It seems obvious in hindsight: Folks with tattoos have unique skincare needs. But leave it to three new college graduates to see what no one else did and launch a direct-to-consumer skincare company for that audience.
That was in 2019, when Drew Fallon joined two of his Miami University (Ohio) buddies who had created a side hustle called Mad Rabbit. “We had one product, one social site, and one advertising channel,” Fallon told me.
Two years later, the company hit $3 million in annual sales — still as a side hustle. That’s when the three founders left 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 entire audio of our conversation is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: Give us a quick rundown of your company.
Drew Fallon: Mad Rabbit is the first direct-to-consumer tattoo skincare company. Our products help folks’ 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 as a side hustle in 2019, the same year my two co-founders and I graduated from Miami University in Ohio. We all had full-time jobs for about two years after graduating. During that time, we went 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 this full-time. The three of us are now 25. We’re early in our tattoo journeys, and so is our primary customer. Many are 25 to 30 years old with only a couple of tattoos. But tattoos can be addictive. People get one, and they tend to get more.
Bandholz: How do you reach $3 million as a side hustle?
Fallon: 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 mainly came down to giving people something that didn’t exist.
Bandholz: You went from a lifestyle brand to hyper-growth.
Fallon: We were profitable only without the salary expense of three employees. By late 2020, we had just finished filming on 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’s now our largest investor, having participated in subsequent financing rounds.
We launched our soothing gel in January 2021. It sold well. Then we created a sunscreen in March, which went berserk. We sold 10,000 units in a week. At that point, we said, “This is a special opportunity. We have two options. We can keep coasting, or we can pursue the most of what this could become.” 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 plenty of investment. We decided to go for it and faced very little competition.
Bandholz: I assume most of your customers are women.
Fallon: Yes. That’s correct — about 55% female. Initially we had more male customers, but our female audience grew as we launched more products. Women tend to buy more skincare goods. We’re going through a brand refresh now to de-emphasize the masculine vibe. We’re switching to white packaging, too.
The tattoo culture is diverse. My 18-year-old sister has three tattoos. Harley Davidson riders have many tattoos. Chefs are into tattoos, as are athletes.
Speaking to each segment is an opportunity we haven’t cracked. We approach everyone as if they were the same. But we’re hiring people with segmentation experience to build different purchasing cadences.
For example, a female might buy the balm and check out the sunscreen two months later. But a male would likely purchase sunscreen first and then try the body wash.
Bandholz: You mentioned Facebook Ads. How did Mad Rabbit react to the iOS 14.5 tracking?
Fallon: In April 2021, about 85% of our marketing spend was on Instagram. When iOS hit that May, it was like the train came off the rails. We didn’t know what was happening. Our sales reflected not only the iOS change but the supply chain shortage.
Fast forward to 2022. We’re spending more money on social than ever but at better marketing efficiency ratios. Plus we did two massive pivots.
First, we did an equity-for-services deal with Inked, an online magazine. They have about 60 million followers across their social media channels. They exclusively and aggressively promoted our brand, products, and content across those channels in exchange for owning part of our company. That exploded the top of the funnel for us.
The second thing was TikTok. We have TikTok videos in the last six months with over 20 million views and 400,000 followers. They too have generated a massive top-of-funnel effect.
With millions of views from TikTok and Inked, our Facebook Ads started working again. We scaled Facebook in January 2022, and we’ve been growing month-over-month since then.
Facebook now drives a lot of our sales, as evidenced by our attribution modeling. We take daily advertising by channel and daily sales on our website and Amazon and do a simple linear regression in Excel. We can discern that Facebook is still driving a ton of our sales, including Amazon.
Bandholz: Where can people follow and support you?