Cobalt Co revenue, CEO Elle Shelley Black, team size, customer count, churn, and more in 2023.

hey folks my guest today is elle black a serial entrepreneur she launched her first company during her junior year of college and then built and sold her second company by early 30s today she's building cobalt dot co which helps connectors create to vet connect to vetted suppliers are you ready to take the top let's do this all right do you have some horror story here why is helping creators find good suppliers important to you oh my gosh i have so many horror stories uh actually just ask anyone who's ever tried to launch their own product um and i'm talking about things as easy as candles jewelry etc etc there are so many brilliant ideas that creators have getting them out of their head seems to be the easy part right everybody has figma everyone can spin up a design the hardest part is finding a supplier or a manufacturer that actually one wants to work with you and two can actually make your product and three is not in china um and so that's the problem that cobalt is solving um we're bringing manufacturers and suppliers from the us canada and latam to one place um vetting them and making it easy for anyone with an idea to launch their product by working directly with suppliers i want to make cap candles that smell like coffee so i don't have to drink as much coffee preserve my health who would you recommend that i use right now well we have so we have over 2500 suppliers in the platform um and when a creator wants to do that it's very easy to search for supplier based off of all of your unique uh requirements so what we learned about creators and quite frankly about the world that we want to create is that who makes your products really matter and so as we're vetting our suppliers we're pretty picky about who we let in we like suppliers that have humane working conditions that are in the u.s that are vegan that organic that are supply uh supply chain transparent uh that are family run that are proven uh that have unique products that aren't just another product that you're gonna find on amazon and so it really the how you find the right supplier for your coffee scented candle we've really made it easy for the creator to decide how much they care about those factors and then sort and find and connect and chat and order samples and get your product made all in one place interesting okay so it was obviously a marketplace motion do you just mention 2500 suppliers what does it mean like is it a lot of work first fire get on board and if it's not like how do you convince me get on board when you don't have a lot of volume yet coming from craters i don't know oh great question so what's unique about cobalt is that we offer low moq suppliers moq is the thing to know that's minimum order quantity um and that's really the question that everybody asks okay i want to launch a product how many do i have to buy in my first run um and low moq suppliers are pretty hard to find um and so we've done the hard part of aggregating all of these suppliers negotiating price points negotiating the terms getting them into the platform and offering low moq's for creators um and so our low our low low moq's are you know to the order of 25 right you want to do a custom cbd bath bomb um you can do 25 at you know 750 a bath bomb it's completely drop ship end and fulfillment you never touch the product um you actually work directly through the platform with the supplier to get the product delivered to get the product made and it goes directly to your customers all without leaving your house how many creators are signed up today yeah so what's fun about cobalt is we're still in this like waiting period right uh and we're we're still building all of the infrastructure and we have over 77 uh waitlisted creators slowly getting people off the wait list um and you know for everybody who emails me every day i'll get to you i promise uh but we like just we just like just show people how easy it is to actually you know launch your own brand and that's really the magic of what we're doing when did you start coding this l when did you start getting all this together what year we started doing it actually right before uh right before covid okay so like 20 late 2019-ish late 2019. yep and then of course it happened and uh we got lucky cobalt got lucky um because of everything that happened with kovid um what ended up happening is suppliers that used to not be willing to work with you know smaller brands creators because trade shows aren't happening because market isn't happening because of supply chain problems in china all of a sudden suppliers are totally willing to work with lower moq's um and so we're you know we're again aggregating all those suppliers doing the heavy lifting doing the research doing the vetting uh doing the negotiating on pricing doing the contracting pieces all the stuff that's really hard and makes it impossible for anyone to get started doing their own product we did all that for you and we're putting it right into the platform to connect directly with the suppliers got it so i totally understand the product i don't understand how you're building now today so it sounds like your pre-revenue when is launch when do you get your first paying customer well so yeah great question so we've been we've been having paying customers um it's just not in an open market place where anyone can do it um so we're we're vetting our customers and making sure that uh we can make them successful okay how many customers you have today we over the last year we've done over 177 product launches oh wow across how many creators 177. oh it's one to one yeah well right now it is yeah interesting why don't i i mean if you do one with one creator don't they want to come back and do another one a month later they yes you are exactly right they do but why is it a one-on-one ratio why haven't creators used you more than once over the past 12 months oh no no no no so sorry i thought you said how many customers do you have so we've done 177 customers that have launched their first product um 36 of them have launched a second product and of that 36 percent another 80 percent have done three or more oh got it you said 177 product launches that was not right got it got it how many how many product launches over the past year oh boy i'd have to i i know the percentage is in the funnel i'd have to go back what was just don't name the creator but i'm just curious what was like the best if you can share what was like the best selling thing is it a bath bomb a cbd bath bomb yeah you know it's sort of sort of defend this is what's the fun about this conversation it depends on how you define best selling do you define it based off of quantity or define it let's use quantity well let's let me let me pressure test that with you right because what we actually really care about is that the creators and the emerging brands are capturing as much brand value as possible but how do you measure that out come on based off of how much the creator can sell the product for okay so what's okay so let's do that what's the highest price point thing you've sold uh for a product we've sold a product well creators have sold products that have come out of pla out of the platform for up to 150 and products that they sourced for 30 percent that so you can do the math on that yeah yeah so that's what i mean right um the example that we like to give here because it's easy to understand is kylie jenner right kylie jenner has a baby what does she do she launches a baby product line that has a bubble bath in it she is kylie a customer no she's not a customer um and if she was i couldn't tell yeah um but uh she launches this it's basically essentially the same product as johnson and johnson you know the best-selling johnson johnson baby bubble bath um it's the same amount six ounces but it has her name her brand and a little bit of a different fragrance on it um otherwise the formulation is nearly identical um and she can sell out in 24 hours and sell it for 2.5 x more than johnson johnson sells it for that's the future and that's what we're doing so when you talk about when you talk about like where is the value you know in my mind it's the fact that kylie jenner can sell out this product for two and a half more than johnson and johnson can i understand it yeah uh trust me the reason we have you on i get the space like i love the space i just understand like how you are going to win the space right so um talk to me a little bit about how what you think your revenue model is here how do you make money oh our suppliers so it's free for creators to use um and the suppliers pay uh any transaction fee okay interesting so what does that mean okay so they pay eight percent so if i let's stick with my coffee candle example if you find that supplier and i'm gonna pay that supplier ten bucks to make one coffee candle you're going to make two you're gonna make uh what is that 20 cents on that 10 sale or that yeah or just yeah this goes back to the minimum order quantity right so um the minimum order quantity is let's for easy numbers let's say it's a it's a thousand dollars right so a creator is going to place an order for a thousand dollars in the platform that order is going to go to the supplier and the supplier is going to pay us 80 because we gave them a customer got it okay cool so that makes perfect sense um talk to me about how you funded the business have you bootstrapped or you decide to raise oh yeah we're venture-backed okay you're that means you're giving up equity so dilution's not a fun thing so why'd you decide to raise why do we decide to raise well this is a bunch of product yeah raising capital means you're giving up equity ownership is the most important thing anywhere so there's got to be a great strategic reason you decide to raise that's what i'm trying to dig here and understand well i mean it depends on how you look at it right strategically there are certain products that are right for venture a product where you need to grow really fast and there's going to be a clear winner in the market and you need a lot of money to get there really fast it's a venture scale business and that's where cobalt fits um to get all of those suppliers onboarded and to build the the back-end infrastructure of a marketplace that's complex like this you couldn't actually bootstrap it so it is a venture scale product and for that reason uh we we opted to do venture okay and how much you decide to raise uh well i mean that's that's a great question we're doing a seed round and we're still in our seed round so we don't quite know what that's going to look like yet oh i see i see okay cool yeah there's a lot of people right now that are sort of letting their their seat rounds roll because if you find more strategic people you want to be able to let them in quickly yeah yeah cool okay so so you're raising capital now are you sole founder here do you have co-founders i have a co-founder okay how do you guys get together how'd you meet well we're in san francisco um and we're in the tech space uh we're both you know serial entrepreneurs we've done a bunch of uh startups previously um and we came together through the space through you know networking and knowing people in space okay and so you're you're doing these you've done these 177 product launches uh sorry customers that have launched many products to date when do you think you'll open up the thing where it's sort of a push button touch people can yeah when is that going to open up yeah q1 of 2022 okay and um and what is left to do before you can open that up is it is it something on the supply side the back end you have to keep building yeah so if you think about a product that's comparable to cobalt um it's easy to think about amazon right um in order for amazon to scale they had to build all the infrastructure for the stores um and so each seller on amazon has a seller store they have all the infrastructure that they have to create and they can set up their seller store they add their products they add their skus they do all of that that's all of the tools that we're building uh right now on the supplier side um as you get to the point where you can release that self-service in q1 at some point you want to say you know what we don't want to raise more money at this current round because it becomes very dilutive uh it looks like based off crunch base you guys have raised 2.8 million today what would you cap that at like would you stop it at 3 million no matter what or would you let it keep rolling for however you know however long well where we are in the business um the way venture works is we're just getting to the end of our seed round um and when you get to seed you you sort of like you know seed is considered you're trying to find product market fit once you have product market fit and you can show scalable reputable you understand the economics of the business model um and it's really easy to understand how to grow and scale next then you go to an a-round or a growth round um sorry my my audience we featured some of the top sessions in the world on amit from gong was on right just before the 100 million run right he's raised half a billion dollars my audience totally understands what it means to raise capital what i'm understanding specifically is how you're managing delusion with your co-founder and your pre-seed round i don't understand where you're what are you asking me i'm asking you how the cap table is structured what do you i'm asking you how you personally think about preserving your ownership in a business that you think can be really big i mean look everybody has a different perspective on this um i think that my job as a founder at this stage is actually to improve the market get the economics right and build a really big business based off of a really big opportunity i'm personally not focused on preserving my equity and actually i'm doing the opposite i'm focused on creating as much value for my investors as possible um and that's what i'm focused on when it comes to preserving equity you know it just depends on how you want to look at it and what your goal is when i look at how i'm building cobalt which is very different you know way than a lot of other people and there are many ways to do it um you know i believe if you build a really big business and you make a lot of people a lot of money then everybody wins and that's actually in my world view and even that's why we're building cobalt so more people have more opportunities to make themselves entrepreneurs and to win really big um so i don't sit there and think about how can elle can preserve the most equity in startup i think about how can i create a million millionaires how can i create you know 10x returns for my investors and then help a whole new breed of entrepreneurs create tedx returns and have financial freedom i love that vision let's wrap up here with the famous five number one what's your favorite book uh ma'am search for meeting victor frankel number two is there a ceo you're following or studying oh um well i'm kind of a nerd and i love all of the startup ceos um and so i've been following everything that's happening um who am i into i'm into retail brands so i'm really looking at a lot of those but i can't think of any particular ceo that i'm following or studying right now number three what's your favorite online tool for building cobalt oh canva number four how many hours i sleep to get every night oh i think about this often actually it's funny you should ask um so my sleep schedule waxes and wanes and i actually say it like that um on short sleeve nights i do four to six and then i have like longer sleep nights where i need eight to ten and it really depends on what i need to do the next day um to actually figure out my wax and wayne state schedule all right and a situation married single kiddos uh i'm married i got married during covet and uh congrats yeah thanks any kids or no yeah we have a he my husband has a daughter a 17 year old daughter and so i have a stepdaughter oh very that's so cool okay do you mind me asking how old you are yeah no not at all i'm 39. okay take the reason i ask it take us back to your 20 year old self what's something you wish you knew i had this very funny story about a lot of things that put me on different trajectories when i was right at that age and the advice that i would give my 20 year old self is actually the same advice i'd give everybody every day which is it's going to turn out better than you imagine just keep going guys there you have it cobalt.com wants help millions hopefully hundreds of lots of people create millionaires for themselves launching their own products by making this very easy to understand your supply chain find people that treat their workers ethically build your own products quickly with very small minimum order values which is what all of us care about when we're getting started to minimize risk she has over 2500 suppliers on the platform and over 77 creators on her waitlist but she's already done 177 launches with creators for the past 12 months to test this space the highest product selling to the space 150 bucks we love that that's brand value as she talked about it they raised 2.8 million bucks to scale this thing today looking to grow big in the next 12 months el thanks for taking us to the top yeah that was perfect nathan you nailed that one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 p.m central additionally remember these recorded founder interviews 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