Nik "The DTC Guy" Sharma joins to chat about how he acquired that moniker, understanding the consumer experience, his vision for future of e-commerce, and what he looks for in companies to invest in. Recorded on August 10, 2022 for Crypto Packaged Goods Genius Call series.
Nik is the CEO of Sharma Brands, a strategic initiatives firm working with a wide range of brands to help grow and scale revenue across digital platforms. Nik is one of AdWeek’s Young & Influential, Forbes 30 under 30, Business Insider's up and coming Investors to Watch, and an investor and advisor to some of the fastest-growing brands in commerce.
Follow Nik at https://twitter.com/mrsharma
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Mikey Piro (MP)
All right, we are live. Hello, CPG poppers. Thank you so much for attending today. Today we are going to hear from Nick Sharma about how he became the DTC guy, how he built sharma brands and hooks, about understanding the consumer experience, do's and don'ts branding, and really, really hoping to tackle the future of e commerce and what he looks for in companies that he is interested in and invest in. Nick is widely known as the DTC guy. He's a Forbes 30 under 30 member ad week, young and influential and is a resource for brands and investors that really turned to him for growth. He's the active CEO of Sharma brands and hooks. And prior to entering this world of e commerce, nick worked on social media strategy for alist celebrities, including pitbull, Priyanka Chopra, and a bunch of other folks to drive distribution, fan interaction and engagement for driving album sales. And that is like, a fascinating beginning to this origin story. So, Nick, welcome. Thank you so much. I'm going to tee up that first question. Let's start with your personal story for the folks that don't know. Even though I think I referred to you yesterday as one of the legends of DTC, how did you get started in this? It sounded like you were a young fellow doing it. If you can give us your origin story, that would be great.
Nik Sharm (NS)
Absolutely. First of all, this is exciting for me because I'm a huge fan of Chris and Jamie, so this is exciting for me. So the quick backstory is basically that I was a terrible student in high school. I grew up with this immigrant mentality of, all right, I got to get good grades in high school. That's going to put me in a good college. It's going to get me a good job. It's going to make me some good money. Then I'll be able to buy a nice house, drive a nice car, live a great life. And I quickly realized that I was horrible in school. And no matter how hard I tried or how much I studied, I was always getting like, b's, C's, DS. I took algebra two, I think, three times and barely passed it the third time, my pre calculus never even finished. And so, anyways, I realized in 10th grade, I was like, this isn't working. So I thought, what's another way to get started? And so I started DJing when I was in 9th or 10th grade, and it was anything from sweet 16 parties to wedding reception nights to any kind of more adult house party. Not like in a dirty adult way, but it's adults who are throwing a party at some nice multi million dollar house. And that taught me, like, okay, I don't need to have a degree to make decent money. And I also became a cold emailing ninja as a result of trying to go get gigs. Then I got really interested in the world of social media because I was like, well, if I was famous, I would never have to worry about how am I going to pay rent, because all the eyeballs would be chasing me, sponsors would be chasing me. Basically, money is just chasing you if you have an audience. But then I learned very quickly that I can't sing and so I can't go be a famous singer. So now what do I do?
MP
Is there an email that stands out to you from this youth that you were like, yeah, I got this. Or like, one in particular you remember from your childhood of being like, yeah, this is one I'm proud of.
NS
Like a Cold email? Yeah, yeah, for sure. Like, when I was in 10th grade and I got connected with Priyanka Chopra's manager, principal Chopra is like the biggest Bollywood star in India or one of the biggest. Getting in touch with her manager and then her manager connecting me to pit Bull's manager. I was like, what is going on here? I should not be here. This seems illegal. But that was probably one. The other one was probably generally like I called emailed Mark Cuban when I was in high school about, hey, I think I said something like, hey, would you ever invest in a person? Like, what if you gave me $300,000 and I didn't go to college, but then I paid you back over ten years out of my salary? Would you invest in me? And he was like, no. But getting the reply and being able to get through his inbox, I was like, that's pretty cool. So yeah, those are probably the ones that stood out. I'm sure there's others too, or even like, as I was DJing, Cold emailing my way into getting a 30 minutes mix that I made played on the radio station. Like, those were kind of fun. But anyways, then I got into social media. I started doing that for a few different artists. I kind of realized I was pretty good at getting people to tick. Some people call it stirring the pot, which I'm also very good at, but I was good at getting people's reactions. And so I was basically running Facebook and Twitter pages at the time. And then from there, I really started to get into the world of ad tech. So after high school, I joined an ad tech company as an intern and then decided to defer college for a year. And I was just going to stay there, learned a ton. And then eventually that led me to Hintwater. That's where I kind of got introduced to Ecommerce more formally. And then from there, the rest is history.
MP
Oh, well, there's a lot to unpack there, for sure. Talk a little bit to me about your mindset as you approached Hint. As I've listened to here, and I've read a bunch of your posts and listen to what you've put forward, and I'm just really curious about the mindset of folks that really put in the hustle and are taking these paths that are not, like, through the collegiate system, but I think it's fascinating and I admire it tremendously. Talk to me about how you got into that mindset with hint and what your specific objective was like going there and how did you approach it?
NS
Yeah, so initially my mindset was at that time, I was at a point where my cell service was being cut off every month because I wouldn't make the payment on time. I was trying really hard to make sure I was able to pay rent. And it was between this ad tech company that I quit and then me joining hint. And I had all these brands, or not brands, but I had these publishers I worked with.
Yeah, a lot of the publishers that were clients of mine, they were running slideshows. They were either like, refinery 29, 29 peppermint products you need this Christmas. It's a tongue twister. Or it was like, at the bottom of a tech crunch article. 27 celebrities, you won't believe how they look today. And I was doing basically facebook media buying for those publishers with the goal of, let's get six page views out of somebody who goes to a slide show, and that makes the publisher five cents. And if I can get a click for two cent and they can make a profit of $0.03, but we could spend $100,000 a day. We were making serious money for these publishers, but I was still just a contractor, and so I still kind of had this mindset of like, I got nothing to lose at this point. And then I started working with hint, where I was basically a contractor for hint, mainly helping the founder with her personal brand to help that become what it is today. And I'd already done the social media stuff with celebrities. I'd done the ad tech stuff where I knew how to buy facebook. I was like, all right, if I put these two skills together, I could really build out her personal brand pretty quickly. And I did, and it worked really well. And it got to a point where it started impacting the hint business model in a significant way, positively. And then I was basically offered the job to come lead performance marketing at hint. And I took that job because I was like, I got nothing to lose at this point, and it's not like I got any better options. I was interviewing at a few other companies that I found on LinkedIn, which now, looking back, I know that going on LinkedIn to find a job is probably the worst way to go find a job, at least in this industry, in this space. But, yeah, the Hint opportunity kind of fell into my lap, and I think it was just a result of doing good work and really caring about them as a client when I was a freelancer. But then when I joined the guy who's there, he was just a board member at the time. Now he's the CFO. He was basically like, most people don't last in this role that you got. Like, we just went through two people in the last two years, so I don't know if I'll see you again, but you got to go get us a lot of customers online. And so coming in with the mindset of this big board dude wants me to go get customers, plus me not having any real direct consumer experience before, but also coming in with the understanding of how organic social works and how publishers, how I can get people to click on content to drive to publishers. All that combined is what kind of, I think was the perfect combination of skills to go in and really blow up Hint.
MP
Unbelievable, the mindset that you had, you've got this total hidden value. You're cranking away on things, you're struggling to pay bills, and you've catapulted yourself by just working hard and getting to be an expert in it to Hint. I have a funny short story about Hint. There was this video that was made when I worked at Facebook, now called Meta, where you could tell the time of day by how many hints were left in the fridges and all the micro kitchens. And so the clock would literally be like it would show a full hint in the morning and then it would just deplete. By 02:00, it was all gone every day. And so Hint has a very special place, I think, in FB culture. And I'm sure that's in no small part to the efforts that you put forward, I would love to turn towards Sharma Brands and building that and working with other brands that you now do. Can you tell us a little bit about Sharma Brands?
NS
Yeah, for sure. So, Sharma Brands, it's basically a consulting firm that also does execution. So you think about what a lot of these large companies go to, like A, Bane and McKinsey for. Actually, similar companies come to us, but it's really hyper focused on direct to consumer and ecommerce and driving Lyft through digital channels. So we have like three buckets of clients we work with. One is brands that are pre launched come to us. They have an idea of what they want. They usually have a visual identity built out at this point. They've raised some money, they know what the product is. They come to us and we help them with everything to get them past launch. So website copywriting, creative ads, media buying, go to market, app integrations, tech stack, website build out all the Q and A order testing fulfillment set up, etcetera. So we're basically like, all right, we take you from this idea to will get everything set up. The second bucket is brands that are doing pretty well. They're doing anywhere from 20 to probably 400 million in revenue. And they come to us and it's usually to solve for a problem that they have. And then from there, once we solve that, it's usually like they just kind of recognize how fast we move and so we just focus on executing more things. So a lot of the times it's focused on how do we increase our share of subscribers in our revenue or how do we better our customer acquisition. We have a .8% conversion rate on our best product. How do we get that to 4% 3% and how do we really scale up customer acquisition. And then from there it goes into just a plethora of different things. Like for a lot of clients, it starts with that and then it's like, oh well, we have all these learnings now from what gets better customers for us. Could you guys just build us a new site with all these learnings? And so that happens a good amount. And then the third type of client is more of those enterprise brands, the Anheuser, Bush, Buckarty Beams, Tory Crocs, etc. And they know that they want to be more direct to consumer focused. And a lot of times there's an internal champion, usually on the board or at some senior level who also believes they should be direct consumer e commerce, ecommerce first, or at least looking at it and testing it. And so they'll bring us on to help them launch a brand or come to them with a bunch of ideas on what they should be doing about something. Or even to. Some of these companies will say, we're trying to bring a brand from the UK. To the US. Can you help us execute a digital launch that even though it's going to be sold in stores, it resonates with the US. And it does well essentially. So the scopes are all kind of different, which is why we only work with a few different companies at a time. But our whole thing is we'd rather go very deep and be super helpful to a company versus try to go bring on 30, 40 brands at a time and not be able to go as deep 100%.
MP
It's 2022 now. You've been doing this a minute. We also are sort of, I guess, coming out of a Pandemic, although it depends on the day of the week. What the past couple of years have you seen that has been a couple of your takeaways about how the Pandemic and trying to operate now has changed since the before times because it feels like there's like supply chain issues, there's all sorts of headaches that the pandemic has thrown at us. What has been some of the lessons and experiences you have there.
NS
I would say the Pandemic, like, going in was almost like the gold rush for e commerce. Pretty much everybody did well unless you were selling something that related to activities that were not allowed during the Pandemic. So most people did really well. I think I saw a lot of learnings come into play when the Apple update happened. The main one being that you can't just rely on ads, which we've all been saying for a minute, but it was always kind of like, yeah, you can't rely on ads, but we're just going to keep doing it because it works for now. But the brands that didn't prepare to kind of beef up the brand side of things, they were hit the hardest. And they went from spending 40, 50 day acquiring customers efficiently to two K, three K a day trying to figure out how to acquire customers now. So that was a big learning. I think another one is just that you have to be a lot more prepared for everything that could go wrong. Whether that's supply chain, whether that's raw ingredients coming in spoiled, whether that's packaging not being shipped on time. There was a lot of delays that popped up really on the op side of things as a result of COVID. And you just have to be prepared in all regards, right? From what's your backup plan on the app side to the packaging side. If a site is built one way but a product isn't ready, how are you prepared on that side? So that was another one, and then I'd say the last one is people have a very good bullshit meter on them or a much stronger bullshit meter now as a result of the Pandemic and seeing ads left and right. One thing I believe with advertising now online is before you used to be able to get people kind of right at the bottom of the funnel and convert them pretty efficiently. And now it's a practice of how do you grab somebody or meet somebody higher in the funnel and then kind of bring them in and almost escort them down the funnel? And I don't know if that makes sense. I can see it in my head, but I'm sure that makes no sense to anybody else. But, yeah, those are probably three things I would say.
MP
Fantastic and fascinating. I think there's so many folks in both the Club CPG, Genesis and on the pop side that have tremendous respect for Chris and Jamie like you do, and hearing you in the trenches in this DTC industry for the past few years and those insights like, yeah, I totally agree. That big shift on Apple really disrupted a ton of business. And I think it comes down to, like, what I've heard from you, and correct me if I'm wrong, is that you're really going deep and with high quality to create these brands. And then the more that you can set yourself up to do that the more kind of accident proof or Murphy proof you are for things that go wrong in terms of the brands that you're looking for or trends in 2021. I kind of want to wrap together like a couple of things as we start to close in on the last few minutes. I'm going to plug our pop incubator. We've got a whole bunch of folks that are applying to it. Some of them are web. Three projects. Some of them are web two. Bridging to web three. A bunch of them are here because of club CPG is crypto packaged goods, but it has its roots in consumer packaged goods. What are you looking for in terms of inspiration in 2022? And it can be anything from the vibe or hard numbers that you look towards when you evaluate what a brand is up to and how well they're doing.
NS
For sure, it's a good question. So I think there's a few things it's funny you bring up the vibes because I feel like that's a huge one too. I think the few things I look for is how well does this founder or the person leading the business, how well are they equipped? From even just understanding the customer standpoint, do they really understand the problem they're solving? There was a lot of brands that came up in the last couple of years that kind of solve a problem that no one had. And those were also heavily hit by the iOS update because it's not as easy to sell. So one is like, how well do they understand the customer? They definitely understand the tam and what they're going to do. But I think a lot of the brands that don't understand their customers are the ones who suffer the most because it prevents them from even really getting a good foundation underneath them. The other one is, I would say, how they think about distribution. And it doesn't have to be some magical answer either. But I usually like to see is there a reasoning behind what they choose as their distribution? I mean, everybody says omnichannel or everybody says we're going to go direct to consumer and then go retail. But a lot of them don't really have a plan beneath that of how are they going to do that or within retail, where are they starting or who are they going to and you don't necessarily need to have all the answers, but I think it's really helpful when you can see somebody has that plan in place or is prepared or understands, you know, what is ahead. And then the other thing I would say is more on like, I guess maybe the vibe side. Is this going to be something that leads the category or is this just another copy cat? And the reason that's important is because, you know, as soon as something becomes popular, for example, hard sellers, right, it took like a year, maybe two years for them to really become a thing. The startup brands did it, White Claw did it and Trulia did it, and now you have like Mountain Dew, Seltzer and all these other things that are going to basically eat up market share and shelf space really fast. And so if you're not a category leader, then the chances of you surviving something like that get very low and pretty risky.
Yeah. I generally think of things through the lens of distribution, so I'm definitely biased in that sense.
MP
And just to clarify, when you say distribution, are you talking about top of funnel channels or you mean literally like stores?
NS
Yeah, everything. How is this thing, this product getting out? Is it distribution? Could be wholesale, it could be Target.com, it could be Amazon, it could be your ecommerce site, your own.com, it could be partnerships, it could be influencers, anything that gets eyeballs on the brand.
MP
Fantastic. So there's also apart from Sharma Brands, you have 1180 and Hooks. Can you talk about where they fit into the DTC guy categories and overall playbook?
NS
For sure. So Sharma Brands doesn't do media buying. Like we kind of come in as a SWAT team. We do a bunch of testing. A lot of times we'll equip or bring on other teams to handle things that last longer time than we do, like paid media or site development. But we're usually in and out within six to eight months. So eleven and 80 is more of that longer term customer acquisition partner. And we own a network of publishers and we have our own network of creators where we create a bunch of content and basically help, I would say more of like the cream of the crop type of brands, brands that are already spending about three, four hundred k a month on digital ads. Internally they have great efficiency. They want to hit the gas harder. They've got a great brand, good reputation, lots of social proof. We'll usually work with them and we help them acquire more customers, usually at double the scale they can for a lot more efficient. So that's 1180. It's basically customer acquisition and branded content studio and then Hooks is landing pages as a service. So the biggest request we get for Sharma Brands is, could you please make us a landing page? We have a new product launching, we have a new bundle we want to test. We're going to go live with the skim and we're going to have a bundle specific to the skim or we're about to be on Good Morning America. We want a landing page that we can send all our traffic to. And so I just figured, okay, what's the best way we can create a win for everybody? So a win for us to create a good lander and a good business, a win for the person buying the lander. Like they should be able to get something that is far more cost efficient than if they were to go try to build it on their own and also kind of streamlining the expertise of landers and then a win for the customer too. So how do we make sure that when customers come to the land or they feel like they're being educated versus being sold? And that's kind of how we created Hooks. We tested it with probably ten or 15 companies. The idea worked really well, the process worked really well. It took us about two months to really dial in the process and build the team. And that's still growing. But we've already gotten some amazing brands that have just come organically from Anheuser Bush to Roman to commenteer to Milk Bar. And so to me it's been a lot more fun because I love starting things and then building the team out and going through the whole legal process of how this thing gets set up and setting up the bank account. But now it's kind of growing on its own and to me it's a fun project.
MP
It's fantastic. I also love kind of that clean sheet trying to ideate if you had to advise some folks that needed to kind of like it's their side hustle, but they want to put some real time into it and they needed to kind of not they can't necessarily dive in with you. And Hooks and 1180. What are the things that are most impressive to you technologically right now that are working, that you would say you need to be an expert in these four things?
NS
Yes, I think it depends what you want to do. For example, I think somebody who is really passionate about landing pages, I consider myself an absolute landing page nerd. This was an easy thing for me to put together because I was like, I understand how it works and the ins and outs and how it should work. And I've sat on the client side and I know what the experience should be on their end. And I've seen every other vendor that makes landing pages and I know where their shortcomings are, whether it be around price or the process. And so I think if somebody's a really good video editor, I think you could easily make thirty k a month doing video edits. If somebody's a really good if somebody was just like, I just want to figure out how to go make ten k a month, then I would say there's so many opportunities of things that have room for improvement. Whether it be helping somebody pixel a site properly, or helping somebody think through their blog strategy on their site, or helping somebody think through merchandising and bundling, or helping somebody that's just within a direct consumer site. You could easily go farm that as a service and kind of productise the service. I think another great example of one, which is really was the inspiration for Hooks is audit. Co I don't know if you guys have seen that, but it's like you pay for a site audit, conversion rate optimization audit. They spend a week or two at the site, and they come back to you with a list of things. And I'm sure it's super helpful for anybody who gets it. And it's just like selling B to B. You'll make a lot more money than selling B to C.
MP
Amazing advice. It’s been it's fun to nerd out. I think this idea of getting into the flow when you get really absorbed into both understanding and having a real depth of knowledge about it and trying to get to that in anything, whether it's sport or your job, there's something that's so deeply satisfying about kind of getting into that zone. And so you talked a little bit about nerding out on landing pages. What are some of the things that apart from the landing pages that you find yourself, like, entering into flow about and really finding that there's some great wins to be had?
NS
I mean, I think you're talking about, like, ideas for side hustles or just.
MP
In the work that you're doing now. You're like, man, I just evaporated 3 hours thinking about this problem in this way.
NS
Yeah, I mean, I think there's a lot I love going down the TikTok rabbit hole and not necessarily, like, watching them, but going down this rabbit hole of, okay, how are these guys making? Like, any time I scroll ticktok and I come across an ad, I always pull up the comments if they have them on and try to look at the, like, to comment ratio. And I'm like, okay, well, what is the landing page look like here? How are they getting the hook in? How are they thinking about the brand page? All that kind of stuff. Another one is probably just like, integrations within apps. Like, a lot of these apps can get super I'm totally blanking on the word. They can get exponentially more impactful when you integrate these apps with one another. Or you can. Figure out how to use something like a Zapier or alloy to sit between different apps. Which leads me to the other thing I nerd out on, which is like, okay, what can we do for customers here that seems like just an absolute win for the customer and not a win or a loss for the brand? So what can we do that just, like, makes them feel special and gets them excited? And then since this is a crypto group, I do like to nerd out and think about what does crypto or NFT technology look like in the world of commerce and how does that play a role? Those are probably some of the things that I love.
MP
Well, I can say that Tyler Phillips in the chat just teed up an amazing question along the Web Three line, and so I'm going to read it for him. Thanks, Tyler. This is from Tyler. Hi, Nick. How do you see Web Three playing into ecommerce brands looking for a different way to acquire customers, build community, and innovate in distribution channels? And what's your best advice for brands looking to activate more B to B business, such as working a corporate office or food and beverage option, similar to what worked with Hint? Let's focus on the web. Three. One, web Three and ecommerce. What has been your research and or understanding of difference and how to acquire and build community as opposed to traditional channels?