On The Rhode To DTC Success
What makes a high-visibility brand go the distance.
She ate and left no crumbs.
Astronomical valuation via visibility…
Rhode sold to e.l.f. for $800 million. Three years old. DTC only. 34% EBITDA margin on 11% marketing spend.
High visibility cuts 2 ways. Raving fans that flood your website on launch day, and raging fans that flood socials when the delivery fails.
Rhode didn’t succeed solely on H.B, or the visibility. The promise had to land, nurture a community, and keep ‘em coming back.
Best Buds at your service, helping founder-led brands navigate high-visibility and higher stakes.
Visibility Is Good For Business. Obvs.
Attention is a social currency that compounds with consistency and trust.
CAC drops where visibility replaces ad spend. Conversions surge when it’s fueled by trust and consistency. A growing community, resulting from adoption, does the retention work that paid media usually handles. Rhode had it all with marketing spend at 11% of revenue. The industry average is closer to 30%.
Non-celebrity founders have also cracked the code. CAKES body, the viral boob solution brand, bootstrapped with $10K, spent $0 on marketing in the first year, and still hit $1 million in sales. 90% of that first year's revenue came from organic TikTok, and at just 4 years old, CAKES is reaching $100M in revenue.
The takeaway: Basic Economics 101, but make it DTC. Visibility reduces CAC. Community grows LTV. Healthier margins. Optimal valuation.
Where Things Get Rocky And A Little Cringe
One misstep in operations, a profound social media reckoning for the founder.
Do you recall, in 2016, Kylie Cosmetics launched the Lip Kit? It sold out in minutes. Orders shipped, customers eagerly opened their packages, and then the defective applicator wands surfaced. Jeffree Star posted his and the internet said “omg, same here.”. Within hours, the packaging defect had the brand up for cancellation.
Bible, this is my favorite tweet from the whole debacle:
Kylie responded fast and personally. New wands, replacements plus a new product were promised to everyone who got the bad batch.
Crisis averted, but at a cost requiring the founder's face, the founder's voice, the founder's time.
I don’t know what happened with the wands, but I can share what I think happened based on experience. Somewhere in the packaging development, someone signed off on a cheaper wand to optimize COGS, and all it did was cause a crisis that required way more money to fix.
The Lesson: Product and operational fouls amplify with high-visibility brands.
In Anticipation Of Your High-Growth Moment
When someone comes at you with a spreadsheet talking about where to cut costs, make sure they're accounting for the real value drivers: your community and what keeps them loyal.
You don't need Hailey Bieber's following to feel the benefits and pressures of visibility.
The truth, and your CRM knows this by now: your customers notice shipping delays. They navigated your return process. They got the timely email, or didn’t. Product and operations are equally part of the brand. No matter how good the marketing is, it will never overcome poor product quality or sloppy operations. Olaplex learned that the hard way, and valuation tanked.
Before you chase visibility, a PR moment, a big wholesale account, a viral product, the question is: if ten times the orders landed tomorrow, what breaks the customer experience first? And how do you fix it immediately?
At your service…
Best Buds CX is a fractional COO partnering with bold brands built on core values. We implement customer-retaining operations across the business that empower teams to operate at their highest potential so you can reclaim your time, energy, and ambition. Learn more.
