Living The Red Life
The Secret to Building a Subscription Empire – Insights from Fab Fit Fun Co-Founder Daniel Broukhim
Thu, 09 Jan 2025
Daniel, an accomplished entrepreneur and founder of a leading subscription e-commerce brand, joins the discussion to share his journey of building a successful business from the ground up. With a focus on scaling sustainably and navigating the complexities of direct-to-consumer marketing, Daniel offers a candid look at the challenges and opportunities he has faced. He dives deep into the innovative strategies that have allowed his business to thrive, even as it transitions into new markets like food and beverage. His emphasis on customer experience and data-driven decision-making sheds light on how to stand out in competitive industries.In addition to sharing his entrepreneurial playbook, Daniel reflects on the personal side of running a business. He discusses lessons learned from hiring, emphasizing the value of attitude and potential over perfect resumes. His unique perspective on handling setbacks, shaped by overcoming personal health challenges, offers a refreshing take on maintaining balance and perspective. Aspiring entrepreneurs will walk away inspired by his insights into building resilience, adapting to change, and taking strategic risks.CHAPTER TITLES02:35 - Starting the Entrepreneurial Journey04:54 - Disrupting the Subscription Model07:21 - Scaling and Maintaining Customer Experience09:50 - Transitioning into Food and Beverage12:14 - Direct-to-Consumer Marketing Strategies14:38 - The Role of Partnerships in Growth16:27 - Key Business Lessons for Entrepreneurs18:39 - Hiring for Potential vs. Experience21:01 - Learning to Handle Setbacks and Failures23:40 - Advice to a Younger SelfConnect with Daniel Broukhim:Fabfitfun.comConnect with Rudy Mawer:LinkedInInstagramFacebookTwitter
Chapter 1: What inspired Daniel Broukhim to start his entrepreneurial journey?
We're joined today by my friend Daniel, built a very big successful business that we're going to dive into, FabFitFun. You've probably heard of it. One of the probably most successful subscription econ models that I've ever seen. Daniel, welcome to the show.
Thank you. Great to be here.
Chapter 2: How did FabFitFun disrupt the subscription model?
Yeah, so let's dive in. If someone doesn't know, you know, most people probably know the brand, right? But they might not know you're one of the geniuses behind it. Can you just give a couple of minutes on kind of yourself and what you do?
Chapter 3: What strategies help maintain customer experience while scaling?
Yeah, sure. So I'm Daniel Rukim. I am the co-founder and co-CEO of FabFitFun. I was born and raised in LA, grew up there most of my life before going to Berkeley for undergrad and then UCLA for law school. When I was in law school, I decided I didn't want to practice.
And so I started working on some of my own entrepreneurial initiatives, starting with a digital agency out of which I launched FabFitFun. Initially as like actually a newsletter and blog. And then, you know, from there we evolved it into a broader retail e-commerce platform where, you know, as part of FabFitFun, the core kind of offering is a subscription box.
Chapter 4: How is FabFitFun transitioning into the food and beverage market?
But, you know, now that offering has really evolved into Discount Retail Shopping Club. So as part of the membership that you get. You basically get a curated menu of about 50 to 60 items every season where you pick six and you get about $300 in value and you're paying $70 a season or $220 a year. So really effectively, it's $55 a season if you are buying an annual membership.
And then you also get access to sales where you get the lowest price on the Internet. Yeah. and a lot of proprietary and exclusive products. So, you know, business has really evolved. There's like that core kind of consumer offering, which is the retail piece of it. But we also own and operate some brands.
You know, some of them we own wholly, some we own jointly, and we help people launch brands through our platform. A couple people may know one is called Our Place, which is a direct-to-consumer kitchenware company. And another one's called Unhide, which is a direct-to-consumer blanket company. And another one's called Pupbox, which is a subscription box for dogs. Yes. So we have that.
Chapter 5: What direct-to-consumer marketing strategies are effective?
We also have also forwarded it forward into like the B2B side of things. We do fulfillment, product development, sourcing, and now starting to do some packaging for other brands as well. So it's really it's like changed over the years, right? Yeah, it started off literally as a blog. Yeah. And then became a newsletter. Then we launched the subscription box.
Yep.
Chapter 6: What role do partnerships play in business growth?
And then we customized that. So it became a very personalized shopping platform. We could pick all the products. And we started adding sales throughout the year. We have sales every single week. And now we have a more permanent e-commerce store. We have actually a ton of products you can subscribe and save to as well as more of that permanent store. So that's really evolved.
And then on top of that, now we start, you know, if you want to break down. So there's like the core retail business. Yeah. There's the owned and operated brands. And then there's like the B2B side where we really work with brands and partner with them and help enable their operations.
Chapter 7: What key business lessons has Daniel learned as an entrepreneur?
Yeah, I'd love to dive in like, you know, in a minute how that all came about. Because like, you know, I've seen the same in my businesses. It's kind of like you launch with one thing. Yeah. And then you're like, wow, I'm crushing it here. And then it's sometimes like I'm making these brands a bunch of money. Maybe I should start owning the brands or owning a piece of it. Right.
And then sometimes it's like, you know, I guess for you, you get so good at maybe an area or you master it from doing it yourself that it's like and there's a gap in the marketplace.
Chapter 8: How important is hiring for potential over experience?
Well, yeah, actually. So for us, it started from the customer side where there were certain products that we wanted to bring to our platform that we were unable to actually buy from brands. And so we're like, okay, well, we can't get these at the price points that we want. We know we can make a product that is equivalent, if not better. And that's how we launched Unhide initially.
And we had tested a few other items, actually. Like there was a fruit infuser water bottle that we launched. It was like our first branded product. It was actually branded under the FabFitFun brand itself. Wow. And, uh, we did the bottle, we put it in, in, in the boxes. It actually went crazy. We actually listed on Amazon. It was generating a ton of revenue off Amazon.
Chapter 9: What advice does Daniel have for handling setbacks in business?
Uh, and then we started getting all these copycats. So we always, Hey, good. We better, if we want to really, you know, do this, like we should. probably have some more infrastructure around it. So these were really kind of customer driven things that we're like, OK, we can't really deliver the products they want, so let's go make them.
But yeah, of course, there is an economic benefit to also owning the brands because the brands don't just live on FabFitFun, but they go off platform so people can then enjoy them elsewhere.
Chapter 10: What would Daniel tell his younger self about entrepreneurship?
100%.
You're getting, it's like, we'd like to think about like a Super Bowl for CPG, you know? You get in the box, which, you know, the people who are buying the box itself are people who are looking for new things, looking to discover, looking to try. And a lot of them also, you know, they're on social media.
So they're posting, they're doing the unboxing, they're sharing the information to their friends. They're usually the person, the friend group who is ahead of the trend and like kind of knows what's out there. So like... Um, you know, I think we're like, you know, the, the, the, the kind of the tip of the spear for them. Like, this is a great way to kind of get your brand out there.
And like, you know, we have obviously our core customer, which is our shopper, uh, and like our member and like, that's always gonna be number one, but we do really think of ourselves as a partner as a brand and them as a second type of customer. So in a way, it's a two-sided business where we're not just serving the consumer, but we're also serving these brands.
And now that we're starting to offer these other ancillary services like fulfillment, product development, sourcing, packaging, trade finance, we really help them bring everything to life.
Yeah, I love that. And I think we glanced over it, but you've done it at a big level too, you know, like a million, you know, a million subscribers. And I remember like when I had my agency about 10 years ago, subscription boxes were like all the rage.
Like I remember at the time there's so many of them, but what are some lessons for, you know, someone listening that's an e-com play or in general building a subscription business? Do you have some kind of key things that you've learned?
I think every, look, not all like, Subscription is an amazing tool, right? For us, because we're able to count, not everything is meant to be a subscription, though you can leverage it, right? And there's reasons why it makes the experience better for the customer and the business better. then it can make a whole lot of sense.
And so for us, the way we're able to drive such deep discounts for our members is because we have the subscription base and we know with certainty that we're going to have this many customers coming back. So we're able to place extremely large purchase orders on products that... Otherwise, you know, we'd be buying much smaller ones without that kind of confidence.
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