In this invigorating episode, David Lorango, CEO and Founder of Startup Accelerators, shares how to reignite growth when marketing spend no longer moves the needle. If you struggle with flatlining revenue despite bigger budgets and a solid team, you won't want to miss it.

You will discover:

- Why more ad spend alone kills ROI at scale

- How to shift from acquisition-only to full-funnel creativity

- What injecting fun and joy unlocks breakthrough campaigns

This episode is ideal for for Founders, Owners, and CEOs in stage 4 of The Founder's Evolution. Not sure which stage you're in? Find out for free in less than 10 minutes at https://www.scalearchitects.com/founders/quiz

David is the director of e-commerce at Uniqlo and the founder and CEO of the marketing agency Startup Accelerators. As a high-demand coach, David has helped over 300+ startups scale successfully. With over 15 years of experience as an innovative marketing leader, David has driven growth for top brands including Chanel, MAC Cosmetics, Clorox, Forever 21, and The Wonderful Company. David’s biggest success story was with Nick’s Ice Cream. When David started with Nick’s in 2019, the company was only selling in stores in the northeast. By the end of 2022, Nick’s was in 14,000 stores, including Walmart. They had raised $100 million in seed round funding, and the business was doing nine figures.

Want to learn more about David Lorango's work at Startup Accelerators? Check out his website at https://startupaccelerators.io/

Connect with David at https://www.linkedin.com/in/davidlorango/

Mentioned in this episode:

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Founder's Quiz

Hello, hello and welcome. Welcome once again

to the start, scale and succeed. Podcast, the only podcast that

grows with you through all seven stages of your journey. As a

founder, I'm your host, Scott Ritzheimer, and there's a wall

that stage four founders keep hitting, and it's a little

different than what we've talked about here on the show, because

what's happening here is predominantly from a marketing

standpoint. Though. It's not just marketing, but what's going

on is you're working on handing off parts of the business.

You've got a management team in place, you've got your marketing

playbook, you've done all your homework, and everything should

be working right? But you're spending more and more on ads

and trade shows and partnerships and ads and trade shows and

partnerships and more and more in marketing, and the revenue

growth doesn't seem to be rising at the same rate. In fact, many

times for folks at this stage, it'll start to flatline despite

all the additional money and effort. And so you pour in

another 100,000 or two trying to make up for the lost ground, and

you end up losing money faster, and then, like, in like, what

is, what feels like the craziest thing in the world, your

marketing manager or someone else comes to you and says, Hey,

I've got it. I know the answer, and it's basically to spend more

money. And you just want to pull your hair out, because you know

that it's not going to work, but you don't know what will Well,

if you've ever felt like that, or if you're there today, than

about great news, because today's guest has built his

entire career on solving this exact problem for major brands

and entrepreneurs alike. David is the director of E commerce at

Uniqlo, and the founder and CEO of marketing agency startup

accelerators as a high demand coach himself, David has helped

over 300 plus startup scale successfully with over 15 years

of experience as an innovative marketing leader, David has

driven growth for top brands including Chanel, MAC cosmetics,

Clorox, forever, 21 and the wonderful company. And his

biggest success story was with Nick's ice cream, which started

selling in the Northeast. And by the end of 2022 Nix was selling

14,000 in 14,000 stores, including Walmart, and had

raised over 100 million in seed round funding, and the business

was doing nine figures. He's here with us today. Mr. David

lorango, so exciting to have you on the podcast. Been looking

forward to this conversation, because it's maddening, you

know, and this isn't something that I do. I do. I don't really

work on marketing with my clients, but so many of my

clients run into this challenge, and they they feel trapped. So

for someone out there who's who feels like they all they got to

do is spend all anyone wants them to do is spend more money,

but they're not confident it's going to work. What would you

say?

Yeah, well, Scott, thank you for having me

excited as always to chat. It's a problem. So all you owner

founders out there know that you're not alone in this. It is

a unique challenge, but it's also one that's very common.

It's unique to your particular business, right? So as you've

done this, like, why isn't scaling? I've had so much

success now all of a sudden I'm flatlining. We in really kind of

start to define the parts of the reasons why. Right? So spending

into oblivion and trying to spend your way out of this

problem, it doesn't work. And there's a particular reason why

we can look at predict marketing channels like meta or Google.

But ultimately, what you're doing is, when you reach this

certain point, you've probably already maxed out your your your

addressable market and serviceable market, let's say

not addressable. What you're doing is you're taking what

worked and you're trying to then scale that out to a new

demographic or a new audience. Well, you haven't really

understood well, what's the next layer, or what's the next

audience, or what's the next cohort want, actually, so if you

could take something like we can use I was not unpopular, maybe

we use Nix, right? We started at Nix. We were a business that was

highly focused on those that wanted no sugar in their ice

cream, right? For basically diabetics and then keto. But

then as we had to scale outside of that, right? We couldn't just

be the Keto brand. What happens? Not enough customers maybe care

or want no sugar ice cream or keto ice cream, right? What we

had to do is become a more broad brand, and so when you start to

spend extra you need one of the elements you need to look at is,

who is your market? How do you start to reach a new market?

Because you're probably over saturating, and instead what

you're doing with more spend, it's the same message to a

different consumer, and it's not resonating. You have to think

about changing your strategy, changing your approach, diving

deeper into understanding what your new target market is going

to look like spending more and then. So that's just element

one. Now let's talk a little bit about the technicals. Right?

When you're in meta and you're in Google, they're actually

great platforms to be able to start testing this. So let's say

with Nick's ice cream. We wanted to be we didn't, but we're gonna

use example of this of other brands that I've worked with.

Now we're gonna be the protein ice cream. We're heavy on

protein. That's a different audience than for moms and kids

or for those that like to snack or premium snack. You can throw

that in there. You can do you can do ads that test into a new

market segment. If all your marketing team is doing is

coming back and saying, we just need to spend more, you're going

to see diminishing returns period if you don't change it,

the algorithm is now Google and. Meta allow you and have some

opportunity to test into new market segments by doing that

through new creative but you're going to have to think through

strategically at that point, right? A lot of what happens

when you've grown and scaled, maybe you've gotten lucky and

haven't really even thought about something like target

market. I also have found that that is also where owner

founders just aren't thinking about this, they aren't really

understanding how to scale into the next level. And it's not you

can't do that at luck anymore. And I you know not that any of

you had just luck, but you can hit lightning in a bottle, but

to be able to be the next to grow in the next phase your

business, you really have to understand what that looks like,

right? Who probably did this? Some of the best is Poppy. You

look at Poppy when they started, they were kind of this niche,

soda. Now, I would say, like the hipster, the earthy, crunchy

person, and then became for everybody, right? That was a

value prop that expanded, expanded, if you look at early

Poppy and then the branding. Now, it is completely different.

It is a different brand, but it's still the same product that

everyone loves. So I would say that's certainly one of them,

right? Spending on these channels and platforms, you're

not going to get better results just by doing it. I would stop

my advice. My advice is, don't spend more. Spend those dollars

on strategy. Spend those dollars on thinking through what you're

going to do, because you're just going to throw money into a

furnace.

Yeah, that's so good. There's so many ways to

go with that. You touched on something that we've not talked

about on the show, and I'd love to share with our listeners, but

you, you started saying total addressable market, and switched

to total serviceable market. So talk to us. What did those terms

mean, and why they're so relevant to this conversation?

Yeah, see, and, I mean, I think there's a third

one in there. This is kind of marketing lingo speak, but

you're a total serviceable market. So let's say again, we

had keto ice cream, right? Or or no sugar ice cream. Okay, well,

the people that care, it's probably this bubble. There's

going to be people that care. But you know what? You know

what, a larger audience cares about friggin tasty ice cream.

You know, there's a reason why Haagen Dazs still does the

numbers that it does. Because when people think of ice cream

like, well, I don't want something that doesn't taste

good. I want to enjoy ice cream. Your total addressable market is

everybody that would ever want to eat ice cream. Any market

that you're looking to get into you want to understand what's

the absolute scale, or what's the peak, right? Ice cream is

easy. Soda is easy. Everybody is going to probably drink soda,

right? But then maybe not everybody wants a healthy soda.

Well, it turns out more people want a soda that tastes good but

isn't going to kill you with sugar and everything else that's

in kind of one of those products, like Coca Cola, which

I do drink no hate. But you have to understand your total

addressable market, right? So now it became, well, just so do

people. But then there's a third second one in there, but it

basically the one that you're going to be able to reach

outside of your initially addressable market, initial

serviceable, right? So it goes from Okay, well, we're keto, but

now guess what, we're just a better for you, ice cream. So

you go from keto ice cream to better for you. You start to

market it out wider, and then you just become the best ice

cream, right? It's ultimately where all of these mass brands

become, right? So even think health aid kombucha, they sold

and they just built a brand around it, right? I think health

aid is a great case study for everybody listening. Take a look

at how they did this. So many brands were so focused on narrow

ROI, and that works. But guess what happens with ROI? It's a

one to one, at some point you have to invest in brand. What

health they did is they partnered with companies like I

heart and they scaled the heck out of their brand because they

spent on brand marketing, right? So they said, Okay, well, those

that really like kombucha may be small or who even knows what the

heck it is. So they had to build a category. When they built the

category, they also became the owners of the category, right?

So this is also where a lot of owner founders are thinking too

narrowly. And I get it, it's scary guys to invest in

something like that that won't show return. I understand that

as an owner founder myself, but you can't win without really

thinking about what is your next big move. And next big moves

here are going to take some dollars. I mean, that's the

other thing to think about. You're trying to spend little or

add it up, right? All of your excess spend in meta. You could

have spent 20, 3040, 50,000 100,000 on something more

strategic than blowing it in meta, but it felt safe, right?

These are just things that you would think about, and how you

want to think about it is start to scale your business

outwardly. But again, it takes strategy, right? So it's a great

question. You to grow your business, you also have to grow

your market, right? And that's really kind of how we think

about it.

I love that, because the the kind of inverse

problem is true where I'll see folks early on who will try and

chase the total addressable market and appeal to everybody

right out of the gate. So would you say that the this strategy

of going kind of TSM niche, and then stepping up is the right,

is the right strategy.

I think so almost always. And I know this sounds

like marketing 101, and it kind of is right. I mean, the most

annoying thing, and this is not new, but every whenever I ask a

founder who is your audience, they say, everybody. I'm like,

Okay, how much you want to spend on everybody, then you know what

that means. You better have billions of dollars to spend,

right? Coca Cola can do that because Coca Cola kind of is for

everybody. And if you really went niche with Coca Cola, it

probably wouldn't look very good. I mean, like, who would be

their niche? Right? Kids, maybe, or kid people that don't care

about that. It's not healthy for you, but it's tasty. Okay? So

you're gonna win on. Taste. We all like it when it pairs well

with a burger, pairs well with a lot of stuff, right? I always

like to start niche for a couple reasons. You win there. You

understand the market dynamics. You understand who wants your

product. And then you can change from there. You can pivot. You

can have other mark. You can have other products within your

portfolio, right? It's it's marketing one on one. Start

there, and also it's going to allow you to test more

intelligently, right? And even think about that now we know

where we scale. We now notice target a different market or a

different consumer from theirs, right? So there's you have so

much more opportunity to think through your market by going

smaller first, but still win there, and then scaling it

outward, right?

And I think that's such an important point,

because it's smaller first. And I think what's lost in the

noise, at least, what I'm getting barraged with,

especially in my space, as being a smaller shop myself, is this

idea that it's like, niche down, niche down, niche down, niche

down. And that's well and good and true, but what happens is,

like you're saying, you run to the edge of that market. So the

question that I have then, if we're saying, Okay, we've we've

got total serviceable market, we want to move toward total

addressable market. We want to expand our footprint. How do you

start to from a strategy standpoint, how do you start to

craft, okay, what is the next step out? What's the next ring

out toward this larger market.

It's a really good question. I start with

research. I look at a competitor or a like type of brand, what

are they doing? How are they talking? What are they

addressing that we're not what? What is the market there?

Usually research. I'm going to, I would say, invest in research

or do it on your own, one of the two, right? Have teams, have

somebody that knows or has done this and say, Okay, what are

your core USPS, right? So what is it else about the product,

both the physical product, maybe, and also what's actually

in it, right? What are the things that are going to allow

us to do that? So like Nick's ice cream, maybe we actually do

win on taste, right? Or maybe we pick a few key flavors that

we're going to make, we're the best tasting better for you,

hands down, right? So that what you do is you do research. Well,

because we're, maybe we're losing a Haagen Daz because

they're vanilla tastes great. Okay, well, maybe we can win

with chocolate, because it tastes better than a competitive

set. So we look at the competitors, and we start to

craft a message, and then start to scale from there. That's

certainly one sometimes, if you're in market, right? So

let's say you're, you have a product that's not TTC, but it's

in retail. You look at where other retailers you want to get

into. So the retail game is a fun one, because let's say

you're in a particular region, you want to find other similar

reasons regions, right, that are like that. So let's say you're

in Texas and you're ice cream in Texas. Okay, well, people who

bought ice cream in Texas may be a different market than those

buying in the Northeast or reverse that, right? The WalMart

customer is going to be very different than the whole foods

customer, right? So just because you're in Whole Foods, you're

like, wow, I could get into Walmart. Maybe not. Maybe that's

not the right place to go. So research, honestly, researching

your market, understanding your core demographic, and then who

you're going to go on the next rung out and then test it.

Right? That's where your meta, any all your ad spend, should be

now on testing, instead of just pouring into the same thing. And

also be bold. My other advice on any of this is being, not being,

and this is a hard one too. Once you have a know your market,

you're you're worried about risking alienating who it is,

but then you can't really grow and scale without taking risks.

And usually what I see a lot of founders in this stage are is

they hunker down right exactly what you're saying they do. They

double down on the same exact thing that they're doing, and

it's not going to work because the market isn't responding in

the next level. So you have to start being bold and taking some

risks. Research is the first one thinking through, taking your

time, having your teams, hiring teams. Really want to look at

those that are going to help you craft this narrative to be able

to go to market in a better way, right?

And, yeah, yeah. And David, that actually

brings me to this next question that I wanted to kind of pull

the leadership lens back on this. You can't do that alone,

right? Especially not with all the other things that have to

happen for your business to be successful. And so there's this

added complexity of managing other people who are engaged in

this process. And one of the things that that brings is this

question of like, do we have a marketing problem, a strategy

problem, a team capacity problem, a budget problem? It

can be hard sometimes to see through all of the mess to

figure out what is the actual problem we're trying to solve.

How do you help founders get to the bottom of that?

Well, that's a great point. I mean, as a

consultant, right? Sometimes I will be that person. Other times

I will say, here's the team to hire to do this, right? Because

let's let's also go, let's take it back. You can't your skill

set as an owner, founder, you don't have it anymore to be able

to be able to scale to the next level. You just don't you have

what you have, and you do well, you're going to need to bring

someone or a team in to help you then, because you just don't

know, right? You're hitting your skill set limit, and that's a

good thing when you've done that. Now it's like, well,

what's the next level? What do I do? Who do I bring in? Who are

the operators that now know how to do this? I do this with CPG.

I. Have teams that I one particular agency that I partner

with. I'm like, these guys are going to get you into retail,

because we've maxed out your DTC, you need to now be in

retail. So finding the teams that are going to do that,

because, again, you just don't know right. So to your point,

you know how to operate at this level. Great. Do the exact same

thing that entrepreneurial mind you had when you started your

business to find the right people. Do the same thing when

you're asking yourself, How do I really scale what do I do next?

Right? Because you don't know, and that is the reality. You can

research it yourself. You can take the courses. You going to

be smart, but you're going to need you're you're going to want

to cut. You're going to want to cut to the end of it. You're

going to want to cut to the chase and spend. Is not that. It

isn't, it's the right people and teams that have done it. So

that's it. It's either going to be me, or, depending on the size

of the business or what they need, it's going to be somebody

else. But you kind of that's usually, Scott, where I find

people, right? That's usually where they come to me, because

they're like, We don't know how to do any more of this. David,

help us, right? And yes, I and the team are the guys, or

actually, somebody else is going to be the team.

Yeah, that's great. So I've got another

question that I want to make sure folks know how they can get

in touch with you, David. But the question is this, what is

the biggest secret that you wish wasn't a secret at all? What's

that one thing you wish everybody watching or listening

today knew?

The biggest secret that I think I would say

it, is that AI is not going to make your business for you. I

don't know if that's a secret. I would say that I wish they

weren't. Maybe put it this way, creativity is what's going to

win. That's the secret. I wish people didn't. So let's talk

about that just briefly. AI is not as creative as you think it

is. Creativity is going to win your day. And if you're stuck,

you know what AI is going to do give you more stuck things

you're not going to be able to be creative. So what do I think

it is a secret these days, because everyone's talking about

automation, they're talking about machine learning, they're

talking about how these are going to solve efficiency

challenges. They're really, actually talking about how

that's going to make you more revenue, and how that's going to

make you relevant, how it's going to make you different. So

it's a secret to think where we come in. We're being creative

with our solutions. We're having you be creative as a brand. I

think true creativity and market disruption is going to be the

secret that all of these brands are going to win on the ones

that are doing what they're doing before and relying on a

machine to do it. You can use machines to be creative, don't

get me wrong, but that would be the secret I wish. And I

selfishly, Scott, I like fun, creative marketing, and I think

it's gotten a lot of it's very boring. Now, remember back the

2010, 2011, 1213, 2007, there were fun ads. There were fun

brands. Bring it back. That's your secret. Do that? Have fun

and have fun. I mean, maybe that's the other one. Scott is

people forget. We connect with brands because they're fun and

we like what they bring us. We like the joy that they bring us,

the happiness that they bring us, right? Coca Cola is drink

happiness for a reason. That was at least their tagline. The

secret is be creative and have fun. And I wish that that was

more of a mantra, because if you're not having fun and enjoy

and I mean, enjoy it, truly. Enjoy the process. Enjoy this.

You're gonna get out of this. You're gonna find partners that

help you get out of your brain. If you're stuck in that, how do

I scale mode? And you're frustrated, you're not having

fun, you're not thinking of other ways that people are gonna

enjoy your product. You're stuck in this kind of negative cycle

loop. So I would say that in secret, be creative and enjoy

the process of what you're doing.

So good, so good. David, there's some folks

listening that would love to hear more about the work that

you do and get your help. Where can they find out more about you

and your company?

Yeah, thanks. Would I LinkedIn? I do go on

LinkedIn, but I would say startup accelerators.io. Just

fill out that form, and I am very quick to get back to you. I

would give up my number here, but I'm worried about who would

spam me. But I'm always available. I love chatting, and

I love kind of having these kind of conversations. Scott, so even

if you're looking to get in touch with me, you know, just a

15 minute call, tell me where you're at. I love just having

conversations with any of you guys, so don't be shy?

For sure. David, thanks for being on just

a privilege and honor. Having you here today. Really

appreciate it. And for those of you watching and listening, you

know your time and attention mean the world to us, I hope you

got as much out of this conversation as I know I did,

and I cannot wait to see you next time. Take care.