Twelve Days of Commerce: #1 Cheers
Cheers to the final feature, and an appropriate one too
As my Twelve Days of Commerce series concludes, I’ve chosen to highlight a business particularly relevant during December’s festive season in London - or any setting with hefty Christmas celebrations. Cheers to my number one.
Despite being a Shark Tank flop, Cheers was founded in 2012 by Brooks Powell, who believed Mark Cuban’s skepticism about the product was a misstep. True to his character, and as anyone following him on LinkedIn knows, Brooks isn’t one to dwell on setbacks. Instead, he focuses on execution, putting his head down and forging ahead as a leading voice in the CPG space.
Being in the public eye
Becoming a LinkedIn voice, or making it a true initiative to put yourself out there, is incredibly tiring, and a topic I’ll write about in a latter article. It was refreshing to see Brooks write about this in a recent post (read here), discussing the controversies and challenges of voicing your opinion in such a public space. Similarly to Will Nitze (IQBAR), Brooks has chosen the path of promoting Cheers, both directly and indirectly from being a voice in the consumable category. Why LinkedIn? He claims “LinkedIn is the MOST powerful platform for building B2B industry support for a CPG brand.”
So what is Cheers? Founded in 2012, Cheers offers science-backed products designed to support your liver and predominantly aid recovery after drinking. With a mission to promote responsible enjoyment, they’ve turned a Shark Tank rejection into a thriving CPG success story. I’ve often written about HealthTech and the new initiatives from founders pushing the boundaries of healthcare to provide innovative solutions at home. We’ve seen vast movements in telehealth, including ketamine treatment, remote blood tests, the science of psychedelics and mushrooms, sleep debt, wearables (including recent innovation: Pison), longevity, and now AI-driven healthcare solutions. Cheers is on track to democratize liver and cognitive support in response to alcohol consumption.
The power of diversifying sales channels and not raising more than you need
Earlier this year, I wrote about the challenges of venture capital and the inefficiencies it creates for e-commerce businesses:
But if you’ve kept up with Dollar Commerce so far, you’ll know I’m always on the hunt for a venture-backed success story, yet it’s been a challenging feat to find one that balances growth and profit.
While some founders treat fundraising as a game, racing to secure the largest raise as their North Star goal (often to sell secondary shares or go public), Cheers has taken a different approach. According to Crunchbase, they’ve raised just $4.05M. On LinkedIn, Brooks proudly shares that the business is not only profitable but has generated roughly $60M in sales (est. $20M p/year), with a revenue mix across retail, Amazon, and direct-to-consumer. Hallelujah, proof it’s possible to fundraise and grow a profitable D2C brand!
However, Ben Cogan, founder of Hubble Contacts, elaborates on a common challenge for e-commerce brands. The issue is that unless you diversify your sales channels, “there’s only so many people that want to buy your product.” All e-commerce brands face efficiency thresholds. As you scale from A to B, or B to C, your core KPIs will inevitably start to fluctuate and your thresholds will soon be realized. This creates tension between venture-backed growth expectations and a founder’s mentality of adding value sustainably.
Cheers are an exciting case study because, like IQBAR, they aren’t overly reliant on their direct channels. Moreover, they’ve raised relatively little capital compared to the revenue they’ve generated. Brooks and his team have executed successfully across multiple channels, with a robust B2B strategy, Amazon strategy, and D2C strategy. As a result, the brand has grown 75% year-to-date.
The money’s in the details
I’ve often quoted Steve Jobs’ famous line: “We start with the customer experience and work backwards from there.” Whether this experience is a brand’s ability to form a ‘cult’ following or simply the product delivering a seamless experience for its users, it’s a critical step for founders aiming to build organic lifetime value, because without it, there is no lifetime value (shock).
Brooks speaks candidly about the challenges he and Shelby (his wife and mother to Ollie) faced in the early days after graduating from Princeton. Battling with investors and trying to differentiate themselves from traditional alcohol brands, positioning Cheers more as a treatment, was often met with dismissal. In one instance, an investor admitted to valuing ‘optics over truth’ when Brooks pressed him on the matter. Brooks quotes in a wonderful post: “Now there isn’t a retailer in the US that worries about the optics of our brand. The same thing has been true among the investor community” (read more).
I was delighted to learn that Cheers spends $50K–$60K per year on subscription gift boxes for investors, friends, partners, and long-time supporters of the brand. But is this actually a sunk cost? Absolutely not. Cheers recently won the award for ‘Best Digital Campaign on a Brand Budget of Less than $5M’ for their ‘Drink Smarter’ campaign.
If their subscription box or influencer outreach converts even one or two new subscribers to join the Cheers club, the investment in thoughtful gifting not only pays for itself but generates a profit. Brooks also sends handwritten cards and thank-yous to key members of the Cheers community every year. My takeaway? While building Cheers has undoubtedly been an exhausting journey and being a public-facing founder is undeniably draining, the strong organic value derived from their customer-first approach is undeniable.