Investing in Outlaw Soaps
I'm starting to invest in early-stage companies. If you’re interested in getting involved in this sort of thing, I highly recommend the book Angel by Jason Calacanis. Jason is a prominent angel investor known for his early investments in Uber, Robinhood, and Calm. His book is a fast read.
There are a few reasons I wanted to start this type of investing:
To gain access to different types of companies and business models. I’m excited to broaden my horizons and gain more knowledge.
To build a strong network. I bet the next few decades of my life will be more colorful and interesting if I can spend time with the world’s most ambitious and driven people.
To help early stage founders through problems I've been through before. So many people have gone out of their way to mentor me, and I would like to give back where I can.
And of course, it would be great to make money. Over the last 10 years I hope I’ve sharpened my judgement and learned something about picking winning products, businesses, and people. I hope to put that judgement to the test and succeed in this field. And, at the same time, if you told me I would just break even across all of my investments over the next few years and get the three things above, I would still move forward.
One of my first investments is in Reno-based Outlaw Soaps. My high-level analysis below:
Strengths
Unusually great sales growth. Sales grew 320% in 2019 and 2020 is tracking towards 235% growth (on a meaningful base).
Strong product-market fit. 86% of their reviews are 5 stars. Customers love the products, primarily the brand and unique scents.
Danielle A Vincent is a sharp and driven CEO. She deeply understands her business, and the passion is there.
Favorable macro-trends for an outdoorsy brand. I believe the pandemic is driving more people to the outdoors to connect with nature. As an advisor to Hipcamp, I can confirm this is true as that company is flying. More people than before are identifying as outdoorsy, rugged, and adventurous. The shift to remote work should lead to more road-warrior/van-life identities, which should make more people a fit for the Outlaw brand over the next decade.
Risks
I know very little about consumer packaged goods (CPG) and soap markets.
Like with most businesses, long term effects of Covid on this business are unknown.
It's a crowded market, making brand differentiation tough.
Most startup investments do not pan out.
Risks being known, I'm excited about the opportunity given the clear traction and growth. And Danielle is the exact type of founder I’m looking to partner with as I enter this space.
If you feel like giving Outlaw products a try, you can find them at Northern California Whole Foods stores, or you can order them on Amazon or their website. If you decide to give them a shot, let me know what you think.
Tyler