies to better leverage email and SMS? We’ll answer all your questions and go over the tactics we’ve used to drive over 7-figures of through retention alone.

Free registration is available here.  

All the best, 

Ron and Ash