Background
Daniel Flynn is the co-founder and managing director of one of Australia’s most successful startups, Thankyou.
He co-founded Thankyou at the age of 19 and now has products stocked by major retailers all over Australia, with every product helping end global poverty.
It’s been a wild startup journey. Overcoming one of the most challenging and saturated sectors, to now have over 50 successful products sold Australia-wide with $17.4 million raised for extreme poverty that goes straight to their partners.
In this interview, Ryan and Daniel dive into the primary purpose and journey of Thankyou, an organisation tackling social problems and improving our communities.
Thankyou’s ways of working
Thankyou is a remote team and entrepreneurial at that, trialling this working structure for a year and a half BEFORE the pandemic while they were working on international expansion. Daniel wasn't originally a fan but grew to adore it. It was the silver lining of the challenges presented by 2020.
They now have coworking spaces at Hub throughout Australia for employees to work in when they want. The key to making remote working WORK for them is not saving money but investing in the team by meeting up as a team every eight weeks in Melbourne, where Australian domestic workers fly in to connect, socialise, and build their relationships in person.
How Thankyou adopts a product-for-purpose strategy
Thankyou's model is partnership-based and splits two ways. They have contract manufacturers who create all their products, while Thankyou's role is in the innovation space, supply chain, sales, marketing, logistics and procurement. They're involved in the process but not running the day-to-day operations of the factories.
They own the stock, stock risk and warehousing, so it's hands-on in that aspect, but the contracted factories run the manufacturing. Their core focus is on innovation, sales, and marketing. Their supply chain and procurement team work on partnerships with the contracted manufacturers, forecasting stock and stock-based finances and delivery.
The Thankyou Genesis Story
It’s a story of partners and best friends coming together.
Daniel references a specific moment that shaped Thankyou. He was doing research for a uni assignment and came across shocking statistics…
"In 2008, 4.5 thousand children die every day from waterborne diseases", and "900 million people in the world don't have access to clean water"
He was deeply moved by the stories associated with these statistics including the impoverished sisters and brothers mourning the deaths of their siblings. Daniel reflected on how this would affect him if he lost his sisters to such a preventable disease. This moment was confronting and moving. He couldn’t comprehend how you could process that as a brother. “It was wrong, SO wrong.”
Daniel also found in his research that Australia spends $600 million dollars, $50 billion dollars globally, on bottled water. “We’ve got this one world and these two extremes, one where we have endless access to clean bottled water 24/7 backed by a billion-dollar industry and another where people die every day because the limited water they can access is not just undrinkable but deadly too.”
“It really shows how broken the world is."
Daniel imagined… What if there was a bridge between these two extremes? What if a project funded clean water for the waterless extreme by selling bottled water where 100% of the proceeds go towards this project? He shared this idea with his girlfriend, Justine, and best-friend, Jared, both of whom became co-founders of Thankyou, as well as others and it was met with resounding positivity.
Product-for-purpose. It was simple. It was effective. It stuck.
"Most of us hear about problems like "extreme poverty" and we hear statistics like "736 million people live in extreme poverty" and become overwhelmed. What could we possibly do to alleviate this? To make an impact? Meanwhile, we spend $63 trillion a year as consumers on products. At Thankyou, Daniel and his team are focused on how they can connect consumers to this cause. How can they make great consumer products? How can they empower consumers to switch to the Thankyou brand to end extreme poverty?
Getting into the market was harder than they thought. Their first big break came 3 years into their story. However, they had an initial break into the market through meta-distribution: They pitched their idea to Red Bull and Lipton, and the director ordered 50,000 bottles of their water on the spot. Thankyou hadn't even been registered yet. Daniel had stars in his eyes. All this initial positivity, however, gave them a false sense of success and inflated confidence. Soon after, they met the saturated beverage market face-first and saw how many established brands were far ahead of them in terms of logistics, marketing, distribution, and, especially, market share. Daniel admits, "it was a tough battle."
How Thankyou grew from 0 to social impact hero
Going to the source
Despite the challenges and competition bearing down on them, Thank you didn’t stop persevering and innovating and they discovered their secret to success 3 years later: people, the consumer, all of us.
Although, their biggest barrier was the national retailers who refused to stock it. These companies loved their idea, loved their pitch and passion but outlined that they were competing against brands who would invest $3-6 million into a singular product launch. Thankyou didn’t have that.
“An idea isn’t worth much, its value is found in its execution”.
They asked themselves how they could nail this execution that will get buy-in from consumers and retailers alike. They tapped into this through a video they launched on YouTube and Facebook which said they couldn’t get into any retailer but in 2 weeks they were meeting 7-Eleven Australia and asked their audience to reach out to 7-Eleven and request they stock Thankyou. This Call-To-Action saw a flood of support via witty social media comments, rapping and dancing videos, and clever emails. Soon enough, the media also jumped on board and began covering this journey. Subsequently, retailers took notice and 7-Eleven subsequently contacted them and said yes. Thankyou hit shelves a month later and outsold water brand, Evian, from day one. They quickly pushed the number 2 brand out of their spot and battled it out with the number 1 brand for the years that followed. “It was the tapping into the people-power that changed everything for us,” says Daniel.
They’ve since taken the globe by storm with their guerilla marketing strategies.
Building customer-love via bootstrapping
Thankyou has been primarily bootstrapped. With their structure, the Thankyou business is wholly owned by their Charitable Trust. No equity. No investors. No shareholders. This creates a beautiful consumer message that they exist completely for the extreme poverty cause.
In the beginning, they functioned by being cash-flow positive, making sure their retailers provided the immediate revenue which could then be reinvested into the manufacturing. Once they scaled with the stock and volume, these terms shifted due to the size and risk, not in their favour but they had more money to handle this. Daniel has learnt to not have investment, money, or free access to capital but as he says, “innovation is born from restriction.” By not having money, campaigns like the Coles and Woolworths were made possible by resting on people-power through consumer awareness and support (and temporarily donated helicopters).
To expand into NZ and launch their baby category, Daniel and the Thankyou team put their heads together to figure out how they could find the estimated $1.2 million to do this. They came up with the idea of crowdfunding via a book titled “Chapter One” based on the backstory, purpose and genesis story of Thankyou. Except, buyers set their own prices and 100% of the proceeds went to fund the future of Thankyou. The results were staggering. Chapter One raised $360 thousand in the first two hours and $1.44 million over 28 days. They earned the title of 20x best-seller in the first few months and were only second to the Harry Potter launch-week. Thus the baby category was born and the NZ expansion went ahead.
Global expansion through B2B2C & D2C models
Their global expansion plans are described by Daniel as aggressive, with aims to move from the ANZ market into the international frame over the next few years. Conversations with global networks, organisations, manufacturers, retailers, distributors and consumers have been met with endless support.
“People genuinely want to help... they love the sustainability, the cause, the success story, the consumer loyalty, the retailing strength and overall message.”
This comes down to the two prongs of Thankyou: a B2B2C model where Thankyou is distributed through outlets and retailers like Coles and 7-Eleven etc. Then there is also the D2C model through brand awareness, customer loyalty, guerilla marketing, and product competition.
Marketing has an immediate cost so the return needs to be realised as soon as possible. Building great brands involves big investments. This invites risk but it also invites reward.
Thankyou has split their strategy in two: marketing and campaigning. They have their “always on” marketing: the campaigns that build the product and build awareness. Then they have “breakthrough” campaigns: the campaigns that invest time, money and creative into a breakthrough from the level they’re at now to the level they want to be next.
Daniel gives an example of one of these breakthrough campaigns - their Coles and Woolworths campaign 5 years into their journey. It was part guerilla marketing, part PR and part sales campagin. Similar to the 7-Eleven campaign, they asked their audience to flood these companies with requests to stock Thankyou. In the meantime, Thankyou themselves hired two helicopters carrying a 24,000 square foot sign saying “Hey Coles, hey Woolworths, thanks for changing the world (if you say yes)” to fly around their HQs for an entire 30 minutes. Social platforms. Media. Helicopters. With pressure from all-corners of the outside, Coles and Woolworths had to say yes.
The big pivot
In 2019 Thankyou retired their bottled water products. The simplicity and high-growth product idea of bottled water for a clean water cause was a cornerstone for their original narrative and the MVP of their initial growth but single use plastic bottles simply weren’t sustainable
“[bottled water] was environmental enemy number one.”
Daniel and his team researched biodegradable options to try to save their bottled water product but, although they looked and sounded great, they realised any alternative “was greenwashing… if you looked at the full cycle analysis of the product it wasn’t better than what we currently had.”
So they made this values based decision to exit the bottled water industry altogether. In succession, they diversified their product suite and entered hygiene, personal-care and baby-care products. This has led them to the final stages of their project called “Revolution” where they’ve assessed and reconsidered their product suites, design, and campaigns, and how they align with their cause and expansion plans. “We had to rethink a lot of things. We had to throw out a lot of old ideas. Going to NZ was a great test of product needing to be really really remarkable.”
“Global product in a successful sales level is going to equal a remarkable global impact.”
Navigating greenwashing and cancel culture
Thankyou’s pivot turned into a runway to long-term success when Daniel read a book called “Do Purpose: Why Brands That Do Good Matter More” and jotted down the two key principles this taught him:
- Rule 1: Make a great product
- Rule 2: Never break rule 1*
*Never use a good cause to sell an average product
The disclaimer set out in this rule spoke to Daniel’s thoughts on the greenwashing of the sustainability and purpose sector, where the “confronting reality is that 69% of consumers say sustainability drives their purchase decision but the post-purchase research shows that only 9% of consumers made a final decision based on sustainability.”
“Purpose and sustainability isn’t the silver bullet to selling average product and making more margin.”
Now, when Daniel thinks about product for purpose and how sustainability fits into their business ambitions and values, they set out five goals:
- All products are to be responsibly sourced
- Everything should be carbon neutral
- Minimisation on waste
- Embracing the circular economy
- Mitigate impact on water
Using the above goals, Thankyou now considers purpose not as the paint on the outside but the fuel on the inside. And like fuel you put in a car or the fuel a nutritious breakfast gives you before starting the day, purpose fuels all the work from the inside-out.
Of course, the problem with this deep internal work around company purpose is it isn’t always visible to the naked eye. And when companies make ESG or CSR claims but consumers aren’t seeing a tangible change or outcome, cancel culture rears it’s ugly head and accusations of green-washing run rampant. It all comes down to the execution of bringing this internal purpose to the visible forefront, as Daniel acknowledges, “Yes there’s a risk of being cancelled or being called out for greenwashing, but when you truly do the work to think about purpose and sustainability form the inside-out, it will eventually come authentically out of your people, your marketing, your products.”
Have you ever gone to a house inspection and noticed mold or cracks seeping through the smell and visual facade of freshly painted walls? It makes you suspicious, critical, and ultimately deters you from throwing even a single cent at that place or the shifty agent selling it. Well, just like that example, Daniel implores that you can’t “grab a paintbrush and paint sustainability on the outside, because you will eventually be found out. It should be an inside journey that eventually ventures to the outside” to successfully fuel the purposeful growth of your business.
“Be transparent in your process and people will be able to recognise the difference between greenwashing and true commitment to your sustainability goals and purpose.”
