Breaking the Rules of Ecom Growth with Steven Pemberton

in just a few short hours per day . And now your hosts , serial entrepreneurs David Shomer and Ken Wilson .

Today , they own and operate Elevatum , an e-commerce growth consultancy , helping brands from startups to $50 million in revenue scale holistically . Stephen is also the voice of Voice Like a Lion podcast . If you're feeling stuck , uncertain or just in a need of a little inspiration , this episode is for you . Stephen , welcome to the show .

Hey , david , thank you so much for having me , absolutely , absolutely . So let's start off to set the table your path . A little bit about your path in the entrepreneurial world .

, look , it's great that our son's on the way , but I don't want to go back to work and , mind you , I'm making $13 an hour , so there's not really a way for us to make that work . And I said great , but you're going to have to figure something out .

And she starts running a business online and at this time I'd never seen anyone do it , and especially no one do it successfully . Not saying that this one has a happy ending , but it was amazing as I started watching her go from zero to making $500 a month .

And I went well , you can make money online and not have to go to a job , because at this time I was working in a warehouse . So I said you know what's better than one person doing it ? Two heads are better than one .

So I jumped out of my job , we went fully into business and , of course , I'm 20 years old , so I'm 20 at that time and we lost I really , really fast . We had no capital , no runway and no skills , so it was bad , but that was my first ever endeavor into entrepreneurship was 11 years ago .

I had gone up the chain of command really quickly . I started out at the bottom , I had no degrees , I had no connections , and I worked my way up . I was one of the youngest managers in the Fortune 100 company and I was just getting able to take over my own location .

And so I'm taking over my own location in East Texas and my wife she's a stay-at-home mom . So we actually come full circle on that story and my wife being someone who is the most hardworking , most intelligent person I know , I knew that would probably not last long . And so she eventually tells me . She says , Steven , I just don't feel fulfilled .

There's only so much Netflix and so much cleaning I can do so , of course , she makes like the cardinal sin that we always tell everyone not to make , which is to post that on Facebook . So she posts that whole spiel on Facebook . Luckily , my mom reaches out to her and says , hey , I'm doing this Amazon thing , Would you be interested in it ?

So they get on a call , they talk through it , and my wife comes to me hey , what do you think about this , this Amazon thing ? And I said , absolutely not . I am finally moving up the chain of command . I'm so close to getting a six figure raise . Why would we do that ?

It's like we have the life I always thought I wanted to live , because I just wanted to be middle class back then and I remember she said okay , and she did anyways , and so that was our endeavor . Back into it was it was all her , and she went back into it . This was early 2018 .

And it was incredible to watch her go from zero , like she would cry when somebody would leave a one-star review or when we would get a return or a chargeback to in the first year . It ended up going from zero to over a million dollars a year . We had six employees . It was incredible and that was when I went wait , now this is real .

This isn't $500 a month Now . Granted , I always love to tell this part . Those profit margins were terrible . They were less than 10% . But the fact that it was possible so there's a million dollars came into this business . I realized working this job , it's like I don't have to do this forever . There's a better way .

So what happens is I come in and I restructure the whole thing because profit margins were terrible and I said , if we did half the revenue but double the profit margins , we make the same money with a lot less transactions and less overhead , because we're not going to have to have as many people .

So I come in , I start doing that , covid hits , everything goes down the drain at the wrong time and in May of 2020 , so now this business , this dream that I had seen in front of me , is starting to go away . In May of 2020 , I'm sitting there and I started having anxiety attacks , and this is the first time ever .

And even earlier in this podcast I talked about losing everything at 20 years old , with a brand new wife and a brand new baby on the way .

And what was fascinating is I started having these anxiety attacks because I'm sitting there and I'm looking at my job and I don't see how I'm going to be able to continue to progress , and I'm looking at the business and I don't see a way out . So now I feel stuck . So in June of 2020 , I just made a decision . I said you know what ?

I can either stay like this or I can quit . So that's when I fired the man and I said I'm out of this and I went into business full time . Now , it was not a

Cinderella story early on , because a couple of months later , amazon ended up shutting us down . And them shutting us down was because we actually spent $15,000 with this guy . He was pretty big in the wholesale space and he started selling his own laws . So he had these connections with brands . He would buy from them and then he would resell them to us .

So we thought , okay , cool , we can get this . There's only one person on the buy box that we're going to crush . Little did we know that there's this thing called brand security . They're the only ones allowed to sell that . So we buy $15,000 . We get set down . We're $100,000 in debt , all this inventory and I'm going . I just quit my job . There's no income .

What are we going to do ? And that's when we ended up pivoting and we started our own Shopify brand . Facebook Marketplace and Shops was our main acquisition channel , and I remember the first month running that this was a couple months after getting shut down we tried everything in between .

We tried just like , hey , man , look , we will give this thing away if you give me $5 for this whole lot of stuff . But we ended up pivoting over in that first month on Facebook and with that Shopify store , we made $5,000 . And I went , oh wait , this might be a thing . And then by the end of 2020 , we were doing about 10 , 20,000 .

We're doing a little over $10,000 a month . We were able to help 37 underprivileged kids have Christmas Within six months from starting the business . We're doing $100,000 a month . And then by the end of 2021 , that business was over a million dollars a year .

We were able to help 137 kids have a Christmas and that was just like the most incredible thing , because we're able to give back in the process .

And so my next question is about selling on . Your experience is selling on Amazon , and your experience is selling on Shopify , and , admittedly , I'm an Amazon guy . I've sold on Amazon for a while and I'm a big fan of that marketplace .

However , you had mentioned a couple of things that are very familiar to me tight margins , the ability for your account to be closed down , and so what has that pivot felt like from a business owner perspective ?

I mean it's the second , probably creeping up on the first most searched thing outside of Google , just because I mean you're going to check to see is it cheaper on Amazon , what's the reviews look like

, all those things . So it's easy to get traffic if you know how to do it right . I think the thing that Shopify and Shopify is just the vehicle that we found , that's just the vessel .

It could be WooCommerce , wordpress , whatever it is for you , but we found that if you know the right strategies there , it gives you a lot more freedom to make different choices . At least when we were selling on Amazon a few years ago , there wasn't an ability for me to control a customer list , so there's no way for me to upsell you .

There's not a way for me to continue to email you , to have you in this flow , so I wasn't able to control the lifetime value of a customer , which to me , is that's like one of the most powerful levers you can pull in an e-commerce brand . So when we went over into Shopify , we were able to see oh , these people keep buying .

This demographic of people are buying this one product , so they're in this place at this age , so we can just resell them to stuff just like this , we can cross sell them to something over here . And we just found that we're able to do a lot better job customer service wise , off of Amazon .

But I think if you , then this is for anyone who has a brand let's say you're not on Amazon , and my opinion on it is once you have a pretty good footing , understanding who your demographic is , go on Amazon , because once you do , then that just becomes rocket fuel for your brand .

How are you getting people to come to your website ?

Because if you don't ask yourself why you're building something beforehand and who you want to sell it to , because realistically , you're not going to be able to sell to everyone this was one of my biggest fallacies

when I first started in business is oh well , you know , if I build it , this thing's for everyone . Of course everyone wants home decor , because we sell home decor , it's like . Of course everyone's living somewhere , right , it's like . But that's not true . Not everyone is going to want your style , so you have to figure out who that is .

I think building it and they will come is not as true anymore . Back in the day , if we're talking about back in the 60s , 70s , 80s , when you built it , it was normally a storefront .

You had a big sign out front and people are going to be interested in coming in and checking it out nowadays because of the barrier to entry to creating a website is so low , especially now with things like ClickFunnels or GoHighLevel , anything like that . You can create a quote unquote website today and cheat .

So what is going to set you apart is the most important thing what's the story behind it ? Why is it different than Jimmy down the road doing the same thing ? Jimmy could have the same exact product , but the story behind how you found it and the way you make it and the way that you help people with it is going to be different than Jimmy .

And then on top of that is before you ever make the website , if you're able to go and talk to people about your products , there's going to be great information that comes in from that . You're going to be able to understand is this actually a need in the market ?

So , proving the market in the marketplace before you ever sell it , before you even have to create the website . If you can prove it in the marketplace before you build it , then what happens is you find a real need and you can find out like okay , so if I build this , you're going to buy this right .

And if they say yeah , it's like okay , great , here here's my phone , sign up for this wait list . And so then you get them to give you money before you even build and you can start building with other people's money and that a little bit of the secret sauce .

But really for me , if you already have the website and you're not sure why no one's coming to it , if no one knows about it , so you have to find a way to get out and start telling people about it , and whether that is in making your , making LinkedIn posts , making Instagram posts , tiktok there's so many social medias , there's so many ways to get your

message out there and you just have to consistently do it . I think that people expect , especially in the beginning . If you're newer , you're trying to exit your job . This has been your side hustle and you're really hoping and praying this is the thing that'll get me out .

Then you're hoping that it's like I'm going to go viral and this one viral post is going to drive a half a million dollars in sales and then I'll be able to exit my job and I'll be able to focus on the business .

It's like , but realistically , it's these baby steps , it's these bricks that you consistently build that then will lead to you having a consistent flow of customers , because , let's say , that does happen . You go viral once and you bring in people that buy half a million dollars , are you even going to be able to fulfill that ?

First and foremost , that's a whole different problem . But then , secondly , it's like how do you keep that traffic ? Because if you're always banking on viral , that's not realistic , because you're not always .

Unless you can just manufacture viral content over and over , and over and over again , it's going to be a shot in the dark for you and you're hoping that lightning will strike twice . So you have to actually start building systems . Think in terms of systems instead of just one offs .

When COVID happened , every counselor in our area was getting laid off and I thought here we go , this is my eight-figure , nine-figure opportunity and I joke , but it's true , it's the only job I've ever been fired from . Me and my wife .

We learned that we're a great husband and wife , but we are not great business partners , that we're a great husband and wife but we are not great business partners and we had different goals . And so we have opted to obviously continue that husband and wife role but have not done any joint ventures together .

And so what for people listening that are thinking about doing something with their spouse ? What advice would you give to them for navigating that and still being married at the end ?

No matter how repeatable your systems are , there's an aspect of luck and for my wife and I , as we met on a job , so when my first job ever is where I met my wife , so we had to work around each other before we ever got married . So I actually knew her from a working standpoint before . I knew her in an intimate standpoint , so it made me .

It made it much easier for us Now , granted the thing that I ran into .

So if you're listening to this and you're working in a job and you're like , oh , I'm about to fire the man , and then my wife's already running a business and she's helping me in my side hustle , here's my one piece of advice is I remember when I quit my job and I was expecting I'm gonna hit the ground running .

I came in she already ran this million dollar business and now I'm walking into it and she doesn't know how to train me . And then I don't know what to do . So I'm sitting there and there's no one telling me what to do . She's like oh yeah , you'll figure it out , just get in the business and go . And I went .

I barely know how to turn this computer on , like what am I supposed to do ? And I think what the biggest killer when it comes to spouses working together , especially before they walk into it , is unspoken expectations like that one . She just expected that I'd be able to pick it up , and for me , I expected that she would teach me .

When neither of those things happened . Now we had this incongruency where I just started playing video games and then now she's mad at me because I'm not working the business , but she's not training me . So of course I can't work the business because I don't know what to do .

And so this is where , if we would have had a little bit more time and , hopefully , wise counsel around us beforehand , to just say , hey , what are you guys expecting out of one another ? And just setting that standard even now is a great example With the way the business is structured . Now with Elevatum , I'm the CEO .

She was the CEO back then she's more the COO . That's what she loves . She loves building systems , she loves being able to talk to people and help put them in the right places , and she wants

to see the little things move down through the workflows . And so , for me , I'm better at casting the vision for the business . I'm better at marketing the business . So we have distinctive roles and we understand the one cool thing we do let each other do .

It's like if it's a big decision though that's whether for the business or our marriage we're going to come together and agree . If we don't agree on this like , hey , I want to go spend $20,000 for this mastermind , she goes . I don't think so . I think we'd be better off putting that in marketing .

It's like , okay , let's go back and forth and just giving ourselves the space to hash that out . But that's a big one , it's just unspoken expectations .

So when you were talking about your story , you had mentioned a lot of obstacles that you ran up against , and oftentimes those obstacles become huge learning lessons that you carry with you and cannot be learned in a textbook . You just have to walk a mile and make the mistakes .

So my question to you is what's one big mistake that you made early on that you're still carrying with you ?

I still don't really know what to do . My wife and I are looking at each other . She really doesn't know what to do , but she has more skills than I do and I go . You know what ? I'm just going to do something , and I think that this is where most early entrepreneurs get stuck . Is you run into this first ? Really big problem .

You don't see a way through it , you don't see a way around it . You don't know if it'll ever figure out . You'll ever figure out how to get through it , and so they quit . And the thing is , is that if you consistently show up and just pound your head against the wall , eventually you will get through the wall ? And is that the best way ?

I think that this is a fallacy too . It's like work smarter , not harder . Sometimes you got to work smart and hard to be able to see the results that you're wishing for .

So I mean , that was a big one , and I think another big one that I've had this one came over the last couple of years is there's been plenty of times like I just want to address the people who you're saying hey , steven , that's great that you're able to just keep going .

It's like right now I'm just like chronically depressed and I just feel like I have no worth . I don't feel like I can do this . Been there many times . The thing I've realized because sometimes it just becomes this way is you can have emotions , and emotions are like warning flashing lights on indicator lights on your car .

They're letting you know that there's a problem , but you're still holding the steering wheel . You get to decide what you do with it . So for me is I make the plan when I feel good , like okay , this is what I'm going to do , like this is how many reach outs I'm going to do , this is how many people I'm going to help .

This is what it looks like , here's our fulfillables , here's the systems . And then , when things get tough , then for me is I don't follow my emotions to make the plan for me , I just follow the plan , and when I'm still doing it , I'm still grinding it out .

I can sit there and cry over my keyboard , and for me is I'm still making progress , even though I don't feel like I can do enough to get the progress , to get the reward , to get the result I'm looking for . So I think that that's just been a big one is , I can move no matter how I feel .

is , then for me is I'm going to look in the marketplace and just see who else has done it and it's like , okay , they're doing it , they're doing it really well . How are they doing that ? And then I'm just going to go look at their stuff to be honest , and then I'm going to type out everything that I'm thinking .

I'm either going to type it out , make a voice note , record a video Usually it's a video now . So I'm almost like SOPing out and reverse engineering what I want . And then , after I do that , I throw it in chat , gpt , and it gives me this exact list of here's some tasks you want to do .

And what I'll do is then I'll break up the task and say , okay , I put in the four quadrants . It's like is it urgent ? Is it urgent and important ? Then I need to handle that right now . Is it urgent but not important ? It's like , okay , then I should probably schedule a time that I'm going to handle that Because it's urgent but it's not important .

It's like , okay , is it important but it's not urgent , then I'm probably going to delegate that to someone else . And then is it not important , is it not urgent ? Okay , then I'm just not going to do that . So for me , that's the best way .

If they fall into these three quadrants that I'm going to work on them , then instead of delegating it to a person , I'm just gonna give it to a system and I'm gonna let the system software , ai agent , however you wanna call it I'm gonna let them handle it , and I'm trying to remove as much of the manual tasks as possible .

Because what I've noticed for founders if you wanna go from zero to a million , if you want to get to a million to 10 , you have to change the way you think . Now it's not just how much more can I do , because that's not realistic . It's not just how much more can you do .

It's what kind of systems can you put in place to double , triple , quadruple what's happening in your business ? Whether that's from acquisition , whether that's piece of the content , whatever it is that is bringing people into your business , whether that's better customer service , it's going to take people , it's going to take systems , processes .

So now your ideas have to be monetized , not just your hands .

I , in fact , I had won a competition called

the Hotkey Olympics where I built an Excel model without touching my mouse , which is super nerdy . I was a CPA a bunch of nerds but that I always felt like . You know , being good in Excel was something that was made me unique , and now with ChatGPT , those skills are obsolete and it's kind of a bummer , but it's also like a superpower .

Now , with a good understanding of Excel , I can be a super user . With a good understanding of Excel , I can be a super user . But I always love talking to other business owners . How are you using AI right now and where are you seeing the biggest benefits ?

The way that we use AI is a couple of different ways . One is we will be on a . We actually met through a podcast so we recorded a podcast . It was forever and a day long . That was the longest podcast I've ever been on almost five hours . But what he did it is really smart . What he did with this is he took that whole podcast .

He put it into Claude , and what Claude did is he said , ok , give me the psychoanalytics of who Stephen is . So it broke down .

Who , like Claude , said , this is who I believe Stephen is , because he's talking about his childhood , he's talking about his traumas , he's talking about the good , the bad and ugly , and it built a , a persona , a portfolio of me , so then he's able to ask questions without having to come to me and say , ok , what do you ?

How do you think that Steven's going to respond if I bring him this change to the business . I go say , well , he will probably respond like this , and then he can shoot me a voice note and I'm able to make that response . And it's crazy how he's able to do that . And what's also interesting is he'll plug in we do this both . We do that .

I do this with ChatGPT . He mainly uses Claude is . We'll plug in different personas of people . We really look up to that . We love their business content , whatever it is , and we will say , okay , you're going to be looking at this as the top lawyer , the top attorney in e-commerce . Here is a contract .

Tell me where I'm missing it , tell me where there's the holes , where it's ambiguous , where we could be taken advantage of . What does this look like ? And it's able to tell me with really eerie efficiency hey , this is what you're missing . This is what it should look like here . Restructure like this . Here's a better version .

So I think that the power for AI for us and then now we're getting more into AI agents we built an AI agent that does a lot of outreach for us .

So to LinkedIn , it puts them in our CRM and moves them through the opportunities so we know where they are is nurturing leads so , and there's people that are doing even crazier stuff than that , like they have AI that are going out and making calls and sound like humans and it's like that's .

I haven't got there yet , but for me , the thing I love about chat , gbt or how my partner uses Claude , is because we've given it so much contextual data that when we come to and say , okay , look , this is the client we're working with , this is what we're dealing with , what do you see Like , what are you seeing out of this Is they'll bring all of us ,

because we plugged in so much of our speak and how we talk , and they'll bring all of these other personas in there too , from the people that we look up to , and it will say , okay , this is what you should see and what you should look at , and it's like , wow , this is incredible how efficient this thing is .

One for , if you're a service-based provider , is when you're talking to someone like , let's say you're on a discovery call , it's 30 minutes , you get off the call , grab that recording and throw it in cloth , throw it in chat GBT , and say , okay , so how do you think , read this person's facial expressions , read how they're moving their hands , their body language

had their inflection tones , no-transcript , and it's like , oh , I missed that . It can give you that and that's the thing . That's like a next level for service providers . Also , it's really good for clients . No-transcript wasn't just their inflection , they sat up a little straighter . So they're excited to make those changes . They're excited would do with reviews .

You take all your five stars . You understand this , especially with Amazon , if you're looking to create a product , it's usually not going and looking at all the five star reviews or the one star reviews . It's like the two to three and the fours .

So you take those two to three and the fours and you plug them in and say , okay , what do people really love about this ? Well , they love X , y and Z . What do they not like ? Well , they didn't like this and this and this . How would you fix that ?

Well , I would either get another customer service rep , I'd fix the packaging , I would do whatever it is and it's like it makes it to where it's very bullet pointed . Next steps this is what you should do .

It used to be something I dedicate an entire day to , and it is now a 30-minute exercise and that's probably at like the upper end , and so it reminds me a lot of steroids and baseball back when , like Mark McGuire , Sammy Sox era , where it just kind of puts a jet pack on the entrepreneur's back and allows them to work faster and more efficient and uh , and

the amount of decisions you're able to make in a given day is is increases exponentially . So that's really neat . I always like talking to other people about how they're using AI , and I'm sure our listeners are going to take some great lessons out of that lessons out of that .

So one thing I wanted to touch on is you talked about putting Christmas presents under the tree for , eventually , hundreds of families , and that's something that I think is outstanding and I commend you for it . It's also something that's typically not on the radar of someone growing and bootstrapping a company . They are trying to make payroll , they are trying to

pay for inventory . It's tight , and so I'm curious what your experiences has been with that and how you were able to manage it while you were growing your business .

So what we did is we were able to automate our entire million dollar business through people and spreadsheets . So it's funny enough you're talking about Excel sheets , we were using Google sheets , but same difference . And so for us is we're able to automate that entire business by having people in it .

So the people that are handling the customer service , people that are making sure that all the returns were handled , all the chargebacks were good , that every product was in , every order was good .

We had a manager that was managing the people and then we could check in because of the way that we built the company , that we could check in every single day at the end of day and look at exactly what every person did , and because the manager was keeping track of them and they were all virtual . So for us it was really easy to keep up with .

This is where we are . This is our profit margins . This is how much we made today . This will be actually made . This is how much we should expect in payouts and when . It should hit our account Easy .

So when we it was actually my cousin , this was his brainchild the Christmas stuff , and he has shut it down for a couple of years , and I remember when we had so October of 2020 , we've just launched this business . We finally are making enough to just like keep the lights on . And then so in November , I'm at his house for Thanksgiving and he mentions this .

He said you know , it's just on my heart to get back into it . Maybe I can help a couple of kids . And I said you know what , whatever money you put into it , it's like if you decide to fire it up again , I'll give you a thousand dollars right now . And he said , really , and he went , and that time it's like , hey , we barely have an extra $1,000 .

We had debts to pay off everything else . And I remember he said , okay , I'm going to do it . So I gave him $1,000 and we fired it up and we were able to help 37 kids that first year . And I remember looking at him and we both looked at each other at the same time and said we're going to help 100 next year , and that 100 turned into 137 .

And what was cool about that was that year , because it was such a big task . Now we had a lot more capital to help him with that , but outside of that is we had to go enlist our friends , family , everyone . This guy was nice enough that he had an unfinished 2000 square foot basement . We turned that into a warehouse .

We had to do literal warehouse management system on it . It was incredible , because we were spending $300 per family , like per kid , so it wasn't as if they're getting a toy . They were getting a full Christmas , and we found all the kids through the school system in Tennessee . We bought all the presents , wrapped them all and deliver them .

We were Santa and his elves , so for us . What we noticed , though , is when you are able to build something that's not just for you , like early on in business . Yes , everyone needs to make payroll . You need to keep the lights on . You got to put food on the table . I get all that .

You don't want your car repossessed , and if you're building for just you , you'll get to a point where your bills are covered and you go . You know what's the point of building beyond this , but if you can add a giving aspect in , really for two reasons .

One , especially if it's customer facing , you're giving away for people to feel empowered to buy , outside of just your unique selling proposition . They get to look at that and go , okay , just like Bamba , bamba socks , you buy a pair of socks , we give a pair of socks . Oh , now I'm making a real impact .

So , outside of just having nice socks , I'm also impacting someone who won't have socks and so you're giving the customer a way to be able to make that impact . But also for you , if you can go and touch and meet these people that you're impacting , it changes your whole perspective .

It'll make you want to push and do more , because the amount of good that you can do with a million dollar business is literally one small fraction comparatively of what you could do with a $10 million business or a hundred million dollar business or a billion dollar business .

Because if you're in the thing is , I've seen people they push to a certain point and they say , oh no , I'm good , it's like , but the people you want to impact , you're barely able to help them at this stage . If you get bigger , you can help more people and help them in a way different way .

And so , yeah , I can think of brands that I've done business with Tom's Shoes is a classic example of this where they make a great product and there's a giving aspect to it , and so there's instances where something can be great marketing and also like a good thing to do , just as a human being , and it's great when you can find opportunities for those two to

overlap , and so I really like that , and I think that's something that , uh , when people are thinking about how do I grow my business , they're often thinking about email marketing or socials or things like that , and the giving aspect , I think , is something that is often not thought about enough , and so I'm glad we're able to highlight that Now .

Stephen , this has been an outstanding interview . I feel like we could go on for hours . However , we have a section of the show called the fire round . It's four questions we ask every guest at the end of the interview Are you ready ? I'm ready , all right , let's do it . What is your favorite book ? Thinking Grow Rich , nice . What are your hobbies ?

So if you believe that it's possible for you , then you will at least try so and I think if you continue to show up , you continue to try , eventually you will break through .

He would probably be my best friend or my long lost twin that I don't know I have , so that's probably the best way to reach me .