Welcome to our founder lessons series. This week, James Storie-Pugh and Neil Tunbridge share how they conceived and founded mellow in the space of a year, and how it’s raising standards in the (currently) under-regulated CBD market.
Neil: mellow gives consumers access to high-quality CBD (cannabidiol) products they can trust in a fully-managed, curated online marketplace; enabling them to buy conveniently and with total confidence. The platform has rapidly developed from concept to reality, with angel funding allowing us to go from initial vision at the end of 2019 to launch earlier this year. Already hosting a range of over 35 carefully chosen brands — including Alpinols, Calm Recovery, Good Hemp, and Just Be CBD — our unique eCommerce offering is designed to deliver the best experience for everyone: user-friendly and multi-currency shopping, as well as bespoke on-boarding and warehousing to support established and emerging sellers alike.
Why and how did you start your company?
James: We recognised that the fast-developing CBD market had huge potential — set to reach £1 billion by 2025 in the UK alone — but not all of the necessary pieces were in place. The key missing element was a reliable online platform that connected reputable sellers with consumers across the UK and Europe; and that’s exactly what we decided to build.
Our extensive shared knowledge allowed us to quickly create a robust strategy for harnessing the CBD opportunity and completing the puzzle. Together, we have 40 years of experience that covers multiple sectors from eCommerce and retail, alongside brand development, cross-border growth, and managing payment services.
But we also wanted to advance the industry. Part of that meant equipping brands with the right tools and support to increase their footprint, but another crucial aspect was increasing trust. Consumer interest in CBD is rising; as is the variety of oils, creams, drinks, edibles, gels, and lotions available. However, in 2019 only 11% of the UK population had consumed these products in the last 12 months, mostly due to lack of awareness and understanding.
By providing a space where regulated brands and consumers could come together, we aimed to fuel better CBD education and broader appreciation. Combined with the detailed information featured on our blog from global experts, we’re paving the way for the industry to achieve the significant growth it deserves.
What have been your biggest success factors?
Neil: At a wider business and investor level, the greatest asset is our agility. Unlike traditional retail, the mellow model operates solely around eCommerce and presents a lower risk start up opportunity as we don’t purchase stock. This not only means we can scale and adapt at speed with less working capital, but also allows us to focus more resources on continuously growing customer acquisition.
When it comes to branding, mellow’s success is driven by several crucial components. From a consumer standpoint, our commitment to vigorously evaluating every brand has cemented our reputation as a quality platform that only sells premium products. For brands themselves, the ability we offer for global CBD players to engage new audiences and expand faster gives us unique appeal as a B2C marketplace; especially for brands based in the USA and Canada who want to move into nascent markets such as the UK and Europe, at minimal cost.
Technology has also played an important part in removing barriers for buyers and sellers alike. Our comprehensive banking solution and end-to-end payment system has been instrumental in laying the foundations for streamlined CBD eCommerce; further enhanced by our capability to manage multi-merchant transactions.
In short, progress so far is down to very imitate brand relationships that have helped us deliver a seamless and transparent merchant experience, quality products, and high versatility.
What are the biggest challenges you have faced launching and running the company?
James: Setting high standards is challenging in a sector that’s subject to plenty of differing and grey legislation. European Union (EU) guidelines, for example, tend to regulate certain CBD products more stringently than others and rules also often vary between countries, which can make international selling complex. But this hurdle is one we’re determined to overcome.
Positioning mellow as a premium marketplace that complies with regulation is not only important for us; it’s also vital for our investors and merchants. This is why we have focused strongly on following the latest legislation from day one; seeking out legal counsel to inform procedures and partnering with Memery Crystal, the UK’s leading CBD legal advisor.
We would very much welcome a more comprehensive UK and European framework, but in the meantime, the company is doing all it can to raise the bar individually. As well as supporting brands in meeting existing requirements — such as the need for manufacturers to gain FSA authorisation of their CBD extracts and isolates by 31 March 2021 — we also have our own strict benchmarks.
For example, not only must brands joining the platform undergo a thorough Know Your Client (KYC) process and adhere to insurance stipulations, but they also need to provide lab reports that show their product source, strength, and manufacturing processes. Credibility is paramount and we strive to ensure no quality or legislative consideration is overlooked.
Which do you think is most important: the right market, the right product, or the right team?
Neil: Cracking question. It feels clichéd to say that they are all too important to choose just one, but it’s still true. For solutions to take off they must fulfil a genuine need, and that means they should be tailored specifically for their target market. Similarly, without our exceptional selection of products and talented team, mellow simply wouldn’t be what it is today. The close relationships we have built internally and externally are what defines and drives us.
If I had to pick a single answer, however, it would be the right team. For mellow, each member of our team brings specialist abilities that enable us to make our platform the best place to buy and sell CBD products; including industry leaders across customer experience and digital marketing, banking, and payments. For the business world at large, creating great products and spotting opportunities also isn’t possible if companies aren’t backed by a strong team.
Final words for those chasing the startup dream
Neil: If you don’t have it already then find some hustle and learn how to sell. Being a founder and an entrepreneur is tough and it demands so much of you in many different ways. Among the most vital are always being ready to hustle — be that for discounts, early payments, extra revenue, endorsements or support — and push your proposition. No matter what people say, you’re always selling once you take the decision to start a business.
James: It’s also important to remain persistent in the face of setbacks and be focused on why you began your journey. Almost everything will take longer than expected and, along the way, there may be people who question what you’re doing and whether it can be done. That’s why it’s crucial to stay fixed on the end goal and gather experts around you who can talk through challenges and collaborate to find solutions.