It seems obvious in hindsight: people with tattoos have unique skin care needs. But let three fresh college grads see what no one else has and start a direct-to-consumer skincare business for that audience.
It was in 2019, when Drew Fallon joined two of his pals from the University of Miami (Ohio) who had created a parallel agitation called Mad Rabbit. “We had a product, a social site, and an advertising channel,” Fallon told me.
Two years later, the company achieved annual sales of $3 million, still on the margins. That’s when the three founders quit their full-time jobs to be, as Fallon puts it, the ultimate in tattoos.
He and I recently discussed the rise of Mad Rabbit. The full audio of our conversation is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: Quickly introduce us to your business.
Drew Fallon: Mad Rabbit is the first direct-to-consumer tattoo skincare company. Our products help people’s tattoo ink stay vibrant and fresh for as long as possible. We provide alternatives to mass-produced products that are generally harmful to tattooed skin.
We launched in parallel in 2019, the same year my two co-founders and I graduated from the University of Miami in Ohio. We all had full-time jobs for about two years after graduating. During this time, we grew from zero to $3 million in revenue with one product, one social site, and one advertising channel.
In the winter of 2021, we decided to do it full time. We are all now 25 years old. We are at the beginning of our tattoo journeys, and so is our main customer. Many are between 25 and 30 years old and have only a few tattoos. But tattoos can be addictive. People get one, and they tend to get more.
Bandholz: How to reach 3 million dollars as a side business?
Fall on: For one, my co-founder Selom nailed Instagram ads, which was our only paid promotion. He did an incredible job. Our first Google ad came in 2021, the same year as our first Amazon sale.
But it was mostly about giving people something that didn’t exist.
Bandholz: You’ve gone from a lifestyle brand to a hyper-growth one.
Fall on: We were only profitable without the salary expenses of three employees. At the end of 2020, we had just finished filming Shark Tank. We didn’t know if it was going to air. We were in the process of closing a $500,000 deal with Mark Cuban. He is now our largest investor, having participated in subsequent rounds of financing.
We launched our soothing gel in January 2021. It sold well. Then we created sunscreen in March, which went crazy. We sold 10,000 units in one week. At that time, we said, “This is a special opportunity. We have two options. We can keep rolling, or we can chase as much as it could get. We went with the latter.
We’re building a brand to be the ultimate in tattoos – way beyond skincare. But building a brand is expensive. It requires a lot of investment. We decided to go for it and faced very little competition.
Bandholz: I assume most of your clients are women.
Fall on: Yes. That’s right — about 55% women. Initially, we had more male customers, but our female audience grew as we launched more products. Women tend to buy more skin care products. We are currently doing a brand refresh to tone down the masculine vibe. We are also moving to white packaging.
Tattoo culture is diverse. My 18 year old sister has three tattoos. Harley Davidson riders have many tattoos. Chefs love tattoos, as do athletes.
Addressing each segment is an opportunity we missed. We approach everyone as if they were the same. But we’re hiring people with segmentation experience to build different buying cadences.
For example, a woman can buy the balm and check the sunscreen two months later. But a man would probably buy sunscreen first and then try the body wash.
Bandholz: You mentioned Facebook ads. How did Mad Rabbit react to the iOS 14.5 follow-up?
Fall on: In April 2021, approximately 85% of our marketing spend was on Instagram. When iOS arrived in May, it was as if the train had derailed. We didn’t know what was going on. Our sales reflected not only the iOS change, but also the supply chain shortage.
Fast forward to 2022. We’re spending more money than ever on social media, but with better marketing effectiveness ratios. Additionally, we did two massive pivots.
First, we entered into an equity-for-services deal with Inked, an online magazine. They have about 60 million subscribers on their social networks. They exclusively and aggressively promoted our brand, products and content on these channels in exchange for owning part of our business. It exploded the top of the funnel for us.
The second thing was TikTok. We have TikTok videos over the past six months with over 20 million views and 400,000 subscribers. They too generated a huge top-of-funnel effect.
With millions of views on TikTok and Inked, our Facebook ads have started working again. We scaled Facebook in January 2022 and have grown month over month since then.
Facebook now drives a large portion of our sales, as evidenced by our attribution model. We take daily advertising by channel and daily sales on our website and Amazon and run a simple linear regression in Excel. We can discern that Facebook still drives a ton of our sales, including Amazon.
Bandholz: Where can people follow and support you?