How Dylan Jacob Scaled BrüMate to $100m+ in 5 Years

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BrüMate is a lifestyle brand that sells insulated drinkware -- and its founder, Dylan Jacob, grew it to $100m+ in under 5 years.

More than 60% of that growth came in 2020, despite massive changes in consumer behavior and global supply chain shortages.

Dylan broke down some of the keys to BrüMate's meteoric rise for our Trends team.

Source: Interview with Dylan Jacob

They have 3 key distribution channels: D2C, Amazon, and wholesale.

D2C came first.

While Dylan had been working on a prototype of an insulated beer koozie for a few months, the company got its real start in late 2016 when he dreamed up the Winesulator - a thermos that can hold a full bottle of wine.

Rather than manufacturing the Winesulator right away, he:

• Paid a freelance designer to create Photoshop mock-ups of what the Winesulator would look like.
• Built a simple landing page to capture email addresses of people interested in buying.
• Spent $30-$40/day on Facebook ads driving people to that landing page.

After gathering ~7k+ emails, he committed to a production run, notified his list, and sold out almost immediately. Since then, their biggest challenge has been getting enough inventory to keep up with demand.

Source: BrüMate website

2018-19 Was A Key Learning Year

By that time, Dylanhad grown BrüMate to $20m in revenue without a single employee (!). But the company was struggling as it hit the limits of what he could do on his own with agencies, contractors, and 3rd-party logistics.

At the same time, costs for their primary advertising channels - Instagram and Facebook - continued to rise.

So Dylantook his foot off the accelerator, and spent the year building new systems to power their next round of growth:

• He created an org chart and began hiring by asking where he could add unique value (versus where he was weak or burned a lot of time unnecessarily).
• He devoted 25% of his marketing budget to new channels like TV, podcasts, SMS, and Snapchat ads.
• He began testing sales on Amazon, despite some believing it would cannibalize his D2C business.

Source: Lauren Denn

BrüMate's theory is that each of their three distribution channels represents a different kind of customer.

"There's overlap," he said. "But all 3 channels can survive on their own… as long as you separate out the channels appropriately and make sure that each channel has something unique to offer."

Trade Shows Were Key to Growing Wholesale

Before 2019, BrüMate had a handful of wholesale accounts but had never pursued that channel proactively. In the months before COVID, they experimented heavily with trade shows, coming away with a few insights:

• There are 2 types of shows: So-called order-writing shows (where you make money), and exhibition shows (where you share new products with existing clients). Dylanprefers the former.
• The gift shows in Atlanta, Dallas, and Las Vegas are extremely valuable. BrüMate has permanent booths in all three, and Atlanta is the biggest for them each year.
• BrüMate avoids most exhibition shows, especially since COVID, opting to schedule a Zoom call with clients instead.

They have a contract sales force of 12 independent groups and ~100+ reps across the US focused on growing and servicing wholesale accounts.

What about Cash Flow?

Selling physical products is notoriously cash-intense, and Dylanshared how he managed cash flow across three main phases of BrüMate's history:

1. Presales (2016-17): Like most new companies, BrüMate couldn't get a line of credit early on, so Dylanrelied on presales. He'd place an order with the factory, and then when it was ~2-4 weeks from being delivered, he'd run a presale with his D2C customers. This kept people from waiting too long for something they'd already paid for (lookin' at you, Kickstarter).

2. Expensive Lines of Credit (2018-19): By 2018, BrüMate qualified for a $250k SBA loan. Dylanalso took every line of credit he could (Shopify Capital, PayPal Working Capital, Amazon Lending, etc.) often using one to pay another, and tracking all of it in a big spreadsheet to make sure he was never in debt for more than 1-2 months.

3. Mature Backing (2019 onward): In mid-2019, BrüMate renegotiated with its bank, had a formal audit done, and was given a $2m line of credit. In September of 2020 they raised $20m, which has given them a very healthy cash profile.

In the end, these were all byproducts of scaling, not the cause.

Dylansays that the real driver behind BrüMate's growth was innovation.

They launch several new products each year, and like to lean into "world's firsts" in their space (e.g., first slim-can cooler, first leakproof mug with a handle, first backpack cooler with a tap).

"People love to talk about innovation," he says. "Your early adopters are going to be your biggest vocalists."

*This piece was originally published in the Trends newsletter in October 2021.

Topics:EcommerceEntrepreneurship

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