What Were We Thinking?! - Defining Success
In our last post, we talked about the reasons that small businesses fail, and whether or not Amazon FBA as an income stream can help Digital Nomads avoid the pitfalls. To recap, small businesses typically fail due to lack of sustained passion, poor location, insufficient capital, and lack of planning. An Amazon FBA business can be a great income stream in the short term, but in the long term will likely suffer from lack of sustained passion, poor location, or cash flow.
Today I want to share Nomadica's story, and how we've defined success to avoid these major reasons that small businesses fail.
How Do We Define Success?
Seven years ago Sarah and I were sharing a bottle of wine in our Seattle apartment and talking about how we cold possibly take back our personal agency from companies and governments who destroy the earth, strip citizens of their rights, enslave workers, and harm animals.
Ultimately, we came to the conclusion that every dollar is a vote. Every time you buy something, you're voting for more or less outsourcing, more or less child labor, more or less pesticide run off, more or less chemicals in your food, for more or less war.
Seven years later, we care just as strongly about ethically sourced and environmentally made products, and we know that a business involving this passion is a business we can get behind in the long term.
By starting a travel ecostore, we can decide where to source, which materials to use, and who to trust to uphold workers' rights. We can vote with the leverage of all of our customers. We can refuse to accept higher margins at the cost of using an opaque supply chain that directly harms workers and (y)our earth.
Most definitions of success describe an end state or a particular milestone. i.e. Earn 1 million dollars, own a vacation home, scale the business to 1000 customers, feed 100 children in poverty.
To keep our business success tied directly to our ethical goals, at Nomadica we believe success is a state of change that makes the lives of others better - in other words, success is action.
- Success is a viable business model that allows us to produce and to continue producing travel gear and clothing that improve the life of every person it touches and harms no one.
- Success is educating customers about the environmental and social impacts of cheap fashion and labor, which influences their future buying decisions and makes the world a better place.
- Success is supporting the families who choose to go nomad, who are increasing their children's understanding of the world and various cultures, simplifying their own lives to reduce their harmful impact on the earth, and creating more personal freedom and happiness.
Every product we produce will promote fair wages, worker rights and sustainable efforts. Artisans are paid fairly to produce quality gear for fellow nomads. Profits are used to grow the selection of fair and sustainable gear and highlight other brands who are promoting the same. Nomadica is essentially a tool to leverage our vote for a more humane, more fair and more healthy society and earth.
In starting to do this work, we've had the amazing opportunity to visit some of the most beautiful countries in the world and the privilege to meet the beautiful families who live there.
What about location, capital, and planning?
When you rely solely on channels like Amazon or Ebay, your "location" is never secure. Sites like Amazon can change selling policies and introduce products that compete directly with your own. When you have multiple channels, especially your own site with helpful content/tools for nomads, you can establish an authoritative location, connect with customers, and promote your ethos.
In a manufacturing/selling business, investing in inventory will always mean a reduction in cash flow. This is true both for Amazon FBA models and for individual store models, but by having our own site we can take advantage of drop shipping agreements that expand our selection while keeping the inventory expenditure as low as possible.
It's hard to forecast capital requirements in the early days, but this was one of the first things we tackled before hitting the road. We saved for a 2 year runway assuming zero revenue for the first two years. The good thing about operating a nomadic business is that it forces you to build a lean business. Monthly living expenses are very low and we can manage a lot of the business work ourselves without having to hire it out.
By starting our own ecostore we are building a brand as opposed to fishing for sales spikes in niche product categories. We are going narrow and deep on products that can dominate the sustainable travel category and hold their own against other high quality brands in the same space. Just as Patagonia doesn't compete with knock off backpacks, we are not competing with the cheapest travel gear. We will focus on creating the best product while balancing margins across artisan wages, customer savings and company profit.
Whether you chose to follow the traditional private label blueprint or make a pivot in a direction that aligns with your passion, we hope this post was helpful in thinking about your own definition of success.
Are you in the process of defining what makes your business successful, and do you have anything to add? We'd love to hear from you. Reach out to us here!