How to Grow Subscription Based Services with Jack Gindi

We sat down with Jack Gindi, Co-Founder at Cheeky, the affordable custom night guard service. Jack joins us to share his story, how Cheeky’s team created a subscription service around a personal need & tips and tricks learned along the way.

Watch the full conversation:

Guest:

Jack Gindi, Co-Founder of Cheeky.

Highlights

• 00:13 – Jack explains how Cheeky got started
• 2:00 – Jack shares about interviewing potential customer base before launching
• 3:22 – Key ingredients for a successful subscription based service
• 4:22 – Different ways to be a Cheeky subscriber. Flexibility is key
• 5:58 – Jack highlights the importance of customer service for subscription based services
• 7:29 – Jack discusses how they determined Cheeky’s pricing structure
• 10:00 – Jack shares what were some of the ways they tested before launching Cheeky
• 11:20 – Jack advices to don’t be afraid to launch with a product that has still room to get better months down the line. It’s the only way to improve, getting your product out into the market & trying to close out the feedback loop with your customers as tight as possible
• 12:00 – Jack shares where he gets his news from and why he doesn’t obsess with Startup News as it’s not healthy to compare yourself as you also lose focus from what you’re actually trying to accomplish.

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Read the Full Transcript

Jack Gindi (00:00):
So I’m Jack, co-founder and co-CEO of cheeky. Cheeky is a subscription service for teeth grinders. We send our teeth grinders a new custom night guard every three months so that they can maintain an optimal hygiene. Cheeky got started when we were in college, I was a senior in college in Boston University, and I lived with my brother, co-founder Sam, and my brother, who’s a really heavy teeth grinder, lost his very expensive custom night guard. We’re from New York, so he didn’t have access to his dentist, and so he needed to find a different solution. So he went to like cvs or I think it was Walmart or something like that, and bought and over the counter what’s called boil and bite night guard, which if you’re not aware of what those are, it’s basically a piece of plastic that you boil and hot water for a couple of minutes, you’re supposed to bite down onto it and it’s supposed to mold to form to your teeth.

(00:56):
Well, unfortunately then, but fortunately for us, it wasn’t a great experience for him when he did that. So he thought to himself, there must be, you know, a better solution. Either I need to find a dentist quality custom night guard at, you know, an affordable price. Dental insurance doesn’t really cover night guards and, you know, being a college student, you don’t really have the funds to cough up for a really expensive night guard. I think his original guard costs close to a thousand dollars, so that’s when the idea for cheeky was born. Kevin and I both have worn night guards our whole life, so one thing that we’re very, very much aware of is that night guards, they tend to get like really gross over time. It’s something that you put in your mouth for close to eight hours, and I don’t believe you’re getting a good night’s sleep, and that can really start to gain a bacteria and start to like yell.

(01:41):
And even if you’re cleaning it really, really well, it can you know, be something that you just don’t feel that’s so sanitary. so we decided, okay, let’s start off with the, you know, the hypothesis that people want a new nicar every three months because that’s what we wanted. so before we launched Cheeky, we, you know, we conducted a whole lot of customer possible lead interviews and, you know, ask them the simple question, would you want a new night guard every three months? Or if would you want one every six or eight or 12? And almost every single time people would tell us they wanted one every three months. and it also felt natural because, you know a company that we look up to is, you know, Quip Oral Care. They send you a new toothbrush hat every three months as well. So we felt like you know, it’s a habit that people will resonate with easily. The way that our subscription base is molded, I think really supports that hypothesis as well. Yeah,

Grace Portillo (02:35):
Yeah. Perfect. Three months is, is common in oral care for replacing toothbrushes, so why not night guards? And

Jack Gindi (02:41):
Like, the way that we thought about, it’s like, you know, night guards are like, imagine, imagine having the flu and you know, you feel really sick and you take all the medicine and you kick the flu. You know, you take your tamo flu and you feel better a week later, but then you still need to put that night guard back in your mouth that you were using that night. So that’s the way we thought about it. It’s like this thing is you know, it’s something that really should be replaced and back then there wasn’t really thought about as something that should be replaced. But yeah, I mean, we’re happy to have proved out that hypothesis.

Grace Portillo (03:15):
Awesome. That you came with a solution. So what are some of the key ingredients for a successful subscription based service according to your experience?

Jack Gindi (03:24):
It needs to be something that people need to be replaced. It has to be replenishable. So that’s the number one factor. It’s like if you’re trying to make a subscription service for, I don’t know, t-shirts, it’s really hard to sell that to your consumer that they’ll need a new one every single three months. It has to be something that just, it feels natural. one term I like is subscription, where subscription makes sense. So for night guards or toothbrush heads or what’s another great or contact lenses like Hubble, like those are things that need to be replaced. So yeah, so I would say definitely as long as your product is something that the consumer believes needs to be replaced, then you should be able to have a sticky subscription service and the retention should be great. yeah, so that’s the way we thought about it at least.

Grace Portillo (04:16):
is it, yeah, is it an annual subscription?

Jack Gindi (04:18):
Oh, the way that we have a couple of different options of signing up, you can choose our annual plan where you’ll pay upfront and save the most money, or you can choose our, like, kind of our pay as you go plan, where you’ll pay for the impression kit initially, and then you’ll, you’ll pay for the night guard every time it ships out or every three months. I mean, we do have subscribers who, you know, they wanna get into nicar every four or five, six or seven months, and we maintain that flexibility as well. So like we, you know, everyone’s needs may be different. So we definitely maintain the flexibility to be able to ship whenever somebody wants. Also,

Grace Portillo (04:56):
They don’t have to follow your exact model in order to be, yeah,

Jack Gindi (04:59):
The vast majority are getting a new guard every three months. but we do have people who want one at a different time span. Yeah.

Grace Portillo (05:10):
Awesome. Any surprising takeaways from your experience? Building a subscription service with Cheeky

Jack Gindi (05:19):
One thing that stuck with us is that you really never get used to someone else’s impression. So like, the way it works, how you sign up for our service is you sign up, we’ll send you an impression kit, you’ll ship those back to us, and then from there we’ll make your custom mouth card. In the beginning it was, you know, it was like a shocker having to pull someone’s impressions out of a bag and deal with something that was just in someone’s mouth and that feeling never got old. But yeah, I mean, so like for us, we’re, we, we’re, we’re three first time founders and always learning everything as we were going on how to build a subscription D to C business. and one thing that that definitely surprised us is how important customer services and how important it is to be proactive with your, with your customers and, you know, answer every single person, every single ticket in a very, very quick fashion.

(06:09):
You know, the product that we are, that we serve is something that’s people need very quickly. so people don’t really have any patience to wait for our products. So, you know for from the beginning it’s always been a really fun experiment and being as quick as possible and fulfilling as quickly as possible because again, like this is a necessity that people need when they buy our product, it’s because they’re grinding their teeth and they need to be solved yesterday. So yeah, I mean, fulfillment, speed and always optimizing for speed is something that, you know, we learned really quickly we needed to do. And you know, thankfully we’ve gotten really good at it. Yeah, I mean, and one thing that we’re thinking about doing now is experimenting with providing each customer their own customer success manager. It’ll be tough because we have tens of thousands of customers. so we’re gonna, we’re we’re needing to think through exactly how we’re going to allot each customer success manager their cohort of customers. But yeah, I mean, improving customer service is something that we work really, really hard at and really happy where we’re at now.

Grace Portillo (07:20):
Yeah, I think that’s super important. So great that you’re focusing on that. well, how do you, how were you able to determine your subscription pricing structure?

Jack Gindi (07:31):
Well, I mean, pricing is something that we have changed over and over again and have ex have experimented with over and over again. and I think the best way, and I read a a tweet thread by Elizabeth I, who’s GP of Hustle Fund a couple weeks ago where she described really well margins in with subscription services and how founders should think about their margins. And the way, and I really like the idea because it described like, okay, let’s say you’re a subscription box business and you have 50% margins, that’s great, right? Like on the surface it’s great, but if you’re that subscription box business and you’re selling that box for $30, you only have $15 left after cogs. And most of the time that’s not going to make up for what your acquisition cost is going to be. Your acquisition cost is probably gonna live between 60 and a hundred dollars.

(08:24):
and that leaves you with a long payback period. most startups can’t really, can’t really optimize for very long payback periods, especially in the early stages, unless you’re extremely well-funded. So the way that we think about pricing is okay, like, okay, how much are we charging? what’s the most that we can charge for this product that people will still find value out of and still wanna purchase with? And then how can we optimize for having the most dollars left over after cogs to maintain almost immediate payback and acquisition cost without almost immediate payback, you need to be very, very well funded. and yeah, I mean, it’s, it’s just a lot easier to run a business when you’re, when you’re being paid almost immediately for that acquisition cost. So that’s the way we think about pricing, and that’s the way I would advise any founder really looking to start.

(09:16):
any type of business is almost always try to bake in what your worst case scenario acquisition cost is going to be, because there are gonna be times when you do hit that worst case scenario and you’re not gonna wanna optimize for a seventh month payback period. It’s very tough to ask someone to stay with you for seven months and then start making profit off of that, off of that. You need that, you need your retention to be really, really great in order to do so, and you also need to be, have millions and millions in the bank in order to really survive.

Grace Portillo (09:42):
Makes sense. Great. Backtracking a bit into your testing phase. How long was that testing period where you were serving out to see what would work in your in Tiki’s case?

Jack Gindi (09:54):
Well, okay, so when we were in college we had this idea, well, my brother had it, and we didn’t know if it was a good idea or not. We know that we would’ve liked it, but we didn’t know if people would resonate with it. So what Kevin did, and that’s his, that’s my co-founder and brother’s name is he created this fake landing page with really just our value proposition on it under like a, a different, a different name for a company. I think we, we called ourselves Forever Smiles Club or something, and we put like a couple dollars every day into AdWords to, to drive some traffic onto the site. And we, and the main goal was like, can we drive leads? Can we accumulate leads so that we can start doing some customer some customer diligence and interview some pe some potential people to see if this is something that that would resonate with them.

(10:40):
And we started getting a lot of leads to this, to this site. and every lead made us feel like, you know, a million bucks. And that’s when, you know, we started to finally get, be able to interview our potential customer base. and you know, the main thing that we heard from them was, number one, this is a real problem. Number two, they needed to be solved really quickly. and, you know, their way of lives was really being hurt from not having the night car that they needed. and yeah, I mean, so they were basically knocking down our door to launch as quickly as possible, and we did launch almost six months later with a product that looked a lot different than the product that we have today. I promise you that. So, I mean, that’s another thing I would tell founders is don’t be afraid to launch with something that you know is gonna look a lot different and a lot better years you know, months down the line. because that’s the only way to improve is to just get your product out into the market and learn and, and close that feedback loop with your customers as tight as possible so that you can, you can get better and better really, really quickly.

Grace Portillo (11:48):
Wonderful advice, Jack. So where do you get your industry news?

Jack Gindi (11:54):
Subscribe to a bunch of sub ck letters. the, the regular news, like just current events and stuff. I, I love Morning Brew for that purpose. It’s just quick, same , quick, easy to read. I think what they’re doing over there is really cool. and, you know, I try to stay away from obsessing over like the, the world of startup news. I mean, it’s important to understand what like the funding market and all that stuff looks like, but it can also be a distraction and it’s really, it’s not healthy or not smart for any startup or any founder to try and compare themselves to others. that can really lead you to a bad place and really take your focus away from what you are doing and how you should best be serving your customer base. I love Lenny Rich Lenny’s letter.

(12:42):
I love Elizabeth Ian’s Twitter threads. They’re always amazing. her, she’s at Duncan Hippo. I think everyone should follow her. and yeah, I mean, Twitter is like the number one place where I think, I think Twitter University is a place to really get so much smarter. and if you’re not taking advantage of, you know, VC and founder Twitter and Tech Twitter, then you’re probably, you don’t care as much about your own personal growth. Like as a founder, you can learn so much for free in that space. So that’s where I get a lot of my industry news from.

Grace Portillo (13:15):
That is true. That is true. Well, thank you so much for your time today and sharing a bit of your expertise and journey.

Jack Gindi (13:22):
Of course, yeah. Thanks so much for having.