#42 Ryan Mckenzie – Going from 0 to $2M/mo With Subscription Business in 1 year

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Ryan Mckenzie is the co-founder of Tru Earth (eco-friendly laundry detergent) and a purpose-driven direct to consumer brand builder.

His achievements include:

Grown Tru Earth to an 8-figure monthly run-rate in less than a year.
Grown multiple premium subscription boxes to multi-million dollar businesses.
Written content has been read by more than 100,000,000 readers.

And lately, he’s been on somewhat of a podcast run and has appeared on a lot of different shows.

And Deividas wants to know why – is it a revenue-generating channel, PR, something else?

Ryan explains that he doesn’t really reach out to anybody. He started doing podcasts a while ago, and now, over time, he’s just getting asked to go on a different podcast every week. He does them for 2 main reasons:

Personal branding – he doesn’t sell services or anything like that, but it’s a good tactic for networking and getting your name out there regardless.
It creates awareness for his products – Ryan explains that since he sells a product virtually anyone can use, doing podcasts is a great way to expose it to even more people.

With full transparency, Deividas agrees it’s a good thing for the Sugatan brand as well – making the whole thing a win-win situation.

With that out of the way, Ryan then properly introduces himself and what he does. He’s the co-founder of Tru Earth – a patented, North-American made, eco-friendly laundry detergent strip.

He explains that they launched Tru Earth in April 2019, and his approach going in was that if they were to sell 150 subscriptions (or products) in sales, they would continue focusing on the business.

Did they hit the number?

Not quite. Instead, they sold 1,800 products in the first 30 days and generated $60,000-$63,000 in revenue.

In one and a half years, Ryan and his team then managed to scale to around $2M in monthly revenue from explosive growth. And Deividas wants to know how they accomplished this.

Short answer: Subscriptions.

Around 67% of the people who bought the product subscribed on their first purchase. This allowed them to get a lot of leverage and poured all of the profit into growth.

According to Ryan – statistics say that the average household does one laundry every day.

In the beginning, that’s what they optimized the subscriptions for and their offer was that customers would get 32 laundry loads (covering one a day).

However, what happened was that the customers would end up with a lot of extra Tru Earth detergent strips. So, whenever they would go and do the laundry, they’d see that they would have too many extra detergent products sitting there unused, reminding them of the unnecessary subscription. It was only a matter of time until they unsubscribed.

This led to customer lifetime value (LTV) decreasing.

Ryan then had to quickly rethink their offer. They started offering different options (different volumes and timeframes for delivery) to pick from, and their lifetime value started going up quickly as a result…

Next question: How did Ryan even come up with the idea of this product?

Time for a story.

Ryan explains that he and his business partner were offered to invest in a laundry strips business. But he wasn’t so sure about it at first (can a tiny little strip really clean clothes better than other detergents?).

Then, one day, Ryan was watching one unboxing show on TV with his kids and noticed how there was an obscene amount of plastic.

He thought there had to be a better way and came around the idea for eco-friendly laundry strips.

Turns out, the product was surprisingly effective, they set up a site and decided to start growing it.

Next topic: Deividas is thinking of tackling the subscription business model. Is it possible for a business that doesn’t do subscriptions to move into them? How would Ryan do that?

Ryan explains that if you have a consumable product – it’s a no-brainer.

The easiest way he gets people to take more subscriptions is to anchor prices.

Essentially, when you’re starting a product from scratch that’s going to be subscription-based, you pick the amount of money you want to make from the subscription and then, charge a decent amount more for a premium, one-time purchase.

People who are generally not interested in buying a subscription see the value of the major discount and decide that the ‘risk’ of trying the product at a cheaper price might be worth it after all.

If you don’t have consumables and are wondering how to boost your monthly recurring revenue, you can instead create a community with a subscription to be in it.

What’s more important than the price though, explains Ryan, is that the customer should be getting value from what they’re buying.

The next topic they discuss is Ryan’s background. He’s been in business (doing different things – databases, SEOs, etc.) for 20+ years now. He’s done it all: Starting businesses from scratch, losing it all, ended up owing the government $100K, selling phones at the mall to recover, and more. He’s learned a lot and overcame a lot of hurdles to get to where he is now.

Ryan explains that he’s not an overnight success – not even close. He’s been at it for 20-something years and has had a lot of failures that he’s recovered and learned from.

Next question: How good is he at living in the moment?

The answer: Terrible.

Ryan explains that he’s tried meditation but he’s constantly living in his head – thinking ahead on other things he could build and focus on.

Deividas agrees and says that the only time he feels in the moment is when he writes.

Back to business – Deividas wants to know where most of Ryan’s traffic is coming from and how he managed to grow that quickly.

Mostly, it’s a mix of YouTube, micro-influencers, PR, Google Ads, and he’s constantly experimenting with other channels.

To handle the explosive growth, Ryan says that one of the most important things is to have some sort of an entrepreneurial operating system ready in the beginning.

Such as – Traction or Scaling up.

Ryan also recommends trying to understand who you should have in your team and to test for that in your hiring process.

With that said, every time you triple in size – all your systems break. So, you should be flexible and be ready to adapt everything as you go.

Deividas agrees and adds that there are 4 types of people in any organization (according to the ‘Organizational Physics’ book):

Producers
Stabilizers
Innovators
Unifiers

Final thing Deividas wants to know is – what obsessions is Ryan exploring when he’s not working?

For Ryan, it’s simple – exercise, business, and his family.

Here’s what we cover during episode #42:

Meet Ryan Mckenzie – his background and 2 main reasons why he’s been doing a lot of podcasts lately (with full transparency)
VLOS: Ryan’s hidden tactic for launching new products and how they hit $63,000 in revenue in the first month of launch
How Tru Earth went from $63,000 in monthly revenue to $2M/Mo in around one and a half years
Monthly subscriptions and giving availability to as many people as possible – 2 underrated tactics that helped Ryan scale
Customer lifetime value and average order values – lesson learned and what caused the sudden uptake (hint: something to do with their offer)
Time for a story: How Ryan came up with the product idea (or rather, how the product idea found him), why he wasn’t sure about it at first, and what caused the spark for him to focus on eco-friendly laundry strips
Jumping on intro calls with other entrepreneurs: Why entrepreneurship can be a lonely place and how exchanging ideas can be incredibly helpful (Deividas’ and Ryan’s personal experiences)
The single easiest tactic Ryan found that gets people to take more subscriptions
What you should do if you don’t have consumables and want to boost your monthly recurring revenue (and how)
Subscription boxes and figuring out the ‘Why’: What’s making people leave – is it the money or the value?
Ryan’s background: How he’s been in business for 20+ years, what’s changed and how life was different from now
How Ryan ended up owing the government $100K in an unexpected turn of events
Living in the moment: Why entrepreneurs are often bad at it, and one activity Deividas does to feel in the moment
Time to talk traffic. Here is where most of Ryan’s traffic comes from and his approach to ads (what metrics and percentages he looks at, and more)
Attribution models, Harmon Brothers, and secret video ad formulas
Entrepreneurial operating systems Ryan recommends to have in place to prepare for explosive growth
4 Types of people in any organization – according to Organizational Physics books and Deividas’ thoughts on team-management and organization
Ryan’s 3 simple obsessions outside his work