Know the Ledge and the Surviving the Times

A common refrain I hear echoing from all directions these days is “Yo! What’s up with UGHH?!” From some angles it’s fueled by the genuine curiosity of people wanting me to share what I’m up to. The other extreme has kept me up at night—sometimes working until 3AM—out of concern.

Over the past few months, I’ve received encouraging and disparaging words via email, Facebook, Twitter, Instagram, online reviews and even through a couple of Better Business Bureau inquiries. Many of these inquiries I’ve taken the time to answer, but I haven’t had the time to address what’s going on publicly.

In short, to keep it Internet, here is what’s up with UGHH:

So, how did we get to the point wherein I’m wading through a blaze wearing a t-shirt with the new UGHH branding and sipping an Old Fashioned out of a mug? Let’s discuss.

Failure By the Numbers

2017 started off relatively strong with us paying off a hefty amount of the six-figure debt that UGHH had previously incurred. Things looked positive as we were able to increase revenue at a steady clip. We then had the best Record Store Day that UGHH had ever seen. After that, we dipped back to pre-Record Store Day revenue levels expecting that revenue would, at least, remain flat as we ramped up other efforts for growth. So, we proceeded with our plan to invest in high-quality editorial content.

Revenue slumped considerably through Summer 2017 as the magazine ramped up. We continued to pay off old debts and then the revenue sharing portion of our acquisition deal kick in early July. In other words: more money was going out while much less was coming in.

The goal of UGHH Magazine was to invest in high-quality journalism and develop long-form, well-written stories to remind people that we are the definitive source for underground hip-hop. Those articles were also meant to drive users to the site, which we hoped would encourage record sales. Unfortunately, the investment in editorial content didn’t yield much in the way of traffic or sales. The chart below indicates that the magazine content only saw 20k visits and yielded $152 in direct sales in 2017.

Even if we zoom out and look at the editorial content through a branding lens (considering some readers may have learned of UGHH through the magazine, and then come back later to purchase) we can only attribute 249 purchases and ~$10k in revenue to that.

No matter how you slice it, we lost a lot of money on investing in editorial content.

As a digital marketer, I know that when it comes to content marketing, you need to invest in it long-term before you see results. Naively, I believed that since we had a built-in audience and longstanding brand, creating content would cut down that timeline.

I was wrong. That won’t be the last time I’ll need to admit that here.

Around the time of our content ramp up, we also augmented our approach to Paid Media. We very quickly zeroed-in on the most optimal advertising channels for UGHH. The problem? There is very little volume for direct response marketing in underground hip hop, and a brand strategy would have proven too costly until we found more solid footing. I still believe this site ultimately needs a media component to thrive, but we did not execute it effectively in 2017.

Ultimately, the year ended with little cash in the bank. Together, my partners and I decided to invest more cash to keep the business going. We decided to personally invest in UGHH because we believe in our brand and its mission.

Sales are not sustainable

Being that we are in retail, my next statement will be obvious, but it’s worth saying to give a fuller picture.

Our customers are highly reactive to sales.

As you might imagine, that’s a terrible expectation to set in a buyer/seller relationship, because there are a ton of customers that will only shop during a sale.

UGHH is a relatively low margin business which means that, irrespective of our price to you, we don’t make much profit from the sale of each product even at full price. But, I get it, I’m no different from you, I’m always searching for a deal.

In the research we did early on, it’s clear that we historically haven’t been the cheapest option because we’re not a distributor and we don’t command enough volume to get preferred pricing from distributors. So, when we run sales, it gives us a shot in the arm with regard to revenue, but then when we have to pay our vendors, partners and staff it just doesn’t add up.

While I haven’t had time to validate this hypothesis, I suspect that’s part of how the previous management got into the rut that they were in.

Running a sale also leads to a huge influx of orders. Being short on staff, this influx was something that we weren’t prepared for. As a result, UGHH’s customer experience suffered throughout the holidays and, ultimately, into 2018. To keep it short: sales need to be more strategic to be effective.

And then there were two

From a technical perspective, UGHH is held together by bubblegum and duct tape. Throughout the past year, there was a tremendous amount of resistance against updating UGHH to a more modern, improved technology stack. As I write this, UGHH is using three distinct platforms: WordPress, Shopify, and a legacy homegrown solution for the forum.

On the fulfillment side of things, there are perhaps hundreds of disparate scripts to sync a secondary database with Shopify, manage inventory and queue up product for ordering and shipping. Frankly, there is no reason that everything aside from packing can’t be automated.

Since last year, my goal has been to bring everything on to WordPress/WooCommerce so we can easily integrate everything and quickly/continuously make improvements. Unfortunately, that did not happen on the original timeline we had planned, and in mid-January (after some key departures) managing the technical components of fulfillment fell entirely on my plate.

Our E-commerce Associate and I were left to our own devices to keep things going. Big shout to him for being resilient throughout this whole process and stepping up in a variety of ways to make things happen. He is definitely the biggest personnel win that has come out of my short tenure of running UGHH.

Unfortunately, the documentation for the management of fulfillment was lacking, referenced computers or files we didn’t have access to or the processes were so convoluted that it wasn’t something that could be efficiently managed by someone without a surplus of time.

So, I did what any self-respecting web developer would do. I wrote my own shit!

It’s all still a work in progress as I have been plugging new holes and fixing bugs as we go, but I’ve simplified and automated most of what was previously done manually. Processes that once took hours now take minutes. In fact, the process of writing UGHH’s new code has been the one thing that I’ve really enjoyed throughout this tumultuous time. Once we launch our new site, there will be additional efficiency gains and we will be able to serve our customers better than ever before.

However, in the short term, these improvements came at a couple losses. At one point during the migration to WooCommerce, emails about historical and pending orders were accidentally sent to a lot of customers. Also, because there were only two of us to manage everything, and I’m split between many responsibilities on other businesses, focusing on building for the long term slowed things down.

I Failed You At Communication

We sent mass emails out to customers when there were big delays, but we did not do a decent job of answering all the email inquiries. We also didn’t establish phone support once the previous management abandoned it.

And when I say we, in this case, I mean me.

As the showrunner over here, any of our failures are ultimately my responsibility. Yes, I recognize getting behind in orders and not communicating effectively are hallmarks of a fraudulent online business. I assure you that it was never my intention for anyone’s order to get delayed. Rather, I thought that the more valuable thing for me to do with my limited time was to sit in front of the computer and bang out the code to get things working better so orders could actually get shipped.

Nevertheless, we fucked up and I apologize to any customers that were negatively affected.

In fact, as we’ve gotten caught up, our customers began to receive hand-signed notes from me because our lack of communication and delivery delays were completely unacceptable.

To that end, we’ve hired someone just to manage email responses moving forward. Every single message we’ve received is getting a response and we expect to be finished with that in the next few days. Other than that, orders are continuing to be shipped in the order in which they are received unless items are out of stock or backordered.

So Ambitious

“I’m different. I can’t base what I’m gon’ be off what everybody isn’t” -Jay Z

I approached this venture like I do anything else I do in life — with uncompromising ambition and optimism. Despite my personal high functionality and various accomplishments, I’ve never seen anything I’ve done or wanted to do as especially hard or requiring exceptional talent. The sobering reality is that not everyone is on board with or capable of making what I see so clearly into a reality.

In hindsight, I still don’t see anything that we’d set to do as being something that could not get done. However, the goals we set out to accomplish were too ambitious for the combination of people that worked on them. Also, I have been an ineffective manager and, to overcome that, I recently completed a management course and I’m continually devouring books to improve those skills. Nevertheless, the order of operations with what we did was exactly backwards.

In other words, what we’ve been working on since I’ve taken over fulfillment operations is what we should have done first. Had we done that, I’d be sharing growth charts with you rather than telling you why we’ve hit bumps in the road.

We should have focused on identifying opportunities to attain efficiencies with the e-commerce and fulfillment operations and paid off all the debt. Once everything was stabilized and we established a step function of growth then we should have been expanded into more exciting opportunities like the magazine.

I believed that we could do the opposite. Again, I was wrong.

Dancing on Quicksand

“Saw a side of myself that I never knew. I’d probably self-destruct if I ever lose, but I never do” -Drake

I’ve watched enough Scandal and helped enough brands through crises to know I’m supposed to make this all look easy. I’m supposed to act like none of this bothers me. I’m supposed to just look at this like a bad acquisition, cut my losses and sell it to the highest bidder. I can’t, I won’t and I’m not.

As corny as it sounds, UGHH means a lot more to me than that and it’s taken a considerable toll on me, my personal relationships and my family to keep this ball in the air. It’s not just “a business,” it’s something that I feel is an extension of me and my partners and the more adult way that we express ourselves through this artform.

I’ve personally struggled through a variety of things over the past year and I don’t share that looking for sympathy. Rather, I share it to clarify that I’m just trying to do the right and most effective things across the board and have simply made costly mistakes.

The Path Forward

“That’s another difference that’s between me and them: I smarten up, open the market up” – Jay Z

The path forward is actually quite simple. We’re doing what I said we should have done previously, focusing on being the greatest underground hip hop record store possible. I still believe in growing toward the Media direction, but we need to develop the step functions that will help us get back to profitability first. Here’s what you can expect:

• Focused Mission – Admittedly, we went into 2017 with 19 tactics that UGHH could leverage to generate more revenue. For 2018, we’re going to whittle that down to a handful of initiatives and put the weight of our resources behind those. The core of that mission is being the best online record store and the home for the underground hiphop community.
• Improved Website – In the next day or so, we will have launched a new website on WooCommerce. Bare with us; we ask for your feedback once its launched so we can rapidly make improvements once this is live. This will position us to continually roll out features and functionality in support of our core mission.
• Improved Fulfillment – We’ll continue to hire extra support on the fulfillment side as we grow and we’ll bring on seasonal support as we head into higher sales seasons like Record Store Day and Black Friday.

• Improved Customer Service and Communication – This is our biggest immediate focus for improvement. We understand the need to be able to reach someone about your order and are correcting that right away.
  • Improved Phone Support – You can now reach UGHH Customer Service by phone 24 hours a day and 365 days a year at 866-311-5320. For those of you that are UGHH Premier members, your priority customer service line is 877-218-0176, also available 24/7.
  • Email Support – We now have someone solely dedicated to answering your emails. As she is working through the backlog, I’d recommend that you call one of the numbers above if you need immediate assistance.
• Improved Customer Experience – I have no illusions about what we’re competing with for your business. I do know that we are capable of giving you a more personalized and higher quality experience then you’ll get elsewhere. We’ll iterate towards being a company that is more personalized and customer-centric. I don’t want us just to be another place that is going to send you things in a brown box. I want to be the company that is giving you a curated experience and knows who you are when you call us.
• Focused Product Efforts – With us finally moving to a platform where we have more control over how things operate, we’ll be developing and publishing a roadmap of the improvements we’re making. The goal is to deploy new features and functionality on the site every two weeks. UGHH is becoming more of a “product” rather than just a “website.” You can expect things like an improved forum, mobile app, a streaming service in the near future — all personalized for you.

Back Like We Never Left

“Always trying to let go of anything that’ll burden me. That’s the reason you can feel the tension and the urgency” -Drake

I understand that we have undermined the trust that the previous management worked hard to establish. Some customers will never order from us again. I completely understand and I sincerely apologize for failing you as a businessman, rap fan and someone who has devoted a large part of his life to this music.

Perhaps, in the future, you’ll give us another chance.

In the meantime, were’ going to keep pushing forward to make this site and this business better than it has ever been. For anyone that still has questions, you’re welcome to email me directly (mike at ughh dot com) and we’re also hosting a livestream on the UGHH Facebook at 4:30pm on 4/20/2018 where you can ask me anything. I promise not to be too Mark Zuckerberg in my responses.

To those that have supported UGHH over the years and will continue to do so, I thank you so much for sticking with us. Now, if you’ll excuse me, I’m going to get back to following through on everything I just said.

-Mike

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