In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley explores why businesses hit growth plateaus, identifying two key factors: execution and market size. Drawing from his experience scaling an ecommerce brand to eight figures, Josh emphasizes that even skilled operators are limited by their total addressable market (TAM). He advises entrepreneurs to evaluate their market's size and growth trajectory, warning against shrinking niches like keto snacks. Josh recommends pivoting to adjacent or larger markets when growth stalls, citing Simple Modern as a success story, and encourages choosing markets with strong tailwinds to maximize business potential.
Bullet Points:
- Mindset shift regarding stalled business growth
- Two primary reasons for growth plateaus: execution and market size
- Importance of selecting the right total addressable market (TAM)
- Insights from scaling an ecommerce brand from zero to eight figures
- Impact of market size on business growth potential
- Examples of markets experiencing growth and decline (e.g., keto snacks, med spas)
- Need for entrepreneurs to evaluate true market size and growth rate
- Recommendations for pivoting to adjacent or larger markets
- Importance of understanding market nuances beyond broad industry data
- Strategies for leveraging existing expertise to tap into new growth opportunities
Timestamps:
00:00:00 Introduction: Two Reasons for Stalled Growth
The host introduces the two main reasons for stalled business growth: execution and the size of the total addressable market.
00:01:00 The Importance of Market Size
Your business goals must match the size of the market you're in. The total addressable market is a key predictor of success.
00:03:32 Good Operators in Bad Markets
Even the best operators with great teams and processes will be limited by the size of the market they serve.
00:06:19 Understanding the True Total Addressable Market
Entrepreneurs should analyze specific, fast-growing niches within a larger market, not just the overall industry data, for maximum growth potential.
00:08:37 Aligning Your Goals with Your Market
Choose a market size that matches your ambitions, whether you want a $100 million brand or a smaller lifestyle business.
00:10:55 A Personal Example: Recipe Cards
The host shares his experience starting in the declining recipe card market, highlighting the importance of avoiding stagnant or shrinking markets.
00:12:04 What to Do If You're in a Stagnant Market
Instead of exiting, analyze your market's growth rate. If operations are solid, the market itself may be limiting your growth.
00:13:17 Pivoting to Adjacent Categories
The host uses Simple Modern as an example of a brand that expanded into adjacent categories to continue growing after its primary market plateaued.
00:15:48 Final Advice and Conclusion
To achieve ambitious growth, focus on large, fast-growing markets, as even average operators can succeed with strong market tailwinds.
Links & Mentions:
Med Spa Space: "00:03:32"
Creatine and Electrolytes: "00:07:26"
Gummies: "00:08:37"
Poppi Soda: "00:08:37"
Grüns: "00:08:37"
Total Addressable Market (TAM): "00:09:38"
Simple Modern: "00:13:17"
ChatGPT: "00:15:48"
Transcript:
Josh Hadley 00:00:00 Today, I want to dive into a massive mindset shift that I have had when it comes to stalled growth in a business. Typically, it boils down to two major reasons. Number one is going to be execution, and number two is going to be the size of the market. Today I want to unpack why your brand might not be growing to the level that you want it to be, and how I've seen that happen in my own business. Welcome to the Ecomm Breakthrough Podcast. I'm Josh Hadley. I've scaled my own ecommerce brand from 0 to 8 figures, and I'm actively building towards nine figures in sales. This podcast is where I document that journey and share the systems, the strategies, and the lessons learned in real time so that you can learn what actually matters and scale your own business. My name is Josh Hadley. First and foremost, I am a man of faith. I am a husband to a beautiful wife and the father of four children. I've been playing in the e-commerce space for over a decade, doing over $20 million in annual revenue in multi-million on sales channels such as Amazon, TikTok, Shop and Shopify.
Josh Hadley 00:01:00 And last but not least, I am also the host of the number one Business strategy podcast for eCommerce entrepreneurs, and that is E-com breakthrough. Today, I want to unpack something extremely important that honestly took me way too long to discover and actually understand. And it is this sometimes the goals and passions that you have, and the size of business that you want to create does not match the size of market that you are you are currently playing in. And the example is this. Let's say you want to have a $100 million brand before you can say, yeah, I'll be able to create $100 million brand. Even the best operator may not be able to create a $100 million brand. If they pick the wrong drumroll, please mark it. At the end of the day, the total addressable market is one of the number one things that will predict the success and the future growth in your brand More than anything else, I have seen this time and time again, and the lesson comes from this as I continue to go to ecommerce events and different mastermind groups, oftentimes I've been sitting next to an operator that, honestly speaking, I'm not overly impressed with.
Josh Hadley 00:02:19 They kind of seem pretty lazy, and they don't really run a very good team, and they might be fairly unethical. Yet guess what I hear? Oh yeah, I'm running this million dollar brand. And guess what? The underlying reason as to why they're running a $100 million brand is they are riding the coattails of a massive trend and a massive opportunity that is growing over 20% annually year after year. The market is growing in a massively meaningful way, and so they only need 0.5% of the market. And honestly, they don't even need to be that good of an operator because like the market's just so hungry for what it is that they are offering. Alex Ramos talks a lot about that today. Right now, which is like the med spa space is just like a massive opportunity. It is growing year over year, month over month. It is a hot space. And honestly, there's a lot of like fairly poor operators that are succeeding massively well in the med spa space just because like it is such a hot and attractive and growing market right now.
Josh Hadley 00:03:32 And so the lesson is this you might be one of the best operators that is out there, meaning you're a great leader, you have a great team behind you, you have the right processes, you have the right playbook. But guess what? If you're in the wrong market, you're only going to rise to the size of market that you can actually conquer and however big that market is. So let's take this as an example. Let's say there's a particular market for we'll talk about a specific supplement. Right now let's talk about, like, the Cato market. Okay. So in the Cato market, or let's call it the snack market, not necessarily supplements. Okay. Cato was on a tear, you know, five years ago or so. But Cato as a whole is actually seeing declines year over year now. So now is not...
