How We Reached $50k/mo Despite Some Big Mistakes Along the Way

Hello! What's your background, and what are you working on?

I’m Evan and I'm a software engineer turned entrepreneur. Back in college, I studied computer science and took a job at a tech startup in San Francisco after graduating. As part of that job, I had the opportunity to lead engineering for a new business vertical and fell in love with the experimentation and the uncertainty of creating and building. From this, I knew that I wanted to be an entrepreneur but wasn’t quite ready to take the leap. After working for a few years, I gained the self-confidence to go for it.

Plain Jane is a CBD company. Like THC, CBD is produced by the cannabis plant, but CBD doesn't get you high. Generally, when people refer to the medicinal properties of cannabis, they’re talking about CBD, and most people aren’t aware that you can get these benefits without intoxication. I truly believe we’re the best CBD company because we offer the best prices and have unique products. And unlike the vast majority of companies, we don’t have middlemen—we’ve partnered directly with farms to bring customers the best prices. Our flagship product is a low-smell and ultra smooth CBD cigarette, which has the same potency of other CBD flower products but without that identifying weed smell. Of course, we’re also continuing to innovate and create new products.

Five months out from putting our products on the market, we’re generating nearly $50k/month in sales. We have customers in all 50 states and we’re in more than 25 retail locations.

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What motivated you to get started with Plain Jane?

At MIT, Duane and I grew weed in our dorm room. It was a fun experiment and we got to learn a lot about hydroponics and the plant itself. We never really thought it could be a job. After college, Duane started Miramix, a supplements manufacturing and branding company, and as I mentioned, I went to work for a tech startup in San Francisco.

We talked about starting a company for years, but the conversation changed in 2018 when California legalized cannabis. We saw the tides turning and knew we'd have to jump in or miss out in a potentially generational opportunity, so I quit my job and Duane flew out to San Francisco.

We’ve never been fans of the way we smelled after smoking or how much it made us cough. In college, we read about a way to remove the smell and harshness from cannabis on some online forums and thought it’d be interesting to experiment and see where we landed. For us, the final product was an instant hit. We could smoke without smelling strongly like weed and it caused much less throat irritation. We didn’t really see any products that offered these innovations and thought, “Why not us?”

Our friend, Lindsey, suggested looking into CBD products and helped us develop our first product. The more we learned about CBD, the more excited we became. CBD provides many of the physical benefits associated with cannabis, but without the intoxication. Lindsey has since joined us as a founder and is constantly helping us develop new CBD products.

I had struggled with smoking cigarettes since college and it felt important to me to create a non-addictive alternative. That’s what how we came to our flagship product: a low smell, ultra smooth, CBD-rich hemp cigarette.

What went into building the initial product?

I believe a product has to have some essential attribute that makes it different from existing products. It could be the price or a unique feature, but something has to stand out and demand your attention. To that end, marketing and branding are lagging indicators of your products, so simply selling something that’s already out there with a different label slapped on doesn’t really appeal to me. Most of the work of selling a product should be done by the product itself, so differentiation can be crucial for growth.

Our first goal in prototyping our product was to figure out if our identifying attribute—a low smell and ultra smooth weed—was an interesting concept to anyone. To test this idea, we bought some weed from a dispensary, processed it to remove the smell, and brought it to Hippie Hill (a location in Golden Gate Park in San Francisco that is infamous for its crowded cannabis celebration on 4/20). We printed out a bunch of surveys and went person to person, asking them if they wanted to smoke a bowl and see how they liked it. After about 50 interviews, we found that people who considered themselves connoisseurs of cannabis hated it, but the more casual smokers loved it.

This was a pretty positive sign that we were going in the right direction. We wanted to be polarizing; with a unique product, the worst thing someone can say is that they kind of like it.

There are a lot of people out there working on a lot of different products, and it’s important to understand why no one has created your product yet. Most people in the industry consider themselves cannabis experts with an appreciation for complex flavors and smells—they smoke too much to ever really cough and they don’t care about the smell. Our product isn’t for them and they make up most of the industry.

Don't overthink it. Figure out what makes your product special and copy the rest.

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When building our first CBD cigarette product, we spent more than a month designing and perfecting the box. We printed out numerous prototypes, folded them and determined a form factor we liked. We also wanted everything about our CBD cigarettes to be unique so we took a few creative liberties.

We added a compartment for matches, complete with a match strip on the bottom of the carton. This turned out to be a huge mistake. To this day, I cannot find a single cigarette box in the world that comes with matches. So in the past couple of months, we've taken out matches entirely and added what people really wanted: more hemp cigarettes. Similarly, the custom shape of our box turned out to be a big problem. It's difficult to manufacture and we are in the process of scrapping it for a more traditional cigarette box design.

When designing our product, we got caught up in thinking about our own idea of how the user experience should be, instead of interviewing people and copying what the market was already successfully doing. You have to know what your differentiation is and not try to make everything special and unique, especially if there are already great analogs to guide. Whatever that special something is, it can’t be a huge burden on any of the other processes that get your product out the door with a profit. We have now spent months undoing design decisions that we spent months creating. Don't overthink it. Figure out what makes your product special and copy the rest.

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How have you attracted users and grown Plain Jane?

We started with $60K in April 2018 and started selling the first product in June 2018. Initially, we had a very difficult time with sales. We didn’t even reach $1,000 in sales our first month on the market. It took us more than three months just to get to $5,000/month in sales. Our strategy has been pretty simple but the hard part is always the details. We've found success with micro-influencers, influencers, and, more recently, SEO.

The hard part with any social media influencer strategy is to find people that correctly target your demographic. At first, we paid anyone who offered to promote us. Big mistake. Once we got past the trap of obvious botnet accounts, we still weren’t always making money off of our influencers. On Instagram, an account with 100K followers is often worth less than 10K followers if your brand doesn't align well with the influencer. Over the course of a few months, we took the time to really understand our target demographic and how to find influencers that would work well with our brand.

We've also found success by partnering with influencers who focus on creating quality content and limit the number of products they review. If you go to someone's page and all they have is product reviews, beware. I gravitate towards people whose accounts are at least two-thirds educational and interesting content. Once you’ve affirmed that it’s a quality account, it comes down to pricing. How many views do you expect to get? What's the click-through rate? What's the conversion rate on your website? Often you'll have to spend some money to answer these questions, but that’s ok. Sales is all about performing small, cheap experiments and then scaling up what works. Do your research and find what has worked for other companies similar to your own.

After we understood how to grow sales, we found ways to scale it while spending less time on it. The nice part of an influencer strategy is that you can scale it by just working with larger influencers. This allows us to not have to put too much more time into growing sales while still being able to achieve 35% growth rates month over month.

Your word of mouth doesn't matter much if people can't Google you.

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Recently, we've begun to reap the benefits of our SEO efforts. SEO is a long tail game and you typically won't notice anything for months. It started out as a trickle at first, but now it’s overtaken our social efforts in sales. A big part of SEO is just making sure that when people Google your name, you show up. Your word of mouth doesn't matter much if people can't Google you. We've noticed that specific keyword targeting doesn't mean as much as just enabling people to search something like: “Plain Jane CBD” and see us there first. One day, we'll hopefully overtake the Plain Jane by A$AP FERG music video on youtube.

What's your business model, and how have you grown your revenue?

Our business model is simple: we make products and we sell them. Like everything, there's a whole iceberg under the surface. Early on, you say yes to everything. If a customer asks to meet you in a Safeway parking lot to pick up their order, you say yes (this actually happened). If they want a customization that you could never do at scale, you say yes. When you're just starting out, no one wants to talk to you, and that’s completely fair. Who are you? Why do you deserve their attention? Honestly, you probably don't. You have to work really hard with the early relationships to start validating your ideas and understanding the market on a ground level.

At this point, it's all about focus. A big unanswered company question for us is white labeling, a practice of rebranding your products with other distributors’ brands. We have retail and distributor customers asking us to create white label products, but at some point, you have to start saying no, which is easier said than done. You have to decide whether it’s worth it to maintain time-consuming relationships that you still have from when you were saying 'yes' to everything. My belief is that you should always cherish and value those early customers and partners but, at the same time, limit the requirements you're willing to accept from new ones. Reward the people who worked with you when you couldn't offer much but don't allow your energy to be split in a million different directions. If you know your base product works for lots of people, get it in front of more people instead of trying to make it more appealing to more people through new products or features.

Month Revenue
Aug ‘18 7000
Sep ‘18 5000
Oct ‘18 21000
Nov ‘18 22000
Dec ‘18 36000
Jan ‘19 49000

What are your goals for the future?

Our goal for the future is pretty simple: tobacco products are sold everywhere, hemp products should be too. A non-addictive alternative to nicotine exists, let's get it everywhere. The solution to nicotine addiction is not a slightly safer version of nicotine.

The biggest restriction on growth is capital. When scaling a software service, you think in orders of magnitude. With a product company, you focus on increments of around 30%. When bootstrapping a company, you have to pay for labor, parts, machinery, packaging, product before you actually get to sell it. The faster you grow, the bigger the problem is. We've partnered with farmers who give us generous net terms on sourcing flower but we have to pay six weeks ahead of time for packaging. You pay for tomorrow's sales with the money from today's sales. We're in the process of working with larger tobacco manufacturers to dramatically increase our production and lower our cost as well.

Especially in the hemp market, you cannot depend on investment. I'm so glad that we've built Plain Jane without an expectation of outside capital. We've never sold products at a loss because we thought we'd eventually get the costs down. Instead, we started with high prices and have dropped them over time as we can afford to. For example, our hemp cigarettes initially came in an 8-pack for $20 each. Now we sell a 10-pack for $11. Eventually, we hope to be competitive with cigarettes around $7 a pack. Right now, we can't do that. When you price your products, you have to be careful to consider the implications of the entire structure. If you price your direct-to-consumer too low, you won't be able to sell wholesale. If you price it too high, your wholesalers will start taking business away from you.

What are the biggest challenges you've faced and you've overcome? If you had to start over, what would you do differently?

If I had to start over again, I'm not sure what I'd do differently. Obviously, if I could go back in time, I wouldn't make any mistakes. But mistakes are necessary when creating a business. Mistakes = Learning. Some people have an aversion to saying they’re learning because it means that you're admitting you don't know how to do something. But that's OK.

Mistakes are necessary when creating a business. Mistakes = Learning

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If anything, I'd try to make my lessons cheaper. I spent too much money on my experiential education. For example, we spent a few thousand on PR people. PR takes a lot of time and the payoff isn't immediate. For a small, early stage company, a long sales cycle is a killer. We had to stop working with our PR people before we really even gave them a chance to succeed because we couldn’t afford it.

Online sales are great because the payoff is immediate. With paid advertising, you pay for a click. A click turns into a sale very quickly. Taking into account the payment processor time, you should be able to turn money around in less than a week. As we've expanded, we've been able to invest in more profitable sales with long lead times. The key is scaling it up within financial reason.

Have you found anything particularly helpful or advantageous?

I like reddit, /r/entrepreneur, /r/startups, /r/shopify are all great. Before I became an entrepreneur, I read many entrepreneurial books, fantasizing about one day starting a company. I don’t read many of those kinds of books anymore. I tend to focus on short, bite-sized blog articles and podcasts that help me accomplish some immediate goal. I'm still glad I've read them, though.

Something that many entrepreneurs don't talk about is their support network. I'm surrounded by a loving girlfriend, family, and group of friends. Being an entrepreneur is very lonely. There's no validation structure baked in like quarterly reviews or 1-on-1s with your boss. The business either grows or it doesn't. My whole mood could be thrown off by a bad sales day. If there's anything I would absolutely recommend, it's the strong support of good people in your life. Having this puts everything in perspective. Even with all of the pressure of the business now, I always make time to call my girlfriend every day so we can play a New York Times puzzle game together. Managing your psychology through the ups and downs of a startup is challenging enough, no need to go in alone.

What's your advice for indie hackers who are just starting out?

One area of advice I’d have for other software engineers starting a company is that you should build in runway for the adjustment. Remember what it felt like to learn how to code? The first few months of trying to make the most basic thing happen was tedious and painfully slow. Learning to start a company is like that except you’re worried about running of out money at the same time.

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Where can we go to learn more?

If you have any questions, I'd be happy to give you my best approximation of the answer.

A couple of my favorite Plain Jane blog articles: Why hemp is so expensive? and The ancient history of hemp

We’re at @tryplainjane on Instagram, Twitter, and Facebook Website: https://tryplainjane.com Contact: [email protected]

Evan Marshall , Founder of Plain Jane

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