How to Scale a DTC Brand Using Freelancers

Links:

• Website: CROSSNET
• Chris' Twitter

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Raphael Paulin-Daigle:
Welcome to the Minds of Ecommerce podcast, where you'll learn one key strategy that made leading ecommerce companies grow exponentially. We cut the bullshit and keep the meat. In a 15 minutes episode, founders and executives take us through a deep dive of a strategy so you get to learn and grow your online sales. In the last episode, you heard from Jason Wong from Doe who shared how to create highly effective referral programs. And today on episode number 22, get ready. Chris Mead is the cofounder of CrossNet, a new version of beach volleyball that's grown incredibly fast in the last couple of years. We'll be talking about how to grow a D two C brand, primarily through hiring freelancers. I'm your host, Raphael Paulin Daigle and I'm the founder of Splitbase, a conversion optimization and landing page agency for direct consumer e commerce brands.

Raphael Paulin-Daigle:
This is minds of e commerce. All right, Chris, welcome to the show.

Chris Mead:
Thanks for having me on.

Raphael Paulin-Daigle:
Yeah, of course. So as you know, this podcast is all about going deep and really dissecting one growth strategy so our listeners can get the most value right away. So just for some context, you've grown cross knit quite a bit over the last few years, but when did you launch the company?

Chris Mead:
2018. We launched the company, we were sitting on the idea for about a year. Yeah, once we finally got our inventory in like 50 units or so, we launched it towards the end of 2018.

Raphael Paulin-Daigle:
Amazing. So just a few years, I mean, it's not that long between 2018 and now because you're now in over 3000 stores, over 10 million in revenue. And you mentioned that your team is completely remote, right?

Chris Mead:
Correct. Yeah.

Raphael Paulin-Daigle:
Awesome. That's pretty great because for people who are listening, the topic that we're going to talk about today is about how to hire talent affordably as you scale fast as a D, two C brand. So Chris, let's dive into it. Why are you so good at doing this for CrossNet?

Chris Mead:
Yeah, I think it came out of necessity. Right. As a founder, I feel like the best founders are very good at identifying what they're good at and what they're bad at. Right. And rather than spending time on what you're bad at, which is one, not fun, but also going to pretty much make shit results. Right. Go hire for those weaknesses and try to hire for the smallest amount of hours just to get the job done. Right.

Chris Mead:
So we've made so many mistakes over the years of bringing on headcount, bringing on a 40 hours work week, like higher, when we really only needed them for 20 hours. Right, and then the other 20 hours were you scratching your head figuring out what is this person going to do? So now you're paying for them, you're paying for their benefits, you're wasting your time trying to figure out how to keep them occupied at your job. It's just a bad situation for everybody. So I always recommend hiring on a freelance basis first, especially if it's a role that you need to prove out and then making that full time hire unless it's so obvious from the get.

Raphael Paulin-Daigle:
That's great. So when you're hiring and looking at which role to hire, what is your approach for deciding what to hire for? Because understandably, any brand, and by the way, most listeners are probably past a million dollar mark or around that mark. Obviously when you're at that point you could literally hire one person for literally everything in the business, or at least you feel like you need to. And obviously you don't necessarily have the budget to do so. So how do you decide which role to hire for?

Chris Mead:
It's tough. I think what you need to first do is you look at internally what are the resources we do have? For us at CrossNet, we have three founders, all with different skill sets. Mine's in sales and marketing. My brother's kind of in social and he's been doing a lot of the legal stuff lately. And then my other co founder is in product and logistics. So across three of us we had a lot of stuff covered. But the one main thing was finance. Finance was terrible.

Chris Mead:
We didn't have a coder and we didn't have a performance marketer. So between that, those were kind of the biggest roadblocks for us. Our first internal hire was a social media manager because my brother was spending so much time on social all day, like responding to comments DMs, that was an easy one to outsource for 20 hours a week, right? And then when 20 hours a week wasn't enough, we brought it on full time performance. We lacked big time. We had always outsourced performance marketing, so let's try to bring that in house. And then finance, we knew eventually we'd want to sell the company, but we also knew that we'd want to hire employees and get ourselves paid and do everything legally so we're not going to jail, right? So bringing that finance person was a no brainer. But back to your question, we kind of identified one position we really needed, let it rock for a few months and then hired again. There's all this pressure, at least for us, there was internal pressure, right? I want to hit revenue goals every single month and as a funded company, you have pressure from investors to hit those goals and hit those revenue numbers very quickly and not see things play out.

Chris Mead:
So for us, we were kind of in a fortunate situation where the only clock we were racing against was ourself. So we'd hire, wait a few months, see how it reacted, and eventually we've made mistakes. We've hired way too many people at once. We've had it downsize from there, right. Taking the slower approach and seeing because the market shifts, your ideas shift, time is really the biggest thing.

Raphael Paulin-Daigle:
So when hiring like that. I think there's generally like two ways to approach this, especially when you're a founder, right. It's to either you can hire someone to take things off your plate, or you can hire to get someone to do things that you're just not really skilled at doing. So just really supplementary. On top of that, do you tend to think about one of those more than the other? Do you try to focus more on taking things off your plate or hiring complementary skills? What's your approach?

Chris Mead:
Yeah, it's a good question. I think in the beginning it was, how can I bring somebody on who has a skill that I do not have? Because I'm fine as an owner trying to get my company off the ground, working 40 hours a night, well, 24 hours a night, right. I don't have the luxury yet as a founder who only has a million dollar brand to be outsourcing my work, I still need to be in the trenches and I can't remove myself. As we've gone from two employees to 20, I am much more far removed from the day to day and thinking more about the month to month and year to year than I was previously. So first I'm hiring for necessity and then for my convenience. And then it's really boiling down to what does the company need at the current moment? And I found that when you cheap out on a hire, when you hire that $15 an hour graphic designer instead of that $30 an hour graphic designer, you're going to get that quality.

Raphael Paulin-Daigle:
It costs you so much more in the end.

Chris Mead:
Exactly. So same thing for legal, same thing for coding. Good talent pays for itself. Eventually. Pick and choose on what you want to spend your money on.

Raphael Paulin-Daigle:
Yeah, I think that's a good approach. Right. Because at the end of the day, when the company is still pretty small, you can manage to handle a lot of things by yourself. And then the thing you're just really not good at doing, you can add people for that. But at scale, especially when we have a similar team size, we're like 20 something people. And although we're in a very different business, we're an agency, right. It's a people business. It's the same type of thing where at one point, if as the founder, you are still doing absolutely everything in the business and you're never really delegating anything, and you're just hiring for the things you're not good at, it's going to catch up on you.

Raphael Paulin-Daigle:
Right. And you're supposed to be the one leading the business. And if you're still doing all the smallest things, you're not going to be able to do that 100%.

Chris Mead:
And I think it's also really critical to kind of plan out your revenue over the next twelve months. It's one thing to look at your bank account and say, can we afford this person now? It's another to say, hey, here's our projected revenue coming in and our spend coming out and this is what our cash flow forecast is looking like. And can we support this headcount? Especially if you're bringing on more than one person. I feel like so many people don't do that. They see, oh, we got 100K in our account, we could figure this out. That may work for one or two people, but if you're trying to hire a team, you really need to be forecasting out your revenue before you're even worrying about hiring.

Raphael Paulin-Daigle:
Yeah, well, and especially when you're a brand that has to put a lot of cash forward for inventory and everything. You need to be conscious of that, because like you said, if you're just looking at the bank account balance, I mean, the next day, if you need to make an order for an inventory, that thing is just not accurate anymore.

Chris Mead:
Exactly.

Raphael Paulin-Daigle:
Okay, so from my understanding, you guys have been pretty successful at hiring people that are a bit more flexible. So as freelancers, before hiring them full time, which I think is generally the default, people are like, we need that person, we're going to hire them full time. So when it comes to hiring and finding those freelancers, what are your best tips for finding the freelancers? Finding the right freelancers. And then you still got to keep in mind that when you find freelancers, you also want to make sure that maybe you can bring them on full time later on. Right. So how do you find these people?

Chris Mead:
Absolutely. I like a tool called freeup.com rather than like an upwork where I have to interview like ten people, other people, free up will give me, in their opinion, the perfect person based off their resume. So here's an example. I'll type in I need a junior graphic designer, $25 an hour, has to have availability to work nine to 05:00 p.m. And can respond to Slack and Skype. They'll then put me in contact with their perfect person. I'll interview them real quick and nine times out of ten it's like a perfect match and just saves me a lot of time. And I think also to get the most out of these people, setting them up with real clear goals and deliverables rather than just like in the past, it used to just be like, I know I need this position, go higher and let them figure it out.

Chris Mead:
You end up costing yourself so much more money and time. If I would have just spent a week really breaking down the job, like the roles and responsibilities, their KPIs and all those buzwords, right. They actually mean something and they actually save you a lot of time. So coming to a table with a clear description of what that job looks like inside and out will save you a lot of time as well. Which we failed to do in the beginning.

Raphael Paulin-Daigle:
Yeah, that's so important because I think a lot of people, especially as founders, you get very busy and then you're like, hey, we're just going to assign tasks to these people. But if they don't have a clear vision of what you're trying to accomplish, they're not going to be able to do anything more than that very specific task that you tasked them. Right. And I think you're losing a lot of value if that's how you operate. So I think that's great that you're really fleshing out those KPIs and objectives. So I guess my next question when it comes to that is for you guys, is there a time where you're like, hey, this freelancer needs to go full time? Do you try to convert those freelancers into full time employees? Or at that point are you going to go out and try to just hire someone full time, completely different for that position?

Chris Mead:
Yeah, that's a good question. I think the majority of time we're talking to the freelancer ahead of time, kind of setting the expectations of, hey, this role is 20 hours a week, but if you crush it or if the business scales, we'd like it to be full time, are you open to that? And the majority of freelancers have been depending on the position, right. Like a performance marketer, somebody running Facebook ads. What I've seen is they would prefer to work for ten different brands because it's not as time consuming and not really a 40 hours work thing. Let me get a check from ten brands compared to just one. I can't blame you. But other positions like operations or customer service or something like that, they've been inclined to take the full time position. So yeah, I'm definitely trying to set those expectations beforehand.

Chris Mead:
I'm also trying to reward people who do good work. If they've been working for CrossNet and doing a great job, it'd be kind of messed up, in my opinion, to go higher elsewhere. I'd want to promote from within. I want to promote the people who puzzled their ass for me. So yeah, definitely want to make those expectations in the beginning and it's a good kind of trial run for everybody. If you could kind of test it out and set that framework, I think.

Raphael Paulin-Daigle:
That'S a great takeaway. Right. It's make sure to just have that conversation beforehand. Don't try to guess if that person would be interested after a while to join you. It should be one of the first questions you ask, at least I believe.

Chris Mead:
Exactly. It's important to build also a company culture that they want to work at. Right. They could come in and think that they want to work full time and then they could end up hating the job. So they're happy too, that they did a freelance thing because it's no sweat off their back that they're not this full time hire. They have to quit now and put their two weeks in. So it kind of works both ways.

Raphael Paulin-Daigle:
Totally. And I think it's even more than culture, right? Because at the end of the day, it's like, hey, if they're just really good at interviewing and doing a test project if you've given them a test project, well, what if in two, three weeks from now, they just don't really work out when they're an employee, it's a bit more complicated. When they're a freelancer, it's like, hey, we can do a little swap a little faster.

Chris Mead:
Exactly.

Raphael Paulin-Daigle:
So you've hired a lot of freelancers to really grow the business. So for a brand that just kind of want to do that instead of defaulting to full time hires, I guess let me flip that question. What are some of the biggest mistakes you've made when you started doing that hiring?

Chris Mead:
Too cheaply. Graphic design is one that always comes to mind, trying to cheap out and say, hey, I have $200 for this project, when the project should have cost me 275. Right. And now I have to spend the 200 on the shit piece of content I can't use. And now I got to pay 275 for the real piece of content and I'm out an extra $200. So paying for the value of the work, honestly, a lot of the mistakes has been underpaying. Trying to be too cheap. I think you should really set your budget on what's important for your brand.

Chris Mead:
Right. We do not pay a lot of money for customer service. We have found a customer service person who speaks fluent English. She's amazing. She could get on the phone and she's cost effective. Cost me probably $40,000 a year, and she kills it. I could absolutely hire an English speaking person who lives in the United States and pay them sixty five K, and they may be a little bit better, but she crushes it. So that's where I save that budget.

Chris Mead:
And now I have an extra 20K in the budget to go put towards graphic design or something that I value more for my brand, like marketing. Right. I have two amazing graphic designers on staff. And since we kind of took budget from over there and put it there, I can kind of build up my perfect team, in my opinion.

Raphael Paulin-Daigle:
Sweet. When you build up that team, actually, do you give test projects when you work with those freelancers? Do you have a set time and deliverable for everyone or is it pretty random?

Chris Mead:
No, I think the majority of the hires are out of necessity for a project to get done. So it's, hey, we got this project, or hey, we're going to throw here's a good example. We just put on a video editor, and he's 20 hours a week right now, so he's literally part time. And some weeks are 10 hours, some weeks are 30 hours. And it's kind of, hey bro, you're on slack, you're on retainer. And our graphic team, like our brand team, will task you with stuff as stuff comes in and so he'll literally get a dropbox almost every day. Blade this up and make this into a 32nd ad and just keep blading for 4 hours a day.

Raphael Paulin-Daigle:
And with these new people, how often do you actually have a call with them? Do you treat them like full time employees? What's the day to day management like for you?

Chris Mead:
That's a good question for me personally. So I'm the chief marketing officer at our company. So I have three direct reports in the marketing team. One's the social media manager, one's our performance manager and one's our brand manager. So those three will report directly to me. Have our one on one with our social manager after this call and she will have her direct report. So those freelancers are typically reporting to those managers and I'll just hear from them. But yeah, when I was trying to have one on ones with my direct reports, my director ports reports, not enough time of the day for that.

Raphael Paulin-Daigle:
Yeah, that's crazy. That's great. So I think there's a couple really important things that you said and I just want to kind of recap for the listeners. So number one, even when you're hiring freelancers make sure that they have very clear goals and expectations set up from day one. Otherwise at the end of the day they're still doing work like any other employee and if they don't know what you're looking for, they're probably not going to be doing what you want them to be doing. So that's number 1. Second thing, I know you mentioned free up I believe, right?

Chris Mead:
Free up.

Raphael Paulin-Daigle:
Awesome. I actually wasn't aware of that. So free up is where you found a lot of great people. So that's good. I'll check it out myself and I'm sure people will want to check it out as well. And then the third thing, I think you said that to me, I'm like, yeah man, I've made that same mistake. And it's like don't cheap out on talent because sometimes you try to be budget conscious and obviously there's a difference between really splurging and going above and beyond with your budget. But there is also at a certain point it's just going to be so much better when you pay people what they're truly worth.

Raphael Paulin-Daigle:
Right. And you don't cheap out, especially if your standards are pretty high. So I think those are great. Now just to kind of zoom out of hiring for a little bit as we're getting close to the end of this interview, if you were to start the company all over again, what would you do differently?

Chris Mead:
I would have brought a finance person on way sooner. It took about two and a half years till we brought somebody on. We're doing all of the accounts receivable, all the accounts payable, doing all of that. Ourself, we had thousands of dollars of unpaid invoices. We weren't collecting sales tax properly, we weren't filing taxes properly. It was just a nightmare and a headache. And our CFO, when he came on, spent, honestly, probably upwards of a year just fixing our mess over the last three years. So, yeah, good learning lesson.

Chris Mead:
Fortunately, we ran a business that was profitable and wasn't in desperate need of money, which was great. But, yeah, bringing on somebody in the finance world sooner than later should have happened.

Raphael Paulin-Daigle:
Yeah, I think that's very relevant for a lot of companies. Finance is one thing that if you neglect, it can really come back and bite you in the ass pretty hard sometimes.

Chris Mead:
Absolutely.

Raphael Paulin-Daigle:
Sweet. Chris, my last question is, who are some people in this space that you look up to or some people that you follow just for great content when it comes to marketing and growing? D, two C brands.

Chris Mead:
Anyone who's done it without the venture capital or the celebrity, I admire that. It's a grind, man. Like Chris Cantino is really good on social. I love his following. I love Sharma as well. Obviously, he does a lot of VC projects. Now. People who just get the grind of just having a few thousand dollars in your bank account and trying to make it into a dream and who actually grind it out for a few years and have a great product, it's tough not to show those people love because I've been through it and it's so damn tough.

Chris Mead:
And we're lucky we came out the other side and have a great business, but there's a million times where we're thinking about know.

Raphael Paulin-Daigle:
Yeah, I love it. I feel you. I'm a Bootstrap founder, so I also know how hard it is to get a company on the ground. Sweet. Chris, that was awesome. Thank you so much. If people want to learn more about you, want to learn more about CrossNet, where should they go?

Chris Mead:
Yeah, Crossnetgame.com. To get yourself a CrossNet. If you want one, follow me on Social, chris Mead on Twitter or LinkedIn, put out a weekly newsletter. It's all about e commerce and entrepreneurship. Check that out.

Raphael Paulin-Daigle:
Sweet. Awesome. Well, Chris, it was a pleasure to have you. Thanks so much.

Chris Mead:
Thanks, man. Appreciate it.

Raphael Paulin-Daigle:
All right, that's it for today's episode. In the next episode, you'll hear from Ben Smith, who's the founder of Disco. Disco is a skincare brand that's grown quite fast, and Ben attributes that growth to understanding his customers and really utilizing the data he's learned from his customers through landing pages, website copy, and just overall marketing campaigns. Really great conversation. So make sure you don't miss any of the new episodes. Subscribe to the podcast, and if you've liked what you've heard, make sure to leave a review in the itunes Store. I would really, really appreciate it. Now, if you're working on an e commerce store that does over a million dollars in sales and increasing conversions is a priority, make sure to check out splitbase.com to see if and how we might be able to help you with landing pages and on site optimization to improve the effectiveness of your marketing.Now, if you have any questions or comments, tweet me at rpaulindaigle and I'll be super happy to hear from you. Thanks again for listening. This is minds of e commerce.