Breaking the Patience Myth to Accelerate Your Path to 8-Figures | Scott Dancy | Azuna

Scott Dancy is the founder and CEO of Azuna, a fast-growing challenger brand in at-home odor elimination. Since launching in 2019, Scott has scaled Azuna into a serious category disruptor. Prior to launching Azuna, Scott built, scaled, and sold several companies across cybersecurity, staffing, and energy - with curiosity as his fuel. 

During the dot-com boom, Scott was the youngest member of the cybersecurity board, working directly with the Attorney General to navigate the rapidly changing early years of the internet. He is a graduate of the University of Rochester and resides in Buffalo, NY where Azuna is based. 

In This Conversation We Discuss:

• [00:00] Intro
• [00:47] Tripling revenue by solving everyday problems 
• [03:00] Reinvesting profits to outlast competitions
• [05:25] Sponsor: Klaviyo
• [07:32] Learning from mistakes at every stage 
• [12:23] Sponsor: Intelligems
• [14:23] Building LTV when first orders barely profit
• [17:02] Grinding to millions without ever going viral
• [20:14] Sponsor: Electric Eye
• [21:22] Learning when to keep things in-house 
• [23:27] Calllouts
• [23:37] Building equity culture across your whole team 
• [23:05] Creating a team culture people refuse to leave 

Resources:

• Subscribe to Honest Ecommerce on Youtube
• Naturally effective odor eliminators azunafresh.com/ 
• Follow Scott Dancy linkedin.com/in/scott-dancy-189542200 
• Get your free demo klaviyo.com/honest 
• Book a demo today at intelligems.io/ 
• Schedule an intro call with one of our experts electriceye.io/connect 

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

Transcript

Chase Clymer 

With the pandemic, it drove everyone to buy online, but it also drove customer acquisition costs up and they just never went down. 

Scott Dancy

No, it never has and it never will. And that's why if you don't have a business in my mind that doesn't have a substantial recurring customer rate and a really good AOV, I don't know how somebody does an online business. 

Chase Clymer 

Honest Ecommerce is a weekly podcast where we interview direct-to-consumer brand founders and leaders to find out what it takes to start, grow and scale an online business today.

Hey everybody, welcome back to another episode of Honest Ecommerce. Today, I'm welcoming to the show Scott Dancy. Scott is the CEO and founder of Azuna, a fast growing challenger brand in the at home odor elimination space. Scott, welcome to the show. 

Scott Dancy

Thanks, Chase. Pleasure to be here. 

Chase Clymer 

I'm excited to chat. For those that are unaware, could you quickly just talk about what are the actual products that you're bringing to market over there? 

Scott Dancy

Yeah. So we started Azuna 6 years ago. And basically, it's based on an Australian Tea Tree Oil. So Australian Tea Tree Oil is a natural antimicrobial. And we figured out a way to make it airborne. So we started with these gels where you basically take a um gel and put it in a glass or at a time plastic jar. 

You just let it open {in] your room and basically absorb the causes of the odor, the sources of the odor. And then we've brought it into sprays, wipes and we've just got our million-dollar order from Shopify recently. And we have another close to that on Amazon. So now we're doing a couple hundred thousand orders a month. 

So it's been growing at a really good level the last couple of years, it has been pretty much tripling in revenue every year. It's gonna get harder to triple again as we get bigger, but we should at least be able to double our 2.5X this year. And those are the main products. So it's an all-natural order limit here. 

Chase Clymer

That's amazing. Now take me back in time. Where did the idea for this product strike you? 

Scott Dancy

So I got separated in 2014, I believe it was, from my first marriage. And in 2016, I was living in a rental and a friend of mine's son was playing basketball. My son went to pick him up, he came to my house, my washing machine broke and it smelled horribly. And he's like, I've got this product that my family has been working on. They are a contract manufacturer and it was the original Azuna. 

It called something different at the time and they really weren't doing much with it sales wise, but it works. I put it in the laundry room and got rid of the smells. Then it worked in my car, my kid's room. I would kid around with them and be like, “There was a movie that came out just before that called Envy with Jack Black and Ben Stiller where he created Poop-B-Gone and all of a sudden you sprayed on the dog crap and it was gone.”

[I told them] you got a poopy gone and you're not doing anything with it." So a couple years later, I asked him, “Do you do anything with it?” And he said, “No, not really. We're doing about 10,000 a year in sales.” So I said, “Let me take it over and I'll figure out a way to sell it.” And we did. 

Chase Clymer 

That's amazing. Can you share any more about buying a business? I know that you had some previous exits. So you got a little bit of experience there. 

Scott Dancy

Well, we didn't buy anything from them. I just said basically, you guys can manufacture the product and I'll take it over. And I gave him a little bit of equity for being one of the original partners in the business. So there wasn't, I bought businesses before and eventually we'll probably sell Azuna at some point. 

So, but that was a whole different process. This was truly entrepreneurial. There was really nothing there. They were doing maybe eight to $10,000 a year in sales. We do that for more than an hour. 

Chase Clymer 

Yeah, but I still think it's definitely something that people should be aware of. It's because the way that I assumed it happened wasn't the way that it happened, but it worked out for everybody. So this was a manufacturing company at its heart. They had built a product but they weren't going to do anything. But what they were best at was manufacturing it. So they're still doing what they're best at. 

Chase Clymer 

Yes. 

Chase Clymer 

You're just running with what you're good at, which is expanding the marketing and sales and really putting some growth behind the product. 

Scott Dancy

Yeah. And I knew nothing about the consumer product good space. So the story is pretty cool. First, we had a good product, then we had some good ideas. And then quite truthfully, 2020, April 2020, I was doing $12,000 a month in sales and I thought I was killing it. 

Then May I get 105. And I think a lot of that has to do with COVID at the time. What better thing to do than have an all-natural odor eliminator that sells online to people that are buying everything online and are stuck indoors. 

Chase Clymer 

Yeah, they're stuck where the smells are. 

Scott Dancy

Yeah, exactly. But proud to say 95% of those COVID businesses went out of business a couple of years later. And we went from 105,000 to 200,000 to 500,000, to several million dollars a month in sales now. So we kind of figured out if you have something good, we had to figure out a way not just to acquire customers, but retain them.

And more than 70% of our customers are subscribers right now. That was really the big piece as we matured. We didn't take the money and go on vacations. We reinvested in paid media and better, better products into more products into diversification into hiring some really good people. And that's kind of the basis of why the business has grown to what it is now. 

Chase Clymer 

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Drew the whole owl for me if you're familiar with that meme. But I need to go back in time. You mentioned previous owners before you got involved. They were happy to be doing like 10k a year. $10,000 US in sales. 

Scott Dancy

Not previous owners of Azura, to be clear. 

Chase Clymer

Okay. Okay. 

Scott Dancy

They just basically had, they became our manufacturer. They had, I'm going to call it the equivalent of a prototype that they were selling at hockey tournaments and boating events, right? 

Chase Clymer

Mm-hmm. 

Scott Dancy

Which we sold to those too. But our target market of 30 to 55 year old women is 89 % of our customers. So while that's hockey moms and some boaters, it wasn't really the demographic that this prototype that they had was working on. 

Chase Clymer

Absolutely. So obviously, Prototype becomes the actual product. There's now branding. There's a brand name behind it. How did you go from what they showed you what they could do their best to now you're doing 10X that? Let's just talk about when you get to 12K a month and you thought you were doing great. 

Scott Dancy

Yeah. 

Chase Clymer

How did you do that? How is that zero to one? How did that happen? 

Scott Dancy

So I built a website. Well, I didn't build it. I hired somebody to build the website. I taught myself how to write ad copy. I am really bad at grammar and spelling. So I think that actually benefited us because some of the ads I wrote got a lot of engagement because people were making more fun of my spelling and my grammar than they were thinking about the product. But then that tricked the algorithm to basically get us a little bit more engagement.

 I learned how to write ads. I set an alarm every two hours for two years to make sure that I was doing all the customer service and basically answering people's questions so that there was engagement. I literally packaged everything myself and went to the mailbox every day. I most inefficiently run business at 12K a month and slightly better at 100 when we moved into a 3PL.

But we've gone through. The one thing I can tell you about owning a CPG is you're going to have… If you're not making mistakes, in my opinion, you're not doing it right. We've been through a number of agencies, you pay media agencies, now we do it in-house. We've been through a number of 3PLs and now we have a really good one. 

We have diversified our manufacturing. We still have the same manufacturer for some of it, but we've got some others as well and we're basically packaging everything ourselves. We've got a 50,000 square foot facility in Buffalo that we're doing everything out of now. I think everything's in evolution. 

We went from just me doing it to now we have a 40 person team that is working on everything from PR activations and big partnerships. [This is] with everything from sports teams to heavy influencers to 3,000, 4,000 orders a day being packaged and shipped all over the country. 

Chase Clymer 

Yeah, that's amazing growth. And I know there's some people out there that they're like, “Well, I just want to get to this 12k number.” Do you remember what you were spending on? I'm assuming it was meta ads back then? 

Scott Dancy

You know, it was crazy. There was before iOS 14 or 16, whatever it was where they had the 30 days, 70 look back. We were super efficient. I was only spending three grand a month at that point. So maybe a couple hundred, a hundred dollars a day. And then it was growing up to four or five hundred. I mean, I started spending once Facebook gave me a line of credit. 

So I was like, “Wait, I don't have to pay this thing for 60 days. Let's go.” So there were a couple key inflection points. That was one. Another was we got involved with a company called Raindrop, which is a big agency for content. I found them because I love the Dr. Squatch ads and I love the Lumet ads. 

I called the CEOs of both the companies and they both were working with Raindrop. Now, we have a bunch of ex-Dr. Squatch employees working for us, including the guy who was the second employee there.

The beauty of our story [was that] I knew nothing, right? I was a business owner. I owned staffing businesses. I was involved in some financial services businesses, everything from a ticketing business for touring bands. So I knew what it was like to have some really good successes and really good failures. 

And I think CPG, assume you got it, everything's going to work and you're lucky if 2 out of 10 ads work out. I mean, I think that'd be really good if I can get that good. So I tried everything. I tried every different aspect of how to do it. I think delusion was really my biggest trait at the time. To me, 12,000 was like, I can't pay any bills with this. And then we got to a hundred and I'm like, all right, now we can actually go out and maybe get a little bit of capital. 

We raised a couple hundred thousand dollars, friends and family. And now we've gotten to the point where we're very profitable. And as I said, I look back, I think it was just a combination of all those things. You have to try everything to get there.

Chase Clymer 

Absolutely. 

Scott Dancy

But it's definitely harder than it was then to get that type of efficiency. There's no doubt. 

Chase Clymer 

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Chase Clymer

With the pandemic, it drove everyone to buy online but it also drove customer acquisition costs up and they just never went down. 

Scott Dancy

No, it never has and it never will. And that's why if you don't have a business in my mind that doesn't have a substantial recurring customer rate and a really good AOV, I don't know how somebody does an online business. If somebody came to me, because I invest in a lot of businesses and they said, “I got a $25 average order value. I'm selling mine.” 

I'll be like, “Then you have to have a 3X at least return and you have to have about $15 to $20 cost of acquisition.” Our cost of acquisition is anywhere from 55 to 75. Our average AOV is 80. So we'd barely make money on the first order. But because we have a subscription, we kill it on the second, third, fourth, and so on order. So I don't know. 

I just think from anybody that's in the business, if you don't know your numbers and specifically you don't think that you can become. If you can't be first order profitable, you better make sure you got a really good LTV. Otherwise it's just you're wasting your time and your money.

Chase Clymer 

Absolutely. 

Scott Dancy

No matter how good the product is, to be honest with you. 

Chase Clymer 

Having a good product is a cheat code to success in this industry, though. 

Scott Dancy

Yes. But there are so many with good products that don't make it either. 

Chase Clymer 

Yeah. But you know what? That also helps you understand you can see competitors with good products and you can get almost uninspired by what you believe is success on their end. But you don't know their numbers at all. I think a lot of people make a lot of assumptions about their competitors. 

And make a lot of decisions based upon their competitors, when the game they're playing and the numbers that they have are absolutely in no way correlated to what you're doing. And I see this with people overspending to acquire customers and not following the numbers like you said. 

Scott Danc

Yeah. And we've been guilty of that. And now we've got a pretty strong board of directors. We have a big KPI piece. We've gone from this completely entrepreneurial company to somewhat corporatey. We literally set out our first organizational chart last week. There were a lot of internal company surveys and people were begging for direction. 

So, be careful what you wish for. But I think that's kind of what we had to do. And now I tell everybody, “We'll probably have some sort of exit in the next couple of years.” And I tell everybody, “You should be working at this to make your career the best thing.” 

It's one of three things. You should be able to be at a higher level at a bigger company. You should try and find another Azuna, or you should be able to build your own brand. And if you don't know your numbers, you're never going to get much higher than being pigeonholed into a certain job. 

Chase Clymer

We talked about getting to 12K and then obviously scaling up to 100K. Was that just doubling down on what was working and obviously all the eyes going online? 

Scott Dancy

Honestly, that was purely luck. That month was purely luck. After that, there was a lot of hard work and skill. But we had an ad that ran that did very well. Again, some misspellings, but it talked about us versus candles versus plugins versus other types of odor eliminators. And I think it resonated. But I just think that was the month that the world spun on its axle and that propelled us. 

Chase Clymer

What were some of the decisions that were made that took you beyond 100 grand a month? What were some of the things that I guess, what I noticed with a lot of entrepreneurs that are looking to break through. 

There's something just wildly aspirational and hard about becoming a million dollar business and going beyond that. That seems to be where people get stuck at times. So what do you remember that took you from that eight-figure business up to a nine-figure business? 

Scott Dancy

I started getting some stuff or discussions with people who were smarter than me, but that didn't make sense. Which was, you got to focus on the returning customer. I agreed with them, but how do I get a returning customer if I don't get new customers? And they wanted me to be super-ly patient with the new customer acquisition. 

And one, that's just not me. And two, it didn't make sense for the timeframe. I knew that if we didn't become a $10 million business by say 2023, we were never going to be where I want to be. Which is $100 million plus, which we're on track for. So if we couldn't acquire the new customers, and I kept looking at them, being like, “Man, these new customers keep coming back.” Everyone tells me there's this 40% returning customer rate is the golden standard. 

And we're above that. And this is when we were little with not a know, small business with not as much data. I'm like, if we can do that now, I could see it at scale. So if I was spending $5,000 a day and getting $9,000 a day in sales, well, maybe I was inefficient. But a $3,000 subscription to me was really a $14,000 day and the lifetime value. And then I just said, “Screw it, we're going to go all in.” 

I raised a little bit of money. We ran at a deficit for three years, but the numbers, I knew the numbers and I knew that they kept getting better and better and better as far as the retention rates and the subscription. And then it was all about dialing things in. Then we would get our SEO, our CRO in place. And all of a sudden, everything's starting to come together. 

Now I could tell you in the morning when I wake up what we're going to do that day. What we're going to spend and what we're going to do based upon [it.] We have a certain amount of subscription revenue before we even wake up. What I think we're going to do on Amazon, and what our daily budget is for that day. 

And I'm within $3,000 every day. So it becomes a very predictable business. And we don't have to rely on ever going viral, which we've never done. I love Dr. Squatch, one of my favorite brands, but they had an ad go absolutely insane and that propelled them. We've never had that. Everything's been a grind. So that's what I'm honestly kind of most proud about with our businesses. Nothing came easy.

Chase Clymer

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And I think that that's something that is obvious, Dr. Squatch was lucky in that regard for that ad going viral. But you also mentioned, hired a bunch of their ex-employees. You know that there was a lot of hard work in place. Going viral was more of them putting in the work and then seeing a result of it. 

Scott Dancy

Yeah. And they worked hard for years before that. They were a slow grind too. And then it went pretty big. And we've had a similar trajectory. Not as big, but pretty damn close. And a lot of it is just constantly refining. We used to say a 1% change would equal... Oh, that's going to equal an extra thousand dollars a week. Now it equals an extra million dollars a month, or more. 

Now it's all to the bottom line. Basically, these little changes, if we see something on the site, like a naming function or a better piece of content that's going to convert a little bit better or anything that's going to work together. Little changes mean millions now. We just hired a company to do our save rate from our subscriptions. 

And basically did an amazing job and saved... It was an extra $200,000 that first month. That was well worth whatever the fee was to him. 

Chase Clymer 

Absolutely. 

Scott Dancy

I've also spent a lot of fees on crap that never worked too. 

Chase Clymer 

Yeah. Hiring is very hard, be it an employee, a contractor, an agency, etc. You kind of, I mean, I just don't have any... You kind of just got to see what type of work they produce. 

Scott Dancy

Yeah. I hired an agency in October because I was very happy with what we were doing internally. But in my mind, and that's part of my issue as an entrepreneur, like, “We can do better. We can do better.” And it cost us millions of dollars. The agency tried, but they started changing everything. They broke something. My only directive was just don't break it. You can be even. Just don't break it. You can be down a little bit. But they broke it pretty damn bad. So now we're back to in-house and we're in a much better spot.

Chase Clymer 

Hey everybody, just a quick reminder. Please like this video and subscribe if you haven't. We're releasing interviews like this every week. So don't miss out. Now back to the interview. 

Earlier, Scott, you mentioned something that I think is worth chatting about here is that you are looking potentially to have an exit here in the next couple of years. How soon into the company did you know that that's what you wanted to do? And how did that change how you built or ran the business?

Scott Dancy

The day I incorporated it, I knew that's what we wanted to do. I've been an entrepreneur. I've sold a couple of businesses. I've been involved in businesses that were really good that then went downhill and you didn't get out at the right time. And this is an amazing, fun family business and everybody in the company has options for equity. 

And we've had some early stage and later stage investors. We haven't raised anywhere near the amount of capital that most have to get to our point, but I still respect capital. Especially since I've been in that situation on the other side of it. So I've treated it, I won't say I treated it from day one as there'll be an exit that was in the mine, but now everything is not geared towards that. 

We want to build a sustainable, fun, profitable business that builds a community within our customer base. And I think that's how everything really gets to that strongest value point. But there's definitely looking at key performance indicators and making sure you're tracking them. There's actual budgets which we maybe didn't have in the timeframe. There's hiring people, there's governance, there's all those things in place. 

So that when people come to us, and they come to us now, but we're not ready, that we're ready. And we can say, here's the bible, the Azuna bible that is. [They can] look at it and be like, “Okay, cool.” Have them ask for less because you've already anticipated having that in place. And, that's knowing your numbers. That's making sure that we're doing things that are adding value for the future. 

And pretty much everything we do right now has at least a thought process on that. We don't make the crazy decisions we sometimes did in the past. There's no more Hail Marys. And honestly, as the founder, there's a lot of pressure because it's not just my own money at stake. It's my employees and people are like, “Wait, I put in what and you're doing what? How much should I get?” I never answer because it's who knows. 

But at the same point, it could be significant. And I want every one of our people that work really hard to not just get a good experience, but get a paycheck too. And then if they have both, their career will be 10x what it would have been without Azuna. And that's going to be really rewarding as well. 

Chase Clymer 

Oh, that's amazing. Now, is there anything I didn't ask you about today that you think would resonate with our audience? 

Scott Dancy

No. The story of Azuna is really probably not different from a lot of high growth businesses. But we've done this with some amazing internal people. Some have had really good experiences. Some have had none and they've all contributed and they all continue to contribute. When we did that employee survey, 96% of the people said they saw themselves working at Azuna in 12 months.

That was cool to see, and generally the survey was positive. It was a little bit more like, “Well, I need direction.” I need this, I need this. Because I forget that people are not coming from the same crazy place that we have. But it was cool. It's fun. We're in Buffalo, New York. There's not a lot of crazy successful entrepreneurials in Buffalo, New York. Even though it's a great city and it's hard working and we're proud to be from there. We've kept everything in-house. 

Our customer experience team is all in-house. We've never outsourced it. And they did a presentation to the company and it's unreal. And they've done a great job of not just being an advocate for the customer. But also an advocate for the company and helping to upsell and keep people and, being sleuths and finding out when people are trying to scam us. 

And we have a lot of fun with that too. So, everything from our product development to our marketing, to our packaging, to the customer experience, it's all equally important. And it's, I've been involved in a lot of businesses. This has been the most fun one by far. And that's why there's a little bit of pressure to make sure that it's monetized correctly in whatever way at some point. 

Chase Clymer 

Absolutely. Well, let's try to get you a little bit more money. If I'm listening to this podcast, and I'm curious about the product, where should I go? What should I do? 

You should go to azuna.com. A-Z-U-N-A.com. We have a number of different offerings i you look. And we make it easy. If you want a two-room kit, you can get that. If you want a four-room kit, you can get that. We have all the different scents. We have all the different sprays, wipes. We always have new products coming out. If you subscribe, you'll get 30% off that first subscription and 20% after. 

And that way you can set it, forget it, and don't even have to think about it. But I think that there's almost a new scent every month. That's a specialty scent. We've got our core scents that have been there for a long time. And we've got, if you're a pet owner, we partner with the American Kennel Club. We have Azuna Pet. Amazing product. Sold really well. Then a lot of other different branding opportunities are in there as well. 

Chase Clymer 

Awesome. Scott, thank you so much for coming on the show today and sharing all those amazing insights. 

Scott Dancy

Yeah. Thank you, Chase. I appreciate it.