Aaron Marino says he hates to read. He’s bad at grammar and writing, he claims. But he’s really good at making videos.
“I had a fitness center that didn’t work out,” he told me. “I started making YouTube videos in 2008 with no idea that I could ever make a buck on that platform.”
Fast forward to 2020. Alpha M, Marino’s YouTube portal, which focuses on male grooming and fitness, has 6 million subscribers. It has spawned multiple ecommerce businesses, including Pete & Pedro (haircare), Tiege Hanley (skincare), and Enemy (sunglasses).
He’s an influential, serial Internet entrepreneur, in other words. My recent conversation with him addressed employees, letting go, and blending lifestyle with work. What follows is our entire audio conversation as well as a transcription, which has been edited for length and clarity.
Eric Bandholz: Let’s talk business. Was Pete & Pedro your first go-round into ecommerce?
Aaron Marino: Yes. I’m 44 years old. I had other businesses before finding my home on the internet.
I had a fitness center that didn’t work out. I started making YouTube videos in 2008 with no idea that I could ever make a buck on that platform. I had no idea that there was any way to monetize what I was talking about.
So I started to look around. I tried my hand in creating an information product. The problem is I hate reading, and I’m not good at grammar or writing. So video is where I was more comfortable.
One day I decided I was tired of using American Crew hair products. I love hair. I love cutting hair, styling hair. So I went to my friend, Steven, who’s a hairstylist. I asked, “Where could I get some products made?” He gave me a phone number. I vetted about three to four private label companies. That’s how Pete & Pedro started.
My first manufacturing order for Pete & Pedro was five products, 96 units of each. They sat in a spare bedroom of mine. The first year I had $34,000 in sales. So, yes, that was my first ecommerce business. Although I also just tried selling beaded bracelets. But I was beading bracelets all night long. That model definitely was not scalable.
Bandholz: One of the things I always admired about Pete & Pedro is how lean you keep the business. It blew my mind the amount of volume you were able to do with few employees.
Marino: I’m still super lean. I have five employees. We’ll do close to $5 million this year. So that’s pretty good.
I’m not opposed to hiring more. But the people that I have are so effective and amazing. We use temporary agencies when we need help. But we don’t bring people in full time.
A designer helps me with logos and packaging. Another contractor produces our newsletters. But I have just five full-time employees that work exclusively for Pete & Pedro.
Bandholz: How are you able to run a $5 million company with five employees?
Marino: Everything changed for Pete & Pedro when I hired somebody. A friend of mine that I had met through the grooming industry, Mike Levy, approached me and said, “Hey, I think that you are missing out on an opportunity. Why don’t I come on board and help you?” At the time I was a control freak. I replied, “No, no. I’m good.” At that point, I was growing. My numbers were doubling year after year.
But then it hit me. Pete & Pedro was around $2 million in revenue. I realized that it’s a real business here, and I needed help.
That was one of the reasons why I went on Shark Tank the second time with Pete & Pedro. I knew I needed help. I’m not good at a lot of things. What I’m good at is talking on camera. This is pretty much what I’ve come to realize.
So I hired Mike Levy as the marketing director. It’s been a little over a year. He has been the single biggest game-changer for our business — having a strategy and getting into the numbers. So I give him a lot of credit.
Bandholz: One of your most understated skills is being able to identify talent and give them the freedom to succeed. You have five companies. What are your secrets in finding good people?
Marino: I’m not that smart in identifying people. The owner of the advertising agency is my best friend from high school. He happens to be an amazing salesperson.
The biggest wild card for me was when I started Tiege Hanley, the skincare company. I was going into business with two guys that I didn’t know. I didn’t know their history. I didn’t know their work ethic. But I knew that they wanted to do something amazing. So I decided to participate. We pooled our skills. All three of us believed in the company.
Everyone else that works for me is a friend. So most of my hires are friends and people that I’ve gotten to know over the years. I knew them before I hired them. So there’s no real secret other than surrounding yourself with smart people that you trust.
Bandholz: Another word to describe your success is hardworking. Tell us what the average day looks like for you and your employees.
Marino: They work differently. None of them punch clocks. I don’t care when they work or don’t work. I care about execution. I care that they get the job done. If things are getting done without mistakes, then I’m good.
For me, yes, I work a lot. I love it. I don’t have children. This business is my baby.
My day starts at around 6 a.m. I work one way or another until about 10 p.m. That’s Monday through Friday. The weekends I take off.
I’ve built my entrepreneurial space around my lifestyle. I exercise twice a day: morning and evening. I make time to see my mother-in-law in a senior center who is suffering from dementia. I see her on my lunch break.
Bandholz: Let’s talk about Tiege Hanley. Pete & Pedro sells one-off products. But Tiege is a subscription box.
Marino: We’re in year five with Tiege Hanley. It started as a subscription service. We developed our custom skincare products — level one, two, and three. We laid out exactly what product to use, how much of it, and what time of day. We tried to take the guesswork out of skincare for males.
We did that for a while. We had tremendous success growing it organically through my YouTube videos. But we needed somebody to take it to the next level. I can only do so much. My audience is limited.
We realized we were trying to force people into a specific routine. We were telling them how to use our products. But that was not necessarily how our customers were using them.
So you’ve got to be willing to modify your strategy. You’ve got to listen to feedback. When we did that, we realized that we need to offer a more flexible option to retain customers longer. With any subscription business, the secret is how long you can keep these customers.
Bandholz: A lot of entrepreneurs fall into the trap of killing a project when it’s not working.
Marino: For sure. Having ways to analyze that data has also been incredibly valuable for us — realizing that certain customers are more valuable than others.
We treated every customer the same when we were starting. We eventually realized certain customers spend more money with us. We needed to treat them differently.
So we created a retention platform that we’ve nicknamed Sequoia that gives free products. Seventy percent of new customers provide their t-shirt size because in box six they get a free t-shirt. We’re trying to keep the good customers happier. Attempting to acquire, acquire, acquire is a losing battle.
Another thing that worked incredibly well was taking the Dollar Shave Club approach. The first box was a starter system at a lower price to get people in the door. It’s a $15 offer.
But we’re still making a profit at $15, even with shipping. We’ve also found is that giving people the ability to add on products at checkout increases the average order amount from $15 to $22.
Bandholz: You came out with a pure lifestyle product called Enemy. It sells sunglasses.
Marino: The story with Enemy couldn’t be simpler. I was in Chicago at a Tiege Hanley meeting. I went for a run near the lake.
A buddy there owns a store called Glasses Limited. He had a sign on the window that read, “Good is the enemy of great.” I thought, man, “enemy” would be an excellent name for a sunglass company.
I love sunglasses. I was spending $500 on high-end brands. I started thinking about developing high-quality sunglasses that don’t cost $500.
So I called a guy who has sourced custom products in China. I had no expectations other than to see if we could do it. So we did. It was a great experience.
But it is more challenging than our products at Pete & Pedro and Tiege Hanley, which are manufactured in the U.S. Trying to coordinate shipping and language and customs — it’s challenging. But we did it, and it’s been successful.
Bandholz: Let’s talk about Ollie. Was that company a regret?
Marino: Ollie was a lesson for me. Ollie is a teeth whitening subscription business. I got excited about the business, but not for me personally. It was because I feel this tremendous amount of responsibility to take care of my friends. In this case, it was my buddy Terry.
So I went into that business for the intention of helping out my friend. We got the inventory. We did a launch. The first day we did roughly $30,000 in sales. We were amazed.
Then we started getting complaints that the inventory was poor quality. It disintegrated in your mouth. The samples we had before launching didn’t do that. So we had to make a decision.
We had roughly $80,000 in inventory. What do we do? Do we sell the subpar product, or do we just shut the company down? Since my reputation on the line, the decision was easy. We shut the business down for about three months.
Then I made the hard decision that I can’t be a part of the business anymore.
Bandholz: I still remember that video of you taking a box of inventory and throwing it into the trash to inform your audience.
Marino: Yes. We filled a dumpster with boxes of inventory. It was horrible. The manufacturer gave us a small credit, but we still had to come out of pocket to keep the business going. We’ve since sold the company.
Bandholz: Where can people learn more about you, follow you, buy your stuff?
Marino: Go to my website, Alpha M. You can find all the stuff that I’m interested in. Or just type “AlphaM” on YouTube.
July 17, 2020 at 10:52AM
via https//www.brucedayne.com/
Eric Bandholz, Khareem Sudlow
