GE 194: How FabFitFun Brought in $40M in Revenue and 200K Subscribers Last Year (podcast)

Michael Broukhim

Hey everyone, in today’s episode, I share the mic with Michael Broukhim, the Co-CEO and Co-Founder of FabFitFun, which offers an incredible beauty box subscription service.

Listen as Michael shares what makes FabFitFun different than their competitors, what their key marketing strategies look like, how he sold 2,000 beauty boxes in 2 days and continues to grow 300% YoY, and what it’s like to partner with his brother.

Download podcast transcript [PDF] here: How FabFitFun Brought in $40M in Revenue and 200K Subscribers Last Year TRANSCRIPT

Time-Stamped Show Notes:

  • 00:37 – Leave a review and rating and subscribe to the Growth Everywhere Podcast!
  • 01:01 – Eric introduces Michael
  • 01:20 – Fab Fit Fun is run by Michael, his brother Daniel, and their Editor-in-Chief, Katie
  • 01:28 – The box carries different products every season and can personify people and their interests
  • 02:23 – The Editor’s box contains a blanket scarf, necklace, different skincare and beauty products, coloring book and pencils, and access to online workouts
  • 03:25 – The member pays a subscription fee
  • 04:04 – The idea is a happy accident and is a collaboration between Michael, Daniel, and Katie
    • 04:28 – Michael was in a digital agency in college doing political consulting
    • 05:00 – In 2009, Michael got his first client, Rachel Zoe
    • 05:32 – FabFitFun was initially an internal experiment and a media business that produced content
  • 06:05 – In the subscription space, Michael wanted to just make the customers happy
  • 06:43 – There was a gradual transition from the media business to where Fab Fit Fun is now
  • 07:40 – FabFitFun has over $40 million in revenue in 2016 and has crossed the 200,000 mark in subscribers
  • 08:54 – What sets them apart is their high profile claim-outs
  • 09:12 – Michael’s role business model is modeled after Jeff Bezos
  • 09:40 – There is a relationship of trust between the customer and the company
  • 10:25 – “We’ve created a very valuable product”
  • 11:55 – There is an enormous opportunity in retail
  • 13:05 – Michael worked with influencer Giuliana Rancic
    • 13:48 – Partnering with an influencer can help get you “above the noise” but it’s not the whole business
    • 14:36 – The celebrities themselves cannot be the whole marketing strategy
    • 15:12 – It has been great for FabFitFun working with influencers, both paid and organic
  • 15:51 – Due to their media list, FabFitFun already had a couple thousand members in their newsletter list
  • 16:10 – When the box was launched in the group with a teaser of the Moroccan Hair Oil, they immediately sold out the box within the first week
  • 17:10 – It is important to build a list before launching a product
  • 18:01 – The most effective thing in customer acquisition is having a friendly, fun relationship with them
    • 18:31 – Some companies give you a hard time canceling orders, but those people will have a sour perception of your brand after that
    • 19:25 – As a practice, Fab Fit Fun deals with customers in a positive way
  • 20:30 – What’s one big struggle you faced while growing Fab Fit Fun? – There is a steep learning curve in terms of logistics due to the number of physical products
    • 21:15 – They now have their own warehouse
    • 21:32 – The mistakes when you are small can be ironed out and will help when you grow
  • 21:47 – Eric shares that mistakes are 95% process problems and only 5% people problems
  • 22:18 – What’s one big change you’ve made in the past year that has impacted you or your business in a big way? – “Hyper, hyper, hyper focused for the first couple years in launching the box”
    • 22:30 – They started planting the seeds in 2016 and 2017 is accelerating on the other aspects of the business
    • 23:10 – They created an add-on program where people can add things to their box and it has added value to the membership and increased business revenue
    • 23:49 – Learning resource allocation and focus allocation was also a big change for Michael
  • 24:15 – Michael is a Co-CEO with his brother and it is working well
    • 24:27 – Michael and his brother are very close
    • 25:03 – Michael and Danny are committed to making the company successful and they both invest in making the relationship work
    • 25:25 – They had to unlearn the shorthand way of communicating which they developed with each other growing up
    • 26:09 – They wrestle with the big decisions together and it’s getting easier
  • 26:39 – Eric shares that working with friends can be beneficial since the communication is easier
  • 26:52 – What’s one must-read book do you recommend? Antifragile by Nassim Taleb
  • 27:34 – Connect with Michael on his website and Twitter

3 Key Points:

  1. Being a successful company in the subscription industry means offering valuable products.
  2. Keeping a positive relationship with customers is of the utmost important—keep it friendly and fun!
  3. Influencers and big launches are instrumental for your business, but will not determine the overall and continued growth of your business.

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  • Christopher Proy

    Very interesting, inspiring, insightful. Investing in performance marketing is vital of course to drive customer acquisition but never lose sight of the customer and establishing an emotional connection with him. By selling on emotion, keeping things fresh and providing a consistent amazing service for the customer, you don´t run the risk of subscription fatigue and churning.