Eric Andrews

[Eye for Retail @EyeforRetail_]

In my CPG business we got a lot wrong.

But of all the things we got right, one was the most important - strong unit economics.

This provided forgiveness for other mistakes, and firepower to double down on the wins.

If your product is not extremely profitable or does not have a path to get there quickly, nothing else matters.

[Eric Andrews @eric__andrews]

@editoraldanish Yep they are acquiring more businesses than ever right now at the same multiples as before.

[Eric Andrews @eric__andrews]

Constellation Software has been acquiring hundreds of no-growth (or negative growth) VMS businesses at extremely low valuation multiples (usually less than 1X revenue) since the mid-90s. Compounding revenue at 25-30% for 30 years straight.

[Eric Andrews @eric__andrews]

I just released a video outlining their business strategy, acquisition frameworks, and some projections around how they make returns on capital. A lot to learn from them: https://t.co/kEwdvHJT88

[Eric Andrews @eric__andrews]

@buzzdexpcoffee Ok will respond over there, thanks for the heads up

[Eric Andrews @eric__andrews]

Conversion rate optimization tip - when should you use a % off discount vs. a $ off discount?

When your AOV is less than $100, use % off.

It makes the discount seem bigger.

Ex: for a $50 item, 20% off is $10.

20% off seems larger.

[Eric Andrews @eric__andrews]

When your AOV is larger than $100, use a $ off discount.

Ex: for a $200 item, 20% off is $40.

$40 sounds like a better deal.

[Eric Andrews @eric__andrews]

If your unit economics don't work from Day 1, they won't magically work later on.

That is why most of the companies we saw get SPAC'd in 2020-2021 did terribly, the common denominator was that they all had horrible unit economics and even at massive scale couldn't make $

[Eric Andrews @eric__andrews]

A lot of brands try to convert people online to do something offline.

This is the opposite, converting people offline to do something online.

More brands should be doing this.

[Eric Andrews @eric__andrews]

Just looking at the data for a very large (billions) omnichannel retailer.

They started out with all stores, then they launched the DTC business ( just transactional purchases), then they launched subscriptions DTC. The subscription business became huge for them.

[Eric Andrews @eric__andrews]

But a few years ago they launched in-store subscriptions (at checkout).

Within 14 months their in-store subscriptions surpassed online subscriptions.

Within 24 months their overall subscription revenue 9X'd. Today 70% of their subscription rev is initiated in-store.

[Eric Andrews @eric__andrews]

@AndySkraga 300

[Eric Andrews @eric__andrews]

Pretty much every time I've been pessimistic about something I've been wrong

[Eric Andrews @eric__andrews]

For subscription-first eCommerce businesses, despite what you might think (tons of incorrect beliefs around these), prepaid subscriptions have insanely good performance and I believe will be one of the biggest revenue unlocks over the next 5 years.

I'm currently seeing:

1) roughly 150% increase in customer lifetime revenue for customers on a prepaid plan
2) 20-30% of customers choose a prepaid subscription over a regular month-to-month subscription
3) no credit card expirations which usually result in 2-3% involuntary revenue churn per month
4) receive up-front cash which improves working capital dynamics

If you are not exploring or testing these yet, I highly recommend you start.

I went deeper into the data here in a webinar I held recently.

https://t.co/pMdnfgWLZa

[Eric Andrews @eric__andrews]

Can someone please create a resume/linkedin verification tool, some of this stuff is looking absolutely ridiculous these days

[Eric Andrews @eric__andrews]

Fire. Bad performers don't magically become good performers. Better to start over and be more rigorous hiring the next time around.

Anecdotally, Jack Dorsey eliminated "performance improvement plans" at Square last year because he said the internal data showed that PIPs don't work. So now they just cut people who underperform.

https://t.co/rPoweB4vXs

[Eric Andrews @eric__andrews]

Nothing more humbling than trying to explain what you do to your own parents and seeing them try so hard to understand and still have no idea.

[Eric Andrews @eric__andrews]

Most technology categories have one monopoly winner that captures almost all the market value.

Crypto - bitcoin
Social - facebook
Search - google
Rocket launches - spaceX
Generative AI - openAI

Yes, there will be smaller winners but most of the value is usually captured by one company/project.

You're either involved in it or not.

[Eric Andrews @eric__andrews]

@FounderKyle Thanks Kyle!

I teach people about financial modeling for startups and give all the models away free on my Youtube

https://t.co/y5SakXJvSZ

[Eric Andrews @eric__andrews]

How I would start a new educational YouTube channel from zero in 2024.

Step 1:

Be an expert in something. Please guys, this is important.

Step 2:

Identify the 20 most important questions people have related to whatever you are an expert in. Write them down.

Step 3:

Try to map those questions to keyword searches. YouTube is the second-largest search engine in the world.

Go to the Google AdWords keyword planner (free) and identify keywords with "low" competition and over 100 monthly queries. This means that people are searching for these subjects AND that you have a good chance to rank #1 for them.

If there is no search volume for your keyword/question, cut it from the list. Make a list of 20 keywords/questions with those characteristics.

Step 4:

Build long-tail video content for each keyword and include it in the title. Cross-link all your videos. Long content is great if good quality, many of my most popular videos are 30 mins +

Don't copy other videos. Don't even look at them, it kills your creativity and ability to think about teaching from first principles.

Step 5:

Share across as many social platforms as you can (ideas: quora, email, twitter, facebook groups, Instagram, tiktok, reddit, pinterest, etc.)

Anecdote:
A lot of the initial traffic I drove to my YouTube channel came from Facebook groups and Quora answers. If you don't have any ideas, try that. If you see 1 platform really working, double down there and cut efforts elsewhere.

Step 6:

Don't stop. Content is about stamina. If you keep going long enough, eventually you will figure it out. Minimum multiple years.

In my first 6 months, my channel got 117 views. Those first 2 videos (the same ones that got 117 views) today have close to 2 million views.

Step 7:

To stay motivated, build a financial model for your influencer business so you can track your progress and business plan.

You can use mine for free here: https://t.co/IWRlse1S5H

Step 8:

Launch a product or service to sell directly to your audience.

Step 9:

When you start getting traction, figure out why. Is it that you are ranking for keywords? YouTube algo recommending them a lot? Which videos have the highest click-through rates?

Repeat what works, cut what doesn't.

See you in 5 years.