How a Subscription Box Startup turned into a Netflix Show with Battlbox | EP. #182

Andrew Maff 00:02
We own this. This is a Netflix original series. We're like, oh, wow, this is legit. What do we do? We start asking, Does anybody know an entertainment lawyer? This is the agreement. If you want it, we'd love to have you, but we're not going to redline a single page. You. Hello everyone, and welcome to another episode of The E-Comm Show as usual. I am your host, Andrew Maff, and today I am joined by the amazing John Roman, who is the CEO of battle box. John, how you doing, buddy? Ready for a good show. Good

John Roman 01:22
glad to be here. Thanks for having me, Andrew,

Andrew Maff 01:26
super excited to have you on the show. I know we actually were lucky enough to meet at shop talk. And I was like, All right, I definitely got to get this guy on the show. Your background, your stories are wild. I always kind of like to start these off relatively stereotypically and give you the floor and just kind of let everyone know, like, where you started, how you got into battle box. I know there's some crazy stuff that happened towards the middle and now, where you're at now, and then we'll kind of take it from there,

John Roman 01:47

sure. So yeah. So battle box started in early 2015, just impeccable timing with the then decade ago, subscription box craze comboed with you know, the product is not existing in the marketplace. So, so I came in, actually, as an investor in battle box, pure limited capacity, not not leaving my day job. The previous decade, I had built B to B sales teams, so every so starting off, focusing on more SMB, I carried a bag, and then it grew into a kind of fortune, 2000 enterprise level sales team just from scratch, building it, you know, targeting cities. So I didn't have any D to C. Experience was all B to B, but I loved it. The reason I invested in it was because what I knew from B to B is reoccurring revenue is like all the negative, right? And a reoccurring revenue, and it's for consumers, which is a much larger, in theory, easier sale, and so much of it is just done through traditional D to C advertising. So super interested, invested, and then it kind of blew up a year in I joined full time, and yeah, the rest is history. A bunch of years of growth kind of our peak. Everybody, you know, so many direct to consumer brands, did well during COVID. Everybody was locked in their house. We did really well during COVID. And then halfway through 2020, we had the combo punch of COVID and the Netflix TV show, which shot us even higher with growth. At that point, there were three partners left. Originally four. There were three. We had a difference of direction. One wanted to be done with it. Two of us didn't want to. Didn't make financial sense for the two to buy out the one and we looked for a partner that was both the same language as us. Found one. They did. They bought us. We stayed on for an agreement of three years, but we were all kind of vibing and talking the same language, so it was exciting, and we thought they would take it to the next level of growth. They were a SPAC. Everybody knows the stories of the valuations and the market caps of SPACs in 2020 when this in? When, when this happened? And then, yeah, the rest, you know we sold in 2021 and the market just fell out. And you know, they had a decent nine figure market cap, and in the course of less than a year, it was seven, seven digit market cap. And we saw the opportunity. Bought the business back, which was not part of the plan, but we saw just over some. Qualify just an arbitrage situation. Yeah, we sold the business for x, and we could buy it back for pennies on the dollar. So we did. Now we have it back. Call this battle box 3.0, 1.0. Was the original 2.0. Was when they owned it, and now we have it back. So, yeah, that's, that's the quick it's so crazy. Yeah, not, not the playbook of what we thought we were, yeah. Point just kept, kept going different ways.

Andrew Maff 05:26
Yeah, no. I mean, I know there's, there's nuances to stuff throughout all that, but no one thinks, you know, one day I'm gonna, you know, take on a partner or sell the business, and then the, you know, after that, I'm just gonna buy it back for to your point, pennies on the dollar, no one goes into a business thing, and that's going to happen. So it's a very unique situation. Let's, let's come back to that. I've got a question about the Netflix side of things, because that's, that's very interesting, right? Like, I'm a huge fan of, you know, build out media, become a thought leader in the space, educate and entertain, and then, you know, use that as a tool to sell. Obviously, a Netflix show is about as big as that can get, especially in 2020 so, like, what was that? Did they approach you? Did you approach them? What was that whole process like? And then, obviously, did it help?

John Roman 06:16
Yeah, so, great questions. And yeah, you see the end result? You're like, Oh, yeah. This is like, you know, perfect storm. How do you get it? So you have to go back over three years of us trying. So in 2017 we had a company, High Noon entertainment production studio, reach out to us, and they said, Hey, we're watching what you're doing on YouTube. We like it. We have some money from the History Channel to shoot some and it's funny. This isn't even really a thing eight years later, but they had received money to shoot a sizzle reel. So just short, eight short years ago, you get money for a sizzle reel. You then make it, think of it almost like a pre pilot. Then shop that, or get the green light to pay for the pilot. And then you get the green light, if that goes well to hopefully run the first season. So they have this sizzle, real money. They come in 2017 we do some. We do about four and a half days of full, full days of shooting. Come up with this is a real they give it to History Channel. History Channel sits on it for six months. Very limited, yeah, very limited interaction. They keep, well, anytime we try to ask or get answers, just kick the can down the road. Yeah, we're looking at it might be this, after six, seven months, they say, Hey, no, you know we're good, but we appreciate it. Okay, so, you know, we got excited now it's not looking good. And then they're like, high noons, like, you know, we actually have some meetings with discovery. We think they're probably a better fit. Anyway, we're going to take it to them so they pitch them. And, you know, long story short, they sat on it for greater than six months, probably like closer to seven to eight. You know, where we have anxiety. We think, we think this could be it, and then they tell us No. So we're like, okay, so from them reaching out in 2017 now at this point, we're in 2019 started 2019 we're, you know, have we don't think this is going to happen at this point. And they're like, No, you know, we have a couple meetings set up. This is January. The first one is with Walmart's streaming service, which I don't know if it even exists anymore, but in 2019 they had one, and they were going to compete with everybody else, and they had that meeting like we have a meeting with Netflix. To be fair. They had never sold Netflix before, hiding entertainment. They have two big feathers in their cap. They have fixer upper, which is huge, and the cool thing about it is it's very similar in the sense that they followed kind of the model you spoke about a moment ago, of like education, entertaining. Um, except they didn't, besides their actual business, they didn't have the business they have today, where they're in targets and have their own line, but that gave it to them. They had that in their hat. And then they also have Cake Boss, which is another big, big hit of a dessert Baker that has a show, and now he's got his vending machines. There was a cake bending does something right?

Andrew Maff 09:37
Yeah, yeah. Um, so,.

John Roman 09:41
yeah, no, that's the guy. So they have both of these, so we feel good about them, but they're we never sold in Netflix before, so we'll see. So they meet with Walmart. Walmart is same vibes as everybody else. Yeah, this looks cool that you know, and all they're asking for is money for a pilot. Um, they meet with Netflix. Netflix. And Netflix is like, well, we don't pay for pilots, like, how about we just, basically in the meeting, how about, let's just, let's just agree on a budget for the first season, and then we want right of first refusal on the next seven seasons and and we own this. This is a Netflix original series. They came out in their meeting. They're like, we think this is gonna get done. Like, okay, so within a few weeks, we have a 125 page legal agreement from Netflix. We're like, oh, wow, this is legit. What do we do? We start asking, Does anybody know an entertainment lawyer we find when we get recommended. And this guy's big thing is Jim Cantor, the Weather Channel guy, the hurricane guy. He's like, he's a client, and that's like, this big guy's big home run, which is cool. Anyway, we give it to him red line. It costs us, like, $8,000 we feel confident we've redlined it. We send it back to Netflix A week later, um, 15 minutes later, they reply and they say, Hey, sorry for Miss setting expectations, but this is the Netflix agreement.

Andrew Maff 11:10
there's no red line. You can negotiate.

John Roman 11:14
Negotiate. This is the agreement. If you want it, we'd love to have you, but we're not going to redline a single page, sorry, okay, make a couple tweaks. We make just some decisions. I was, I was down to be in the show originally, even though I wasn't a fan of the character they wanted me to be. I want is going to be like this city slicker that was like, quit spending all this money. You know, it's entertainment. It's it's fake reality. The asks were a lot. I was out afterwards, but, you know, we had four, four team members that were in, signed the deal the back half of 2019, all six months filming by like 60 hours a week. So all those guys were basically able to work during that time, they came back early 2020, just to two weeks of just filming some some additional shots for, you know, continuity and to wrap it all together. Then Netflix went radio silence on us. We didn't hear anything at all. They came to us in April, four months later, and said, Hey, we're thinking July 4 weekend. This is the art. This is what we're thinking. It's very, very, very patriotic, which the actual end result isn't, which is the last little curve ball. We're going to call it southern survival. We're like, okay, cool. So we start ordering. We go all in on manufacturing. We're manufacturing a line of southern survival stuff, like we're going, we can get it all in time. It'll all get in right before the July premiere, forecasting, literally throwing a dart at the board. How do you even measure this case? There's similar case studies, Duck Dynasty, but there's was a weekly new episode drop, as opposed to, it's 2020. People binge it all at once. Yeah, we make a guess. We think we're good. And then as we get a little bit closer, we have the George Floyd stuff happen, and everyone's a little bit, you know, there's, there's chaos in our country, and people weren't happy, and they come to us and they're like, patriotic isn't really a thing on the release rate. So they're like, um, we're gonna make some edits to the thing. They remove all the American flags. They remove any USA patriotic vibe of the whole thing. And then a couple days later, they're like, we don't know about the title southern survival. And we're like, we just went all in on branded southern survival gear. And they're like, Yeah, we don't, we don't know about the title. We don't know if we're even gonna air this right now, we need to do some thinking, and we're trying to plead our case, but at the same time, we're talking to talent managers, because that's all we're viewed as, as talent they won't even have a conversation with me. They will only talk to the four people on the show, and they don't, you know, Netflix is too big. It's not like this guy in the talent department is going to go out on a leg and reach out to, you know, four orgs over and say, Hey, these guys bought millions of dollars worth of inventory. Should we take that into consideration? Yeah, we learned that quickly that we were just never dealing with people that spoke the same language as us from the business side, but then they made the decision, we're going to keep it. We'll call it southern survival. Still going to go. We're still going to go July 4 weekend, and we launched quick answer on the on your ladder, question. We were getting about 125,000 unique visitors a month leading up to the premier. Year, the month of July, 2020, we had 1.2 million unique visitors. Saw massive increase. Now, to be fair, they didn't, they didn't all behave in the same way, right? We're talking COVID traffic. They're buying one time stuff. They're not buying the membership. But still, when you when you 6x traffic, even if they perform at about half of expectations of normal traffic, which was accurate, it's still a big, big windfall. Yeah, so yeah, it's a long answer, but yes,

Andrew Maff 15:32
that's crazy. So, I mean, obviously this is a exaggerated version of what every brand would love to do, because that's, I mean, that's, it's such an interesting opportunity. Would you do it again?

John Roman 15:47
Um, the answer is yes, um, it was, it was not easy. There were a lot of you know throughout the process of unknown, not being in control of the situation, the fact that we would get, you know, copied in to conference calls with Netflix, and then they would remove myself and others out that weren't on the show, there was a lot of frustration. But at the end of the day, Netflix paid, paid for the show, it still sits there. I would say our post purchase survey today, still about 5% of our new members, new customers that come in. They still, where did you first hear about his Netflix TV show? So it's very long, so I would say, yes, absolutely. But it wasn't like it wasn't a cake walk, and it was, there was massive frustration a lot of times during it.

Andrew Maff 16:42
Yeah, well, I know that developing media is obviously a forte of yours. For those of you that are listening and not watching, I can see the YouTube black behind your shoulder. So like, I know that this is a common approach for you guys. Is it something you still lean into because of that. You know, obviously it's entertainment and it's education, but at the same time, it's that community building element. So is it still basically what you lean in on in terms of kind of developing that new customers?

John Roman 17:13
Yeah, no. 100% so we still view, you know, traditional digital advertising, and traditional advertising for us, really is a middle funnel. There's some this top of funnel, but for the most part, our top of funnel is organic content, whether it's the TV show, which is a sliver still, but most of its YouTube, Tiktok, Instagram, short form videos. So we're for being such a small business relative, it's wild. We have three full time video editors, which is very unusual for small c brand, yeah, but it's because we're constantly doing content. We have a full time creator. We've looked at hiring additional full time creators. So it's, it's definitely, it's definitely part of our DNA and our secret sauce, if you will. In fact, we analyzed and we used AI to help us with this. We analyzed all of our short form video posting content that we posted in all of 2024 we did this in January and February, dumped it in AI and just analyzed the data. And we saw that not all platforms, but some platforms. We saw that if we increase the frequency on certain channels, the output operator, there's some channels where it's not doesn't work that way. If you post too many times in a day, it gets watered down and you're spreading the views multiple. But we found direct correlation. Tiktok was was the leader that increased frequency will actually net more results. So February 1, we doubled down, and we increased all of our content output by about 80% and it's not like we'll see the results instantly, but the goal is more top of funnel, we'll see. We'll be able to test the theory probably 120 to 150 days in, we'll have enough data to understand given the buying cycle. And hopefully, hopefully that's part of our next unlock.

Andrew Maff 19:24
Yeah, I mean, it's definitely the, you know, it's a if you have the the means to do it and the creativity to do it, which is obviously one of the big sticking points for a lot of brands, it's hands down, the best way to do it, because if you can get that organic traffic, and you get those types of views, all you have to do, from a paid advertising perspective, is middle of funnel, because you're you're basically already covering all of your bases, and the CPMs are typically wildly lower even when you factor in production costs, right? So it's a it's pretty it's a genius move. You have the ability to do it. So you've doubled down the Tiktok side. I assume you're probably. Also leaning in on like Tiktok shop and advertising on that channel. Also, how's that going?

John Roman 20:04
Yeah, so, so Tiktok shop. We started it when we started it. We went live January of last year. It took us about a year of learnings and mistakes we were just trying to figure out is scale it, because it's not our traditional customer at all, and it's not only a different generation, it's a different customer, it's a different household income demographic. You know, our like direct site traffic, our core business, average order values typically $85 average order value for memberships is 140 Tik Tok shop. We finally found our sweet spot. Average order value is $20

Andrew Maff 20:54
which is Tiktok, wild and different.

John Roman 20:57
And we finally got what we believed in January of last year we launched. It was definitely a seven figure channel. We just didn't know how we were going to get there. We figured it out that March was our first month. It was our best month ever. Um, we did right at 100k um, we'll do slightly over 100k knock on wood. We're over 50, and we're halfway through in April, and we still know next steps to scale further. So we're figuring it out. It's, it's just interesting because we have to be, we have to be, we can look at the whole big picture on Tiktok shop because of the price point, because it's different demographic, because they don't, you know, we have ways to get get them over into our ecosystem. They don't necessarily make further purchases, so we do probably go on the channel by itself, which has been a lot of the challenge. But still, eyeballs

Andrew Maff 21:58
Yeah, but you're thinking based on that, the way that consumers acting, it's gonna, it's gonna end up most likely being, obviously, it's a lower average order value out the gate, but are you thinking it's also gonna be a significantly lower, like lifetime value over time, or is it something you're kind of building into significantly lower for it, for the cohort in general?

John Roman 22:14
Now, don't get me wrong, there's, there's the little, the little bit in that cohort that are, there are customers, but you have to, you have to, you have to squeeze so many more tiktok shop customers to find the battle box gems in there. There's just not, it's not the same ratio as other channels.

Andrew Maff 22:35
Yeah, and it is amazing. Almost every brand I know that's successful on tick tock, it's because they figured out, either they figured out how to talk to that audience, because it's a very not only is a different audience, it's a different platform, and, you know, to fit in. It's, it's a different approach. But then it's also the products being offered. It's, it's like, that $20 price point is perfect. Anything over it. It's, it's tough to get anything to actually move on there. There's not enough education on the platform and consistency to be able to stay on top of them. So that doesn't really shock me. That's interesting. Look. Obviously, I really appreciate all the time. I don't want to take up too much of your time. I know you're super busy. You've got a ton of content create, and now we've got some more for you. So I love to wrap this up and give you a moment here let everyone know where they can find out more about you, and, of course, more about battlbox

John Roman 23:25
Yeah, so battle box, B, A, T, T, L, B, O, X, you can misspell it in a Google site will still come up. Yeah, we're on all socials TikTok is our largest with 1.1 million YouTube for those that are watching, we're so close to the gold one, and hopefully we get that this year. That's the goal. We've been close, though for a while. So all social channels were there. Myself. I'm probably most active on LinkedIn, and then onlinecase, oh.com, is my blog, which I'm 80% of the content, and there are 20% other people in the industry. It's like we try to highlight. It's not just about the wins. So you can go on there and watch our journey, or read our journey on Tiktok. You know, we were on there for over a year, posting every day, not having much success, and just trying to get learnings until we've eventually popped. But you know, it's, there's lots of losses along the way. It's not just wins. And I think we do a good job on the blog of like, highlighting, you know, the L's, and then how we can learn from them, if we can at all.

Andrew Maff 24:43
Yeah, hey, those sometimes are the greatest things to learn about, is the losses, because then you can hopefully not make the same mistakes someone else already did. There's typically a lot more than wins. Yeah, John, thank you so much. Really appreciate you being on the show. Everyone who tuned in, of course, thank you as well. Please make sure. Do the usual thing, rate review, subscribe all that fun stuff, whichever podcast platform you prefer, or head over to theecommshow.com to check out all of our previous episodes. But as usual, thank you for joining us. See you next time.

Narrator 25:13
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