03 Sep 2020 | 02.11 pm
Funding Online Growth Requires Capital
Interview with DRVE founder Oliver Mauss
03 Sep 2020 | 02.11 pm
There’s no shortage of Irish entrepreneurs who formulate original skincare products. The market is huge and it’s global, but plenty of other people around the world have a similar idea. In Singapore, Nicolas Travis (32) studied biomedical and pharmaceutical science in college before working in advertising. In 2016 he jumped out to establish Allies of Skin, starting with one product, an all-day mask.
In subsequent years many more products were added to the beauty range, which sells in retail outlets around the world, including Space NK on Grafton Street in Dublin. Allies of Skin sold its products online too, but not in huge volumes.
That changed in 2019 when the company linked up with DRVE, a digital marketing agency with a difference based in Lisbon.
Headed up by Oliver Mauss (pictured), DRVE has private equity funding to invest in online marketing with partners such as Allies of Skin. The idea is that DRVE’s expertise with the online spend and marketing, and the data back-end, will drive up the online brand sales so that the investment will pay for itself. The agency takes a slice of the increase online sales, and if DRVE can achieve a 1% to 2% monthly return on its investment, then it’s happy out.
Mauss says DRVE is so-called because he couldn’t afford the asking price for a ‘Drive’ domain. The company’s activities are centred on process and automation and the team is just 14 people.
“When we started out we knew that if we didn’t automate we would need hundreds of people and it wouldn’t pay off,” says Mauss. “Most of the campaigns are automated but to run them you need data people and integration people. We also partner with development agencies for the executions.”
According Mauss, when Allies of Skin started working with DRVE, its online turnover was c.€50,000 a month. Now the skincare vendor’s online revenue can be ten times that figure, driven by the marketing investment supplied by Mauss. However, Mauss makes clear that increasing ad spend by a factor of ten is not going to increase your sales by ten times too. “If that were the case it would be easy to become a millionaire,” he says.
What DRVE brings to the party, says Mauss, is rightsizing marketing efforts for performance, scaling strategies, identifying new markets, targeting audiences, and developing new sales channels. For Allies of Skin, this spans partnerships with magazines, affiliate deals, and constantly pushing and testing.
At any one time DRVE can be managing up to 600 campaigns for the skincare brand, though that could be reduced to 400 or lower in a week’s time, depending on results.
According to Mauss: “With some Facebook advertising, you might be able to have revenue of €3,000 or €5,000 a month for your site, or maybe not. If you want to get to sales of €1,000 a day or €5,000 a day, people completely underestimate what you need. You obviously require a lot of money to drive that, bit it’s also to do with logistics, how you establish channels to your audience, how you work with data.
“We receive about 30 to 50 applicants per day and if the business has monthly revenue of €20,000 we will look at it. Our preference is for monthly sales of €50,000 and multiple products in the range. For the business at the €50k a month level, we can grow sales by 20% to 50% within four weeks.”
Mauss believes that most online ventures don’t achieve meaningful growth because they can’t source capital.
quires CFapital“If they sell equity for funding, then they have to rent out marketing teams, and four out of every five euros goes into Google and Facebook. We try to make the company profitable by fixing everything and we take away that cashflow load by financing the marketing. That’s why our approach is different.”