How Shabi Dagan Turned a Loss-Making Store into 10x Growth - Product Builder Podcast episode with Eyal David
00:31:31

How Shabi Dagan Turned a Loss-Making Store into 10x Growth

Host: · Guest: Shevi Dagan · About the host

Shabi Dagan bought e-commerce brand SPORTYWOLF and found it loss-making — the seller never ran it like a company or counted his own time. The lesson: a business must calculate revenue minus expenses, including the owner's time, or it loses money unnoticed. With niche focus and a lean method, he made it profitable and grew revenue 10x in a year.

In this episode

  • Profitability above all: a business must calculate revenue minus expenses — including the owner's own time — otherwise it's loss-making without anyone noticing.
  • Niche focus wins: starting from 'women' was too broad; the focus narrowed to training women aged 25–40, and soon to just a single niche.
  • The right operational method reduces headcount: the business runs with one full-time employee and a few service providers, instead of a team that would have lost money.
  • Brand and differentiation are the defense: against Lululemon and Alo Yoga, the differentiation is quality at an affordable price (a set for 240 ₪) and focus on a precise audience.
  • The real profitability is in returning customers: by the third transaction it's already very worthwhile, because there's no marketing cost there.
  • Influencer marketing carries a built-in conflict of interest between the influencer and the brand, yet it still generates initial trust among those who don't know the brand.

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Episode Description

Shabi Dagan, an entrepreneur and owner of a software house, reveals his journey to acquiring the e-commerce brand SPORTYWOLF — high-quality sportswear for women. After a video-analytics startup that shut down during COVID, he bought an existing store that turned out to be completely loss-making, and within a year turned it into a profitable business with 10x revenue growth. A candid conversation about misreading financial statements, niche focus, brand building, and the complex world of influencers.

Read the full transcript
Full transcript with speakers and timestamps

Selected quotes

“I bought a completely loss-making business, much worse than I thought.”
— Shabi Dagan
“If you build the right method, you need fewer hands to do it.”
— Shabi Dagan
“The big profitability will come from returning customers, because there's no marketing cost there.”
— Shabi Dagan

Questions & answers

What did Shabi discover after he acquired SPORTYWOLF?

That he had analyzed the financial statements incorrectly and bought a completely loss-making business, far worse than he thought. The reason: the business wasn't run like a company — the owner didn't account for his own time and didn't choose suppliers correctly, so revenue minus expenses came out below zero.

What's the performance after a year?

Revenue grew 10x, the business is profitable (though modestly, without drawing a salary yet), with defined KPIs and an orderly operational method. The target for next year: 3x in revenue and profitability above 10% pre-tax.

How many people run the business?

Only one full-time employee, plus a few small service providers who fill in the gaps. Shabi argues that with the right method you need fewer hands to run the business.

What are the next growth engines?

Entering the American market (a much larger market), and diversifying with complementary products — a tank top, a bottle, and items that deepen the customer's everyday experience.

How do the customer club and photoshoot day work?

Joining is free and includes a 15–20% discount on the next purchase. On photoshoot days they photograph real customers (not models) — a circle of 60–70 customers who receive professional photography, the sets for free, a yoga class, and their photos go up on the site.

E-commerce Branding Entrepreneurship Women's sportswear Digital marketing Influencers Returning customers Niche

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