#47 Simon Phillips – From $200K in Debt to 7 Figures Profit in Under 3 years Scaling eCommerce Businesses

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A highly anticipated guest, Simon Phillips, co-founder and chief strategic officer of Glass Elephant (eCommerce growth engineering firm) joins the Sugatan Effect podcast to discuss his journey of going from $200K in debt to generating multi 7 figure profit in under 3 years scaling eCommerce businesses, and everything he learned along the way.

Over a year ago, Simon was talking to Deividas about how he was going to acquire a creative agency and some of his other business goals. A month ago, the two reconnected and Simon said he had 50+ people working at the agency.

So, a lot happened, let’s talk about it.

First things first, Simon recalls his interesting background and rollercoaster of a business journey.

He grew up in a small town in New Zealand, was a bodybuilder, dropped out of university, and decided he could do better than this.

Simon took to online selling and scaled a $3.5M eCommerce business in 2014 during the early stages of Shopify – in the good old days, as he puts it.

However, just 2 years later, things took a sharp turn for the worse. He ended up losing everything with $200K in debt and moved back home. Through that journey, this became a conceptual framework that eventually became lead to his digital agency.

Because he had no money from there out, he decided to start his own eCommerce growth agency, which proved to be a major success. Eventually he got a big client which they scaled from $3-$4M/year to $50M+/year – through a lot of trials and tribulations.

This was the explosion that helped him realize the value they had to offer.

Deividas agrees and says they’re on a very similar journey. For them, it was 3 clients who scaled to massive numbers within 1-2 years. And as a result, the agency scaled to 70+ people as well.

Next topic: How does Simon structures their deals when creating partnerships with his clients?

They vet their clients so that they can work together in the most effective way possible. It’s not just the clients interviewing them, it goes both ways.

Earlier on, they had a profit share model and they were doing an equity model. Now, Simon’s approach is to treat the clients’ business like they own them and grow together.

Now, they’re at a point where they don’t need 100 clients. They just need 5 or 6 to build a 9 figure business.

Simon says performance marketing is an art. It’s both left and right brain. It’s a science and an art.

You have to do all the number crunching and data analysis that gives you all the information that leads the creative process.

But if you’re more of a numbers person and you’re struggling to come up with the right angles, Simon recommends partnering up with a creative copywriter to work on it together.

To rewind, Simon recalls his rollercoaster of a journey and how he got into $200K depth, his highs and lows, and how he managed to come out on top.

You learn and then you implement a strategy or a tactic that solves the problem.

Deividas wants to know: What kind of mistakes did Simon make in his businesses that he could share?

The biggest one: Losing the soul and the authenticity of one of his businesses. They got an investment and gave away too much of the responsibility too quickly to other people. In reality, Simon was the ‘magic’ behind the brand himself.

Lesson learned: Don’t make it too quick and give away the responsibility.

When hiring people, Simon says it’s all about character. Deividas agrees and adds that skillset is also important.

How did Simon become so aware? Was it his rollercoaster of a journey or something else?

His answer: Primarily psychedelics and mindfulness.

Next topic – back to marketing.

Deividas thinks a lot of the new marketing channels (including TikTok) bring a new unique set of benefits that are impossible to resist.

Last question: What is the one book Simon would advice to anyone working in eCommerce to read?

Simon says he hasn’t read an eCommerce-based book but recommends people to listen to the Sugatan Effect podcast (thanks Simon!) for technical knowledge.

But the book that helped Simon the most in his business career is Rocket Fuel.

What would the new 2020 version of Simon say to the old 2014 past version of himself?

You’re not as much of a loser as you think you are.

Simon says he was on a path of becoming arrogant and bitter.

Losing everything was what allowed him to remove the ego.

Here’s what we cover during episode #47:

Why Simon has been a highly anticipated guest for the Sugatan Effect podcast and his thoughts on Sugatan
Long story short: Simon’s background, why he decided university wasn’t for him and how he scaled a $3.5M eCommerce business in 2014 (the good old days)
The operation was a success but the patient died. Here’s how Simon ended up losing everything and going into $200K in debt despite his team fulfilling their deliverables
A simple reason why Simon decided to then start his own agency
80/20 rule at its finest. Here’s how Simon managed to kickstart his agency’s success by piggybacking off scaling their first client.
Too much growth: a case of vertical over horizontal scaling. Here’s why Deividas is saying they’ve decided not to take on new clients after a while
Simon’s thoughts on the eCommerce agency partnership model
Next topic: eCommerce client partnership acquisition models. How Simon went from the traditional agency model to a profit-share model, to an equity model, to what they’re doing now
Simon’s incredibly simple approach on how to build a 9 figure business and how they can do this working with ONLY 5-6 clients
Being consistent at business, identifying what you’re good at and how to lean into that for maximum efficiency. Here’s what makes Simon different from everyone else and what he recommends doing if you’re a numbers/data person
Simon goes in-depth into how he got into $200K debt, his highs and lows throughout life, and how he managed to come out on top after his rollercoaster of a journey
How Simon sold 5% of his agency for $500,000
What mistakes did Simon make in his businesses when he was just starting out and what did he learn? One of them was growing too quickly and giving away too much of the responsibility.
Complacency: The #1 reason why most top companies fail and here’s what you should do about it
How Deividas hires people and here’s why he strictly looks are experience instead of resumes
The perfect mix of experience, skillset, and character. Here’s why Simon says that’s impossible and roots for character instead
Simon’s take on being self-aware and a constant topic on the Sugatan Effect podcast – psychedelics and mindfulness
Higher self vs lower self: How to evolve mind over body and the duality of self
Back to marketing – business lessons learned, analyzing data, and why Deividas is thinking of experimenting with these new ad channels
Why TikTok is bringing this new unique benefit compared to other media buying channels
Crowdsourcing ads – creativity set free with this platform and what Deividas thinks of the concept
The one business book that helped Simon the most in his business career.
The concept of a visionary vs. integrator – why you need both
What would the new 2020 version of Simon say to the past 2014 version of himself? His advice can be applied to most entrepreneurs listening to this podcast!
Quick thoughts on finding a mentor. Here’s why getting a mentor organically is like a performance profit share according to Simon and why you shouldn’t pay for one
How to find and connect people that are where you want to be and how to deliver value using the 51/49 rule
Another quick golden nugget on how the simplest and easiest things can have the most profound effects
Simon’s ROI on Facebook messages and how he gains value out of Facebook
What Deividas is focusing on for 2021