[00:00:00] The Venture Podcast with Lambros Photios.
[00:00:06] This morning, I’m talking to a gentleman whose name is Simon Griffiths, and that that name may not mean much to you, but it definitely will by the end of this podcast. He started a business with his co-founders in 2012 code who gives a crap hilarious name. I know the business started with the intent of selling well rolls of toilet paper, and it was started with with a mission and a brand’s purpose. That is admirable. And it’s the reason I wanted to chat to Simon is what they’re doing with the business. I’ll give you a bit of background about them. They started in 2012 with a crowdfunding campaign that started with Simon, who’s joining me. He sat on the toilet for 50 hours to generate 50 grand through crowdfunding and then leverage that with bootstrapping to push his business forward further and further. And it was through the panic buying that happened during covered that the business secured huge amounts of revenue growth and is now pushing five point eight five million dollars to fund six charities. Simon, I think that pretty much sums it up in a nutshell. Thanks so much for joining me.
[00:01:10] Yeah, thanks for having me. So, Simon, let some tell me about the story. I mean, sitting on the toilet for 50 hours, you know, it’s it’s to raise capital. I’d probably say that that’s that’s a bit more intense than than most fundraises. Can you tell me a bit about what that experience was like? Yes.
[00:01:27] I mean, when we when we went to crowdfund this, it was 2012 had been six one million dollar crowdfunding campaigns that had happened kind of before we launched US Dollar Shave Club and launched their viral videos six months earlier. Warby Parker was just getting started. So it was kind of pre the direct consumer movement kicks. Kickstarter wasn’t yet a household name. And so the landscape was quite different. And we knew that we were crowdfunding the sporting products that I funded.
[00:01:54] You know, we’re talking about toilet paper. And so we had to think about our products a little bit differently. And so one of the guys working on the campaign had this great idea that we should shoot the whole campaign on a toilet. And I should pledge to to not get off it until we presell the first fifty thousand dollars worth of products. And so we live streams that that means sitting on a toilet in a warehouse. And I think we started at six a.m. on a Tuesday morning and I got off at eight a.m. on Thursday, two days later, which was a pretty mammoth effort made, I think.
[00:02:23] I think there are a lot of messages that go through someone’s mind to found his mind when they’re going through really intense moments, whether it’s product launches or anything else.
[00:02:31] I can’t say I’ve spoken to anyone who’s spent 50 hours in a toilet. What was going through your mind during all of that?
[00:02:36] Yeah, I mean, I think when we when we first started, we really thought, you know, this is either going to be like over in twelve hours, it’s going to go viral really fast and we’ll be done or it’s going to fail. And we’re going to be here for like a week or two hakes or whatever. And we can have to get like a doctor to come in and, like, relieve me of something. But it kind of ended up somewhere in the middle. So which was a bit of a rollercoaster.
[00:02:57] And we kind of launched early in the morning to try and get into the the the US media stream before everyone went to bed. And then fortunately, I guess we got picked up quite quickly by national television in Australia and then when it went viral quite quickly on social media and eventually got like national print coverage and everything else.
[00:03:16] And we were crazy popular in Brazil and Greece, of all places. Who knows why? But we got embedded onto the home page of the largest Latin American newspaper in the world. And so we thought that overnight I’d get a bit of a break because no one would be like watching the livestream. But because we had all of these people in Brazil watching, I actually couldn’t get off the toilet. And so we’d have this plan that I could kind of sleep on the ground with my arms, like, you know, still touching the toilet. So I was I was on it in inverted commas. But in the end, I had to I had to sit there the whole time, which was a bit of a shock for everyone.
[00:03:49] I don’t know if you’ve ever tried to stay up more than 24 hours in a row, but you start to hallucinate like your body kind of starts to shut down and not work properly. So I was like, you know, trying to do like Trump, trying to drum up interest on Twitter and all of the like, static jpeg, you know, Avatar images were turning into GIFs that were like jumping out of the screen and like moving around. And it was really like hard to focus and kind of make everything happen. So that was kind of the hardest part of it, was that, you know, after 40 hours of being awake, your body is really, really like not used to doing that and you’re trying to shut down.
[00:04:26] And so my body was trying to make me fall asleep in different ways. I kept loosening those alleged next to me that I could lean on for a rest. And then I’d like, oh, let’s fall off the toilet. So it was quite a bizarre experience, the whole thing, but amazing way to get started. You know, we got our first 1000 customers use the capital from that took place, our first production run office purchase order. And then those customers were what helped us to grow. You know, they taught the people about what we were doing and that’s how we got up the initial word of mouth interest around our business, which is what we’ve relied on for most of our growth today.
[00:04:59] That’s crazy. Yeah, the the old ideas. Look. There’s something else there. That was a I remember those and all, not that I had to pull once for a product release, that which is which is funny, I expected at times for first startup. The problem was that I’d send you to podcasts with the co-founder of Netflix after 30 hours of being alike. To this day, I don’t remember doing the podcast and I’ve never listened to one of my podcasts because I can’t stand my own voice. So I don’t know if it was any good. I’ve been told it’s decent.
[00:05:31] Well, yeah, it’s good. Yeah, your body starts to do audio at that point. And I’m not I’m not someone that I’d never pulled an all nighter at uni. I haven’t pulled the work either. So that was the fifth time. So I’m not like conditioned to. So it was quite an experience kind of going through that.
[00:05:49] Yeah. Yeah. Go down, man. So let’s yeah. Before we get to I guess 20. Everything that’s happened recently was I really want to talk about what you guys are doing at the moment because it’s quite exciting. Talk to me about the grass.
[00:06:02] So you’ve gone from kind of 2012. We did the initial crowdfunding you bootstrapped, which I absolutely love because I’m very fond of bootstrapping businesses. I think it I think it teaches you a lot about scarcity. And I think that my my, my, my my belief is that anyone who’s going to go for a fund raising process should have had expertize with bootstrapping, because I think it teaches you to really, really be respectful of every dollar you’re spending.
[00:06:31] Particularly because it’s at the end of the day, it’s it’s it’s kind of money out of your own pocket in some respects. Yeah.
[00:06:38] I think it teaches you where to focus on what’s important as well. Yeah, that’s right. You kind of really narrow down on what are the right metrics for us to be tracking in order to make this business kind of grow at the pace that we wanted to, which is a great experience. So, yeah, so. So I guess some. Yes. The kind of story I guess was that we landed our first production run in 2013. Honestly, we thought people wouldn’t buy toilet paper online. And this is kind of before the direct consumer movement took off. And so we were sending product out to our crowdfunding campaign supporters, you know, incredibly thankful, not expecting kind of out on lines that was to really go anywhere. And we thought supermarkets would be the distribution channel that we really needed to focus on. But without us doing any marketing or sales, our daily sales right from our online store started to double day on day. And after five days, we sold out of a complete supply that we thought was going to last three months. And so we were out of stock incredibly quickly. And when we we weren’t quite sure how that had happened because we weren’t doing any marketing ourselves. And we realized basically our customers were taking rolls to work, giving them to friends and family, telling everyone they knew about what we were doing, and posting photos of us all over social media with their pets and their kids and all sorts of stuff. And so we created this kind of word of mouth groundswell around toilet paper, which had never, ever happened anywhere in the world before. As a result, we realized that, you know, online business could probably be a much bigger business than what we originally thought. And so we kind of tripled down on our order volume and had enough money to pay the deposit for that order, but knew that we had to find fifty thousand dollars before it landed in eight weeks time. And that was the that was how we kind of got into this this mindset of, you know, what’s important and how quickly can we can we turn stock over in order to pay for it and and sort of modeling out all of the financial implications with this eight week horizon where we had to find fifty thousand dollars to make it all work. And as part of that, you know, I did I sat down with someone who was actually planning to, like, ask to be an equity partner in our business. And he said to me, you guys are doing such an incredible job, just so close to being break. Even if you can just get through this next hurdle, you’ll be able to grow the business for a while without having to sell equity to anyone, which will put you in a really great position. And so off the back of his advice, instead of asking for it to be an equity partner, I said thank you for lunch. This has been awesome. And went away and start to think about, you know, what are the other ways that we can fund this. And I was really fortunate to meet a philanthropist who was helping me to think about the philanthropic side of the business. And he said, you know, what other problems that you faced with? And I said, oh, we’ve also got this fifty thousand dollar stock problem that I’ve got to solve. He said, well, maybe I can help you with that. And three weeks later, he became office debt holder. So he wrote us quite a high risk piece of debt that helped us to cover the cost of that that second purchase order that we made and off the back of that said, you know, repay it in 18 months. All of the interest that you generate, instead of giving it to me, you’re going to donate it to a water based charity of my choice. So from our point of view, that was a really great piece of capital. That was quite high impact compared to any other capital that we could take. And that he is incentives are really aligned with us. And we ended up repaying that debt in five months instead of 18 months. And he said, great, you know, I’ve never seen you in repay debt that quickly. You guys are obviously doing something right. If you want more money, let me know. So we ended up going back and we we borrowed four hundred thousand dollar debt rides with him and another party kind of pari passu and then repaid that and taking a little bit more. We repaid all of that. So we’ve been debt free for about 18 months now. I don’t think at our peak we had about a hundred thousand dollars of debt in the business and we’ve really kind of gone and executed on what our financial model told us we could do in order to be profitable and cash flow positive kind of on the time horizon that we felt was possible. It got pushed out a little bit because we ended up going international and needing more working capital as we open more warehouses around the world. But in general, we’ve kind of been able to show that that first financial model that we wrote was actually correct. And we got to execute on that and we’ve been able to make it work.
[00:10:52] Yeah. Let’s talk a bit about debt versus equity and prelude. This isn’t financial advice for our listeners, I think. I think there are two trains of thought. I think one is to go down the path of bootstrapping, which I’m going to talk about.
[00:11:10] The perks of the other side is obviously getting external an external investors, which you had the opportunity for there, and you turn it down. I’ve seen businesses where they’ve gone through capital raises and it’s helped them to grow a lot faster. I’ve also seen businesses that have gone through capital raises. They get to the end of their journey. They go through an exit. They sell the business. And they only had five percent. And they left scratching their heads thinking, jeez, I put my blood, sweat and tears into this.
[00:11:36] On the flip side, debts got a really negative perception, just as a word. I think in society we’re taught to hate it. We had to talk to me about your decision making process there and why you decided to not part ways with equity and look at other options.
[00:11:49] Yeah, I guess some you know, first and foremost, I’ve got to say, I’m a huge bootstrapping fan. I think it teaches amazing discipline and rigor. It teaches you what are the absolute core metrics that we have to focus on, which for us became around cash flow and kind of monthly monthly order book that we were placing. But I’m also not not A.B.C.. I think this is also great selling equities. Great. It depends on what type of business you’re running, what stage you’re at and what all of the kind of risk and cash implications are for the business moving forward. I think in our business, you know, we have to date not taken on equity partners, but it’s not to say that we wouldn’t. There’s definitely potential to do that in the future. It’s just that the path that we wanted to go and execute on, we believed we could do that without needing to bring equity into the business. At some point that that may change. You know, our vision may change or the way that we want to grow, the business might change. And as a result, our capital strategy and how we think about debt versus equity will potentially change as well. But I think, you know, I think you’re right. Debt does certainly have a kind of negative perception, particularly in Australia and particularly for younger businesses. And I think that that’s that’s I think it’s fair. Like, you do have to really understand how to use debt and be very careful with it, because it often comes with very strict covenants, which means that if you do lose control of the debt, you actually lose control of the entire business. Whereas with equity, you’ll still have your stake. It might just mean that you get fired as CEO and someone else kind of comes in and runs the business. But you’ve still got your stake there. And so you need to be really hyper aware of what are the covenants that are coming with this? Are we truly comfortable with those? Are we certain that we can execute on this on this this next direction without breaching those covenants? And therefore, is debt the right financial instrument to be using in this in this instance? And we’re probably pretty lucky that as a founding team, we’re quite financially literate. So we’ve got one of our founders. It’s been a few years at Boston Consulting. Very briefly worked in investment banking. And so between us, we can piece together the financial models that we need to to show, you know, whether debt’s the right tool for us. But that’s certainly an amazing place to come from as a founder. If you’re going to go down that pathway, because it is a it can be a dangerous tool if it’s not used correctly.
[00:14:17] Yeah, like I guess like they say they can hit dangerous tool if it’s not exactly like this is what people don’t realize. This is at the start of a business like you. You don’t have a product, you don’t have stock. So I think the reality for a business at the very start is that, you know, equities, equities, your most valuable asset. And it’s a lot of the time it’s all you’ve got. People are so eager to part ways with that, not realizing that, you know, five, 10 years down the line, it’s most likely still going to be the most valuable asset. So you really should be holding it close. I think a lot of people get emotionally attached to their equity at the same time. So I think there’s a bit of a tradeoff. But I think when when it makes you I don’t think people should be so willing to part ways with equity as well. I think that it definitely needs to be something that’s that’s how it’s. Surely. Yeah.
[00:15:04] The other the one of the challenges is probably worth talking about there is that also when, you know, typically when you take venture capital, you are signing up to sell the business. And that was and often on like a pretty well predetermined time horizon, you know, a five day time horizon. And for our business, because we’ve got these 50 percent donation mechanism embedded into our Constitution. It’s part of, you know, the trust that we have with our customers. You can never change. But we weren’t sure as a result whether this business could be sold in the future. Could it IPO, would it stand up to the COPS Act requirements of the directors to ensure that they’re always maximizing shareholder profits if it’s donating profits? We’re not sure. You know, could it be an acquisition target of a Unilever, someone like that? When we started, all of that was uncertain. And so we didn’t in a way, we didn’t have the luxury of saying, hey, there’s a clear exit strategy here. And therefore, we know that this is possible and venture capital makes sense. And so we didn’t want to run into the potential mission drift of selling an equity stake to someone that needed to exit when we weren’t sure if we could exit without changing the donation mechanism embedded in the business. So that was the other consideration for us. Again, I think the markets shifted a lot in the 10 years since we kind of first had the idea. And now I believe that businesses like us could potentially exit in the future. And so Venture does become part of the toolkit that can be used for businesses like us.
[00:16:32] Yeah, that’s really good advice. I think you’ve you’ve underplayed how valuable that is. So I hope our listeners tuned in. One thing. Let let let’s fast forward to 2020. Everyone knows Ozzy panic buying. And I don’t think it was just Australia. There are a lot of countries, I would say, that had the same thing happening.
[00:16:51] But when Kovik shock, that was panic buying toilet paper. I want to read this stat out real quick before before I handed over to you. So I got this early March this year.
[00:17:02] Twenty twenty. Who gives a crap? Saw a eleven hundred percent increase in demand for products and then off the tail end of this had to try and twenty five freelances in less than a week to the point that they broke their inventory management software, which is a big deal. And at the same time have as we know, pledged 50 percent of their profit charity, which is incredible night. Talk to me about March calling me the story, man.
[00:17:33] So, yeah, I guess it probably started in January, February, when we saw Hong Kong had panic buying of toilet paper, then Singapore, Japan, we were kind of looking at it going know this is strictly. But sure enough, the last few days of February, we started to see daily sales increase. And then the first couple days of March, there they were up like 400 percent and then eleven hundred percent. And then the next day they were going to like 3000 per cent, 4000 percent increase. And we just said we have to turn our store off because when we’re selling more than a month of product in a day, we don’t know how much inventory we’ve got. And we will potentially short stock and then not be able to to provide us subscribers and our business customers who rely on us to make sure they never run out of toilet paper with the toilet paper that they need and we’ve promised to give them. And so we moved our Australian store to sold out. And shortly after we saw the same thing happen in the UK and then in the US. And so we were kind of sold out globally. We turned on an email sign up expecting that we’d get a few thousand people wanting to be notified. When we were back in stock, we had more than half a million people sign up for that email list, which is, you know, from from a like an entrepreneurs point of view. It’s on one side, incredible. You’re like, wow, so much demand there. But on the other side. Terrifying because it’s too big an email list to ever be able to work through it in a reasonable timeframe. And so a team was kind of scratching their heads going, you know, what do we do here? Like, this is the biggest problem we’ve ever had to solve. But in a way, as a distributed team selling toilet paper online, it was like we’d been training for this moment for the six years prior. And this was our moment to shine as a team. And so everyone really dug deep and started kind of thinking really creatively about what we could do. And we realized that we need to get toilet paper to the most people possible. And so we, as you said, turned on, oh, we got twenty five freelancers that we trained up within a week to triple the number of customer service inquiries that we could respond to. We got our large forty eight roll boxes and packed them into two smaller twenty four row boxes so that we could send out twice as many orders and we create an invite only version of our website and then slowly kind of drip sent invitations out to our waiting lists knowing what the know what we thought the email conversion would be for, for sales and then slowly works through that. You know, I think it end up being like more than. Two thousand people on that waiting list over a six week period. And so we basically, like took all of our inventory management systems, our warehouse carias. We pushed them as well as our kind of customer service team. We pushed them all to the absolute maximum limit of the number of orders that they could deal with in a day. And as a result, went through that at least as fast as we could. And so it was from my team’s point of view, you know, incredibly exhilarating but exhausting work because we were moving so quickly. Things were, you know, we had really great strategy behind what we were doing. But inevitably, we’re doing things for the first time. And so I imagery management system kept breaking because working the Shopify API too quickly, you know, our warehouse. As a result, didn’t get a day of orders and then had two days of orders that were bigger than what a regular wake would look like kind of coming to them the next day. So we had lots and lots of problem runs through that, which was super challenging. But I guess for everyone, we knew that because we donate half of our profits, getting those month right was going to ultimately end up in this massive donation come June 30. And so we were kind of digging deep knowing that it was our duty to get toilet paper to as many people as possible. And the end result and the silver lining was that that would allow us. I mean, this massive donation at June 30 as well.
[00:21:23] Yeah, awesome. Why is it like the sort of business why is it that you chose to give? Give that 50 percent of profit to charity.
[00:21:30] Ye ah, I mean, it was it’s really the reason why we got started. So know, two point three billion people globally don’t have access to a decent toilet. Doesn’t sound like much, but if you can imagine going just a day without a toilet, it’s pretty horrific from a dignity point of view. But then also from a health point of view, because you end up with the bad stuff ending up in water that’s used to cook, clean and wash. And that results in diarrhea-related disease that’s basically the number two killer of kids under the age of five. So it kills about 700 kids under the age of five every day. And it’s the largest filler of hospital beds in sub-Saharan Africa. So from an economic standpoint, it’s hugely devastating. All of the kind of data and research shows that if you invest a dollar into sanitation, you’re getting a five dollar 50 economic improvement because people are living longer. So they’re able to be more healthy and work more. But we also see things like school attendance rates go through the roof for teenage girls who don’t have anywhere private to go at school. And so, you know, the numbers suggest that the more money we can get flowing into the space, there’s a huge R y there. But we just simply haven’t been able to get enough money flowing into the sanitation space fast enough. And part of that’s because it’s a pretty icky gross topic to talk about. You know, it’s not like great dinner party conversation. So unlike clean water where you’ve got these beautiful pictures of kids drinking clean water out of a well, for the first time, we’re talking about toilets, which are like, you know, it’s something you don’t take photographs of and share. And so we saw that there was this opportunity to try to work with the products that we all made every day, start engaging people in this conversation about what it was actually used for and why that’s important all around the world rather than, you know, the marketing that all of the incumbents were doing, which is about puppies and pillows and feathers and cushy beds, which just aren’t related to the product at all. And so we thought there’s an opportunity to build a great brand here that can cut through and be a real kind of human brands.
[00:23:30] But at the same time, deal with this very serious issue that’s lagging because it’s having trouble having getting people to talk about it because it’s becoming gross. And so that was sort of the the aha moment that that brought everyone together. And if the sanitation problem didn’t exist, then, you know, who gives a crap? Wouldn’t be a company today.
[00:23:50] Yeah. It’s an incredible story. It’s great. Yeah. It’s I think it’s phenomenal what you’ve done with the brand. I think there are a lot of companies that can learn from what it is that you’re doing. So, so well done with that, Simon. The last thing I just want to chat about really briefly and not to deter from that really powerful message is how things are going now.
[00:24:14] You know, post that spike, I’ve seen my fair share of instances where a company will get a lot of attention due to something happening in the market. Those kind of macroeconomic factors, and then probably play their cards terribly after that spike and not kind of leverage it with the exception of, I assume, excessive CRM face due to the size of your database now. How is it that you’re kind of leveraging the increased awareness of your brand and what’s happened to keep driving things forward and potentially accelerate your grass as well?
[00:24:48] Yeah, I mean, for us, it was really the last few months have just been this big step change in our business.
[00:24:54] And it’s really interesting, actually, looking at the toilet paper category more broadly. So when you think about supermarket sales supermarkets, are the toilet paper actually lower than what they have ever been in the last five years at the moment, because people have stocked up and now they don’t need to buy. And so there’s this huge slump across the category. But in the online sales channel, you know, with people wanting to buy online more than ever before because they don’t want to leave the house and go to supermarkets, we’ve actually seen our sales kind of pick up through that period because, you know, the sales channel of online sales channels outperforming the category. And so that’s a really interesting phenomenon.
[00:25:33] This acceleration towards, yeah, digital purchasing has just been amazing and awesome to kind of be at the forefront of that for the consumer packaged goods kind of in Australia in particular. And so now we’re really focused, I guess, as ever, really kind of listening to our customers and making sure that these new customers that we’ve brought into our business a big service as well. And we’re we’re making sure that we’re not dropping the ball and having our customer service response times blow out as a result of having more customers in the business, for example. So really just kind of focused on making sure all of those metrics that ladder up to P.S., we’re kind of focusing on those and getting those right and really listening to our customers to make sure that we’re not dropping the ball on anything else that’s that’s going on. So, yeah, it’s been it’s been quite a amazing kind of moment for us to go through this. As I said, this kind of. Great sort of step changes the business, which is super exciting to see for anyone in any business anywhere, I guess. Yeah, it’s really good. Really, really good.
[00:26:37] Cool. All right. Let’s wrap up this woman. For those who are interested to read more about who gives a crap.
[00:26:43] The website is very simply. Who gives a crap dot org. Simon, well done on everything that you’ve done. Not just with not just with the brands quarries, but with that with that huge donation that you guys have done. My hat’s off to you. It’s great. And I wish more brands had that had that mindset. So. So well done with the brand and good luck over the next over the next few years as that growth continues. And yeah. Just looking forward to seeing how this story unfolds.
[00:27:10] Yeah. Thank you. And I think, you know, what we’ve really tried to show is that profit and purpose actually work together and reinforce each other and make the business proposition stronger. So hopefully we’re going to see more businesses adopting that approach and realizing that profit and purpose actually work better together rather than being these opposing forces. So, yeah, that means we’re seeing more businesses like us in the future.
[00:27:35] Yeah. Great. Thanks, Simon. Really appreciate your time this morning. Thank you. Great. The venture podcast with Lambros Photios.