We know how daunting it can be to start a new business, especially if you’re disrupting an industry or creating an entirely new one. When there is no path to follow, the biggest question is, where do I start? There is so much to do, but before you get ahead of yourself, let’s start at the beginning. To kick-start the process, and ease some of those first-time founder nerves, we’re asking successful entrepreneurs to share their stories in our series, From Scratch. But this isn’t your typical day in the life profile. We’re getting into the nitty-gritty details—from writing a business plan (or not) to sourcing manufacturers and how much they pay themselves—we’re not holding back. Ahead, Elizabeth Walton Egan, co-founder of Dally, shares the “lightbulb moment” that inspired her and her husband to start a small-batch soap brand together, the unexpected challenge they had to overcome when launching their business, and the cute phrase that inspired their brand name.
Tell us about your background and what you were doing professionally before launching Dally.
I have spent the last 10+ years helping build and scale tech companies (one to IPO and beyond and another to acquisition). At my core, I’m an entrepreneur and always dreamed of building my own company. My husband is a creative director in advertising so we have the perfect combination of skills to build something together.
What was the “lightbulb moment” for Dally? What inspired you to start your business and pursue this path?
My husband and I live in NYC and have always had fast-paced lives so we took frequent trips to decompress. When we would return home we’d always been daydreaming about the incredible places we visited and how they made us feel when it hit us, we should try to bottle that feeling. You probably use handwash more times a day than just about any other product in your home so we thought that would be the perfect place to start channeling that dilly-dally energy.
How did you come up with the name Dally, and what are some of the things you considered during the naming process?
The inspiration for the name is my husband, Kevin. He has what I would call a loose relationship with time. We always joked that he was the Chief Dallyer in our family so during the naming process we threw out “Dally” as a joke and it stuck.
The process was much harder than we expected. Not because it’s hard to come up with a name that captures the essence of your brand (it is!), but because you have to make sure the name isn’t already being used. We went through multiple iterations of naming before landing on Dally.
We like how it captures the dimension of time in addition to place and adds a bit of whimsy.
You decided against venture capital and opted for the self-funded route instead. Talk us through your bootstrapping process. Why did you self-fund and would you recommend that route to other entrepreneurs today?
Having come from the VC and then public growth company world, I know firsthand how demanding it can be to hit and exceed your growth targets and get stuck in that growth at all costs trap. Self-funding means we will grow more slowly, but it can be on our terms. We can make decisions for the long term and take a more creative path. Plus, we wanted to run Dally as a real, profitable business from the beginning (a novel concept!), which means growing more slowly.
One of the benefits of VC is the built-in advisor and the connections they bring. So in making the decision for your company, think about your experience in that industry, the relationships you already have, and how you might seek out information or connections where you don’t have them.
Is venture capital in the future for Dally?
VC or other funding certainly could be in the future when we feel we have a strong fit that we want to scale. Some things you simply need capital to do!
Image: Courtesy of Dally
Do you pay yourself, and if so, how did you know what to pay yourself?
We only started shipping eleven months ago so we don’t currently pay ourselves. We hope to soon!
How big is your team now, and what has the hiring process been like?
The team is currently Kevin and myself. However, we have a variety of amazing agencies and freelancers who help in specific areas. Freelancers and agencies are extremely useful in the early days of a company because hiring, training, and managing take an incredible amount of time to do right. Plus, we’re still exploring what works for us so being able to experiment with different things is a major plus for us.
I have a lot of experience hiring and building teams, which is why I believe in being slow to hire. It’s probably the most important thing for your company and making the wrong decisions can have disastrous and costly ramifications.
Did you hire an accountant? Who helped you with the financial decisions and setup?
Hiring an accountant was one of the first things we did! Taxes are inevitable, so we wanted to be sure we set up everything correctly from the start. We made the financial decisions ourselves leveraging our experience from our careers and leaned on friends who have startups. Google can also be your best friend here. There is a ton of helpful content for entrepreneurs and small business owners.
What programs or software do you recommend for bookkeeping?
We used spreadsheets for the first bit and now use Quickbooks.
How did you find and identify the manufacturers that you work with? What was important to you during this process? Are there any mistakes you made and learned from along the way?
We had specific product attributes in mind (clean, vegan, etc.) so needed to find a partner who could deliver on that for us. To be honest, we found our manufacturer via Google and then had a series of conversations before deciding to work together. We also wanted one that was local, which meant I was able to visit them and see their operation first hand.
For some of the other component part manufacturers, like the bottle itself, we received recommendations and made decisions based on price.
Along the way, we learned that everything, I mean EVERYTHING, takes longer to produce than you expect. You basically need to double your production timelines. If you have a hard launch deadline, be sure to add a buffer into your production plan otherwise you will be stressed and disappointed.
What has been the biggest learning curve during the process of establishing your business?
Supply chain operations were our biggest blind spot upon launching Dally. It’s not rocket science, but if you’ve seen it before you know what to expect and what to double click on.
For example, we wanted to start shipping in December in time for the holidays so we express shipped everything at great cost to our warehouse. It was peak season for the warehouse so they got backed up and it took a whole month for them to start fulfilling our orders. That meant people who had ordered gifts for the holidays didn’t receive them in time, which is the exact opposite brand experience we had hoped to provide.
We decided to turn a bad experience into a good one and gave everyone who had made a pre-sale order double the number of bottles they had ordered.
Image: Courtesy of Dally
How did you promote your company? How did you get people to know who you are and create buzz?
From day one, we knew PR would be a very important tool for us. Great press has the ability to tell your brand’s story in a more compelling way than you could have on your own and put it in front of new audiences. It also endures longer than a paid ad and is helpful for building up your SEO.
From there, we had people visiting our website so we set up retargeting advertising to help turn those people into customers. The nice thing about hand wash is it’s on display in your home so there’s some built-in virality as more people use it.
Do you have a business coach or mentor, and would you recommend one?
We don’t have a business coach or formal mentor but know it would be valuable for us. We’re lucky to have a strong network of people who we can turn to with questions.
What is one thing you didn’t do during the setup process that ended up being crucial to the business and would advise others to do asap?
You should make plans for different growth scenarios. We launched with the approach of “let’s see what happens” which has meant that we are constantly calibrating and making decisions on the fly. If we had instead identified the different possible outcomes and what to invest in and test based on that it would be easier to make decisions now.
Also, make sure you know exactly what you need and can expect from your fulfillment company. We didn’t vet very many options and went with the one that seemed to fit our needs and were disappointed. For something so critical to your daily operations it’s very important that you have a partner who can deliver what you need (pun intended!)
What is your number one piece of financial advice for any new business owner and why?
Be intentional about the type of business you want to create and invest accordingly. There’s no shortage of ways to spend your limited resources so you have to know what your goals are so you can stay focused. Things that seem to be too good to be true probably are.
Anything else to add?
Starting a business is a rollercoaster. There are high highs and low lows. Try to document both so you have a record that you can look back at because it all will go so quickly. And in those low moments, it’s extremely helpful to be able to reference all the good things you have going on.
Featured image: Courtesy of Elizabeth Walton Egan