We grew to $4M revenue in our first year – Lauren Schulte Wang, CEO and Founder of The Flex CompanyFeatured

Lauren·Mar 04, 2019

Hi Elpha, I’m Lauren Schulte Wang and I’m the CEO and Founder of The Flex Company (YC 2016). Our mission is to create life-changing, body positive experiences through the products we make and the conversations we spark. We work hand-in-hand with our customers to understand what they don’t like about their periods, and design bespoke products to improve their lives. We’re known for our namesake FLEX discs, which offer 12 hours of leak-free period protection, including during swimming, sex and sleep. Our newest product is the FLEX cup, which is a completely redesigned menstrual cup that’s as simple to remove as a tampon (coming next month!) Before launching Flex I gained over ten years of experience in marketing in the startup and corporate world including working at Coca-Cola, Autodesk and Upwork.Company culture is extremely important to me. The Flex Company values are:- Choose Love Over Fear- Have a Growth Mindset- Optimize for Trust - Be YouI’m passionate about our customers, entrepreneurship, innovation, health and wellness, marketing and branding and, of course, company culture.Ask me anything about starting a business, fundraising, hiring and managing a team, innovating in a new space, branding, subscription services, leadership, growing a company or anything else!

cadran·Mar 04, 2019

Lauren – thanks so much for joining us for an AMA this week! We're excited to have you here.As a reminder: this conversation is part of Elpha's ongoing series with members of the community doing incredible work.

Lauren·Mar 07, 2019

Thanks for having me! I've been a member of Elpha since the beginning and I'm honored to be in this AMA.

lauriewu·Mar 07, 2019

Hi! Just wanted to say THANK YOU for making the product!!!! I've been using flex product for a year now! Having softdisc in my life helped me struggle with one less thing being a women <3, THANK YOU <3

ZoeScharf·Mar 04, 2019

I'd love to know what customer acquisition strategies have performed best for you / where your marketing spend goes?

melkargi·Mar 04, 2019

Yes please @lauren

Lauren·Mar 07, 2019

Our first year 86% of our acquisition was organic. Before we launched we built up an email list by testing different offers on a landing page and writing content. Ultimately we built our list to over 200,000 email opt-ins and we still get value from that list today. That said, email marketing and WOM wouldn't work if the product didn't live up to the hype (the product was highly differentiated and people told their friends about it). As we grew, we started testing paid acquisition channels (the usual suspects for D2C.... facebook, instagram, google, snap). I've learned that the most important thing with any customer acquisition strategy is getting LTV/CAC right and also payback period. Margin-based LTV should be >2 (ideally 3-5) and payback period depends on how much $ you have to spend on acquisition. We aim for 3-6 months. Now that we are much much bigger than $4M, we are careful to maintain a steady CAC and 50/50 split between paid and organic acquisition channels.

asrkennedy·Mar 05, 2019

Seconding the marketing question: would love to hear more about what marketing channels have worked for you, which didn't, and any lessons you can share here about strategies and best places for spends. Also, I LOVE Flex - such an amazing brand and product and it truly has changed my experience with my period every month. Thank you so much for building such an awesome company!

Lauren·Mar 07, 2019

I'm so happy to hear you love FLEX! Adding my above response here to make sure you see it. :)Our first year 86% of our acquisition was organic. Before we launched we built up an email list by testing different offers on a landing page and writing content. Ultimately we built our list to over 200,000 email opt-ins and we still get value from that list today.That said, email marketing and WOM wouldn't work if the product didn't live up to the hype (the product was highly differentiated and people told their friends about it). As we grew, we started testing paid acquisition channels (the usual suspects for D2C.... facebook, instagram, google, snap). I've learned that the most important thing with any customer acquisition strategy is getting LTV/CAC right and also payback period. Margin-based LTV should be >2 (ideally 3-5) and payback period depends on how much $ you have to spend on acquisition. We aim for 3-6 months. Now that we are much much bigger than $4M, we are careful to maintain a steady CAC and 50/50 split between paid and organic acquisition channels.

asrkennedy·Mar 07, 2019

Thanks so much Lauren that's super helpful (and thanks for repeating it so many places for us all!) If I can ask a follow up, how did you grow to 200k emails - was it primarily just content from your blog and then how did you promote/drive traffic there? Thanks again!

Lauren·Mar 07, 2019

We started writing content on our blog and posting on Reddit. Also tested different offers to get people to sign up before we launched. I think the magic was in the offer and positioning of the product that really made it take off (30k email subscribers in the first two days). From there we had a good proof point for PR and with some luck got picked up for a story.

asrkennedy·Mar 08, 2019

That’s amazing and so impressive - as a web designer and developer I really struggle with the marketing side of things so really appreciate advice like this. I can create amazing user experiences and destinations but can’t figure out how to get people there 😂 Thanks so much for sharing this and taking the time to feedback to this community!

celinehh·Mar 04, 2019

Hi Lauren! What was your process when defining Flex's company values? Did you actively define them, or find that they naturally identified themselves?

Lauren·Mar 07, 2019

Great question! We defined values after hiring our first employee. We went through an exercise to explore/define what really mattered to us. From there, themes emerged and we wrote them. Ultimately I wanted the values to be 1) impactful 2) short / memorizable. One thing that really helps is that each of the values must work TOGETHER for them all to work. E.g. If you decide to not give a coworker critical feedback because you think you're "choosing love," you're actually choosing fear because you aren't optimizing for trust (you'd be helping your coworker and building trust by giving them the feedback... and overcoming your own fear of sharing something awkward). Finally, we do performance reviews twice per year. Half of the review is evaluation on performance, the other half is an evaluation of values alignment. We've found that tying reviews and compensation to values really helps to underscore their importance. P.S. I wrote a post about our values here https://medium.com/@laurenschulte/choose-love-over-fear-how-we-grew-to-4m-in-under-1-year-ee9608197773

Chansey·Mar 04, 2019

A few questions... (btw, thanks for being here!) Did you build an audience before your launch or use marketing tactics to build one post launch?When manufacturing your products, how long did it take and did you get patents etc? How did you manage the overwhelming success of your brand in the first year? How did you go about fundrasing? Did you have good investor relationships already in your network, did you build a portfolio and just start knocking on doors? Thanks! ☺️

Lauren·Mar 07, 2019

Thanks for the questions! 1. Did you build an audience before your launch or use marketing tactics to build one post launch? (I answered this in detail in a question above... in short, we built an audience before launch of 200k email subscribers)2. When manufacturing your products, how long did it take and did you get patents etc? This is different for every type of product out there, but for us I researched the space esp the FDA for 1.5 year before filing incorporation paperwork. We tried building our own manufacturing line pre-launch but ultimately acquired one, which really sped up our launch process. We've since built a lot of manufacturing equipment... some successfully, some not so much. We're in the process of building more and the timeline for doing so from scratch is about 12-18 months. Patent process is about the same.3. How did you manage the overwhelming success of your brand in the first year?Not sure I understand the question - but if you mean how did we become successful, I think it's because we really listened to our customers a LOT and iterated on the product and value props before launching. I wanted to be 100% certain that if I was going to quit my job that people were actually going to use what I was making. I wanted to make something that was 10x better than traditional period products.4. How did you go about fundraising? Did you have good investor relationships already in your network, did you build a portfolio and just start knocking on doors?I had ZERO investor relationships before launching. I didn't even raise any friends and family. I nearly bankrupted myself after putting in $70k of savings. I actually borrowed $10k from a friend to be able to live after my landlord discovered that I'd been illegally renting my apartment on Airbnb for cash :) That said - I applied to YC and they offered me $20k initially, and I used that momentum to pitch Amplify.LA. They gave me $200k and that was enough to get things going. The most important thing that I learned was to just focus on getting started and taking the Company as far as I could with my own savings before asking someone else to put in money. And I also learned that making $1 from customers is better than a theoretical idea. I wrote more about the early fundraising process here: https://flexfits.com/blogs/thefixx/94871878-talking-about-periods-with-men-helped-us-raise-money-join-y-combinator-s-fellowshipSome tactical advice - intros from other founders seems to be the most effective way to get through to someone vs cold emailing. To start a lead list, I looked in Crunchbase to look at companies somewhat similar to us... in both industry and/or size/stage. Since there aren't any menstrual disc startups, I focused on consumer products or D2C subscription companies in the seed stage. Once I found investors that met those criteria, I created a list and then looked them up on LinkedIn to find out if we had mutual connections. Or met with the founder(s) of one of their early stage portfolio companies, built a relationship, and asked for an intro to their investor later.

amymjones·Mar 04, 2019

What do you wish you’d known when you started fundraising? Appreciate you taking time to share your experience!

Lauren·Mar 07, 2019

I wish I'd read Sam Altman's startup handbook before the first time I went out to raise. I used the YC application to create my rough business plan (I didn't apply at first). I quickly learned that I needed to gain a lot more traction than I thought that I would for my particular product and business. People didn't believe that a new period product was needed or wanted. For many different founders or types of business, that's not the case. But our situation was different since we were creating an entirely new category of product and it was hard (and still is hard) for investors to compare us to other known companies (investors like models of success to help de-risk their investments). I also wrote a blog post about the things that I did learn along the way: https://medium.com/the-fixx/talking-about-periods-with-men-helped-us-raise-money-join-y-combinator-s-fellowship-70a561e94746

amymjones·Mar 15, 2019

This is much appreciated and I loved your medium post (as well as the other couple you recommended). Saved 'em all!

melkargi·Mar 04, 2019

Hiring. Obviously you cannot simply use passive strategies via postings, so when searching for candidates actively here are some Qs:1) Where do you go? Linked In? Coding schools?2) Do you do it? Does an assistant? Early on assuming you have no on staff HR did you hire support? An agency? Recruiter? 3) When you are searching for candidates how do you check your own bias? How do you make sure your unconscious biases are accounted for? For example: linked in isn’t blinded like some solutions offer (which only work for passive hiring it seems). Tell me everything. Thank you :)

Lauren·Mar 07, 2019

Excellent question! First, recruiting will always be the most important part of my job, so while I may outsource parts of it, I do still cold email people on LinkedIn the way I did in the early days. Going back to the early days... I told everyone I met about my idea and the problem I was trying to solve (first dates, Lyft drivers, TSA, old business colleagues from when I was 19... everyone). I talked about our mission and why this product was needed. I had specific asks of what type of skills or people I was looking for, and I focused on 1 role at a time, starting with an FDA consultant. I asked so many people if they knew someone who'd worked with the FDA before (even a founder) to ask them how they navigated through the process... and while it took months to find that person, I learned a lot more about what I wanted along the way, so when I found the right person, I was very clear that they were going to be the right fit. Anyway, networking and referrals were really important in the early days and still are. I think it's important to do that as well as post the job on any channel you can (LinkedIn, your website, your social media platforms, secret facebook groups, etc.) From there, I pick a couple of "ideal" profiles so I get a sense of the right experience/background that I want in someone. Then I create a list of people whom I'd reach out to and email them. I track the response rate and A/B test email subject lines to refine the way I approach people. I also found that writing about my mission/vision/values was a great way for early candidates to understand what I stood for before ever getting on the phone with them.We still do our recruiting in-house, though we've worked with a couple recruiters in the past, the best people have come from this method. Regarding checking my own bias, I take a look at the list of candidates whom are on my shortlist before reaching out and making sure that the candidate pool is diverse on a variety of factors (age, ethnicity, years of experience, gender, educational background, etc). For example, here it's really important to me to have as close to 50/50 gender balance as possible... so the process will involve getting more men into the candidate pipeline for roles that are sometimes not traditionally done by men (such as EA). It's a bit of an opposite problem from most Companies. :) Finally, there's a nifty tool that our head of engineering showed me that checks for gendered words in job descriptions. I'll run our job descriptions though it before posting to ensure we're attracting the right type of candidates. http://gender-decoder.katmatfield.com/

Tashanah·Mar 05, 2019

I would like to know what strategy you used to grow your revenue to such a high number during the first year.Did you start a marketing campaign before launch?Also, given that your product was something new in the industry, were your customers skeptical about giving it a try and how did you overcome this?On fundraising, how difficult/easy did you find it to raise funds, did you have a working prototype with users before fundraising or did you raise based on an idea?

Lauren·Mar 07, 2019

1. Regarding revenue / marketing, I will re-post an answer from above since it's somewhat hidden from the thread:Our first year 86% of our acquisition was organic. Before we launched we built up an email list by testing different offers on a landing page and writing content. Ultimately we built our list to over 200,000 email opt-ins and we still get value from that list today.That said, email marketing and WOM wouldn't work if the product didn't live up to the hype (the product was highly differentiated and people told their friends about it). As we grew, we started testing paid acquisition channels (the usual suspects for D2C.... facebook, instagram, google, snap). I've learned that the most important thing with any customer acquisition strategy is getting LTV/CAC right and also payback period. Margin-based LTV should be >2 (ideally 3-5) and payback period depends on how much $ you have to spend on acquisition. We aim for 3-6 months. Now that we are much much bigger than $4M, we are careful to maintain a steady CAC and 50/50 split between paid and organic acquisition channels.2. Yes, I'd say most customers are skeptical of the product before trying it. We got over that by showcasing real customer testimonials from people who told us that FLEX changed their lives (we still get emails like that every day!) We also tested a lot of different value propositions to figure out the top reason a customer would TRY FLEX vs the reason people KEEP using FLEX, and adjust marketing messages according to where someone is during their lifecycle. We also invest a lot in education both pre-purchase and post-purchase. We figured out quickly what some of the biggest reasons are that people were hesitant to try the product and we addressed those head-on. All of that said, this was after we were certain that the product really worked and delivered against the promises we were making.3. For fundraising, we did have a prototype before raising real $. Before that we had detailed quantitative and qualitative data from hundreds of women about their experiences using various period products.

verakutsenko·Mar 04, 2019

I'd love to hear more about how:1/ You ran your pre-launch or gathered interested before a more official public launch? 2/ What has been your best distribution channel especially early on?3/ For most big companies (think Casper, Away etc) they have built up a modern brand and that's their defensibility and they have money to pour into continuing their brand voice. For a company super early on, is there an 80/20 in terms of what to focus on to start building a brand? (Ex: maybe it's social media content, blog, etc)? What has worked for FLEX?

Lauren·Mar 07, 2019

Thanks for the pre-launch questions - it's a popular topic! I answered #1 and #2 above. Regarding #3, I wanted to create a product that was not just a brand, and that had IP defensibility. Very different problem we have to solve vs. a known product category. I read about category creation and studied how unique/bespoke products were brought to market (successfully or unsuccessfully). In terms of 80/20, we found that ignoring what other D2C brands are doing really paid off in helping us to stand out. We defined what our brand was (if she were a person), what she stood for, etc. and built around our values, mission and vision. That authenticity is something that our customers tell us they love. When we launched, Medium was just picking up, and I found that writing in my own blog really helped to get the word out. Email marketing and focusing on constantly improving our customer experience helped the brand grow organically. To be honest, we didn't really invest much in social... which maybe was a mistake? But back then I didn't really see ROI in organic posts (Insta wasn't what it is today), so we were slow to start. That doesn't mean it's the best strategy... it's just that I chose to focus our tiny team on executing in areas that had demonstrative impact on customer experience or sales.

verakutsenko·Mar 10, 2019

@Lauren, thank you for your response! Sounds like the key is just to start from foundation/authenticity. It's great to hear e-mail marketing as I have heard that's a good converter from other brands as well.

adri·Mar 04, 2019

Fantastic - love to hear about the Flex Company's growing trajectory! Big fan

Lauren·Mar 07, 2019

Thank you for your kind words!

zari·Mar 05, 2019

my question -- how have you observed subscription services changing over time?

Lauren·Mar 07, 2019

Great question. We finished YC the same week that Dollar Shave Club sold to Unilever. The D2C companies of the past (Honest, Dollar Shave, etc) had a much more difficult task of building big engineering teams and bespoke platforms. With the rise of Shopify (and Recharge for subscriptions), it's infinitely more cost-effective to start a D2C subscription business, so we've seen dramatic rise in the number of D2C subscription startups. I've also noticed a positive change for customers... Companies are no longer allowed to trick customers into subscriptions and can't force consumers to "call to cancel," which I believe has inflated retention of sub-par products. I think the excitement around subscription comes and goes in waves. I think about 18 months ago, D2C wasn't "cool" anymore, but now it seems like every day another subscription company is raising a massive round (Hims/Hers, Roman, Brandless), drawing investor attention to the space, especially for emerging brands.

saya·Mar 04, 2019

So excited to hear your thoughts. I'm deeply passionate about better period experience, having gone through a year and a half long period of... my period (because of complications with my birth control implant).I'm curious to hear how you started experimenting and testing your first product. What was its ideation and development trajectory? And do you see (if any) technologies that could be game-changing for period products, but aren't developed enough yet?For example, Netflix in 1997 delivered content via DVDs because it was the fastest way to deliver content. They always knew that the internet might be the best solution for making content delivery faster, but didn't use it until 2008 because the technology wasn't there yet. Would love to hear your perspective!

melkargi·Mar 04, 2019

Customer acquisition: I need to know. When you’re somewhat in product market fit, and just trying to get the case study customers so that you can provide specific numbers (I.e. X% improvement of Y) - how do you get biiiiiug enterprise, who have inbound interest, actually close?

Lauren·Mar 07, 2019

Hmm, not sure I fully understand the question. Are you wondering how to close enterprise deals? If I understood that correctly, I can only say that it's extremely difficult and takes a lot of time. Half of my career was in B2B marketing. I don't have much tactical advice for you (maybe the Elpha network does?) If there's one thing I learned in B2B enterprise sales, it was the importance of ensuring that the person you're selling to is the one with the real authority to authorize the decision and fund the decision. Once you've confirmed that, understand what their chain of approval is and what materials they need to influence other people within the organization. Finally, once the solution is implemented (this is the part that companies often forget), it's critical that the end users of the solution (typically not the decision-maker) really understand and find value in whatever it is that you sold in. Otherwise if they're not using it, you'll see churn quickly. Hope that helps and I wasn't too far off base.

Beez·Mar 04, 2019

Hi Lauren!! Can you please describe the culture of YC + what it was like to produce not only a physical product, but a women's menstrual product there? Friends of mine have gone through the process, but are mostly males working on analytics + digital tech. 🤔

Lauren·Mar 07, 2019

I get this question quite a bit. I LOVED YC and got a ton of value out of it... so much so that I wrote a blog post that outlines my top reasons why more women should apply to Y Combinator: https://medium.com/the-fixx/why-more-women-should-apply-to-y-combinator-536b12d792c4That said, YC is helpful for giving advice. It's up to any Company to take that advice and make it applicable to them. For example, hearing Tony Xu (CEO of Doordash, YC Alumn) speak at a YC dinner about his early growth strategy didn't give me a playbook for growing FLEX, but many of the lessons he learned were applicable to us.

kellyrenaebrowning·Mar 04, 2019

Hi Lauren! I've been tasked with building both a local team and a company's content strategy and messaging essentially from the ground up. I would love to hear your thoughts/advice on building something from scratch:- What were the first few things you did to get company messaging/branding out in the marketplace?- Any particular tactics/mediums you found the most useful/saw the most success with? E.g. in-person events/meetups, community building, blogs, social, press releases, etc.- Advice on prioritizing tasks and workloads at the beginning, including managing the work itself and hiring an internal teamThanks so much!

cadran·Mar 08, 2019

Hi Kelly – unfortunately the AMA has already ended but please do post your questions on Elpha. No doubt some other experts in the community can give you some input.