Lessons learned from scaling from $0 to $350k/mo too fast

From $0 to $360,000/mo

I started an eCommerce business and in less than 10 months, grew it from nothing to $360,000 a month in revenue.

The graph looked like a mountain because nearly as fast as it went up, it came right back down.

Looking back, it is fairly easy to see where the failures were and how I could have prevented them. But now it’s hindsight, back then, being deep in it, it was not as easy to see.

It’s also easy to say, “Oh, I won’t make those mistakes” or “How do you grow too fast? Can’t you just use the money to fix everything?”. Keep in mind, I use to say that too, it can happen faster than you expect.

Let’s get into it!

How I grew

Most of the growth came from Facebook ads. Even before I launched the brand, I used Facebook ads to build a small email list that I used for a Kickstarter.

As I grew, I just kept throwing money into Facebook ads. In the beginning, the returns were great, 3-4x. Since the product I was selling was digital, it was basically all profit.

Thinking I was smart, I hired a freelancer to manage the ads. They seemed to be smart and know what he was doing, and what could go wrong.

The first freelancer did great, he took me from the $20-30k/mo range to the peak of $350k. Keep in mind, this is revenue, not profit.

The ads slowly become less and less profitable. I was still making good money at the end of the day but each month was less and less.

What exactly went wrong?

There was no single issue that caused the business to implode, it was a number of things that compounded.

I don’t necessarily regret some of the paths I took but I do regret how I did them. Some things are hard to avoid, but now I’ve learned from my mistakes and I can say I will be less likely to repeat them.

Hired too fast

As a solopreneur, especially being bootstrapped, everything is on you to start. With that, you need to learn how to do things right.

In the beginning, I did the ads, emails, customer service, social media, website design, etc. I did it all.

If I were to do it differently, I would hire core roles first, roles to strengthen the foundation.

I didn’t need to hire an ads manager so soon. I was performing just fine but I got greedy.

I should have focused on my VA and building systems together. Creating better education and customer support systems.

Hired the wrong people

One thing you will find when hiring people and agencies, they NEVER care about your business the same way that you do.

Hiring can be hit or miss, sometimes people are good at pitching themselves or their services but then the delivery falls flat.

Make sure, that your initial contracts have either some sort of out clause or are for a short term to start, some sort of introductory period. You don’t want to get locked into something and then it doesn’t work after a month or two.

Some people will try to get you with the “Well, it’s going to take a few months to get things set up and optimized.” and this is usually a red flag to me, maybe not a deal breaker, but something that I think about before signing.

While yes, there is sometimes a setup period to get things created, it’s usually pretty quick, maybe a few weeks at best. Results should be near instant in today’s world. You can launch an ad or send an email and know the results within hours.

One bad hire I made was an ad freelancer. I was spending around $150-200k a month in ads, my first ad manager was slowly doing worse and worse so I switched to this new guy.

The new guy had a small base fee plus a percentage of ad spend. Not an ideal payment method, it would have been better to do a percentage based on performance, such as certain ROAS or profit.

Anyways, I fell for all the bullshit. And then, after months, it was just failure after failure. I will admit, he was good at pitching and sounding professional. He always made it seem like “this isn’t going the way I want but I know what to do and this is how we’ll pivot.”

I also always had to chase him for money. He automatically billed me and it was based on our starting ad budget, which we never actually spent, so he would have to refund me the difference.

Another example was a big fancy ad agency. After 2 failed freelancers, I thought it would be best to go to a big agency.

Utter shit from day 1. Poor results, always had an excuse, spent money to up their fee, just terrible. So bad, I use to have to go in and pause ads myself because they were asleep at the wheel.

The last example I will share was hiring an agency to build a new site. First, I don’t think I needed a custom site. This is some BS I fell into believing that to look like a big company, I needed a fancy and unique site, that just isn’t true.

Second, all they basically did were offer a little bit of “expertise” and be the middleman between me and some overseas devs.

With this particular example, what would have been a better use of money was hiring a conversion rate specialist or 2 and getting feedback to then work with a developer on Upwork to complete the work. It would have probably cost me 1/3 to ½ of the cost.

Hiring the wrong people is what I would consider one of the biggest failures for my business. It cost me hundreds of thousands of dollars.

Didn’t build proper systems

My business didn’t require a lot of

Didn’t build enough supporting content

My product was a bit unique and a fairly new concept. There was a level of product education that I didn’t meet.

I had numerous customers reach out and say they were expecting X when they got Y instead.

For example, they thought it was an entire tablet and not just a PDF document. Some people thought it was a standalone app that you downloaded.

I attempted to make it very clear in the headline and body but despite that, people still don’t read it.

I needed to add more education such as video tutorials, guides, and demo products. Letting people see how to use it, then try it themselves before buying it.

Build marketing channels properly

In the beginning, 70 or 80% of the revenue came from Facebook and Instagram ads. Google was maybe 10-15% and the rest trickled in from other sources.

What I should have done is really focused on 1 stream at a time. Picking the source I thought was best, learning it, and creating a system I can document and hand off to someone.

Instead, I was trying to do them all myself at the same time and then just jumping into hiring “professionals”.

The correct way would have been to figure out what worked with my audience and build a guide on what works, what to include, figuring out the content, etc.

For social media, you don’t need a professional. What you need to do is figure out each channel 1 at a time, create a guide on how to do it, then hire a $10-15/hr VA to schedule everything out.

Content is reusable and you can create new content periodically and hand it off to different team members to use.

This ties in with the content but I also regret not focusing on SEO in the beginning. SEO is something that takes time, sometimes you see results fairly quickly but overall, it takes months and years to really build out.

I should have taken ¼ of my marketing budget and put it into SEO and content. If I had done that, it would have really helped down the road when paid ads needed to be turned off.

Expensive isn’t always better

This was one of my biggest issues. I thought that because I was bringing in a lot of money, I should be spending it as well, you know, “investing in the business.”

I thought I needed to build a fancy store so I spent $30k over 6 months having a new store built, tested, and updated. As I mentioned before, I could have done this differently and saved a lot of money.

It doesn’t even apply to big purchases, it even comes down to smaller subscriptions. For example, I was spending around $600 for a rewards program (LoyaltyLion) and another $6-700 for customer service software (Gorgias).

Completely unnecessary, I could have paid $100-200 for all the seats I would have needed for support software (ReAmaze) that is basically just as good and $50-200 for a comparable rewards program (Smile).

You can quickly have 5-10 different software subscriptions and if you’re overpaying by hundreds of dollars each month, it adds up. Even upgrading to Shopify Pro, the features seem worth it and it seemed like the “professional” thing to do, it was $2,000/mo.

And as solopreneurs, that is money that could go directly into our pockets.

A quick guide to lessons learned

• Don’t hire or outsource until you absolutely have to and you have a system in place for that channel.

• When things go bad, act quickly to either make adjustments or cut it altogether. Most of the time, things don’t fix themselves and you’ll just waste more money.

• Slow down. You’re in no rush. Making $10k per month with a solid foundation is better than $100k a month with a shitty foundation.

• Build out the systems and give them time. As I said, you aren’t in a rush so you want to make sure things have a chance to settle so you can see if there are any cracks that form.

Where that leaves me today

Now I am in a battle to pay off the huge mountain of debt and it truly is crippling.

At this point, I have to be extremely careful with how I operate my business. Since basically any extra money goes towards debt, it doesn’t leave a lot of room for error.

Some people may say, why not call it quits and file bankruptcy sure, that is an option but at the same time, people have paid me over $2,500,000 for something. That is validation.

I just need to adjust, work the plan, get out of the hole, and rebuild from there.