Practical Advice

Five lessons on launching and scaling a D2C startup with MADE.com & Typology founder Ning Li

Practical Advice

Five lessons on launching and scaling a D2C startup with MADE.com & Typology founder Ning Li

March 1st 2021 / 10 min read


Disruptive D2C (direct-to-consumer) brands have been shaking up retail for a while now, cutting out the middle-man to offer lower prices, clever tech solutions, and simpler transactions. In the process, they are radically transforming consumer expectations – and demolishing their brick-and-mortar competition.

Harry’s, Casper, Allbirds, Everlane, Dollar Shave Club, Barkbox, Warby Parker, Glossier, Reformation, MADE.com – the list of successful D2C brands goes on. It may seem as though they have cropped up overnight. But in reality, they have been years in the making.

Shaving startup Harry’s launched in 2013, and within a few days, they completely sold out their first inventory of 10,000 razors; in 2018, the company generated about $270M in sales. In two years, Casper, the bed-in-a-box startup, have sold $100m worth of mattresses. And since launching in 2010, MADE.com has “transformed the way we buy furniture” (Sunday Times), achieving an annual revenue of £400m.

The D2C market is projected to maintain 19.2% growth in 2021. And within the next 5 years, more than 80% of end consumers are expected to make at least one purchase through a D2C brand, according to the Direct-to-Consumer Purchase Intent Index

Today, we unpack our recent conversation with Ning Li, the founder of MADE.com and Typology, a new D2C brand for natural beauty products manufactured in France. 

Excerpted below, Ning offers practical advice for first-time startup founders, and shares the top five lessons he learned while building two of Europe’s most coveted online D2C brands, including:

  1. Why being an industry “outsider” can be your biggest asset

  2. Prioritising your long-term brand over short-term growth

  3. Hiring the right people can change the game

  4. How to acquire customers whilst staying true to your brand

  5. Strategies to help cope with doubt and uncertainty

Whether you’re entering the D2C market, or you’re just looking for advice on how to disrupt your competition, you can read on to discover how to launch and scale a successful digital startup. 

We also recommend watching the full interview with Ning, which is an incredible resource for early-stage startup founders.

Excerpt below from our interview with Ning Li, Co-Founder of MADE.com and Founder of Typology

Learning 1

Why being an industry “outsider” can be your biggest asset

The first thing I’d say is that it’s totally okay to start building something in an area you don’t know that well. Sector experience really isn’t necessary.

As an industry outsider, your ignorance can be both an asset and a liability: you might end up making a lot of mistakes that an insider would not make; on the other hand, you’re not afraid of changing the rules of the game. 

Personally, I have built companies that solve problems I’ve faced in my own life. When I launched MADE.com, I had just bought a new flat, and needed to furnish it from scratch. I wanted to buy nice, high-end, well-made furniture, without spending thousands of pounds. I knew nothing about furniture — but I thought there might be other people out there who were looking for the same thing. And that’s really how the idea for MADE.com was born. 

Similarly, I knew nothing about the beauty industry when I started Typology two years ago. After my wife and I were fortunate enough to have our daughter, I was tasked with buying a lotion for my little girl’s skin. I’ve always been a control freak, and I went a bit nuts with my research, comparing this cream to that cream, getting increasingly worried about the ingredients with long names I couldn’t pronounce. I thought there might be a space to create a new cosmetics brand that would use not only the highest quality effective ingredients, but also the safest. And that’s how we started Typology. 

"Going up against the big guys is always daunting. One way to look at it is to ask yourself: “What can we do that the big guys cannot do?” "

We never expected to be better than L’Oreal, Unilever or PNG at detecting what products would sell. We also knew that we couldn’t outspend them – those guys have the biggest marketing budgets in the world. But we knew that we could move a lot quicker, we could be more agile, and we could apply our digital mindset to a physical world. We can also stand for principles and values that they simply can’t.

Ultimately, I think the question of “legitimacy” or “credibility” is overrated. After all, industries are most often disrupted by outsiders. In the end, it’s what you do that defines you – not your experience. 

Learning 2

Prioritise your long-term brand over short-term growth

Your brand, mission, and long-term vision need to drive everything you do. After all, your brand is your ultimate equity; it’s what people are paying for.

At MADE.com, we built a brand by delivering consistency of a quality product. Our brand stands for design and value – and we have invested in those two attributes over and over again for the past 10 years. We’ve eventually become quite good at those two things, and I think our customers recognise us for that.

In the case of Typology, our physical product is our differentiator: we wanted to use the most concentrated and efficient ingredients to create the safest beauty products on the planet – and that’s where we invest all our money, internal resources, and time. 

We decided to take a “product first” approach, initially launching 100 products. I thought to myself: “If I’m good, ten products might work; if I’m really bad, at least one product should work; if nothing works, we should close the company.” So that’s what we did: we launched 100 products, and once we found our best-sellers, we continued in that direction. A large FMCG brand simply couldn’t do this.

A word to the wise: if you have to choose between quality and speed, you should always prioritise quality. You really don’t want to churn out products too quickly, only to disappoint your customers— ultimately, that’s what will damage your brand the most.

Learning 3

Hiring the right people can change the game

When it comes to hiring, it’s “grow or die”: if you don’t hire people, you don’t grow – and then you don’t exist. 

Even though most founders are aware of this, it can still be a difficult conversation to have with your co-founders. We started MADE.com because we wanted to be our own bosses – but at some point, you might need to hire someone that will become your boss. It requires some emotional adjustment. But ultimately, if you make the right hire, those people will demonstrate their value. 


Looking back at my 10-year journey with MADE.com, this is how I came to define our growth:

  • Phase one: The Wrong Hire
    When I was a young founder, I thought: “We’re a consumer business, so we need to hire someone from one of the biggest consumer groups.” Using a very expensive headhunter, we found the perfect senior candidate – someone with a great CV and 15 years of industry experience. I was thrilled and impatient to get to work, and really thought this person could help us take MADE.com to the next level…

    The bottom line is that the hire didn’t work out. It just wasn’t a good culture fit. The whole thing was a really painful experience; it felt like a waste of time, a waste of money, and a waste of good-will from the team. I learned the hard way that the person’s attitude and motivation are much more important than their experience or their CV – and that hiring from bigger companies isn’t always better.

  • Phase two: The Right Hire
    In our third or fourth year, MADE.com launched abroad (in France, then Italy). At the time, our organisational chart was a mess, and I had about 15-20 people reporting directly to me. That’s when we hired Phillippe Chainieux, who stepped in as COO; he later went on to become our CEO.

    Phillippe came in and organised the company, putting in structure and reporting – without this kind of hire, we wouldn’t have been able to scale the company in the way we did. It really changed the game for us. 
    Having learned from my experience at MADE.com, we did things a bit differently with Typology. Early on, we wrote down the values of the people we’d like to work with, and used that list as a recruitment tool – this is something I would really recommend to other founders.

    For example, I know that I work best with “doers”: people who are down-to-earth, results-driven and pragmatic; people who get the job done rather than agonizing over strategy slides. By prioritising these traits, we were able to substantially narrow down our pool of candidates: out of 150 interviews, I ended up hiring two people to join the product development team at Typology.

  • Phase three: Staying lean with a growing team
    Once you’ve made the right hires, and you’re on the path to growth, you might run into another problem: ironically, the more people you hire, the slower you get. I’ve seen this happen both in large businesses and, to some extent, at MADE.com (we’re now a team of 600 people). I wanted to avoid this problem, and when the time came to launch Typology, I thought: “I have the opportunity to start something new – I’d like to experiment, at least, with something different”. 

    We took inspiration from Supercell, a Finnish games company, whose organisational structure based around “chapters”, which are small cross-functional teams created to bring products to market at speed (Spotify also structure their team in a similar way). At Typology, each chapter is made up of at least one engineer, one product designer, and one marketer; and each chapter decides what they want to build, and how they’ll go about doing it. 

    We also use an OKR system, which I would recommend to everyone. Each chapter sets their own OKRs – then, once per quarter, we spend two (very intensive) weeks aligning our goals and planning out our priorities for each chapter, and the company as a whole.

This company structure enables us to stay as agile and as lean as possible, even if we end up becoming a 500-1000 person team. And although we’re still in the early stages of this experiment, it seems to be working really well.

Learning 4

How to acquire customers whilst staying true to your brand

I’m sure there are a lot of founders and marketers who want to hear about customer acquisition in the D2C space. 

Speaking from my own experience, acquisition strategies can vary a lot: selling a £15 face cream is very different to marketing a £1500 sofa. It’s hard to give one answer – but there’s lots of insights to share.

  • Paid acquisition vs. organic word-of-mouth
    MADE.com was really built on aggressive acquisition marketing spend. Our budget was huge: we spent tens of millions on acquisition last year alone. 

    With Typology, things are very different. Skincare is such an intimate product: customers aren’t likely to try out a face cream they’ve never used before, despite very heavy marketing. Because of this, only 20% of Typology’s growth comes from paid channels. 

    Meanwhile, 80% of our customers come from organic channels, word-of-mouth, and press. The good thing about an organic growth strategy is that, obviously, it costs much less. The bad thing is that you can’t control your growth trajectory – we can’t say “this month, we want to double our revenue”, and then adjust the levers to acquire more customers. In other words, our growth engine isn’t paid marketing – it’s our product.

  • Don’t rely on one single channel for growth
    Paid marketing still plays a role for Typology, accounting for 20% of our growth. We’ve tried a couple of channels, for instance Facebook and Instagram marketing; we spend money on Google; we even tried some influencer marketing (at great cost, and with a lot of disappointment). 

    We can’t rely one one single channel for our growth – instead, we have hedged our bets, adopting a strategy which splits our focus across different channels. In my opinion, it’s much better to focus on the brand experience, and creating a product that can go viral, rather than trying to artificially create a viral campaign.

  • Physical/offline experiences vs. online experiences
    My belief is that you should really focus your limited efforts on one channel where you can be best-in-class – or at least better than anyone else. 

    In the case of Typology, digital is our differentiating factor. Plenty of companies have built their brands through physical presence, and have had success with selling their products on Amazon and through physical retail stores like Target. So rather than investing in physical retail spaces, we’ve focused all our efforts on digital, which is where I believe we can outperform our competitors. 

    We hope to replicate offline experiences – and enhance the traditional online purchasing experience – by investing heavily into digital products. One example is Typology’s new diagnostic tool, which can identify specifically which products will work best for each customer’s skin type. We’ve already seen that customers who go through the diagnostic test and purchase a personalised routine have higher NET promoter scores – simply because the products work better for them. 

    With MADE.com, however, we took more of a “hybrid” approach: we introduced physical showrooms in key cities, which enables customers to try products, see our furniture in real life, and pick up fabric swatches. In other words: offline strategies can make sense for some D2C brands. There is no right or wrong way to launch your business. It’s just about picking your battlefield. 

"There is no right or wrong way to launch your business. It’s just about picking your battlefield."

  • Discounting as part of a wider acquisition strategy

    The incentive for discounting is inherently embedded in retail environments, or what I call “the middle-men industry”. For instance, if L’Oreal sells their products to Sephora, Sephora has incentive to discount L’Oreal’s products, because it will give them an edge over other retailers. 

    Because D2C is such a new thing, we can afford to change the game a bit – or at least to try. For example, the only way for people to purchase Typology products is to go to our website. We’re not in direct competition with retailers — in other words, we don’t have to engage with discounting. 

    The question, for many, is whether discounting is “bad” for your brand. Firstly, I would say that it depends on what kind of brand you’re building: if you’re building an aspirational brand, I would argue that discounting is bad for the brand. At Typology, we never do discounts. But at MADE.com, we tolerate discounts, because that brand stands for value, and we want to bring value to our customers. 

    Second, you have to ask yourself what kind of customers you want to attract. If you ask consumers, they’re always looking for a cheaper deal – as is their right. It’s also true that almost every single brand out there offers some kind of discount, especially in the “Black Friday” environment. But remember: there are some types of customers that will only come to you when you’re discounting – and whilst those customers are important, and you want to provide them with an equally great brand experience, they're probably not the customers that you want to build your brand with long term.

    The good thing about being a founder-led business is that you’re able to make those decisions: you might lose some revenue in the short term, but it protects the brand in the long-term.

Learning 5

Strategies to help cope with doubt and uncertainty

It’s interesting to compare where I was 10 years ago, when I started MADE.com, to where I am now. 

In the beginning, my co-founder, Julian, slept on my couch for 3 years. We basically worked for 24 hours a day. Our revenue has grown incrementally, at a speed of around 10-20% growth every month. Our success didn’t happen overnight — there wasn’t one pivotal moment that changed the business. It’s slow and steady progress. But when you compound that for 10 years, MADE.com became a huge business. 

The first few years of any business are always taken up with a lot of firefighting. Business goes up and down. And that’s totally normal.

Here’s a piece of advice that I picked up through our French manager, David Vanek, a former sailor. He used to tell me that when you’re on a boat in a storm, and it’s really going up and down, you have to look at the horizon. That faraway goal doesn’t change – no matter how much you’re rocking. 

Even now, with Typology, there are some days where I feel like we’re going to conquer the world – and the day after, I’m not sure we’re going to live through this year. It’s a rollercoaster of an emotional journey, and I’m sure a lot of founders can empathise with this. The important thing is to keep going, solving one problem at a time, until you reach that horizon.

About Ning Li

  • Born in the south of China, Ning Li arrived in France at the age of 16, unable to speak the language. He financed his studies by working in a pastry shop in Chinatown, before graduating at the prestigious HEC Paris Business School.

  • In 2006, Ning co-founded Myfab – an e-commerce site for event sales – which sold to the PPR group in 2009.

  • Ning then left for London to launch MADE.com, a digital D2C brand that sells designer furniture online at affordable prices.

  • MADE soon disrupted the furniture industry, achieved annual revenue of £400m (!), and “transformed the way we buy furniture” (Sunday Times)

  • In 2019, Ning launched his third venture, Typology, a new D2C brand for natural beauty products manufactured in France

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