Under The Hood: Jen from Mílà
Interview with Mílà founder, Jen Liao
Welcome Jen! So MìLà initially started as a restaurant in Seattle - but since COVID, you’ve gone D2C. Is the restaurant still around?
Yes, it’s still around! It’s in Bellevue, downtown Seattle. We opened the restaurant to eat our favorite Chinese street foods and we became well-known for our “Sheng Jian Bao”: A pan fried soup dumpling.
And then during COVID, we started experimenting with frozen soup dumplings, a totally new format and product.
We started selling those within a close radius to the restaurant. And then we slowly expanded outside of that, eventually dealing with logistics partners and 3PLs to deliver our products further and further.
Now that you’re primarily a D2C business, is the restaurant a separate business altogether?
Yes, it’s separate. It started for fun and was backed by friends and family - so we keep that separate from our new parent company.
When you expanded into D2C, was that bootstrapped?
It was all bootstrapped. Some things worked in our favor since we had restaurant employees looking to keep their jobs during the shutdown - so we managed to supplement our D2C efforts.
My husband and co-founder Caleb built our website on Shopify himself and ran our first ads using stock imagery. Our CAC was $7 during this time when Facebook Ads were cheap. That all allowed us to experiment and explore the potential of D2C.
It also helped that many warehouses were vacant during this time, so it was a lot easier to move into a space that was ready to go.
Tell me more about selling frozen goods online: That’s usually prohibitively expensive. How are you able to make it work from a unit economics standpoint?
It comes down to a lot of the operational pieces. On the supply chain and logistics side, we've refined our approach over 2 years.
In the beginning we used Ziploc bags to pack our goods and TaskRabbit to deliver the goods. Then we graduated to doing our own deliveries which gave us a lot of hands-on experience, and then we expanded into leveraging 3PLs.
Knowing the ins and outs of how fast our products would melt under certain conditions allowed us to pick the right partners to work with.
And then it really helps us that we’re vertically integrated. We manufacture our own goods. This helps on cost but also on product innovation. Not having to work through a co-packer saves us a lot of costs that we can reinvest in a more efficient supply chain.
It wasn’t a planned decision to manufacture the goods ourselves, but the co-packers/manufacturers we met just couldn’t make our product the way we wanted it. So we had to figure it out ourselves.
Let’s talk about your website and CRO: Are there any tests that stand out as being hugely successful?
Because shipping frozen goods is so expensive (sometimes 40-50% of the total cost to the consumer), we did have to experiment with our business model and structure offerings that hit a certain AOV.
So we tested selling single bags of dumplings, having different flavors, different sauces - and doing everything we could to get customers above our set AOV threshold (around $90) where we could begin subsidizing shipping.
We also played around with different bundles; those were very successful because people tend to go for the path of least resistance.
Let’s chat about retention: How do you retain customers?
This is an area that we are starting to focus a lot more on.
In the beginning it felt tricky to prompt customers to re-purchase because we typically sold our dumplings in bulk (70-100 dumplings at a time). And that’s a lot of dumplings to run through. And depending on whether you’re a family of 4 or 1, it’s tricky to identify when you’d need a refill.
But we’ve recently expanded our portfolio with skewers, noodles and ice cream. So it might make more sense to look at subscription or retention today. We just want to hit the right cadence for retention and focus a lot on subscription and loyalty programs to structure something that really makes sense.
Another piece is operationalizing our approach to product drops with limited edition flavors - that will likely drive our retention efforts too.
In the past 2 years, you guys have raised over $30m: Walk me through how and why you decided to go down that path?
We've actually done 2 rounds of fundraising: The first round was in January 2022, and then the second round was this year in January 2023.
The first round happened opportunistically. We were very comfortable continuing to grow at the pace we were, and bootstrapping the way we did. But we started to consider fundraising after we received inbound attention from investors.
We took those conversations to see what this could look like - and how others thought about our business. And then diving into that, we were picking up on larger trends with people increasingly interested in Chinese foods, separate from American Chinese food. We decided that we wanted to play a role in that shift and fundraising would accelerate our path towards that.
We eventually met the folks at Imaginary Ventures, who were a perfect fit. They understood our vision and were excited to bring a balanced approach to omnichannel growth with D2C and retail each playing their part. It wasn’t a traditional CPG trajectory and they were excited about supporting us through that.
For the second fundraise, we were being cautious and gearing up for tough times in the economy. We wanted to keep operating the business even during hard times, and investing in growth without having to worry as much about macroeconomic pressures.
Super interesting. And then you decided to bring on Simu Liu! How did that come about? How did you structure that contract? What are his responsibilities?
We met Simu during our first fundraise. We were able to get him to receive our soup dumplings - though he never got a chance to actually taste them that first time, since his parents were in town and they devoured them all (which was a good enough endorsement from Simu’s perspective)!
He joined as an Angel Investor first and we met in person in August of 2022. We talked about our goals and philosophies and they lined up really well with his. So we decided to team up more officially, and our contract was mostly equity since that’s what both parties wanted.
Now, Simu acts like a cross between an advisor, a board member, and an exec altogether in different roles and seats. We love that we can leverage his ideas and his platform, as well as the folks he’s able to bring to the table to tell the story.
Love that. Let’s talk about the stack: What’s powering your business?
Our website is on Shopify. We also use Klaviyo for email. In terms of our dashboards and analytics, we use Northbeam, which has been a really good tool to analyze cross-channel look performance and see activity a little bit more true to what we see reflected in our actuals.
For subscription, we use Skio. On reviews we use Loox and with customer support we use Gorgias.
Shopify is a commerce platform that allows anyone to set up an online store and sell their products. It's the go-to eCommerce platform for young direct-to-consumer brands. It's ease of use and setup is what's most attractive to merchants, but also the incredibly vast Shopify app store.
Northbeam is a universal attribution platform for media buyers, business executives, and marketing agencies that want to know exactly how their ad spend is performing – and how to improve it. We combine sophisticated data cleansing and stitching with proprietary ML models to create hourly, channel-agnostic reports so you can scale with confidence.
Gorgias centralizes all your support tickets in one place and enriches them with lots of extra context about a buyer's profile. Through Gorgias, you can connect directly to your eCommerce store and edit orders, modify subscriptions, and refund payments without leaving your helpdesk.
Last question: What’s your key to success?
Going to ‘first principles’ in almost everything we do and persevering.
As I was saying earlier, when we couldn't find the right co-packer manufacturer, we decided to make the product ourselves. That’s an atypical decision in the CPG space, but because we wanted the product to be restaurant quality, we refused to compromise on that.
We did the same with supply chain logistics. During COVID when Fedex and UPS only offered an 80% on time delivery success rate, we kept working on it until we eventually got to a 97% on time rate.
We kept persevering and we still do today.
