It was a sunny day in both Portland and San Francisco when we chatted with Jesse Richardson, the CEO at Subscription Catalyst. Sub Cat partners with the world’s biggest brands, influencers and celebrities, to develop ecommerce and subscription businesses. Just turning two years old, Sub Cat has already worked with Amber Rose, Reese Witherspoon, Cindy Crawford, Tyra Banks, and more. But this isn’t Richardson’s first rodeo.
How Did You Get Involved In This Gig?
Located in Portland, Richardson has always been up to date on e-commerce trends and practices. He’s educated other entrepreneurs at Subscription School, and his website is a treasure trove of e-commerce business tips and resources.
Previously Cratejoy’s Community Marketing Manager turned CBD entrepreneur, Richardson was stolen back into advising by Sub Cat. With partner Barrett Wissman, a talent agent who has written for Forbes, they started Sub Cat just at the tailend of 2016. Sub Cat partners with the world’s biggest brands, celebrities, and influencers and helps them develop successful subscription box businesses.
Instead of “paid sponsorships or one-off deals where they work with a brands,” celebrities and influencers were able to have something of their own. “Everybody has that natural inclination to have their own thing. Subscription boxes seemed like an interesting choice for some of them because a) the verticals they were in and b) the sustainability of recurring revenue versus ‘oh I gotta go chase down 10 deals this month.’”
While we might be star struck by Richardson’s clientele, he is not, “I’ve worked with a lot of celebrities and influencers before. I used to babysit cindy crawfords kids. I was always involved in the industry some way.”
Who Were Your First Customers?
Starting out with Sub Cat, there was definitely a focus on people who were Instagram and Youtube famous. “2017 was very much our influencer year. We worked with more influencers and did more influencer pitches than celebrity pitches. Like Sazan Hendrix, who did Bless Box with us. Pitching with Alexis Ren, an instagram influencer. And those people were awesome to work with.”
Richardson was actually surprised to learn, “Though you might expect maybe the younger generation of social media stars to be a little more internet savvy than a celebrity counterpart....None of them had email lists. There’s still a lot of learning that they’re doing as young entrepreneurs too. I naturally assumed,’oh if we work with this youtube star, they’ve got to have two million emails addresses, right?’ That’s actually not the case.”
That wasn’t the only nugget of knowledge Richardson has learned about influencers, “Their numbers actually truly convert to buyers. It really depends on the funnel you put them in. Someone might only have 450,500 followers, does 1% convert to subscribers? Does 10%? And what we really learned: it totally depends on how to speak to them, and how you get them opted in from the beginning.”
Richardson built a system about boxes, focusing on the prelaunch: a soft launch, a lead funnel. They would push traffic to a page and only ask for an email address. “That works really well with this type of audience.” With social media, nine million followers sounds exciting, “but it’s ultimately untouchable and basically untraceable.”
When it came to 2018, Sub Cat worked more into celebrities. “We worked with Amber Rose. June Shannon, aka Mama June; we just launched her first box. Phil Heath, who is Mr. Olympia. People in the MLB, people in Nickelodeon. A lot more TV or sports related personalities.”
Even though Sub Cat has been around for almost two years, Richardson still considers all these people his first customers. “We’re still a very small startup. We’ve grown a ton, but we’re still very new at what we’re doing in terms of scaling an in-house incubator for celebrity brands. And we now work on a half dozen brands with one team. We’re still learning the ropes in terms of dealing with these people, how we’re structuring deals, and how we’re leveraging their resources with ecommerce best practices.”
What Challenges You've Overcome or are Facing Today?
Richardson’s main challenge is staying stable with marketing, “that’s a constant challenge not only for subscription business but for any business. There are a lot of experts that we’ve worked with that I feel like are still shooting in the dark.”
Other than that, Richardson can’t think of anything else, “we have a fantastic team that does branding, product sourcing, operations, fulfillment, logistics. We’ve really built a team where this is our core competency.”
How’d You Come Across Arka?
When it comes to partnerships, Richardson works with a variety of people always based upon two different things: 1) pricing and 2) existing partnerships.
Richardson laughed, “this guy Phil kept emailing me over and over again.” (Phil being the CEO of Arka). While Richardson was at the time doing subscription school with Cratejoy, he and Phil chatted and got the ball rolling on their long-term partnership. “We did a bunch of projects together, and now it’s become a staple.”
Sub Cat primarily uses Arka now, “for all of our prototypes, proposal decks that we’re creating for people. Arka’s the fastest turnaround time for the highest quality product. We just can’t find people who can match it. I’ve worked with dozens of people. I can get something done with Arka before someone gets back to me with a quote. The speed is totally ludicrous. For our litho label, and our really intricate, difficult boxes. Arka always has really competitive prices and really high quality.”
How do you come up with the packaging for your clients?
Sub Cat usually comes up with everything 75% of the time, “we come up with the brand mark, colors, packaging concepts. There are times when we have a partner that has something developed. Amber Rose is a great example. She’s got Slut Walk. Her fonts are already prepared, her colors are already prepared. So we really piggy-backed on that brand because we really wanted a synergetic mix between Slut Box and Slut Walk.”
When it comes to choosing packaging, there are two points Richardson focuses on. What’s inside the box, “is it a full size, medium box? Is this a sample mailer?” And shipping, “how are we shipping this thing? We use USPS for everything. Pirate Ship is our number one favorite partner that gives us amazing rates.”
Final Thoughts
If there’s any advice you’d lend to new e-commerce entrepreneurs, what would it be?
Richardson did not hold back on this one. “Let me put on my Mufasa hat.”
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You will fail, and accept it. “Just prepare, and you’re going to feel like shit. That’s just the way it is.”
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Just because someone else is doing it, doesn’t mean you shouldn’t or couldn’t do it better. “Everything is a repeat. If you see something you love, and you want to replicate it, by all means, do it.”
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Test everything. “Down to the people you work with. Everything digital and analog in your life. You need to be able to discern what works and what doesn’t very quickly as a new entrepreneur, especially if you’re bootstrapping it.”
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Read a shitton of stuff. “Read all the time. It depends on your space. Be educated on your space. That could be about competitive advantages, or just best practices.”
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Get a mentor. “You should absolutely reach out to people for help. For a new entrepreneur, you go to the entrepreneur Reddit. You find people.”
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You cannot run away from your customers. “One thing that I do, every single morning, I start my day with customer service. Whether that’s responding to comments on Instagram, or going through emails. Or just sitting down with the customer service team. It’s one of the most important things - reading and reviewing what customers are saying. You need to have those conversations.”
Most importantly, Richardson wants entrepreneurs to have fun. “If you’re not enjoying it, you probably should be doing something else.”
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