Hey everyone, today we have a very special show featuring three of my friends from high school: Andrew Tsai, Jonathan Hong, and Mike Zhang, co-founders of The Drip Club, a trusted online e-liquid and vape shop. Andrew is the VP of Sales, Mike is the CEO and Jonathan is the VP of Products.
On today’s show we’ll be talking about how The Drip Club began as an online subscription service, similar to BirchBox, and evolved into a consumer products company, what they did to get to a quarter million Instagram followers without paid advertising (which they can’t do because of the industry they’re in), and how they scaled the effectiveness of working as a team with a divide-and-conquer strategy.
Download podcast transcript [PDF] here: How Drip Club Used Influencer Marketing to Get 250,000 Instagram Followers and Grow the Business 1,000% in One Year TRANSCRIPT
- [3:28] – They want to model themselves after Red Bull.
- [04:54] – They try to add value and provide the best products and the best service, and take the personal approach. They share insights and best practices that will help their customers be successful.
- [6:34] – They ask what is not moving and take it back at no charge and give equivalent credits.
- [06:57] – They want to make whatever is on the shelf is moving. They set a high bar. They help with planning for holidays in retail. They have account representatives reach out to the shops and give tips and free products.
- [8:25] – Their focus is to help customers to sell products.
- [9:08] – Social media has helped to build their brand. Especially Instagram. They grew the business over 1,000% from 2014 to 2015.
- [10:14] – Today they have a quarter million Instagram followers. They are unique because they can’t do paid advertising.
- [11:25] – They wanted to share great content as a lifestyle brand on Instagram. They focuses on sourcing great products to give away and build a following. They also transferred those followers onto Facebook and built an email list.
- [12:30] – As the channel grew they spent less and less, they began with expensive products that people may want, but not want to pay for. They also got free product, so it cost them time. It was probably in the 5 or 6 figures in retail value of products.
- [14:36] – People have a desire to share about a good product. Social influence points by sharing something of value. Influencer placements have been organic by creating great products.
- [16:34] – Joint goodwill created by a collaboration with a popular DJ and building relationships with people in the industry. They are always seeking out influencers to build relationships with and collaborate with. Win win situation.
- [17:56] – They have been observing from the beginning and have found the best influencers from building their reputation over time. They also started early on and grew with a lot of people. Find good people to interact with because you never know how big their influence will get.
- [20:07] – Struggles faced from working with friends. Relationships are about communications. They had no ego struggles and were very blunt about their ideas and thought processes. Communication can be a challenge, but they feel they have mastered it. Communication and trust.
- [22:22] – They would all hang out, then Andrew and Jonathan kind of disappeared. Mike noticed they were working all the time. For Mike, it was rewarding having a third party perspective. He knew a lot about the value of time. Being effective and not just efficient.
- [24:25] – How to scale the effectiveness of working as a team with a divide and conquer strategy.
- [26:27] – Get started as soon as possible and listen to your instincts
- [27:15] – Productivity hack, mindfulness or meditation incorporated into each day to avoid overwhelm and help to focus
Resources from this interview:
- The Drip Club
- Instagram @dripclub
- Facebook @thedripclub
- YouTube Drip Club
- Twitter @DripClub
- Productivity Hack: HeadSpace
- Must-read book: Good to Great by Jim Collins
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Disclaimer: As with any digital marketing campaign, your individual results may vary.
Full Transcript of The Episode
Announcer: Do you want to impact the world and still turn a profit? Then you're in the right place. Welcome to Growth Everywhere. This is the show where you'll find real conversations with real entrepreneurs. They'll share everything from their biggest struggle to the exact strategies they use on a daily basis. So if you're ready for a value-packed interview, listen on. Here's your host, Eric Siu.
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All right, everybody, today I have a very special podcast for you all. I'm actually interviewing three people that went to my high school, and we actually all, well, two of them I used to hang out a lot with in high school, so I'll just go ahead and introduce them. We have Andrew, Jonathan, and Mike, who are the co-founders of The Drip Club, which is a trusted online, eLiquid/vape shop, and they offer the highest quality Elo goods for electronic cigarette and vaporizer devices at the lowest prices, and my understanding is that they're going into other areas as well, which I'll let them speak to. How are you guys doing today?
Andrew: Thanks for having us.
Mike: Thanks for having us.
Jonathan: Thanks for having us.
Eric Siu: Yeah, thanks for being here. Andrew, why don't you start off with telling us a little bit about ... I guess you guys can each introduce yourself, and Andrew you can talk about what the company's all about.
Andrew: Cool, yeah, this is Andrew. I'm the V.P. of Sales.
Mike: This is Mike. Andrew and Jonathan, I guess, are the two original co-founders, and I kind of tag along and I bullied them into allowing me to be the third co-founder, and my job is everything and anything. Official title is CEO, and then Jonathan, he can-
Jonathan: Hey, I'm Jonathan, I'm V.P. of Products. Mike joined in so early on, he's definitely a co-founder.
Andrew: Definitely, definitely.
Jonathan: For the record, he's definitely a co-founder.
Andrew: Cool, so just a little bit of background on how we started and where we are today.
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Basically we started as an online subscription service, so it's kind of like Birchbox where we would send customers samples of eLiquid every month so they can try based on a specific flavor profile that they would fill out on our website, and it was a highly curated and customized experience. We made our name in that space in the industry and evolved very quickly to become a distributor of the products to actual vape shops in the industry, so we went from B to C to B to D, essentially, and moved upstream, up the value chain a little bit, to start branding our own products, so now, today, we consider ourselves almost a consumer products company with our own portfolio of brands that we exclusively distribute.
Mike: Like Red Bull. That's probably a good parallel of a company that we aspire to. We really appreciate and respect a lot of the stuff they do surrounding brand building.
Eric Siu: Got it. What prompted the change? It sounded like you guys made some pretty significant changes right away, and you guys are going towards the Red Bull kind of model. What prompted all of this?
Jonathan: We were really out there scouring the industry to look for the most premium flavors just to cater to the demand. There was a lot of noise out there and we wanted to cut through it. There's too many flavors to offer, and we quickly realized not only were a lot of the flavors themselves and the experience was sub par, but the entire experience for the consumer on an branding level, as well, just wasn't up to our standards, so we dug a little bit deeper, made some really key partnerships with a lot of great people in this industry who manufacture as well as distribute the products, so we decided to take a stab at it on our own with our own creative juices, and decided to create our own first brand. That's what really opened our eyes to selling directly to shops, not only online.
Eric Siu: Got it. If I have a vape shop and I'm looking to sell different flavors, is the idea for a drip club to be the go-to shop for whenever I want to add inventory or just kind of buy stuff for my shop?
Mike: Yeah, I think so. I think above and beyond, just the source of, obviously, what we consider to be a very lucrative catalog for the retailers. We try to have value-add above and beyond just providing the best products and the best service. I think those are certainly two important pillars of what creates a sustainable consumer products company. I think the third that we really take pride in is always thinking on behalf of our customer base. Essentially a lot of them are small to medium size businesses that, depending on their size and depending on where they're at in their growth cycle, a lot of times can benefit from certain insights that we might have, that we might collect globally, as well as certain best practices that we can sort of advise them on because their success essentially translates into our success. We really try to take a very personal approach to ensuring that our customers are successful, above and beyond just selling them product and making sure that that product then, in turn, is being sold and is generating income for them and is being properly represented in the marketplace, so kind of taking a step above and beyond what you might consider the traditional distributor.
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Eric Siu: Great. Can you give us a real-life example of how you're making that customer experience better?
Mike: Yeah. There are two I can think of off the top of my head, and Andrew feel free to supplement here. We have fairly personalized high-touch relationships that we try to build, so it's definitely not an eCommerce shop where you've got a shopping cart and that's pretty much it, that's the extent of your relationship with us. We will do things like ask the customers, essentially these are specialty vape retailers, what's not moving, be it our products or, in many cases, other products that they might have overordered or misordered, and we'll take that back at no charge, and we'll actually give them equivalent credits for our products, which ostensibly I think moves the needle for them a lot better than some of these things that have been collecting dust. As you know in retail, shelf space is king, and so we want to make sure that whatever is on that valuable precious shelf space is actually moving for them, you know, double points if it's obviously our product, so I think we have a high bar that we set for product, and then we meet that with these types of service guarantees.
Another thing that we do is, around the holidays small business owners are so busy getting distracted, getting pulled in every which direction when it comes to planning, that sometimes they'll miss out on core things that ... You know, the holidays for retail, I think, are where you can get the biggest incremental return on effort, and what I mean by that is, if you run a sale on Black Friday versus running a sale any other Friday of the year, you might see a four or five times return on your effort. We'll do things like have our account representatives reach out to the shops to make sure that they are, in fact, pulling out all the stops for their customers for whatever sales they might be planning. We might be throwing in free products for them to give away, and sometimes we just give them tips. We give them reminders via our email campaigns that don't try to sell them anything but just say, "Hey, did you know that Black Friday's around the corner. Maybe you ought to think about putting together an event or putting together a sale," or something like that. I think sometimes a little bit goes a long way in that regard, so in that way, I think we really see ourselves as kind of a value-added partner, not just a vendor. You have anything else?
Andrew: Yeah, yeah, that was great. I think our focus is really to just help them sell products, and so to the extent I would invest in point of sale displays, making sure they're stocked up on flavor cards and marketing material. We invest a lot of time and money developing those things, and offer to our customers for free so that when their customers come into their shop, it's a lot easier for them to push the products, so really, investing in their businesses as a whole, not just balancing against a check or a bank wire, and cutting it off there.
Eric Siu: Awesome. Yeah, I guess in return, they're going to remember you forever, and they're going to stick with you because you're doing all this extra stuff for them, so I almost think of it as customer success, right?
Andrew: Sure, yeah, absolutely. That's a good way to put it.
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Eric Siu: Okay. Great. Can you guys share some numbers around the business today in terms of ballpark revenue and customer numbers?
Mike: Yeah, definitely. I think maybe a good place to start is social media. I mean, so much of our traction and so much of what we've been able to build by way of brands have really started and live on social media, specifically Instagram, Facebook to a lesser extent. There's a very active Instagram community surrounding vaping and e-cigarettes, and I think through that we've been able to obviously grow our business. We were a very small business when we started in 2014, and in 2015, so kind of the first year to second year, we grew the business over a thousand percent, and that is completely not normal.
I think we definitely lucked out in terms of timing and in terms of being at the right place at the right time with product that we thought people might want. We consider ourselves very fortunate in that regard, but I think Jonathan can speak probably more to the social media in terms of the growth and the numbers there, because I think as of today we're almost a quarter million Instagram followers, and he'll explain a little bit of what makes this industry unique insofar as not being able to overtly advertise and do paid advertising campaigns, which for most other consumer products categories or companies, you can do it. We're a little bit unique in the way that we sort of acquire customers.
Eric Siu: Great, so Jonathan, do you want to speak to what Instagram has done for you guys? I'm staring at your Instagram right now and, yeah, a quarter of a million Instagram followers. That's crazy. What has it done for you so far, and how did you guys get here?
Jonathan: Yeah, absolutely. We were very limited in terms of the options that we had. We quickly found out that Facebook and Google had already jumped the gun and categorized their ad abilities within the realm of excluding us out because we were categorized in the tobacco category, so Andrew, Mike, and I, we were continuing to think about what would be the best way to get as much reach as possible. At the time. Instagram, there were a lot of lifestyle brands that really influenced us that were building their businesses just through that platform, so we wanted to focus around sharing really great content and ultimately creating our own content, more as a lifestyle brand than just throwing out ads and saying, hey, buy this, this new product has launched, and etc.
Starting out, we really focused on sourcing great products that we essentially invested in with our own dollars to give away, and we wanted to build a following through the giveaways, and also pepper in great content that we wanted to share, so a lot of our audience started out following us because they liked the cool things that we presented to them and shared, as well as gave away really cool products, and then we would transfer, or do our best to transfer, those followers onto Facebook, as well as obtaining an email list just to further build our other channels to provide new content.
Eric Siu: Got it. Okay. Fantastic. Just ballparking here, to get to this to this 242k followers right here, how much stuff do you think you gave way in terms of dollar amount?
Jonathan: You know the first time I remember, the first time Andrew and I were thinking, we went
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to this shop and we saw this really high-priced product that most people wanted but wouldn't drop the money for, and at the time three hundred dollars was a lot to us, but that was our first effort.
Andrew: Yeah, you know what's interesting? I think that we actually, as our channel grew, we spent less and less money, because here's the cool part of that [inaudible 00:12:53], basically what we did was, we asked for free products in exchange for exposing their channel on our Instagram as well. It was kind a collaboration where you would identify some other brands in the industry who had their own IG channels, or other influencers, and we would do joint giveaways where we would expose each other's channels and kind of build off of each other's communities, and because that was so valuable, people were willing to give us free juice, free mods, and things like that. Honestly, it didn't really cost that much dollars, it really was just time on our end to coordinate those giveaways.
Jonathan: Yeah, I would say, if you had to put a ballpark number on it in terms of retail value, it's probably now in the five or six figures easily in terms of retail value of products we've given away, and I think that obviously helps on the community-building front, because at the end of the day this is a very engaged community online, and we like to try to be in the middle of as many of those conversations as possible.
Eric Siu: Got it. Awesome. You talked about using your Instagram and other people's Instagrams too. Are you guys doing anything else on the influencer marketing front? Because that's a topic that's growing in terms of trends.
Andrew: In terms of new products.
Mike: Yeah. I think, and Jonathan can speak more to the influencer placements, or the influencer shout outs or features, those actually, interestingly, are very organic. I think what, at least for me, what I found is, and this is part of the reason why I think we love being in consumer products so much, is that when you have an inherently good product that lends itself to sharing, people actually have a desire to share it. I think there's probably some psychology at work there where there might be social influence points that someone might think subconsciously they're racking up as they're sharing something of value to other people, so I think a lot of the influencer placements have been very organic by way of just creating really cool products, and I think Jonathan definitely has to take a ton of the credit for that. He's our VP of Product, and he is like The Guy for all of our products and as he's sitting here, shaking his head right now, but ...
Jonathan: It's a team effort, for sure.
Mike: I think
one interesting thing that we have done is more on the deliberate end of doing product licensing, is we teamed up about a year ago, I would say, that's when we first had a conversation with a DJ or an EDM producer by the name of Brillz. He's signed to Diplo's Mad Decent label and he happened to be a friend of a friend of I think Jonathan and Andrew, your guy's-
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Andrew: It was Tiffany
Jonathan: It was Tiffany. Eric knows her too.
Eric Siu: Small world.
Jonathan: Very small world.
Andrew: Small world.
Mike: Small world, yeah.
Jonathan: Hi Tiff.
Mike: It was, I think, serendipitous that we happened to find out that he's a huge vape fanatic, and I think he quit cigarettes because he started vaping. Right?
Jonathan: Absolutely, yeah.
Mike: Yeah, so it was the perfect storm of an influencer that actually really enjoyed the product and actually wanted to have a hand in developing product that cater to his tastes and that he could market to his audience, and so many months later, we actually ended up launching a product that was licensed, that had his brand, called Twonk, on it, so it's called Twonk Juice, and that ended up being also very successful because we thought we were able to really use the social influence, that joint good will that was created between the Drip Club and Twonk brands colliding to promote this new product, so that was exciting.
Jonathan: I think our collaboration with Brillz is just one example of when you're creating desirable products, naturally we always look out for building relationships with good people within the industry, which could potentially lead to something greater, and I think we're always very active of seeking out those types of people so that we can continue to build our brand reputation in association with others who are doing things the right way. From an influencer level we've always been active to really build relationships, see what other people are doing in this industry, and potentially collaborate, because as we grow through these collaborations, it's a win/win situation, so once that bit of time, it definitely snowballs to something greater, especially when you're working on product together.
Eric Siu: Great. Jonathan, how do you go about finding these influencers? What's one tactic that you use that's super effective?
Jonathan: Oh, that's a great question. Every step of the way we started out as a subscription company, building our Instagram, contacting and scraping through our news feed, following the right accounts, just observing the type of content that they're pushing out and the type of influence that they're creating. Either sometimes I would meet them
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face to face at a trade show, or an event, or just directly messaging them and proposing an idea to them. Sometimes it may not necessarily sprout right off the bat, but over time as you're building your own reputation, other influencers may see you, may talk within the industry, and-
Andrew: Yeah, I think one thing I would add to that is, we started pretty early on in this industry, and so we essentially grew with a lot of people. A lot of people may not necessarily had the biggest following when we first contacted them, but over time they've grown significantly, so it's more if you find good people to interact with, and kind of work together, in whatever industry you're in, you never know how big their influence can get. It's about investing in people early on, and that way, when they get really big, it's a lot easier to access them than when their following is huge because they probably have a thousand people trying to reach out to them now.
Eric Siu: I think that actually makes a lot of sense, because a lot of people, they often try to think about reaching the biggest influencers. What you're saying right now is, nobody is too small, and then eventually those can become something bigger, and I think the bigger picture item here is that a lot of people that listen to this podcast think about, okay, what can I do with Facebook, guys, what can I do with Google AdWords, and what can we do to continue to scale after we've raised a big round of money, but that's just not how it works for you guys, and then people are trying to sell guns and things like that. Doesn't work for them either. You guys have found influencer marketing to really work for you, and I encourage the audience to dig deeper and see how to make that work because you talk about YouTube influencers, Instagram influencers, and probably Snapchat influencers. It's just going to get bigger and bigger, so great job on that.
I want to switch gears a little bit. Got a few more questions here. This is more for Jonathan and Andrew, especially starting this thing. When you have two best friends starting a company, what are some big struggles you faced growing this thing?
Andrew: I do think that a common piece of advice out there is that don't work with your friends because things can blow up and things can go wrong, but I do think that, just like any other relationship, it's about the communication aspect of it, and so the benefit of us being very good friends is that we are, well, number one, we have no egos, number two, we were very blunt with each other in terms of what we thought and how we felt about certain ideas, and so I think that through that process, and we have the same relationship with Mike, as well, and so there's a lot of confidence that no matter what ideas are on the table, we will always arrive at the best decision or best path forward, so I guess the challenge was the communication aspect, which I think we have definitely mastered, and that's how we were able to grow to where we are today, really.
Jonathan: Yeah, communication and trust is extremely important. You can be way more productive with the day-to-day knowing that your partners have your back, along with the rest of your team. It could go both ways, knowing Andrew since the first grade, and then it feels like I've known Mike all my life now, we know each other's strengths and weaknesses throughout each part of the process as the business grows, and I think in the beginning what was really important is how we defined each other's roles. That was
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a challenge as well, just because in the beginning we were, all three of us were doing a little bit of everything together, but we quickly found out that that wasn't the productive way to really scale, so really defining the roles with each other, amplifying our strengths, was very key, and we've been able to persevere through our challenges ever since.
Eric Siu: At what stage did you guys decide, holy crap, we're doing too many things, we need to really define our roles? I guess, is there a specific turning point or a story that you can share?
Jonathan: I think Mike can definitely, because Mike had a third-person view joining us and observing us from the start.
Mike: Yeah. I joined probably a couple months ... Well, I have kind of an interesting story to tell. Jonathan, Andrew, and I used to go out on the weekends, like normal people, we were all friends, we'd hang out. Then all of a sudden, Jonathan and Andrew kind of disappear for weeks at a time, and then I'd get the occasional Snapchat at three in the morning from, I forget if it was Andrew or Jonathan, but it was of the other person packing boxes and printing shipping labels. I was thinking to myself, either things are going horrible, because why are they up at three a.m. packing boxes, these guys obviously the value of their time is greater. Or things are going horrible right because they're up til three a.m. packing boxes because they're just so successful. In any case, their having been there from the beginning just as friends and seeing them really take their vision through the process of actually executing and starting the company and getting traction and their first sets of customers, it was really rewarding for me, and when I stepped in I think I really did have a third-party perspective, as Jonathan mentioned.
Previously I had started and grew an eCommerce company that I ended up exiting or selling to a strategic acquire, so in that process I learned a lot about the value of your time and making sure you're being effective and not necessarily efficient, as measured by the aggregate output of effect that you have through your work and not necessarily just how efficient you can be at some minutia that ultimately is not really going to impact anything materially, so I kind of have that perspective that I brought and I think Jonathan and Andrew are being extremely sort of open minded but also very execution-focused. We were able to quickly see that, hey, you know what, this is working. How do we scale it, how do we scale the effectiveness of what we can achieve as team?
That sort of created this, really, need to divide and conquer, and identify rules, strengths, weaknesses, put it all on the table. I think we literally, we're driving back from a vendor meeting, or something, and one afternoon when we were still operating out of Jonathan's house, and I said, "Hey, let's sit down and let's define our roles." It was totally random.
Jonathan: I remember that.
Mike: Yeah, but it just kind of built up to that point where we said, okay, well, you know what,
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maybe we all don't need to be on all the vendor calls all the time. Maybe we all don't need to be doing all the same things all the time, but maybe it's time to divvy up some of the work, so that we can be a lot more effective as a team. That, I think, was the catalyst for how we operate today.
Jonathan: It just clicked right after that. Quite literally. It's great.
Eric Siu: Okay. Jonathan and Andrew, you guys were working until three a.m., so how often are you guys working now? Are you guys working a typical, are you guys working until six or seven p.m., or how does that look now?
Jonathan: Yeah, yeah, I'll say it's more balanced. We believe in work/life balance, for sure. We're not Elon Musk so we don't ... In the early days we did work on the weekends too, just because it was literally the three of us. We have a bigger team now, so we're able to, yeah, work until, maybe, seven p.m.
Eric Siu: Okay. You guys are still probably working on the weekends though, right? Because to me this seems like a game, so I just like working all the time. I don't know if it's the same way.
Jonathan: Yeah, I mean to a certain extent. It's hard to peel yourself away completely [inaudible 00:25:49]. I think the weekends are a good time to think about the challenges ahead and without. It's different in an office setting when you have a lot your team members that you're interfacing with on a regular basis, but on the weekends it's more of strategic time to really set the strategy and goals for the next week, so yeah, it's not like we're peeling away completely, but we do take some time off to reset.
Eric Siu: Great. I just have some quick rapid-fire questions for you guys. I'm going to split them out. Jonathan, this one's for you. What's one piece of advice you'd give to your twenty-two-year-old self?
Jonathan: Get started as soon as possible. I think being in college and growing up in the city of Arcadia, Eric you know that all too well, there's definitely a set list of things that you would like to achieve at that age, and moving to college and post-college. I think there are a lot of instincts that I had that were unconventional to pursue other things, and I think listening to your instincts more so at an early age, a lot of times going against the grain, is something I would tell my twenty-two-year-old self.
Eric Siu: Oh, and by the way for the audience, Johnathan was actually one of my roommates when we went to school in San Diego.
Jonathan: Yup, for three years.
Eric Siu: Yep. Moving on here. Andrew, this question's for you. What's one productivity hack you can share. For example, it might be sleeping with your phone far away and then having to wake up and walk to it.
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Andrew: Well, I think the past year, two years, I've taken up some mindfulness. It's another way of saying meditation, and I thought that incorporating a little bit of that into each day, admittedly I don't do it every day, but I think that the days I do do it, there's a long-lasting effect in terms of being able to stay even-keeled, because I think in doing what we're doing, it's very easy to get overwhelmed and have ADD almost because there's so many different things pulling you in so many different directions, but I think doing meditation can really help you focus and not be so, I guess, overwhelmed by all of the different things calling to you.
Eric Siu: Great, and which app do you use for that? Do you use like Headspace or Calm?
Andrew: Headspace, actually.
Eric Siu: Great, and Mike, the final question is for you. What's one must-read book you'd recommend to everyone?
Mike: The one that I always go back to, I've re-read it probably three times, is Good to Great by Jim Collins. I like the fact that it's almost an academic study of what empirically makes companies great as opposed to being just good, and I think there are a lot of actionable things in there that can add value no matter how big or small a business you run.
Eric Siu: I love it. Well, guys, this has been really great, and I think this adds a lot of insight because everyone thinks it's all about just driving paid traffic, but you know when life makes it hard for you, you know you guys have to figure out another way, and I think you guys have proven it, but Jonathan, I guess this question's for you. What's the best way to find you guys online?
Jonathan: www.thedripclub.com would be the best way.
Andrew: Yeah, that's our online eCommerce website. If you want to see the products that we have, go on there to see all the different eLiquids that we sell.
Eric Siu: All right, awesome. Thanks so much, guys.
Andrew: Thanks, Eric.
Jonathan: Thanks, Eric.
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