Revenue Is Vanity: What By Babes' Megan Jones Learned the Hard Way

Here's a statement that makes every scaling founder sit up: you can double your revenue and still be losing money.

That's not a hypothetical. It happened to Megan Jones, co-founder of beauty brand By Babes, and she says it out loud on the latest episode of DTC Live On Air. 

"I didn't even know what profit I was making. I just saw the number in my bank." 

The revenue was climbing, the bank looked healthy, and underneath it the business was leaking cash.

It's one of the most honest conversations we've had on the show. Megan talks about the highs, the lows, and the very expensive lessons in between. 

Here are a few things worth taking from it. The rest, you'll want to hear from her directly.

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1. "Revenue is vanity, profit is sanity, cash is queen"

By Babes blew up fast. Organic virality, selling out, huge margins, the lot. And when the numbers are that good, it's easy to assume the business underneath is just as healthy.

It wasn't. Megan only clocked the problem when she went digging. 

"Because the revenue was actually growing, I didn't even know that we were losing money." 

The fix was a finance crash course and a new rule: know your P&L better than your accountant does. If you can't say what profit you made last month, that's the first thing to go and fix this week.

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2. Don't bank on organic forever, learn paid acquisition while you can afford it

The first run was dreamy because it was all organic. A creator co-founder, a product people genuinely wanted, and a community that showed up. Then Meta got pricier, the algorithms shifted, competitors piled in, and the easy growth cooled off.

Megan's honest about where she went wrong. She poured the early profit into the wrong things instead of learning how to actually acquire customers. 

"If I'd known what I know now, I would have kept all that money to just acquire new customers."

The lesson isn't "organic is bad." It's that a viral spike is a moment, not a model. Build the boring acquisition muscle while the good times are paying for it.

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3. Own your customers, don't rent them

By Babes could have gone all-in on TikTok Shop. Megan deliberately didn't. She's kept the brand roughly 60 to 70% on its own website, on purpose.

Why? Control, and data. 

"(On) TikTok, someone can't really buy that business because there's no data behind it." 

No emails, no retargeting, and a platform that can throttle your reach the second you stop playing by its rules. She still uses it, just as one tool in a blended mix rather than the whole strategy.

Use the channel. Just don't let it own your customer relationship.

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4. Spend on community over influencers

By Babes barely spends on influencer gifting. Instead, they pour that energy into their own community: pop-up events, product testing, real meet-ups where customers become friends with each other.

"Your community are the ones that are buying and shouting for you anyway, so you may as well make that stronger." 

They get honest product feedback, genuine word of mouth, and the kind of loyalty a paid post can't buy. On the hard days, she says, it's the community that keeps you sane.

If you've been meaning to build that muscle, our own retention playbook digs into this: why the customers you already have are worth more than the ones you're chasing.

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5. The retention reality check

Klaviyo was crediting about half of By Babes' revenue to email. Looked great. Then Megan looked closer.

Around 70% of that was just the welcome flow, the first-purchase discount from people who'd probably buy anyway.

"That's not really retention."

 It's a brilliant, slightly uncomfortable reminder to actually open the hood on your flows rather than taking the headline number at face value. 

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Watch the full episode

We're only scratching the surface here. In the full episode Megan gets into scaling her team up and right back down, being underestimated as a young female founder, how she's rebuilding on a budget, and the mental-health side of riding those highs and lows that most founders never say out loud.

A taste of what else is in the full episode:

• [30:20] Can you actually avoid founder burnout? Megan's honest answer: "I haven't."
• [32:38] Being underestimated as a young female founder and the imposter-syndrome question she can't stand.
• [35:54] How she really uses AI day to day, and the shiny tools that just wasted her money.
• [37:56] The next 12 months: rebuilding cash reserves and a full rebrand, all on a budget.
• [40:58] Her advice for anyone starting an ecom brand: know your numbers, and negotiate everything.

It's funny, it's generous, and it's the kind of honesty that makes you feel a lot less alone in the chaos of building a brand.

Watch the full episode here on YouTube, or add to the queue on Spotify: DTC Live On Air podcast.

And if Megan's story struck a chord, come and find your people. Swap notes with other founders in our community, meet them in real life at one of our upcoming events, or if you're a partner who wants to reach brands like By Babes, here's how partnering works.

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Production notes (not for publishing)

• Source: Ep 16 of DTC Live On Air with Megan Jones, co-founder of By Babes (transcript supplied). Guest also owns Boss Babes Aesthetics; co-founder is Heather Bowling. All quotes are verbatim from the transcript; all figures (doubling revenue, ~70% of email revenue from the welcome flow, 60–70% website split) are Megan's own statements about her business, attributed to her — no invented or general stats.
• Tone: friendly, fun, honest, insight-led. Teases the episode rather than giving the whole story away (team scaling, female-founder bias, rebrand, burnout left for the watch).
• Primary keyword: by babes founder / Megan Jones. Secondary: ecommerce profit vs revenue, DTC founder lessons, beauty brand scaling, know your numbers ecommerce.
• Suggested slug: /blog/by-babes-megan-jones-lessons
• Meta description (≈155 chars): "By Babes' Megan Jones doubled revenue and still lost money. Her honest DTC Live On Air episode on profit, community and owning your customers — plus what to steal."
• Word count: ~950.
• Internal links: /podcast (+ episode), /community, /events, /sponsorship + 2 blog cross-links (retention playbook, DTC brand news). Schema: Article + Author + Organization.
• Links to confirm: /sponsorship canonical URL; blog cross-link slugs (dtc-retention-playbook, dtc-brand-news).
• Note: podcast is "powered by Brightpill by Sage" per the recording — left out of the body; add a sponsor credit line if you want one.

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