DTC POD: How The Best Brands Are Built

this is d c pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcast podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linked in the show notes so before we kick off today's recording i've got one more for you e commerce costs are rising usps changes alone could push delivery costs up more than twenty five percent this year and to stay competitive you need a supply chain partner built for scale and that's what stored is a modern p that unites warehouse saying fulfillment and transportation with cloud software for full visibility and control in twenty twenty four alone stored save customers a hundred thirty million in par fees and powered nearly one percent of all us black friday and cyber monday sales now they're offering a free mystery shopping report see how your ops logistics stacks up against competitors with real actionable insights get yours at store dot link slash mystery and scale smarter with stored what is going on d t pod today we are super excited to be speaking with danielle kidney who is the founder of the creative pack so i'm really excited to have danielle on for this episode because in the world of d or cp g or whenever you're trying to bring a product to life one of the most important things one of the first things that the customer notices is the packaging right and a lot of times you know it's harder than it looks to nail beautiful packaging i think everyone's used to seeing these beautiful brands that are scaling fast with amazing packaging a lot of times you don't really know what goes on behind the scenes to produce this level of packaging what needs to happen from both a design point of view a branding point of view as well as like a logistics and supply chain point of view to pull all of this stuff off so i'm really excited to have danielle on today and that's what we're gonna be chatting about we're gonna break down how you build packaging that stands out and that can really help your brand especially as you not only start up but as you scale so danielle i'll let you kick us off why don't you tell me a little bit about you know your personal background and what led you into starting the creative pack sure i'm so excited to be hit yes so i founded the creative pack eleven years ago the name kinda says it all but it's a play on words so we create packaging but we're also a tight knit group of creative people and we have a diverse set of skills interest and backgrounds my background i started my career in a london agency who focused on food and beverage packaging and one of the biggest clients was tesco which is that a third largest retail in the world and we managed a high volume account for them in private label or own brand and that's spread across every category in store so everything from a non food you know skincare beauty product all the way through to bakery buns and condiments and tea and coffee so that experience is actually what brought me to los angeles almost eighteen years ago to help tesco launch fresh and easy which was their us small format grocery store so we started in that world and kind of have built from there i love what we do i'm constantly looking at packaging everywhere i go nobody wants to go to the grocery store with me because it takes hours and i'm going down every aisle and taking pictures and emailing clients and all kinds of things so i'm a little bit obsessed but it's a good thing because i love what we do and how we can help people launch their products yeah and i love that going to the grocery store and just like learning out on packaging that's something that i do it's one of the best ways to you know see things it's the i feel like the packaging landscape is always evolving there's always brands that are putting out new innovative ideas and you can apply them cross category and there's so many ways to innovate and it's really cool because you're innovating in in the physical world too it's not just digital it's like something that really comes to life and and stands out so you know one of the reasons i was excited to do this is you not only have experience at tesco working at with retail at massive scale but you've also created and done a lot of the branding and the design for a lot of very popular brands that you know people know in their household even just scanning through your site brands like you know no or la cookies you know mother's mother's market stuff like this these are like brands that you know i think are super recognizable so you know i'd love to learn a little bit more about you know talk to me about your process like what is the design process look like when you start working with a client not only on your side but what does like the brand have to have and what stage should they they should they be at to bring our first package to life yeah that's a great question the thing with packaging like you said is it's very tangible but with that comes some timelines because you're actually printing and producing something so i always say you should engage with a designer and agency as early as possible so i'll take calls with entrepreneurs that just have a business idea or a product idea and haven't really gotten much further than that because it takes time and there's a process so our process at the very beginning is to just really establish the needs of the client ideally they bring to me like a one page brief which can be as simple as a background about the company what their objective is with the project and also some of the drivers to why they're developing what they are developing sometimes people would just tell me about the product but i like to know you know did it come about because you're solving a problem is it developing a product because you couldn't find that product on the market the reason the story is so important is because it can feed into the creative so you'll see a lot of brands right now the founder led extracting that story from the founder really build some authenticity with the brand and relate so people can say oh that could have been me i could have done that someone solved this problem for me so we always wanna get to know the client so this initial conversation i'll be asking lots and lots of questions and also i wanna get to know them how do they think what are their strengths and weaknesses if they come to us with just like a product idea but they have never gone through a branding project before that's okay we take people step by step so from that one pager we would create a design brief and the scope of work and the scope of work would essentially outline the steps to get from a to b so let's say it's someone with nothing all the way through to launching we would actually break that down and say okay we're gonna need to come up with some design concepts we're gonna create mood boards we're gonna develop those designs to make sure they're fit for purpose and then we're gonna roll out the final packaging whatever that is how many skus how many formats and all of that kinda goes into our scope of work and it's really important that the process is collaborative we don't wanna race the away and do what we think is right we always kind of touch base back with the client so we have a lot of touch points during the project so that they're onboard and they're kinda coming on the journey with us and hopefully we can surprise and delight them throughout the design process with ideas that kind of push them to think differently or really nail whatever creative ideas they brought to us so part of that is getting to know the client and part of it is making sure that their design is fit for purpose so understanding who that consumer is who are we talking to what are their habits how are they gonna shop is this a shopify website is it an app on your phone is it an e comm retailer where you're up against lots of other products in a stream of tiny little pods on the phone are you gonna be half an inch high your image is it gonna tell the story so there's a lot a lot that goes into it but we're here to help we don't just bamboo clients we kind of give them a breakdown of each step before we start so one of the questions that you know immediately comes to mind like when it comes to brand there's kind of this balance you know and the best brands do a best job of maybe not even balancing but just getting it perfect but you know there's a balance between brand that stands out but like also a brand that communicates simply and can sell right so how do you you know as you approach design what is the balance between you know getting that story across in terms of like the information and the things that you know universally need to be communicated whether it's a nutritional label or you know specs that like need to just go in there versus being innovative and making something like stand out how do you balance because a lot of times you know obviously people want products that look pretty but at the same time people want products that sell so how do you balance and how do you design for you know not only accommodating brand but accommodating sales and conversion and how did they go together yeah that's a great question i mean one thing that's kind of a trick of the trade and it's something we do because we're also working with different clients in different industries in different categories is the first first thing we do is a competitor review now there may not be a direct competitor if you're creating something super unique but there's always something around that space so is it that you're packaging in a liquid form and you need a pump on the top of the bottle is it that you need outer packaging like primary packaging and secondary packaging because the product like over the counter medicine has a drug fax panel that's massive so you're just simply not gonna fit it all on the bottle or are you up against a gigantic goliath and let's let's think about it they might have a giant budget for consumer research so the reason to look at the competitors is to look at form and function but it's also to look at claims and hierarchy and i do think there is the balance when you're shopping online or on the phone there's usually images with supportive text so you can maybe do a more minimal design because you can explain it really well in the description or you can annotate the images but when you think about you know when the consumer takes at home you wanna make sure that they you know still understand what it is and that no one picks it up by mistake or even that you're using a product that i'm watching you use and i'm like wow what is that where did it come from how can i buy that so we try and break it down in a very simplistic form after the competitor review we go through the review with the client and we ask them which ones stand out to you which ones do you like which ones are successful which one's on that's again to get to know them but after that we take a framework and we create a hierarchy on blank packaging so we're not designing colors or images or anything distracting we're literally looking at the proportion between the logo and the title the claims and the call outs all the mandatory information that has to go on that maybe a client doesn't know because they've come from another industry like in food the net weight the servings per container we do that in just a grayscale scale form so we're not distracted by any of the design yet and we wanna make sure we're aligned with the client do they want a really large logo or a really large title and again that stems from reviewing the competitive set and when we design against a hierarchy that's already been determined that really helps with the next step in the process because then when we do a mood board and we're bring in visual cues and color palette and typo and a mood and inspiration into the board we compare that structural technical piece with that outstanding creative design essence that we're gonna design against and those two pieces help inform the concept so when we do concepts they've they've not come out of thin air they've been informed by the research and informed by the the hierarchy and we may design under two hierarchy we might have one where something bigger on one design versus the other and then in the real world in the in the concept stage you can see it and we try and make sure that stage is rendered on the exact form of packaging at the same scale you're gonna produce so we know if it's a small bottle versus a large bottle or a big box or a small box we we'd try and take all that guess work out of that final tangible piece by you know drip feeding it through the process earlier on so that's kind of the magic when the concepts come to life they're actually a little bit more considered than just a good looking design without context yeah and i think this part is so so so important and that is designing for function you know first right like and then once you've got that solved then you can figure out what the exact like form is going to be and the colors and like the splash things that all the users remember but like i just love that from even you know for anyone who's like launching their brand when you're thinking about packaging design start with the things that are non negotiable about your design what are the things that like neat physically need to be in there need to happen start in grayscale it's almost like when you're designing you know in software systems you're using you know you design the ux first and you're doing kind of like mock ups where you might just have like you know boxes instead of like text or like dummy text where you're designing for hierarchy and then you can put in all the splash and color and i think a lot of maybe you know first time sort of founders or people who are exploring designs for they might their eye i might gravitate towards something i catch but then you start to realize you're like oh wait a minute that's catchy but oh crap now i need to go rep put in all of these different essential parts so i think just kinda stripping stripping down the way you think and what the design thinking is and building and layering on top of there i think that's just like a universally great approach to approaching especially products in the physical product world right because like it's not as easy and why this is even more important in software like you know if something's messed up you go and you write a line of code and push a new release and you're done but you know and maybe that's kinda of like the next topic we can talk about is in these sort of packaging designs like what are the you know what are the order quantities what does your process look like once you've kind of like got a design to not only like test it right so like what does that kind of testing process look like and then what is the scale look like obviously if you're working with you know a product launch in a ot tesco that's gonna be different from a new brand who's coming to work with you and maybe wants to do somewhere start with you know a thousand ten thousand fifty thousand units but yeah why don't you just talk to me a little bit about once you guys have a solid design foundation in place from like the fundamentals you've kind of layered in the colors you've got a brand that everyone sort of agrees on now it comes time to like see what how that product manifests itself in the real world right we're dealing with materials we're dealing with the manufacturer how does the color render under the packaging how does the packaging feel so maybe we could start a little bit with the actual material design component and how that comes together and then we can tackle you know other parts of the design process yeah so kinda like the process being collaborative but also being different one project to another might have different deliverables in this case we do ask a lot of questions about manufacturing so is this a product that someone's making at home in a kitchen or in a you know a commercial kitchen is this a c manufacturer where is it being manufactured with the past you know five years with freight costs and supply chain all of these micro decisions can actually affect the final product cost and margin and profit so we ask those questions because depending on where it's being manufactured if it's being manufactured on a production line that exists someone else is probably going to already solve for the bottle shape the label size maybe the box that it gets put in and depending on their machinery that could be you know by hand or by machine so often clients will come to us we we get provided a dye line which is a lay flat version of the packaging for us to put the design onto so we do ask those questions a little earlier before the concept because we don't wanna design even as detailed as a clear label if the manufacturer can only do a paper label or a opaque label so we try and do that so that the design that you're approving is as close to what's achievable as possible but as you touched on this also cost so depending on how many units you're printing that will also determine in the print process so whether you're doing a digital run or whether you're doing a full flex or lit commercial printing run the cost might be higher for the digital but you can adapt and change and do a minimum order quantity versus a full production run in a commercial environment with a commercial printer you might be printing print you might have print plate costs and any changes you know are gonna be kinda costly later down the line so there is a system in place that we use where the artwork gets reviewed by all the parties involved so that we don't put something on a dial upside down or back to front we understand a lot of the technical elements of guidelines and that's why we specialize in packaging but the printer and the manufacturer they know their machines they know what works they know what's been successful they know if a label is gonna wrinkle or not wrinkle so we involve them in artwork at when we release the artwork we make sure everyone sees it and then they get a chance to say it's too many colors it's gonna be too expensive you need to switch it to this i gave you the wrong line accidentally all these kind of little things can happen along the way and then we make changes to the design refining that artwork to make sure it's fit for purpose so in in that you know primary packaging when you're packaging the thing that you're actually selling versus the shipper box that you might produce to get it to someone's doorstep different print process processes different printers different technical things in the files that need to be on there print finishes capabilities you might find for a shipper box you're just gonna print one color on the outside because that's the most economical design and then with that one color you have the opportunity to knock out to the craft of the box or white if the box is white so you can still be really creative but you might be limited on number of colors and then there's the unboxing experience which in the last you know again few years you've seen a lot of unboxing videos surprise and delight easter eggs happening there's something to be said for you've done all this work to get the product you know refined but how does the the consumer actually experience it and you talked about the digital space where you're designing that experience in the physical world you're also designing that experience is there a special finish a soft touch on the label that creates a tactile feel is there something where it needs a texture so it's non slip out of your hands like there's lots and lots of things you can just do simple gloss versus matt packaging and you can do a combo where you do some spot gloss some matte finishes again the cost is part of this conversation because we don't wanna go and design you know a louis vuitton priced product if it's supposed to be a valued here so this should be discovered along the way and we shouldn't be like taking a four color or a six color design down to one color the last minute because the guarantee that's not gonna be the brightest and most beautiful result it's better if you design for one color and you'll limit did at the beginning so there's lots of sort of little hints and and tricks which is why partnering with the right people who know all the technical details is really important and you can you know you can have an an agency like ours manage the color with the printer we can attend the press check we can go to first production there are ways to make sure that there's consistency throughout the process and that the results you get are as high quality as the product you're putting inside so it's just about you know staying close to it at all touch points and making sure that everyone's expectations are met and that people understand and we're always here to help break down some of the technical language that our printer used to help make it a little bit easier to digest yeah i think i mean just printing and color alone is like it's a it's its own beast right like you may have a green and the way that green even like even when you're working with pant tone colors and stuff away that digital green shows up as a pant tone color shows up as a pant tone color on a particular type of material these are all different things so you know having a design digitally that's you know very much only half the battle and you know there's a whole another side that goes into okay how do we get this design that looks amazing in digital and how do we make sure that it comes to life so when it hits a retail shelf or something it it's what we envision when we're were going through and designing that physical product right yeah and even mock ups we're at a stage in a project right now where we're doing physical mock up so we can see it at in the three d form and you know we receive a set of mock ups the clients receives a set and then we review it together to make sure everything from the computer screen translate onto the actual material even that step alone you might do for a trade show or you might do for an investor meeting or even a pitch you might want the three d object before you finalize it in your hands and that can be you know a couple of hundred dollars but it's well worth the effort before you print thousands or hundreds of thousands so we build that step in depending on the clients needs to make sure that we're all on the same page and that there's consistency yeah i mean even something like you've got some you know bottles of wine it looks like in your background even something as simple as a label and how it renders digitally is flat and then when you put that label on a bottle with a curve you know maybe you don't see the whole label if the design is a certain way and the packaging is the cylinder right so i think there's so many things and you know could once you go to production like these are you know real real elements and and i i think one thing that i just wanna highlight is just what for a a brand that's starting up what the true cost is of like messing this stuff up because it's something that i've been through that other founders have been through but like you know for example even if you build a piece of packaging and say you send a pallet of package and this is something that even just happened with the brand that i was running build a build a build a packaging send it to amazon well now you're paying not only to create your product you're paying for your product and imagine something goes wrong if you have to then get rid of that product you have to pay amazon to dispose of your pallet right like and these are you know real cost not just in terms of like what the materials cost to design and implement but in cost of what it costs to ship large volumes and what it costs to you know in a horrible or a worst case an scenario what it costs to dispose of or you know liquidate merchandise so yeah these are it's better to get it right than to to to get it wrong that is for for certain and the other thing is it's better to do an extra round on the digital file than it is to make it print mistakes so that's why part of our process is also including more than just the founder or the brand owner in the reviews we all know some of us are good at certain things are not good at others there might be a brand owner that's great ensuring the color and the imagery is exactly on point but they might have a technical person look and proofreading and copy and check our and check the upc is correct at the last stage back against the original upc supplied sometimes in file version mistakes can happen spelling mistakes simple stuff we as a point in our process we have a second or a third designer review files with fresh eyes so someone that hasn't been working on the project we'll check it before release and make sure that it's all those checkpoints are done and also that's why it's good to have the manufacturer the qc maybe even have a regulatory review from a professional services which we also can arrange and make sure that like every single piece of it is checked digitally before you print and produce because as you said it can be a very expensive mistake further down the line i'd love to talk about that let's talk about what a review process looks like a regulatory review i know when you go into retail it's a little bit different than when you're online a couple things that you mentioned q upc right like what is the bar code look like very easy to get the wrong bar on your bottle right that's that's a problem and that's something that you know don't wanna make a print mistake around on but there's also requirements as they pertain to for example the nutritional facts right if you're in in cp g or health and wellness or supplements and you're selling a food product you know certain sizes that the fonts need to be certain information that needs to be contained so how do you guys i i know you just mentioned having that review process but are there any other call outs that you could make in terms of you know things or things that maybe not everyone's thinking about that they need to get right before they go to print yeah i mean it's a moving target because the fda and usda for example they re categorized and change things and whether you know it or have noticed it often you'll see from package to package you might see differences in serving size portions number of servings per container that measurement is a factor depending on what category you're in on a product and the same between fluid ounces and net weight liquids are measured differently to solids there's even another reason why it's good to do a competitor review you might catch something like serving suggestion needs to be right near the product imagery whether that's an illustration or a photo because you might be showing like a lemon or a garnish of parsley that doesn't actually appear in your recipe and that sort of brings me to some of the peril of ai right now because a lot of people have been asking me about that i mean our business because it's food at food and beverage and beauty and products like that yes you can generate something where did it come from is that tagline belonging to a big brand like so knowing the source of where these things came from from a trademark infringement and you know own mobility standpoint is concerning to me and also making sure that it meets the requirements legally and technically so different sized packages have different requirements for point size of both the net weight and the nutrition facts panel organic products have different requirements for calling out the organic cert same with kosher there's a lot of bodies that also have technical requirements and you have to adhere to their requirements as a policy or business as well as your own so it might be nice to like change the color of a logo that belongs to someone else but there's a reason why you're not allowed to so really just working with partners that know these rules we double check the information we're given from a client because we don't know necessarily if it was from a reliable source right out the bat we measure things we point out when things need to be bigger or smaller and i do recommend an outside review whether that's an ip attorney making sure your claims can be said d is a great example where you might claim something on your website but as long as you don't print that claim right on your package you know there are things you can and cannot say and claims are made in a very specific way like good source of protein or x number of grams of protein per serving if it's multi servings intentionally or mistakenly misleading you know customers it's a very expensive mistake to get a cease desist letter to get sued by a brand because you've copied something all of not all of these things can be prevented but by going through a thorough process not cutting corners not copying other people's packaging you can hopefully set yourself up for success and also make sure that your future proof you're not putting something on the package that's a trend or a fad or a design that's just a hot design right now we try to make sure that the brands stand the test of time and that they can last for a couple of years because it takes a long time print produce distribute it might be a year long process so your product by the time it goes live might have been designed a year earlier so it's okay to be influenced by trends and excited by new things but just make sure they're gonna last and you're not putting eight thousand claims that are irrelevant in a year so we try and make sure those little things are part of our process with our clients too danielle the other question that i was gonna ask like you know you've been talking a little bit about lead times and how long it actually goes into creating you know an amazing packaging short to run could you kinda walk walk us through timelines and what thing what things normally look like you know we can talk about it obviously from an emerging brands point of view but also like a scale up like you know obviously i'm sure you have projects that run longer than others but like ballpark for someone who's looking to get a brand off the ground let's just say they've got a product they've got kinda like the brand they've bought the social media coming together and they wanna start you know but they wanna bring their product to life as fast as possible what do things look like in the fastest case scenario whether it's working with you or working themselves like how fast can you truly bring a a solid product to market and then what do things look like you know for more scale ups that are looking at potentially doing like a proper brand across maybe multiple skus and rolling out things at a a larger scale what do those two worlds look like i mean for a launch date to be realistic i usually work backwards so let's say for example you wanted to launch something in april of next year so you had a springtime time launch it it you know coordinates with the calendar of then sink something is happening next year so if you're packaging let's take the longest lead time which would probably be a tetra pack or a flexible film like a roll stock or a film you could be looking at a twelve to fourteen week lead time on just printing the material so if you take that off your sin launch and you work backwards you're probably at you know january to release print ready packaging i would also add a buffer so i would take a couple of weeks earlier than that to make sure that you have time for all those reviews you also have to think about the printed package is just material it also needs to be formed and product put inside and shipped to wherever you're shipping whether that's a three p or you're housing it in a warehouse and shipping from there so shelf life is another thing if your product has a short shelf life you don't want tons of inventory coding out in the warehouse so let's say you're doing a a long lead time package like that and then you get your january for release of print files so let's say it's december you wanna leave a couple of weeks for those files to be reviewed people might take vacations your printer might be you know closed for the holidays so let's say two to four weeks for the reviews so now you're at november then before that you've probably had to do some photography some imagery gather your print specs your product specs so that might be four weeks earlier an hour in october and then you wanna give your design team or whoever you're you know you wanna give them some time to go through that process of competitor review audit mood boards design developments i would say for design ideally you have you know twelve weeks maybe two weeks for the onboarding and the research four weeks for concept two for developments and production so basically september we're already late for next april and that's like dream crushing to some people so shorten the packaged now say you're gonna launch a box a carton and a box of cereal or cookies it cotton maybe it's a four or six week lead time so now you've just bought back you know six to eight weeks in the timeline if it's a label you might have two to four weeks of labels so now you've just gained a little bit more time so you do have to be realistic because if you rush the beginning you're likely to make either a mistake in not the right design or maybe a technical mistake on the file or maybe you're rushing through so speed isn't always the best it's really good to make sure every single person in the process has their normal amount of time to capture you know changes and so i would say six months nine months a year a longer project might be over a year shortest time frame twelve weeks for the whole thing we launched a brand last year of fresh food brand with a printed sleeve the recipes were existing the trays that the sleeves went on were existing and it was brief to us second i can january and it was on shelf by april and that's photos shoes food stylist all of it so you can be quick but maybe not with something that's off the ground like from scratch never been developed before because there's quite a few pieces that you i wouldn't recommend rushing yeah and just from sort of like my experience in seeing this i think there's kind of a there's a couple ways to go about it i think you know there is an element especially like when you're starting a brand maybe you don't have like that pure product market fit yet you're still exploring you're still making sure it's something people want i think having the control and maybe you spend a little bit more in the beginning but like having the control to order you know three especially with d right being able to you know order something like three hundred or five hundred units and test and like try to understand like how does this work and learn from your customers and iterate i think it's valuable but at a certain point once you realize that you do have that like product market fit and you wanna start scaling up like if you keep iterating you're gonna just drive yourself crazy because you're gonna be iterating through you know product form factors you're gonna be getting iterating through design form factors you're gonna have packaging that doesn't line up with your other packaging and it's just gonna sort of be a nightmare that kind of comes together so you know i think there's value definitely to being able to like iterate early on but like once you kinda know where it is that you wanna go and you're ready to you know do things properly i think you'll go crazy if you just iterate iterate and iterate and your bound to run into problems and matching your demand to the specific units that go into your packaging and you're better off kind of you know where it's it might say hey let's take some time let's get everything right from a design perspective from a regulatory perspective from a brand perspective materials perspective and it might feel like it takes a little bit longer but like you're saying you'd you know you're better off you know crossing all the boxes and and dot all the the i's and crossing the t's then you are you know ending up with a big po that that goes bad so this is this is this is really helpful the last question that i did have for you based on you know like production would be what are some of the now you've created design and brands and across multiple different like product categories in in the cp space what stands out is like maybe some of the biggest learnings that you know you've seen along the way whether it's mistakes that other brands have made things that went really well that like worked out great but like if you were speaking to a you know founder or an operator of a brand who is like tackling the design supply chain and packaging side of the business like what are some of the most important like learnings you'd say you've you you've witnessed in the field yeah i mean twenty years doing this you've seen a lot maybe not everything every scenario that could happen but just on that you know the initial objective of the project is obviously for it to be successful and measured whatever successful means to the client so it could be an uplift in sales it could be selling through the three hundred units that you outlined at the start again your success is gonna be measured differently i will say that in this current environment building in the margin and the profitability from the out outset is crucial and you can there's a couple of tips that you can use at the very beginning stages which might narrow down some of those iterations you're talking about endless iterations not regular iterations but you can work backwards to a price point that you think will sell so depending where you're selling depending on the competitive set there might be kinda like a upper threshold at which people are willing to pay for a product like this so you know what maybe your outs size or your net weight gets measured according to the cost of the product with the margin built in and that you cap it like that so that's kind of a tip we designed a broth eight years ago in the custom bottle which was a very expensive outlay for the client initially it's still on shelf today but it was a twenty four ounce size and that's size was unique in the marketplace because it was the right size to sell fresh broth in a custom bottle so the bottle was engineered to a price point now you could do that with any product even when you're selling on amazon you wanna take the costs add them to add them all up add on your profit and say will someone spend you know fifty nine ninety nine on this or will people only spend thirty nine in which case maybe i need half the amount so really thinking through the whole life cycle to make sure your product is relevant and stays relevant and sometimes differentiating doing something well sometimes means creating something that's never been done before that broth project other people were in the tetra pack shelf stable we did a fresh broth and a custom bottle it with a shrink wrap it had little markings on the side for when you were running out of broth so you could still see through the container i think there's just smart ways to do it the cookie company they had three price points of four pack an eight pack and a twelve pack so we actually designed three shippers one that held a four pack one that held six cookie or eight cookies and a dozen cookies and economically we made the box the exact same insert to hold the cookies so it was either one insert two inserts or three inserts so now when they're ordering they're actually ordering hundreds of thousands of the inserts but they're not unique to the pack sides we made the box format design and everything else the exact same across the three footprints so you could gift your friend four cookies you could send twelve as a corporate gift there's ways to make one sku work harder and deliver in different ways and to your point as well on the website you can see are are we selling more twelve packs or four pack are we selling does anyone want an eight pack maybe that one goes away off the year one so us bringing ideas and the client also thinking through the product themselves and maybe even you know having a cfo or a fractional cfo run the numbers if that's not your strength i mean ultimately we wanna design for a brand that's gonna stay you know and be a favorite in people's parts and mines and shopping carts whether that's digital shopping carts or real shopping carts in a store and also making sure that d might not be your only channel you might end up in retail like dollar shave club harry's they ended up on an end cap at target so what does success look like maybe it's getting the brand out there and then having it on an end cap a target where people are walking past hundreds hundreds hundreds of people seeing your brand so you don't wanna dial it down or up you wanna make sure it's fit for the channel and for the consumer and make sure that they're comfortable you know with the price and the quality that you can pivot so i don't know if that's helpful but a couple of live examples of and one other thing i'll say about the digital space is scale that design down scale it all the way down to a thumbnail does it work have you made a pack format that no one recognizes it so people are like i don't even know what this hexagonal weird shaped box like what's inside so you don't wanna make it so far that people don't recognize it and you might wanna pump up like pack size three pack twenty four pack ten pack you might wanna pump that up in your digital pdp asset it doesn't need to be go on the package itself but when people are scrolling you wanna know that you're gonna get ten of those not the competitors four pack you're you're selling ten so all your little points of difference amplify in the digital space would be another tip i would say no i love these super helpful and i love the concept of thinking you know in terms of also how does the packaging relate to the pricing that you can get and thinking strategically about that that's something that i think is so so important and maybe goes overlooked right you're thinking about oh the constraints of the product and you know you wanted it in this form factor but like wait a minute maybe you can actually test and think about what's the right size and wrote the right price that someone wants to pay for that size i think that's super spot on as we wrap up here danielle would love for you to shout out you know where we where our listeners can connect with you you know your site your socials all that good stuff yeah i'd love to i'm pretty active on linkedin so connect with me there danielle kidney and then all our socials and websites the creative pack dot com or at the creative pack and yeah i'd love to connect if people have questions follow ups comments totally available sweet danielle thanks so much for coming on pod this has been awesome talking about everything packaging and yeah i appreciate it thanks so much thanks for helping me if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

this is d c pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcast podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linkedin show notes so before we kick off today's recording i've got one more for you e commerce costs are rising usps changes alone could push delivery costs up more than twenty five percent this year and to stay competitive you need a supply chain partner built for scale and that's what stored is a modern p that unites warehouse saying fulfillment and transportation with cloud software for full visibility and control in twenty twenty four alone stored save customers a hundred thirty million in parts fees and powered nearly one percent of all us black friday and cyber monday sales now they're offering a free mystery shopping report see how your ops logistics stacks up against competitors with real actionable insights get yours at store dot link slash mystery and scale smarter with stored what is going on d t pod today we are joined by min la who is the ceo of urban stems and i'm really excited to have this conversation today because not only does we actually come from and an exceptional background as it pertains to fashion and very popular consumer brands that you guys are all familiar with but when it comes to operating a flower business online it isn't necessarily the easiest thing so there to in order to achieve the scale that you guys have done you need to really have your operations in order and today we're gonna be diving into everything about what it takes to grow and scale one of the largest and most successful businesses in the floral space so without further ado and actually let's get into it why don't you give us a little bit of background about yourself your career what led you into the ceo role at at urban sense hi so nice to meet you and thank you for having me here very excited to share my story and share the story of urban stance i spend two decades of my life in various sized businesses within the fashion retail vertical businesses at different stages of their life cycle and you know when i'm asked this question now i say well i came to flowers because i wanted to do something harder but i was in i obviously it's a joke but in reality it's the it's the truth perishable product and flu specifically within perishable are by far the hardest product category to be in but i have tremendous you know i've been blessed with the opportunity to work for tremendous businesses in fashion retail businesses at every scale of their life lifecycle various product categories luxury to contemporary designer and that sort of that experience built me and built my career up built my experience portfolio up to really drive operational excellence into this business and for floral which is a very complex product category by nature of its ability being a true operator bring a solid operator having excel excellent operational excellence is a given it's a it's a baseline requirement for coming to this business i was hired by the prior ceo to come to urban stance as the chief operating officer i spent eighteen months in that role bringing all of my experience and learning about the floral space candidate there was so much to learn this was an industry and a product that i knew nothing about i am still learning three years into it but eighteen months of changing how we think about supply chain changing how we think about scalability changing how we think about accuracy within planning and forecasting day and from then you know i was given the honor by the board and the shareholders to take on this e seat and it's you know mike thirty year anniversary coming up very soon at urban stamps thirty year anniversary and urban stamps then second year anniversary as ceo of urban stats well well congrats on that i'm excited to get into the growth in the story you know under your leadership but you know maybe we start with some of your other experience in retail i'd love to kinda set the stage you know you said you worked in in retail in you know i think in in jewelry and some really popular brands could you name those brands that you worked what your role is and maybe what some of your learnings were along the way as you were coming up and cutting your teeth in your career absolutely i again as i said i had the pleasure and honor of working for some privileged noteworthy brands within the fashion retail space alison olivia ali har ur air elizabeth and james pcp g juicy couture some really heritage brands and businesses that the foundation of which was set to really drive innovation to really drive change in a what had become a very mundane sort of expected space some of the designers you know like allison and olivia like air really brought out innovation really brought out change within fashion and some of my learnings from working in these businesses were brand sits at the forefront of everything you do this is something ali har taught me this is something else olivia taught me all of the businesses i worked in trends change marketing tactics exchange acquisition tactics exchange but what stays and businesses that succeed are the businesses that stay at front and center of their brand ethos as they stay true to their brand true to their product those are the businesses that continue to grow today this morning we woke up to the news that george armani passed away at ninety one years of age but that is just that is an example of how a brand continues to maintain its heritage stay relevant in spite of all of the saturation the vertical has seen by staying true to its brand ethos and that is the pe and knowledge and expertise that i have tried to bring at urban stands and we continue to build on through the course of my tenure are here yeah i think it's so so important what you mentioned about brand right like all of the brands that you mentioned are household names they all have like a brand in in essence and they're not just scale up changing their identity every you know with with with whatever direction the win changes they're they're established brands they've got identities and and that's what makes them you know iconic and makes people buy them urine and year out so i'd love i think there's a natural point to transition to urban sums right like you come over you move into an operational role what does that entails you said you were doing a lot of learnings along the way so you know what does it mean to be the coo of urban sem what are the duties what falls onto your desk and what did you have to learn on the job as you were getting acquainted with the the new space so the challenges that i experienced seo of urban stems were so different that anything i had experienced in my career until that point in a week i could be talking to my supply chain team about a snowstorm that is supposed to hit some of the key cities during valentine's day in another week i could be talking about a volcano that has erupted in ecuador on the mountain that you know has a lot of our floral farms and in another week it could be you know dealing with high temperatures that have resulted in now our floral not being able to ship at the highest level of quality that we want to give our customers so those challenges were very unique to me coming from a non product space like fashion retail you know yes some will say passion is perishable to because styles and trends expire but the physical product doesn't des which is what happens in in flowers when you're working with flowers and those were challenges that i had not experienced so there was a lot of learning to be done on how we approach pivoting our supply chain how we approach dealing with demand dealing with sourcing in moments like these and these are real issues that plural business experience fundamentally though i think what prevailed was through all of our diligence in troubleshooting and problem solving fundamentally it's the agility the innovation out of the thinking businesses that have a agile supply chain and operations facilities businesses that can pivot and really think about how do you der risk how do you move your supply chain when moments like this i mean recently we experienced that the tariffs as well and some businesses thrive then some businesses really took a hit so to me fundamentally as an operator it's about having a supply chain having an operational network that is a agile and can pivot depending on the challenges you're experiencing yeah and i think this is such an important point it's a a topic that we've been talking about a lot because so much on one hand of a brand is what you were saying it's the brand ethos the designs the feeling that it makes the customers feel but order to really achieve that at the end of the day you're running a business and that business needs to be operationally sharp it needs to deliver the product and so many things happen behind the scenes to in your case get a flower to a customer you know like you were saying dealing with supply chain that originates maybe in another country being able to store and warehouse that product and store it in a pair that is a perishable product in the states before it makes it out the door you're dealing with forecasting you're dealing with you know a perishable inventory you're dealing with different product skews and how they're arranged so there's so many moving parts and i'm really excited to go deeper into this but maybe before we do that i'd love if you could just characterize the landscape right like where does urban stem sit in this landscape what if you could walk us through even just like a brief history call it of like the e commerce diversification of flowers right because it wasn't so long ago when you know buying flowers on the internet just was not an option and then we we kind of saw a boom and now it's like maybe the most convenient way to do it if you're not in a location where you have a a local floor that you you know you know and it's an easy way to get exactly what you want when you want it or say you wanna deliver to you know a friend or a loved one on the other side of the the country you know you can't just go to your local floor and say hey you know i want these flowers from my friend on the other side of the country so yeah why don't you just walk us through the the landscape what is it like yeah so the floral industry is an extremely complex but a very unique and interesting industry for for as a consumer if you want flowers there so many channels that you can obtain flowers through you can go to your grocery store and get flowers you can like you said reach out to a local forest and get your flowers you can you can grow them yourself like a lot of people like to but fundamentally that is when you are servicing yourself when you think about gifting or sending which is what urban stem does when you want a gift loved one when you wanna a gift covid was a perfect example when you couldn't see your loved ones you couldn't see your friends in failure you couldn't wish people or be with them during a moments of you know when they had experienced loss sending damn sour was a big sentiment was a huge sentiment that's where businesses like urban tends to and that's where the e commerce the evolution of flowers has existed the complexity continues to drive the how and how businesses continue to evolve within flu e commerce and why that that didn't prominently exist years prior was because shipping flowers in a box is extremely complex the entire quote rep a process supply chain process for bring bringing flowers into the country or bringing them to you as a consumer is what we call cold chain flowers have to travel refrigerated flowers do not drive in temperatures outside of thirty seven thirty eight degrees to fifty degrees anything warmer or cooler will kill the flowers and that is very very complex to achieve and maintain from a supply chains standpoint so within e commerce there are two most common ways to fulfill hours are you know what a what we call wire service which is a business you know like a one eight hundred flowers collects your order passes it to a local flourish who then fulfill for you that's great in big cities like new city and la where that are incredible flo who can put together an amazing arrangement to make it look exactly like what you purchased but when you start going to your point to like smaller local cities and local towns around the country it's demand and supply those floors are not necessarily sitting with all the steps that are featured on the site at all times and that's where substitution comes in your play so as a consumer your vision for what you ordered may not be delivered and the other example is you know a ton of e commerce businesses should farm direct where the product has to travel from the farms to your home in which case you have to order case you order three four five days before you expect a delivery date and we all know thanks to amazon we are also trained to receive our product today or tomorrow the same day and next day dinner a res sentiment is big especially in the plural space because if you're year today someone lost a member their family and you wanna send them flowers you're not waiting a week to sell in flowers you want your flowers to get to them the next day urban stands has this unique supply chain where we source our inventory with our farms our new york studio designs all of our bo with our farms in partnership with our farms we work with farms around thirteen countries around the world and we we bring in the product in country two united states through cold it's all end to end refrigerated the product is then housed in seven refrigerated fulfillment centers around the country because again like have to ship in twenty four hours they have to get to you in twenty four hours and depending on your geography and your order placement timing the product has been delivered to you from one of the fulfilling centers so that's what makes us unique urban instance can truly stand out and say to you not only are you getting high quality high design which to me by the way is table stakes if you are going to be a floral business you better be shipping high quality flowers because you're not in the business to ship debt flowers to your customers so that's table stakes but what urban stems can confidently stand for is you will get what you see what you order is what you what will be delivered to you there will not be substitution and you will get them same day and next day so your date the date that is really critical whether the is a birthday or in anniversary or a valentine's year or a mother's day your flowers will be delivered on that day wow so that's really impressive from a supply chain perspective in terms of what's happening under the hood so you're basically saying that when you know if i place a same day order these are flowers that are coordinated probably coming from another country into the states the day of and then basically the next day they're being arranged right because obviously the there's there's an operational element on the fulfillment side of having to arrange them so how how does that happen because like you're not getting the the the the flo isn't in you know another country arranging the flowers you guys are getting the products and then you have assemble them in in the us is that right no so actually the farm so our design and merchandising team travel to the farms around the world that we work with and work with them on the design and planting process we forecast our planting cycles a year out so for example the product that we are going to sell on valentine's state this year is forecasted for it's planted it's growing on the farms as we speak that inventory is committed to but we have also trained our farms over the years to work with us and build the bo case for us so they do indeed put the book case together for us at the farm so whether it's apartment ecuador or holland or columbia those farms are putting the bo case together but to our recipes to our design we send them spec sheets that are written specifically to down to the stem length of what your book stem length should be and it's qc so if your stem length is an inch or two shorter it will be rejected at quality control rest assured you are not going to get a book k but shorter stems than what we asked for because as a consumer we want you to have the best physical experience at the products on your table to look as close as it does in that professional shot that you that you see on the website so the product then in bo form travels through refrigerated supply chain and comes into united states are fulfillment centers then qa each fo to make sure their excellent quality before it is then put in a box and ship to you to enjoy on your you on your dining table or a coffee table awesome one thing i'd love to talk about while we're on the topics of international supply chains we've obviously had a lot going on with tariffs and then obviously you're dealing with customs on every single order and you know products can get caught up in customs or inspected by you know all sorts of agencies but for you guys and a product that needs to happen you know so quickly how are you able to ensure that you know you're able to keep that supply chain moving because like for example like if if your product is perishable and it's coming in and you know someone says oh well let's inspect this and it's a friday and then the next thing you know it's a sun monday and you're like wait we're my product's is still not here so how do you guys manage you know think about supply chain given the stakes of your product and and and how it's perishable sure so too parts to the question i'll talk about tariffs first so tariffs are an ongoing challenge in the geopolitical climate that we are nip in however the approach urban steps has taken is our consumers value curation and quality they value premium bo that are designed for them with high quality stance our consumers are very savvy they're very smart they know the product they know what it takes to bring those premium stems from around the world to their table as long as the curation is high end and high quality and personalized we are willing to invest more dollars in the book case that are being offered to them so the approach that we've taken is we're not just gonna increase our prices we're not gonna go for that model we are going to change our assortment to be high design high curated so when i'm coming to you and charging you x percent higher than what you typically pay for abu bo the value you're getting from the bo is obvious if not just in increasing the price but is in offering you a more unique and curated or inventory table and our customers have really responded well to that the other you know element of how do they manage supply chain the shelf life of our product once it hits our fulfillment centers is five days if it doesn't sell it in five days that's that's the end of the life lifecycle of that product which means it gets tossed out because it is no longer ship bulk so not having a robust supply chain that ensures there are no delivery delays is is like is life and dac for this business is if that delivery delay does slide in a week we will have no inventory to sell weekly inventories received that our seven fulfillment center so product comes in on a weekly basis from all our farms around the world and for five we have a five day window to sell and fulfill the product before our next tran of inventory comes in the the accuracy the delivery accuracy takes it it's you know mobilized by several of our team members around the country who work very closely with every partner that is involved in the supply chain right from our farms to our trucking partners to the airlines or logistics partners to receiving it in you know in in the united states and having agriculture inspect to then putting it on refrigerated talks to get to the women center every step of the day way we have you know our team on the ground ensuring that there are no slips there are no misses that if there are any challenges or hurdles we are reacting and responding to them as quickly as possible okay so i wanna get into i wanna get into the the last mile part of the delivery and the customer experience in that end of the fulfillment side because that's that's a beast all of in itself but while we're on the topic of this what you just said you said you know you've got five days you have a perishable product how do you guys think about and how do you manage the processes that are related to like inventory projections and management and getting as close to the ideal you know purchasing volume for your sales how do you match those up and how do you reconcile i know you said you're projecting way out but like how close are you guys able to come and how do you make all that happen yep so planning and forecasting is a beast in this space we have a team of planners who have extremely valuable experience from having worked in products in their prior life but they study our demand cycles they study our consumer behavior they study trends they study we feed a lot of a fashion trends in our design and merchandising process so our planning team and our merchants were very closely to what we call bet on the volumes per q for each seasonality to ensure that we're truly understanding why we wanna put certain amount of inventory in a certain sku and when do we wanna amp it up in a certain cyclical cycle and then you know bring it down as an example the day after valentine's day the entire valentine's day assortment the red and pink of bo mean nothing to anyone no one wants a red sku the day after a valentine's day no one wants a red sku the day after christmas no one wants a purple or a pale pink skew after mother's day so we really really have to ensure that the collections are very specific to those holidays because a consumer is looking for very specific color palette is looking for very specific stamps and we are purchasing enough to hit our revenue numbers but not low enough where we are managing what we call spoil is a critical term in the industry which is you know the inventory that doesn't get sold so net net we have really brought a lot of accuracy in our planning and forecasting cycles to effectively effectively be able to manage our spoil rates over the years we have brought a ton of efficiency we used to you know run in multiple points of spoil to now being in low single digits which is a huge accomplishment for the business and you know this goes towards the ethos of what we have been running the business principles of high operational efficiency and that this goes back to my original point of when you're running a business which is a perishable product business being an operator is critical to how we think and how we operate and how we run this business i yeah i i i love all these concepts it's actually funny was the podcast that we just had i had one of the heads of supply chain on who built some of the supply chains for literally most of the most popular cp g brands that that we know and we were just talking about how supply chain in of itself is not only an art but it's a it's a moat right it's it's hard but it means not everyone can do it so when you're able to build a robust supply chain and you're able to get your spoil rates down and do all this it creates a moat for your company and your business because i'm sure there's a lot of people who would be like oh i'd love to start a you know a d flower business but it's like if you don't have the operational chops in the supply chain built out it's it's you know it's something that's it's very hard to do and getting it right you know builds your it it is it is a massive business mode it absolutely is supply chain is the the heart it is a spine of a business especially when it comes to perishable product without a robust supply chain team and a robust operational team businesses cannot thrive in this if you know especially in this environment that we are in today so let's talk about you know now let's talk about fulfillment as it pertains to the customer right what do you guys need to do from a an operational like packing sort of thing from a customer communications point of view you know there what is the package that the customer's receiving and what are the inputs that go into other than the flowers of course but like what are the inputs that go into that customer experience so you know they get a you know a perfect bo k of flowers just as they see it as they shop absolutely so the product arrives at our fulfillment centers as i said with refrigeration it is refrigerated into end it is then stored in refrigerated coolers in all of our facilities so it sits at the optimal temperature as orders are collected against them the product is then hydrated for twenty four hours before its packed and the intent of doing that is so that as a consumer when you receive the flowers it is in that perfect stage where it is bloom but not fully bloom but not complete blood form so you can enjoy it as a recipient of the flowers you can enjoy it but also the product needs to have enough what we call waste life it's a technical term in the floral space it has a long ways life for you to continue to enjoy it while it's sitting at your coffee table and there is a science to it every stem has a different pace life every sem has a different cut stage it's so our designing spends a lot of time studying the cut stages and the raise life of each stem wick our farms to ensure that all the stems are being chosen for a certain bo not just as technically look great but also have similar waste light so you don't have one stand dying before the are others do or you don't have the just the greens thriving while your focal flowers have all perished so to ensure that the life of that bo and you're able to enjoy the full beauty of the book as it's meant to be as it was designed there's a lot of ways life testing that has to be done before the assortment is finalized so once the book is then hydrated and packed and your last mile delivery service then picks it up and delivers it to you upon unboxing the box has very specific care instructions it has instructions about the flowers that are in your book tells you what flowers you have in your bo tells you how to care for them there is flower food that is included enclosed in all our case we always tell you you know go with what the experts tell you use the flower foods there's a lot of tips and tricks the internet will tell you of course have fun with it experimented but fundamentally the flower food and clean water is all your flowers need we tell you about how often the flowers need to be changed how do you style it and if you click on you know if you go to our site you typically receive a post post delivery email correspondence from urban stems that will tell you all the g and tricks to keep your flowers happy and healthy so you can enjoy them for a long time on your table and our site will tell you if you search for a certain stem or certain book and wanna know about the origin of the stem so where the flowers came from or why they were chosen for that particular sentiment there's a lot of information on our site as well so how do you manage the like the number of skews and arrangements and all of that you have versus the physical packaging that you need is it like like are you dealing with custom packaging per per sku or like how how does that work because that's a whole another beast it's a whole other beast so yes there is a lot of different packaging sizes that our full fulfillment centers have to store because again you're dealing with a very delicate product you cannot put a very large in a really small box we all know what that what'll will happen with that when it's in transit it isn't a a product with a finite shape floral flowers are living you know living stubs and they're extremely delicate if they're packed tightly they will be ruined what we call mechanical damage they would have tens of mechanical damage before they get to you so each so throughout the development and the design process our design team at not not only do they work with supply chain on defining what each stem in each bo is and then they work on waste like testing as i explained earlier to make sure that the stem life followed the is they also do packaging testing so each bo is then tested to the various packaging sizes and options that are available for us and the spec sheet that is provided to the fulfillment center indicates exactly what packaging should be used used for each skew so that packer at the warehouse when they pick a bo the purchase order has a spec sheet attached to it which tells them exactly what the stems are how many stems are on that bo how it should be hydrated how it should be packed and which size of box it should be packed what kind of collateral needs to go at it all of the specifications are attached to the purchase order for that thicker wow i i mean that's a it's it's super complex and like again like the theme of our whole conversation has been like sometimes you know you get this amazing customer experience but you don't understand all the elements that go into it but it's fun being able to speak with an operator who's having to oversee and understand all the elements that go into delivering a product like that so i think this is a natural transition for talking about what what did it look like moving from coo into ceo like what what changed in your role and your responsibilities what changed about how you thought about the business just walk me through that transition and stepping into that role before i answer that question this is a line i always quote from prada when meryl streep talks about the peruvian pub blue sweater and how she talks about and hathaway probably has no idea how much effort has gone into picking that exact color of sweater or her that is exactly how it sits in i i truly believe in every vertical in like the consumer who receives that bo has no idea about everything that has gone into you know putting that bo together shipping it c it and getting it to their table but the more we talk about this and the more you know people learn i think i hope that consumers will have an appreciation for all those brands and businesses out there and how much due diligence goes into growing product to their daily lives no absolutely it's it's sometimes it's the simplest things that you take for granted that you don't realize how many how many touch points have to happen and and you know i just appreciate being able to chat with someone who's really involved on the operation side because oftentimes there's a lot of people who are on the marketing side of things or maybe the finance side of things who don't understand the operational challenges that have to happen to be able to pull off you know that end customer experience so it's always fun to be able to to go down the rabbit hole with with someone who oversees all that sort of stuff so and i guess that takes me into my next question is like what what did that transition look like what changed you know how does having operated as a ceo affect the way you think is a ceo yeah just talk us through all of that absolutely so yeah i think fundamentally not a lot has changed from a perspective of this business or any business there are two pillars in my eyes to building a successful business operational excellence is one especially when it comes to perishable product but i'm sure this fundamentally applies to every other product category having operational excellence in a business allows for the the roots of the this the structure the foundation of the business to be a solid high margin business to drive profitability to drive revenue growth having your foundation established to drive an official an efficient business is critical so continuing to embrace operational excellence and continuing to grow efficiencies in all operational channels within within the business was front and center at all times and i you know i mentioned this in the early part of our podcast having a brand first approach having grown in the fashion pe having grown and lived with incredible fashion designers brand has always been front and center in the approach that i have taken in any business that i've worked in in any role that i've worked in so when i took the role of ceo on urban stamps the approach was to build brand recognition to build brand awareness it's an incredible brand the product that we create is incredible we have extremely high brand loyalty how do we communicate that how do we resonate that with our customers how do we how does our customer hear more about who we are and what we do and how do we acquire additional customers by brand awareness so that was front and center and a and a shift in approach and again you know like to me it's it's continuing to build on fundamentals of who we are and what we do we deliver high quality high design product we are a gifting business that is who we are building up strategically on the the differentiator that we bring to the table as compared to our peers in this space are things that we have worked on and most importantly you know something i have learned being in fashion retail is always listen listening to your customer what is your customer telling you about the experience about the product what we have recognized is our customer is always set to us they want curation they want ease they want agility if we are giving them a seamless ordering experience if we are doing careful curation for the moments that they want to gift urban stands for there is no holding them back in terms of price barriers in terms of loyalty today's consumer is extremely vigilant and extremely smart loyalty is not something that we can take for granted loyalty has to be one with every transaction even if you are repeat customer we have to continue servicing you in a way where we win your loyalty and that is you know by offering them careful curation by offering them a seamless shopping experience a seamless journey a more a agile shopping journey we're you know as a brand we continue to build on that we continue our customers have time and again told us that they want us to be the one stop shop for all their gifting needs we have now started integrating food bundles with our offerings our most prominent bundle food bundle on our site right now is what we call our autumn bundle which is la cookies and urban instance flowers it's a nostalgic new york brand you know that our customers had really responded to sending you know these nostalgic cookies with flowers for birthday is you know hands down one of the most well received curated bundles that are we have been able to put out for our customers by offering some personalization tools on our site we have a video message tool on urban stands where you can record a video message for your loved one across the country where you can you know talk to your cuss talk to your recipient while not being next to them or not getting with them so think about like a mother whose son just our daughter just went to college and she's missing their voice and missing having them at home and at the kids sends them flowers being able to hear it with your video message so these are just some elements to you know curation and personalization that we've added in the recent times based on all of the feedback that our customers have given to us and again as i said you know fundamentally it's still the three things it's operational excellence brand first approach and listening to the customer and then how do you think about how do you think about growth right like so in the in the ceo role obviously we've got brand as as the forefront we're coming in we're making sure people understand what our brand is about we know it's rooted in excellence we know they're gonna get the you know the best case and they're gonna have that quality the operational excellence is gonna be there but when it comes to our customer acquisition like how do you how do you think about it like what are the opportunities obviously we've talked about like you know gifting and relationships and bundles and all these different things but you know as you think about growth like what are some of the most exciting what are some of the most reliable like channels for you guys and then what are some of the most things that get you excited as as we look forward as it pertains to growth yeah so the most reliable long term growth channel is brand it's organic right there is no a substitution to brand loyalty there is no substitution to brand awareness if you as a consumer if if urban sense is top of mind to you we can establish that that stickiness with as a consumer that is a winning formula but that is not a short term formula that is a long term investment and a long term formula and you have to consistently show up with a quality and a seamless delivery and ordering experience for your consumer to get sticky to your brand so that to me is the long term growth play how do we get there is you know some of the examples i gave you is is solution for our customers needs hearing the customer what are you looking for what can what can drive it and all year round business how do we create moments of sending flowers when you're not thinking about flowers for you valentine's day and mothers here are the most obvious you know holidays when you think about sending flowers but how do we convert every single occasion in your life to be a floral gifting occasion or a floral gifting moment how do we create that stickiness with you as a consumer and that we believe is by doing careful curation so some of the play that we are going after is creating these you know opportunities and creating these uniquely curated bundles that will allow you to by whether it's by moments whether it's by you know marketing campaign ideas or it's by careful product curation is to remind you of a nostalgia i remind you of a moment remind you of a loved one that is far away and helping you think about them but also helping you think about urban stems as the solution for showing up in your loved one's lives and that is how we believe we will grow this business by creating more gifting moments out of nostalgia out of sentiments and out of you know candidly trends yeah and what i think is really interesting here what i'm hearing is basically like you know there's there's two options you can either go acquire a bunch more customers for you know fill up your top of funnel for the things that they're already used to do or you can build that you know customer lifetime value by helping them understand and unlock you know different things i mean one thing i'm looking at your site right now and like literally under the header which shows like great moments of you know people with their k and in video form you come right down in the first thing that you see is flowers and gifts for every occasion so now you're already putting it into the mind it's not just like hey look at these flowers that you're already planning for you you're like wait a minute is it for a birthday is it are we shopping for sympathy for thank you for friendship for love just because so i think taking that approach is a really novel way to approach a business on one hand it's like what's the what's the thing that's gonna carry us in the long term and that's something that you've learned which is brand and then also how do we you know let's focus on the customer base that already trust us that knows our product and let's get them buying into it more as opposed to just saying oh let's go compete for you know a single one time purchaser who who's looking from mother's day flowers who's you know not gonna come back and be like one with ecosystem so for me as an operator i mean that's something that you know really resonates and it's cool to see that from a a strategic lens for for how you guys are implementing that you know as we kind of wrap up here the last question i have for you is you know what are some of your biggest learnings that you've had in the ceo role over the last year you've can you you know and what are some of the things that you're looking to apply and grow towards you know in the next couple of years at the helm at least some of the biggest learnings have been never take your customer for granted customers today as i said earlier a loyalty is not a given loyalty has to be earned you have to continue to show up for your customer with every transaction they make with you you have to continue to elevate your game complacency and being laid back about what you do well it's no longer a tactic for success i think another learning has been learning or more i would say more than a learning it's been a rev validation of fundamentally what i have been taught by my mentors over the last few decades is the nuances of the environment the macro the you know geopolitical environment all of the above are constantly fluctuating brands that or leaders that will continue to thrive and succeed our leaders that display agility smart thinking operate with you know a lean structure and that are able to pivot when challenge when they face challenges whether they're are environmental challenges like a snowstorm or a you know earthquake or its tariffs in a certain part of the world so maintaining that ability to be no matter how big a business you grew up grow into being a agile and being able to pivot and being a quick thinker is what will make a business successful and that is something we continue to remind ourselves every day i love that and as we wrap up here min actually why don't you sure shout out where can we connect with you where can we follow along with the journey you know this has been super super fun to get all the way into the weeds no fun intended if you will but yeah what why don't you shout out your socials or where can we find you and where can we find more about urban stems thank you well urban stamps you can check out our site urban stamps dot com and our instagram and tiktok handle is at urban stamps so please follow us there my personal handle if you wanna continue to follow my journey or you know get in touch with me just to chat about something to do with floral or not my linkedin handle is the best way to get in touch with me it's min la you will find me there and if you wanna follow me on instagram and my journey at urban stems as well my instagram handle is at min m i n u l a la love it well thank you so much for coming on the pod we learned a ton and we'll have to have you back and and continue this con in the future sounds great thank you so much for having me if you enjoyed the show we'd love your support a rating in review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

this is d c pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcast podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linkedin show notes so before we kick off today's recording i've got one more for you e commerce costs are rising usps changes alone could push delivery costs up more than twenty five percent this year and to stay competitive you need a supply chain partner built for scale and that's what stored is a modern p that unites warehouse saying fulfillment and transportation with cloud software for full visibility and control in twenty twenty four alone stored save customers a hundred thirty million in par fees and powered nearly one percent of all us black friday and cyber monday sales now they're offering a free mystery shopping report see how your ops logistics stacks up against competitors with real actionable insights toll get yours at stored dot link slash mystery and scale smarter with stored what is going on d t pod today we are back with burst who is the director of business development at p i am really excited for this conversation because we're gonna be talking about everything supply chain recently if you guys remember we had on john morgan from p as well who was responsible for building out seeds supply chain in the early days as well as a bunch of other things he's recently launched logic and works with nat i've had the pleasure of getting to chat with nit on a variety of projects and he's just got a tremendous amount of depth and knowledge in the field so today we're gonna be unpacking supply chain pitfalls everything that you need to know how to build a resilient supply chain well you need to look out for whether you are a brand that's just starting out and you're looking to you know go omni channel and start to scale a little bit or you're in the scale at phase where you're rapidly scaling and looking to blow up nationally so i guess nit on without further ado why don't you tell us a little bit about yourself how did you tell us a little bit about yourself your career how you made it to p and what your focus is on in these days yeah probably like everybody else in the d space not the most linear path to getting to where i was my family's background is in the contract package in space so it was exposed to that at a young age freshman year of college working as a quality inspector on a production line and said i don't wanna do this one off the school became a teacher so was a public public school teacher for almost twenty years all the while the family business can continued to grow eventually got pulled into that and then ran the business with my father where there we got to see some very exciting brands including john's work with seed but other very well known brands like liquid iv and celsius an element and lots of dummy brands that a lot of folks have heard of and really innovative brand builders that were trying to come up with something new rather than just a copy of something that was already out there and got to hear those founders challenges in in trying to create something that didn't exist yet and through that we we grew we had a lot of success we were fortunate enough to exit about three and a half years ago and when john caught when that i was a free agent he had told me about what he was building at p and met the team and the rest was history so yeah that's how i came about to aligning it p but we essentially act as a fractional supply chain team for brands at their various stages of growth and as you know blaine that challenges when you're trying to get from zero to one are very different than when you're rapidly scaling to when you are the brand and category leader and you've gotta think about your business in in different ways at each stage of growth and so we have departments dedicated to each and and specialists within that space yeah and i mean i think what you guys do is is so cool because everyone when you're thinking about d you know it's a a lot of marketing and a lot of brand and a lot of pretty packaging and all this sort of stuff but truly the bones of making a successful d to omni the channel brand work is the supply chain it's like how do you get a product created how do you ship it how where do you store it what does that form factor look like as it makes its way to the customers how do you ensure that you know there's no breakage along the way how do you make sure things don't get lost how do you make sure the customer understands things like there's so many elements and it it's you know easy to get wrapped up in in pretty packaging but what is pretty packaging mean if your product arrives damaged or if your product can't make it through you know say it's not heat resistant and you know and spoils and transit or something like that there's so many ways in which things can go wrong so you know supply chain it's one of those things that oh often gets overlooked but is so so important when it comes to actually turning your brand into your business and into like real revenue that's able to scale and grow month over month over month yeah and there and there's incredible creative folks that we get to meet with on behalf of brand sometimes their in house sometimes those are outsourced groups that have a brilliant ideas and and i think our team gets what the vision is we come in on the execution part okay so you have this amazing idea you have the market research you have the pain points you you understand why this product will be well received but how do you actually get it made you know and have you make get it made in such a way that it's a sustainable business from a a fiscal point of view because there's lots of folks creating a lot of products that are losing money and and fundamentally in business that that doesn't last very long so we look at it that way but there's also the consumer experience the end user is really the the ar of how you're gonna do as a business so we have to always keep them in mind in the decisions that we make and while we're not gonna speak to oh you should change this color on the packaging to this because it'll sell more we could speak to if you put this out or finish on the packaging it will be less resistant or more resistant to to sc as the the unit is moving through the supply chain and the end result will be what you want and just being able to call out from the mistakes of others for any brand that's you know going through it for the first time second and third time founders or some of our favorite people to work with or first time founders that have tried and have experienced some some challenges they seem to understand the value of the service that we provide yeah and i think another thing i remember the first time i i met you a part of supply chain is knowing how to avoid and navigate and and avoid the mistakes that you know oftentimes for other founders would be in inevitable and oftentimes challenge the success of the business but like other times it's also just a matter of speed right like for example i i remember the first time i connected with nat i was working on developing a product in the supplement space and i saw another brand that had amazing like packaging and i was like i could look on google all day to try to like find like how the heck do they do this and i remember i'd talked to like different packaging suppliers and they were like oh well maybe we can kind of get there maybe we can kinda get there and then i was chatting when the ton and i was like hey ton do you know how you do this and he's like yeah i know the manufacturer they're are the only people that do it talk to them right so like and just being able to like save that time and be paired with the right person for the right job oftentimes when it comes to you know things like cp g or d is is so important because like you could work you know tirelessly on an iterative cycle with someone who can't pull something off versus working with someone who's done it who knows how to do it and is gonna get you the result that you're looking for because inevitably in this space when you're building your own brand there's things that you want custom there's things that what you want unique to you and you know knowing where to go to get those things is oftentimes so important as well well and and one of the biggest challenges specifically in supply chain for the d space is the best providers and it could be your primary or secondary packaging it could be your manufacturer of the products it could be your logistics partner your fulfillment partner some of the best providers don't advertise their services because they don't need to because they're good and other people tell other people about them so if you're a brand builder how do you find them and and the flip flipside is also true that some of the less ideal providers are some of the ones that are promoting their services the most so there's this this catch of well then how do i find the right you know fill on the blank manufacturer for this and we still as a company continue to discover these gems you know across the us and even globally that have been doing this work for many many decades quietly focusing on the quality of the service and yet we've never heard of them until we've heard of them and it's about building that network and vetting it because it'll it's always changing so a particular packaging supplier could be your go to and and three of your contacts said this is who you have to use but something could be changing within their business almost by nature it will be changing how are you vetting that and how are you paying attention to that and that that's the added challenge to navigating this whole c so on the one hand you know the the best locations are uncharted right they don't show up on a map and you have to find out through word mouth and then secondly it's always changing so you have to you have to navigate those challenges and unfortunately a lot of brands get burned by that where they're just they're misspelled and it's not that the the vendor of the manufacturer is bad it's just a bad pairing either based on need or timing or people in the way that the ask is described where there are assumptions made or misunderstandings whether it's to do with lead time or quality or as you and i were talking previously about a product actually pouring out of a bottle because that's the whole purpose of the bottle maybe you could tell that story better but yeah that's i think that's the challenge that's also the fun for us so we're constantly looking to chart who are those best in class providers and then build a relationship with them understand what's happening in their world so that we can pair them with the right brands because then everybody wins yeah and that's why i think the the agency model in this space especially for you guys like on being able to be an agency that helps with supply chain and ops is is so exciting it's because like at the end of the day agencies get reps right like it's like if you're a marketing agency you're gonna see the strategies that are performing across multiple different brands what are the creative formats that are scaling what are the best things to do what's happening and your fingers on the pulse because you're not only like putting reps up on the board time and time again on one core competency you're seeing that across multiple different brands and it's the same thing on the supply chain side right like you are real time you know the network of suppliers who they are what they make and what their outputs look like in various different products and that helps you guys bring different brands you know forward with with with a lot more speeds so that totally makes sense to me i i think what would be cool to do i definitely wanna tell the story that we were chatting on earlier so we'll we'll get there a little bit later but to start i'd love to just talk about you know what it takes to so bring a cp g product or you know a d c cp g omni channel style product to market you know who are some of the players involved from you know the the manufacturer to the c packer to the three p l like who are some of those players in the space what roles do they play and what do you need to know as a brand as you're starting to you know bring your product to life from a supply chain point of view yeah i mean there's there's the nuance of what the industry vertical is if you're bringing a frozen food product that's very different than bringing an apparel product to market for obvious reasons but no matter what regardless of the product type and industry vertical the thing that you're trying to sell to the end consumer has to be made and it's made of things right so we we call the the finding of those things the sourcing and the making of the product the manufacturing and and even the words coma man contract manufacturer contract package those are misunderstood even within the industry somebody gets the product made from its parts or raw materials into the way that you know the end consumer is is gonna see it and then there's also the distribution piece well who's gonna get it from the factory that manufactured it to blame the end consumer and in some cases the factories have their own fulfillment capabilities in other cases the brand founder themselves is fulfilling out of their garage until it makes sense to grow to larger scale but those are really the main pieces getting the thing made by you know either sourcing or having your manufacturing partner do it then getting it moved and distributed and and arriving at its final destination the way that it should doing so in a cost effective manner without sacrificing quality price or time those are the the levers that end up getting moved as you're making a decision as a brand founder so are there ways to get things really quickly yes are you sacrificing the quality often yes in some cases the price yes you pay for that expedited service so really understanding what's most important for the brand and and when to pull certain levers is the key a lot of it depends on the brands cap table if you will is this just blame a founder by himself and he doesn't have to answer to anyone or does he have a list of investors who have you know given them the capital to bring this idea to life and therefore there's some additional pressure so we take all of that into account before we ever were to make any kind of recommendation for the brand and i think that's so important what you mentioned is like there's different companies that are on different trajectories right like if and and i think one thing that you said from the out the from the get go is like we need to align on what well the founders idea of success like what are they in it for what are they trying to do are they trying to you know build a pretty side hustle that's spitting out you know a million bucks a year are they trying to scale this to be a category dom that has the ability to get picked up by year or go public like where what is the scale of the brand and in order to achieve that like what needs to happen on the supply chain side to to to to make that happen right and rightfully so we have some founders that weren't really sure the why or or often it was driven by either they had an idea they saw white space that they they felt like they could solve for or they had a product and people said this is really good like their community essentially said you should bring it to market and we had some clients that had a second full time job if you will and this was sort of a side hustle but then it picked up steam and i'm thinking of two really amazing brand builders separately that kind of came to us at the same time saying i'm gonna quit my other job this is like we're going all in on this and it was very exciting to see that happen in both cases but they're their why was rooted in you know initially solving for a problem but they weren't really sure where it was gonna go whereas there's others it's very clear i wanna get to hear by this time and you know twelve months later go into retail and this type of retailer and and they're hyper focused both can work both can be challenging and a lot of it depends on things beyond their control yeah i i i'd love to talk about because you've seen both sides of the coin right you've seen these businesses that are almost like bootstrap they just kind of chug and chug along they become super profitable and you know they're they might be growing year after year after year you know ten years on just spitting out crazy prop it versus the ones that are like planned everything's coordinated to a t scale up we're gonna be in retail in twelve to eighteen months everyone's gonna know us massive brand campaigns a lot of capital so maybe why don't we start with but the latter and then we can go to the former so you've seen these what does the playbook look like how do they set up their supply chains how did some of these top in class d brands how do they scale what does it look like what are they what do they have to prepare for how much are they investing into inventory and supply chain and being able to get everything right to scale like that i think in in those cases they're spending a lot more than people realize both in their time and then obviously in their capital and the the fall is from much higher because of that so the pressure is much higher being paired with the right partners having realistic expectations to timelines because the challenges if we go back to that description of you need to find the stuff and then get it made and then get it moved you don't do it necessarily in that order some of the things are parallel paths so okay we know that this is the formulation or these are the ingredients great but who's gonna actually make it how do we know that they're gonna make it to our standard what is the packaging and the look like who's gonna fulfill it it it's it's not one behind the other they overlap because in some cases it's reverse engineered this needs to launch by this date and you have to back into that and say great you have to make a packaging decision by this time like sometimes the artwork and the the stakeholders of the brand agreeing on that it is what can hold things up so in a sense it's harder but it's also easier because there's a set deadline and as you know most humans work really well with deadlines and if it's vague and oh it's kind of this thing i'm doing on the side it it can be a little harder for people to get motivated to make important business decisions i think that's actually a really interesting point i i hadn't thought of that as it pertains to supply chain but you're right i think that i forgot what the name of the principle but it's basically like however much time you allocate you'll just expand and you'll take that amount of time to make that decision right and sometimes you know that procrastination we can be good you'll get more inputs and you'll have more information to make a better decision but other times it can like slow you down and that can slow down other cycles and things a process that might you know only needs to take three months can end up taking a year right so i think i think the timeline piece the the the time piece is actually one of the least understood part of supply chain management where we we've seen it on both extremes where people say hey blaine nice to meet you i wanna launch this product in one month and you say look that's gonna be very difficult because it needs to be custom and we need to source this ingredient that isn't in stock and we haven't designed the packaging yet and we don't know who's gonna make it so that's one extreme on the other hand we've had brands come to us saying yeah but i heard the lead time to get the you know this part of the process is this many months and it really isn't it's like two to three weeks and so people are working with false assumptions on time and that that's been the fascinating part for us where people do their research and it's just not necessarily true because on the raw ingredient side there is an issue of like i can't get it made if i don't have the pieces i need but on the actual manufacturing some manufacturers will say nope our calendar is locked and like we had a manufacturer last week say we're not taking on any more clients until january of twenty six then there's other manufacturers that are flexible and are able to move their production around and they have enough capacity that their quoted lead time maybe ten weeks but they could actually get you on a production line in two weeks and it's figuring out who those folks are and when they have that capacity and utilizing that to your advantage that's the part that i think so many brands are just not aware that that's possible and it has to do with the way that brands are asking questions of their supply chain partners so if i go to you blaine the manufacturer and i say what is your mo q what's your minimum order quantity for this product i wanna make i'm actually asking the question the wrong way instead i should say blaine i would like to make this many units are you able to quote this for me so i'm now priming the volume and if if you know for a fact it's well below what you're willing to do you will share that and then i'll follow up with well who do you know within your network that i should speak to that you think can help me to get you know three thousand units made whatever the small amount is and they often will have a partner to refer you to knowing that you'll graduate them at some point and be the right customer for them and therefore they were helpful but if you say what's your mo q and they say fifty thousand and you need five thousand made you never really get to meet so it's all in how you ask the question and as it relates to time you could also say well what would it take for me to have this made in ten weeks and you know after the the jokes and the sarcastic comments are made you really get to the brass tacks which is okay so what needs to happen and if they say you need to approve artwork within forty eight hours of getting the okay great but you phrase the question that way and a lot of these obstacles start to get removed and and you have to stay relentless that way and say great so if this particular type of packaging doesn't pour our product out the right way then what do i need to do to get it to do so instead of just accepting your fate i think so many brand founders we see this with three p providers where brand founders tell us my three p provider is awful but you know what can you do and we think to ourselves we know some wonderful three p providers that would would love to take care of you would won't introduce you to them they just don't know each and they've just accepted their fate as i guess that's how it goes in cp and i we refuse to accept that because we know there's some excellent providers out there right i love that i love that in terms of just like framing the thinking because like you're saying when you're thinking about the mo q you're almost putting that out into the world because you're assuming that's what the you know your partner is that's how they're evaluating the decisions as opposed to just sticking what it is to you need and seeing how to get it done so i think if there's one actionable piece of advice like i love that is just like leading with a what it is you're trying to accomplish see if they can do it if they can't who else you know that can accomplish it and if they can but they've not at that timeline well what would it take to get it done in this timeline maybe there's a no but at least you tried it and you've you're the gone down the right path exactly right i mean most people don't know this but like the higher level the restaurant that you go to with a few exceptions you can ask for something that's not on the menu they can also say no but you can ask most people don't realize they can ask you know some menus will say no substitution okay certain restaurants want your business and they'll prove their value by saying yeah i can make that and if you go into it with that mindset that you are the customer and you are essentially voting and choosing with your pocket book by being there and you have choices to be elsewhere the right restaurant will decide to take care of you and there are there there are some except options where you know you're trying to get something made and there's only two manufacturers globally okay you have less of a buying power at that point but in a lot of the categories that we play in there are multiple choices and those manufacturers know that that you have choices so why should you go with them it it's really their account management is better you know the way that they they treat you and follow up their lead times are better their quality of the product that they make and how they check is better where their price is better but that's really it and i i think that's another actionable thing for a brand founder is to remember you're the customer and and i i i think the the saying is don't ask don't get right like if you don't ask for it you're not gonna get it actually mouths cold mouths don't get fed exactly i i actually i have a funny funny example of that which is again more more on your like restaurant example but i have this friend who went out to dinner and she asked for like the dinner was over and she asked for she said and we'll have a round of complimentary to tequila shots and we're like a round of complimentary i was like that's a bold ass and and the the waiter was like sure and like was around a complimentary to tequila shots and and i was like oh that's that's a bold ass but i was like i guess don't ask don't get right so yeah it applies to this this this world as well okay moving forward i wanna talk about you know you've seen this happen time and time again with a different brand you have different perspectives so i'm gonna throw this one on you i'm gonna let you pick the category of brand let's just say you're starting any type of brand it can be in you know the food space it can be in the gummy space apparel space you pick right i want you to walk me through what you would do if you were launching this brand today what you would do as it pertains to like you know figuring out and solving for your manufacturing solving for your you know your c packing or or whatever it takes to get it packaged and solving for your fulfillment and let's use the example of you know let's say you're not fulfilling out of your house for the moment just because we'll just assume that you know it's it's more of a more scalable brand new brand does not exist yet brand new brand doesn't exist you wanna bring a product into the market it can it doesn't have to be a completely innovative product it can be just a a different variation that you're putting your spin on but how do how do you do it what's the product how do you do it yeah so no matter what the theme is the same if you're thinking about the sourcing or the manufacturer or the fulfillment you have to think like those people so if i'm thinking about the fulfillment piece of this product that doesn't exist yet and i think like a fulfillment partner what's the most important thing for a fulfillment partner it's three things like during what is the thing and how many varieties of it do i have the skews and then how much space is it gonna take up how long is it gonna be here am i gonna charge you storage for it and then how many units are you gonna move through what's the churn rate gonna be like so if it's a brand new product everybody understands that there's no data on it yet it's so much easier for us to find a right three p partner if there's actual data oh they're moving thirty thousand orders per month three p get excited about that number oh it's a hundred thousand orders per month they get really excited about that it's a brand new product okay do you have any kind of forecast and they have to then build that into the contract so i i would keep that in mind on how fast am i planning on moving this product and that would then determine the type of three p partner i would go to and and maybe let's let's actually pause there like yeah i know we wanna do this but i think three p l and what you just said is like super important at what stage do you think makes sense for a brand to go to a three p oh when if i if i can do the fulfillment myself like if my significant other isn't gonna kick me out of the house because we have boxes you know moving in and out i i would try to do that myself first for a number of reasons one is you're the last to handle the product before it gets to the end consumer you will then have a greater appreciation for what three p have to do you will see how you're manufacturing partners are sending you the product so you're able to essentially qa and qc their work and and again i think you're you're closer to it i've seen brand founders that do it themselves and add handwritten notes they create content around that so so it's great it's not sustainable beyond the certain size unless you have we have a couple of clients that have access to space and labor and processes but others don't like through other businesses of theirs but ideally i would do it myself if i could i would even say the same other manufacturing if i could one thing that you just called out that i think is so important if you're handling yourself is what you just said about being able to q in qc the product right like you know we were just talking about the example of an olive oil bottle that doesn't pour properly because of the cap when we were fulfilling directly right like my wife when she's to filling directly you know we've got bottles we open them up we're pouring them out we're do them all the time then we assume that everything's gonna be good for the next batch and boom guess what all of all doesn't come out of the cap and that's something that you would catch when you're physically being able to handle your own product you see how they should be packed you understand that experience that the customer's getting now we're we've i think i believe we transitioned out into a three p when we were doing about i think about fifty orders a day it started to get like kind of like okay like this is you know time to time to go but but having that i think everything you're saying was like spot on in terms of too close to the customer in the qa and qc part of that customer experience i mean if we have clients that do a thousand orders a day and do it themselves but they have a a small team one of them even created a a content creating studio within the space because they realized it was right there and it was great i think there's definitely like a hustle and a respect piece to to them doing that at some point it gets to be maybe not as manageable there's also if if the product that i'm selling is like i'm looking at a a a tool that's sitting on my desk right here if it was just that i'm a little less concerned about what you just referenced so it it really depends on the complexity of your product we have clients that there's like a welcome kit that the consumer gets and then subscription model where there's a refill kit and they really wanna make sure that first impression is right or how do you handle returns do you do that yourself you have a partner do that so there there's nuance in every single step of the process that then should determine the strategy we actually work with brands that that say okay at what point should i outsource it to a three p l and then at the opposite end of the scale should we open up our own operation because they're dealing with you know tremendous volume and it just makes sense in some cases they even go in on a joint venture with their partners and set up shop where they put their brains together but when is the signal for that is is is really the essential question and the answer is it depends right how much capital do you have available your quality of life you know we work with a lot of founders whose families are growing right and then i've gotta get these boxes out of here i have a toddler running around the house you know so that that drives the decision even though fiscal it would make sense if they could still do it themselves and i'd also i'd also love to hear about your experience with different three p so like i can say you know we're we're working with the three p at the moment the experience has been awesome like they've got processes they can build complex workflows even to the point where if a customer order like say you know package arrives damaged they literally have a video of every package that gets packed and they'll send the video and be like here we see exactly like what happened and like to me i'm like wow like that's good that's not even something that i would have set i wouldn't even have these processes set up if i'm doing this operation you know myself in my house so like yeah i think i think the three p are actually leading in the supply chain on how they've blended tech and tools into their processes and it's probably because they've have to because they have in in a sense one of the hardest jobs because if they don't catch it the m consumers catching it we've seen some really interesting vision systems with some of our three p partners and ways to ensure that every order that's picked as the correct order there's some that utilize third parties to audit them which very few three p do but but again at the forefront of like tech meets cp g it's really happening at the three p sends and probably happening the least upstream at the sourcing ingredients right there's not a lot of tech enable some of the manufacturers are there is some interesting uses of systems and connected systems a real time inventory tracking is a big problem for brands when you're utilizing you know multiple nodes how do i know how much i have because i'm moving lots of orders every single day and i need to order more and that takes time how do i ensure that i'm not over stock or under stock and so there's a few manufacturers that are creating you know customer inventory portals that allow the brand at any time to get a real life snapshot of what they have and where it's located so i see the three p leading the charge and hopefully other folks in the supply chain following suit because it makes a big deal we've seen three p that have optimizations based on the weather forecast of where the product is going to there's one three p partner of ours that we'll do that for products that are maybe temperature sensitive that depending on the time they will say okay we need to pack this differently and it needs to travel differently in order to ensure the quality so that's really cool in in our minds of how people are utilizing technology that way oh absolutely and let's so let's talk about you know let's go back to this brand example so again you're picking whatever type of of brand is you wanna be doing we just talked through three p which is the fulfillment side of things but like let's talk about bringing this product to market like what are some of the considerations that need to be made between manufacturing the product and the packaging and then the three p right because like if you think like even in this example of like the olive oil you've got the manufacturer who's putting the olive oil in the bottle then you've got the you know the the c packer who might be you know if you're importing yourself maybe you do the packing state side maybe you actually have to deal with importing something across the border paying a tariff on it differently there there's a lot of different elements that are happening now in the supply chain and then you've got packaging which needs to correspond to the form factor of the product that you're selling like in the examples that you just mentioned you said a lot of brands that you work with they wanna do you know first number or first they wanna design a kit for the first order and that's gonna be different than the refill or whatever but all of those now have contingencies based on the product and the form factor that's used the product right and then that yeah geography geography part and then ultimately those are the things that make their way to the three p so when the order comes through the three p assembles everything and sends it out the door so what looks like a really simple experience there's actually a lot of contingencies and variables now in this equation so you know your brand you're setting it up how are you thinking about things to make sure a you're avoiding pitfalls at the manufacturer and packaging level and that you're able to get something set up quickly and and out the door and and i'm purposely skirt around the pick the product exercise that you're asking me to do because by picking i'm sort of choosing a elaine and so if i think about the product that you you held up a moment ago that's you know an oil and a glass bottle that's heavy i think about the strategy differently than if i have ten grams of powder in a single use packet because i may be able to move close to a million units on a full fifty three footer container of a finished product in that that powder format whereas for you maybe if i'm lucky i can get fifteen thousand units so now the cost let's say it cost five thousand dollars to move a full container across the united states that's way more impactful on your cogs in in your bottle example than the powder example so you're right it's those nuances that really matter and should i make it overseas and bring it in again depends on what the product is we we had a client that was sourcing their cor from overseas and there was there's no reason to do that there's fantastic options here and generally you wanna source it within you know less than two hundred miles of where it's gonna get packed because otherwise the freight doesn't make sense right and it's it's a bit upside down and you have options so i'm i'm looking at i i have thirty different types of products here across my desk and each of them has their own nuance some are cold chains some are heavy some are light some have a shelf life or barrier issue some it's time to customer that's the most important thing because it's perishable yeah some it's just strictly a geography play the the brand just wants it to be easy and yeah i don't know that i would launch a brand you know what that's why i would say no yeah what you do no but i think when one important point that you called out maybe the right framework could think about it is rather than you know starting with it like start with the little things right like what are the most important things like what are the scale you're at what's your form factor that you're dealing with and where should you be getting that product from because that's something that's even important right is it something because you know you can get products overseas that are a lot cheaper but now you're dealing with tariffs and you're dealing with freight right and freight get and time tariffs freight and time right and or do you look for sourcing that's a little bit closer to where you're packing and the crazy part about what we're just talking about is sometimes that equation it starts to flip right where in the beginning maybe it's cheaper but like as you scale like now these now these things really matter and you're like wait a minute i actually why am i sourcing this internationally and paying all these tariffs in this freight when it looked good to just you know test a couple units maybe that equation doesn't look the same you know as you begin to scale out well that's that's the key that you just hit on which is you have certain understanding certain assumptions but your business should be evolving it's rare that a a consumer business is the same all the time forget just seasonality but just in general if it was the same all the time it would be way too easy and that's just rare there's very few businesses that say that's static and and those that do are either hidden gems or it doesn't last as long and so it's gonna change and that means you have to be looking at it all the time and as a brand founder asking yourself k what assumptions that i've made in the past are not true anymore that i need to revisit and you have to lead with curiosity and some of the most successful brand builders surround themselves with people that they deem to be quote unquote smarter than them that are gonna look at things differently that are gonna challenge their assumptions as opposed to just being you know yes people that say yep that sounds right get it made overseas and bring it here so we don't have to think about it and when when you start to challenge those assumptions you find tremendous amount of cog savings time savings quality savings across the board and it's always gonna change that's the the frustrating and the exciting part of of doing this now if you're just in it for a short time yeah you can pick a pick a lane and run with it but a lot of the brand founders we work with are they're playing the long game and so they wanna strategically evaluate it and and when should you do it you can't do it every day that's madden but you also can't do it once every ten years and so it's finding that right balance of when should i revisit my assumptions about my packaging materials versus my manufacturing partner versus my three p strategy like when should i move from having just a single three p location to two when does that make sense and and that's where i think our our our team because to your earlier point we get so many shots on goal and so many views or are able to speak to that with with greater confidence one thing that i'd love for you to you know share was when we were chatting offline you were telling me a little bit about your theory that you know the reason supply chain it's so great is because it's so hard right it's not something that everyone can get right so now it actually if you get it right it creates an opportunity for you as a brand and a lot of times it's not just like oh copy paste whatever someone else is doing and it works like you as a brand can actually build moat and leverage and scale with building your supply chain the right way i mean i i get to work with the brand a long time ago that went to a retailer and the retailer looked at the product and said i don't know where to place this there isn't a category for this on the shelf well nowadays the brand created that it's it's it's a whole section of that that store and knowing the brand founder and the team that they put around them how they overcame that challenge also was their biggest advantage they had such a head start on everybody else that they became the category leader in what to some people looked like overnight but it was really a many year journey of overcoming those challenges when they had something new those that have come after them and and tried to play in that category had some things much easier like getting into the retail was easier because the shelf now exists specifically in the location in the store but they now had to compete with more people so if it was easy it would just be the folks with the most amount of money that would win but we see all the time that these big big organizations are really slow to make a decision really slow to turn and to pivot and the really lean organizations that are una afraid to make a decision and to do so quickly can get leaps and bounds ahead of them and sometimes get acquired by those bigger folks like that's their that's their growth strategy is to just acquire the innovative brands so there's there's plenty of room there i think for that yeah absolutely and nit we kinda wrap up here you know i'd love to i'd love for you to share any other major like tips or you know pitfalls that you've seen that you see time and time again that you just think it's like really important for you know brands or brand builders to be looking out for as they're thinking about their supply chain like what are the things that you know maybe or obvious to you now but like for that first time founder you you see it time and time again where it's like oh man this is something you just you gotta avoid be there any person just be there in person if that's your sourcing you're manufacturing your packaging your fulfillment be there in person there are humans involved in the process make the the interactions relational rather than transactional and those are the brands that that get it and those are the ones that then miss it they miss it because of that aspect they think it's just a transaction but there's humans involved and if the humans care about your brand they will time and time again rise to the occasion for you and and be those great partners that you wanna have so people say that all the time like we wanna have a partner not just you know a business relationship but show it in your actions and and try to understand the world through the different supply chain partners world and through their lens and and ask them like what is it like to run a three p like what are the headaches you know the busy season is coming right now for for all of them they're all prepping for that in into q four and into the beginning of the new year what does that mean and and the end of the day these relationships are are based on emotions and people wanna work with people that they like and that includes their customers again if we come back to the restaurant example there's that you know older couple that always comes in on wednesday mornings to the diner and the diner goes out of their way to like reserve their favorite booth even though nobody else could have a reservation it's like it's it's based on that and how do you get that type of relationship they didn't sign a contract to get that booth but there is something in how they interacted with each other that made everybody look forward to seeing them and they became part of their family and so how do you do that with your partners and that's that's the tough part yeah and i think that that one is so spot on because like when you're in this space you something's gonna go wrong in some part of your supply chain inevitably like pretty frequently actually probably so you're gonna these are the people that you're gonna need to call on whether you know there's a delay in shipment from one and there's a contingency that you're waiting on you had a scheduled production and one item isn't there you need to move production up because you know some other thing went missing like there's gonna be something and i think to your point being there having the established relationship with the partners that are involved in every step of your supply chain is gonna be really critical when you have to call in that inevitable favor that you're gonna have to hate to ask and they're gonna be like screw this guy i don't wanna hear from him again versus like okay like i get it this makes sense like these guys have been great with us and we're gonna step up to the play and make this happen yeah exactly and and think of it like a relationship not like a transaction and the world becomes a little bit simpler to navigating i love that still difficult little easier well appreciate you coming on this was super fun nerd out about everything supply chain we'll have to have you back to to to go a little bit deeper but in the meantime for anyone who's looking to learn more connect with you maybe chat supply chain and ops with you and the p logic team where can we connect where where can we find you why don't you shout out your socials your contact info any of that p dot c o is is the website if you go on there there are ways to get a ahold of us in there you can fill out the contact form we'll get it immediately and either myself or john will respond so yeah looking forward we're on linkedin as well i have a strange enough name that i think it's pretty easy to find and just looking forward to helping people there's incredible supply chain partners out there they're just busy doing the work and we'd love to pair them with great brand builders because that's really what they need for their business love it love it thanks so much that's anton thank you take care bye if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d n nba joined follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

this is d pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linked in the show notes and now let's get into the pod what is going on d pod today we are joined by brent var who is one of the two managing partners of bullish i'm really excited for this con today because you know we obviously cover a lot behind the scenes with founders and how they're building their brands but today's conversation is gonna take a slightly different approach we're gonna be talking with brent from the venture and brand kind of marketing side of things so bullish has a really interesting model they're you know one part branding agency one part venture sort of fun so and with all the things that have been going on in the consumer landscape i i just thought we would have to have friend on for a chat so brent without any further ado why don't you give me a little background about yourself and what you guys do at bullish and then we'll get into things awesome thanks thanks wayne it's great to be here thanks for having us on and a chance to chat love this subject love what you guys are doing i think d in general is one of the things where i think a logical think it is one thing and it could be lots of things and and it's it's it's got it's got its fans it's got its d tractors it's it's a great space i love you guys specializing and this stuff yeah i'm i'm brent i'm one of the c founders and managing partners of of bullish and i got my start the joke is that i started media it's true but it's a it's a long joke but in media advertising in ninety nine at like the last great date technology and influx influx or change or inflection point the dot com era but i started an advertising agency in san francisco and very quickly discovered the the discipline called brand planning which was disappointed advertising invented in the uk and brought over hanks like four or fifty i should know this forty or fifty years old it's an awesome discipline and you're really you all you do is you you learn how to do research qualitative and a quantitative research and you could give them problems by big huge fortune fifty companies and your job is to figure out really what's the right needle of the thread between where consumer and culture is and where commerce in the company is and how to point creativity into it so i did that for years and years and years and years and moved to a couple agencies bb being one of them one of the biggest worked on all kinds of brands fortune fifty brands and then met mike my cofounder at deutsche and had a great run there for about eight years and that's really the infection for bullish really started it was two thousand and eight and mike had an idea about moving moving the agency further up stream and all the applications that was followed for that and i love that idea so i i started to hang out with michael lot and yeah i think one thing i probably should've have mentioned in the intro but you know you guys aren't just or another agency or or vc you guys have been involved with some of the biggest brands in the consumer space so you wanna shout out what some of the companies you guys have done and been involved with our we were first money investors in peloton and war parker and casper and harry's and care of and hugh chocolate and no foods those are some of our our best investments though we are still active investors in some of those we've executed some of those the we're investors in bubble we're investors in bandit it running we're investors in someday long and investors in daisy which is a super you know it's a integrator of super high end technology systems in people's homes and spaces yeah we we were fortunate being in the right place at the right time when when d was coming to life in two thousand and eight two thousand nine two thousand and ten and some very nice people and in the traditional venture venture world brought us into some deals because they thought we could add some value and turns out we didn't disappoint and so what did what did that look like right because like you said you guys do have a unique sort of value prop where you guys are you know part you know branding agency you've got on an understanding of like the market where things are going planning all of that sort of stuff and you've got the capital so how would you characterize your guys like as a fun how do you guys think about things what what's your sort of like differentiator and how are you able to you know odd value in in the space to so many like of the the marquee sort of names yeah well i i think it's safe to say that bullish is the is the only consumer venture investor form that's built by by marketing practitioners so we're the the only only consumer only venture firm that has like marketing practitioners that are still active for practitioners in in at the gestation stages of this stuff and what what that gives us is that this this distinct distinct set of expertise but because of our business model it's it's actual capabilities that that can be turned on but what we're trying to do is we are we aren't really trying to help these businesses become really strong brands and not a lot of people are thinking that way have you know a couple decades of experience building brand value and are able to kind of one put their money where their mouth is two actually pick up a pencil and three follow it through and kinda of be in the robot with you on those things so that that's been really valuable to lots of different people and and some it's been valuable to harry's when we sat with them and you know jeff any started the company inside of our company for the first first year me in the same space and we had weekly office hours with them and started shaping the brand strategy for what would be not just the launch of a shaving brand but the guys wanted to talk about how they build a hundred year business in packaged goods and the those whiteboard still are there today i just got a note from the guys when they release their their latest their latest blade and razor and it it brought actually been me very very emotional because they were referencing back to some stuff we did twelve years ago warmed my heart and it's that kind of foundational strategy work that really can make a a big difference apparently the no no we've we've helped no no where we did some nice strategy work for them too and then they went offer about eighteen months and then they were raising some more money and the new investors coming in we're all talking about as as were we as were they about the brand is unrealized opportunity for them so we came in nate and and the rest of his cofounder came in and they they tapped the agency because they knew we were totally invested in the outcome to do a complete brand overhaul we changed the company name from no no to no no we made the brand pivot away from all the care and love that's in the category because was there back to this product point of difference which was ours which is about these great recipes that may turn adult dogs in the puppies again and we talked about living life at eleven so we change the whole like identity system to represent that vitality and that energy and the minute we released that sales went up seventeen percent nothing changed except the brand sales went up seventeen percent and then you know we went back and then we got callback back in and do some some work for some top level advertising kind of top of funnel stuff so it's those kinds of things that have been really really valuable that are about the difference between having this this venture firm that is built by marketing practitioners that over the years have have way more successes than failures and have learned a lot and can give a lot then we're able to start really putting into practice the idea of not just building a strong business but building a really strong brand yeah and that's one of the reasons i was super excited for this con because there's is a lot of you know really good vcs and investors who can see things from the investment side but you know when it actually comes to getting it their hands dirty and understanding what it takes to scale what it takes to brand what it takes to position like they've got sort of they've got their own insights and opinions but like they haven't really maybe done it themselves so i think that's something that's really cool that you know you guys are able to do one question that i had about some of these brands and when you guys got involved what was like the status like what stage were they at in terms of you know how i know you had said sometimes you guys were first money in other times maybe you followed along a little bit later but overall like at what stage does a brand come to you right is it or is it when you know they've got an idea they've got serious revenue traction they've got a little bit of revenue traction they're you know like where is it that you guys think you can add the most value and you guys are the best fit and you know where did that happen for some of the the big wins that you guys have had in your portfolio yeah for all for all the wins and i could maybe add something that for all the wins it's it's when we got in it first money and that's a big part of our thesis thesis of our fund is to go very very very very very early in consumer venture and there's a big distinction between the consumer venture that we do and the consumer venture that silicon valley does and the consumer venture that you know get covered is covered us that the consumer adventure that we and i are talking about is really gt and that's that kind of stuff but it's always it's always early so the it's the first check or the second check in the first round yeah and that that is where we can add the most value the the point being is is at that point we are talking about brand strategy and we are talking about brand strategy as a a growth mechanism and when when we sit down and we start talking about those those things if you start talking about what's your man on the moon by end of decade and what what is it we can't give that to you but we'll help you bring me out of yourselves and it's essentially a an objective it's a big visual emotional objective and that's what we're trying to do in five years or seven years or whatnot so what are we gonna do to get that from a to b and then how do we go to market in an interesting way but isn't just dependent on trying to work the c machine so that that's a that's a really important thing when with helping the brands go to market in a much more holistic way way thinking about okay what are all my behaviors and how do they all work together not just about targeting and that that's that's a that's a big big differentiator on that stuff so it's it's coming it's coming very very early and we can help set a larger or more sophisticated playbook for going to market that has a series of tactics not just you know not just one or two things and that's that's where we we wanna play you know our our first checks now are somewhere between half a million million five in rounds that are two or three million bucks we will go earlier in in some occasions we're not really worried about revenue really aren't the we're kinda just worry worry a little bit about proof of concept not even product market fit i wherever someone's definition is it's just is this a good concept and i think that's the thing i'll i'll cap this in a second but i think that's a thing that is really important about going really early in consumer is and i say it's humbly we we've spent decades looking at ideas at their at the with their tiniest stages and that's what a business is it's an idea and seen how it can play out is a skill that you can absolutely learn but it does take some repetition and i think that's the way we look at these businesses is there wonderful ideas and i think we humbly have a set of of techniques and tools and expertise to try and play it out and to see if this is what culture wants and how this could go and how it could be really really different yeah and i think another thing that's interesting it's like when you mentioned the brands that you guys have been involved with it feels like from at least from the consumer's perspective that there is like this this thread that like you know kind of connects them they seem like they're in spaces that are like really big markets and the brands themselves are very you know very different to they're they're mixing things up versus what the status quo is but they're doing it in a very like professional way i'd say in a very like smart way as opposed to just like gonna be different for being for the sake of being different you get what i'm saying so are there are there any things that you would say like you know when you saw some of these brands come to you early like what did that sort of that strategy and that road map and that planning sort of look like and i i'd love if maybe you could pick one of the stories and we can just kinda walk through what it looked like for like seeing that brand come to you in terms of like you said super early right and then what does that growth journey look like because a lot of times when you know people really i mean now things get faster and faster where maybe a brand can you know grow up in like a year or two but like you know for most successful brands it takes a couple years to like really reach like peak household saturation name recognition all that sort of stuff yeah if you could just like walk us through that timeline and that experience of how you'd seen one i'd i'd love to kind of just get that you know sure that perspective sure i love that question i think part of what's in that question is an understanding around what what we think is really like a strong brand and like what we would call a household name i think when you when you look at it still getting big kinda household name awareness is extremely hard it takes time you might be able to spend into it but people would forget so like if i think you'd be shocked to see like if that we run numbers on awareness and for some of our oldest brands that should be the most popular they're still pretty low you know like so i think what what we start talking about when we think about a really strong brand and maybe this gets our definition of product market fit and i'll get to some examples of that that which is just you know for us it's it's we're way more oriented towards customer lifetime value and we're way more oriented towards repeat and we're way more oriented towards n mps and we're ray more oriented towards our own metric we call market index and what what we like is when you have a a really rapid customer base and they're working for you on your behalf that means you have so many things going right for you it means that you have an incredible product it means that you have exceptional service exceptional service means you're incredibly responsive and with the next products you make with the way you market another thing with the way you respond to a problem and that stuff that stuff's really great so some of the stuff that we start with that we see some some examples of how you know oh how do we get to that that kind of point i think when we look at a a company like sunday long for example sunday long comes in you have an amazing founder in and culture i've talked about him a lot but you start to see that he's working on something from a product standpoint he's he's got a great mine for culture and he he sees this tailwind which is the that you know are moving out of the out of cities and they're bringing millennials are they're kind of biology taking over and they're bringing their kind of metro dynamics into the suburbs and they're like what can they be better and then this is pre covid and you see this kind of you already see this migration into into secondary cities tertiary cities and things like that and he starts to buying a better way to to take care of lawns and it starts with an like a very high friction process of doing that stuff and he proves that that can be done that you you can do a process and he can make a product that's like not toxic like crazy toxic for your lawns and stuff and your kids are playing on it and that can create a really powerful relationship where people come back and then can go great then then like on that platform of that relationship what else could we do what other their job could we solve for them oh maybe pests oh maybe how to how to actually plant and put things on there that i have to take care of it whatnot and now what sunday is a is a pretty interesting platform to do that stuff and i think culture culture and his his founding team are really really strong we are the advocate in the room in that case where we're like this is a very strong brand and not doing it not taking short term term ideas about chasing low cost c but investing in in essentially acquiring expensive customers that we know will have a long relationship with because there's other things that can be done for those for those people some of it comes down to jeez i think harry's harry's was was interesting you know when you when you start thinking about what we were doing it it was a pretty easy proposition quality shaver at a fair price but that brand was set up to be much more about to be positioned much more on kind of the shift in masculinity that was happening at the time and that that was about kind of the recession of the total ag alpha male and whatnot and it was the rise of the kind of the the regular dudes for for example and that was a really interesting place to play and it and it it created a kind of an ethos of we talked about is the the kind of the founding strategy for that business was man can get better the play of the best may i can get and it was a belief in culture that man can get better was a belief that i would say humbly the guys have taken in the mammoth of brands and if you look at my brands right now today many brands is like we just make things that are better in every single category passively possibly can't it's very true to like those guys but it's just trying to think about that longer that they're kinda north star so to speak and then working your way back and trying to make a couple decisions about products and having enough for to do to pose your breath for customer lifetime value over c yeah i think that's a great way to to like really think about it when you know i think you said yeah you could just spend a bunch and acquire a bunch of but is that really you know are you building an intentional brand and and thinking about who's the right customer are they getting the message and what is there ultimately what's their lifetime value because if you get a massive lifetime value versus someone who buys and never comes back and wasn't interested in the brand to begin with like you can get a bunch of those people if you're just acquiring people on meta or or something like that but getting people who are really bought into the ethos of the brand i think that's a that's great and that's where a lot of that brand positioning comes in and if if you could just walk me through like i don't know maybe we take a harry's or or sunday's lawn like in terms of timing in terms of like capital like what what did that story look like because i'm just trying to you know let's put ourself in the situation where it's like hey i'm working on a brand i'm starting a new brand right now and i wanna build a brand as big as one of these like what does that story look like in terms of timeline in terms of capital and in terms of you know operations and logistics to pull it off going into retail scaling up operations all of it yeah i i appreciate you i appreciate you circling back on that specific point it's a hard it's a hard question to answer timing on on that stuff you know the both those companies have a significant amount of capital inside of them i think harry's is pretty public there's there's hundreds of millions of dollars of capital inside of harry's in venture capital inside of it the those guys met and those are two those are two good examples let me try let me let's take harry's on let's take another one like harry's is are harry's those guys are those those guys off in year one they bought their own factory they totally vertical integrated they're became the only the third vertically integrated shaving brand in the world you know that's that's a kind of a big play you know yeah yeah and i think it's i i think it's so relevant too because i think in the news right now right like you see all the the like the venture funding that's going to this space like david just raised they were on our podcast like i i wanna say like maybe four or five months ago and the next thing i do is it's like he like he had just raised his zach just raised his seat around and then he came back to me or then i see in the news it's like oh they raised like seventy five million and bought a factory to like scale things up and i was like wait didn't i just like talk to him a couple days ago so like you know and and part of the reason i wanna ask is because like you know some for some brands like people you know they bootstrap the brands they have really successful exits and others you know are like go go go and wanna fund and wanna fund so i'm just trying to el it like who the right person is for what that journey looks like if you go that way and what success looks like when you know because you've seen it now looking back yeah yeah yeah harris is a longer road like if and i use an extreme example you know those guys really wanted to build a house of brands and harry's was the first and they've they've been able to they've acquired brands they've brought them on their platform accelerated them every time they have you know so that's a very different thing and and their trajectory is towards you know not necessarily a strategic outcome it's it's something much bigger in in those things so you know that's a that's a different play and to your point like there's other plays where they're really lean and mean and they get there and i think you're either you are this is kind of a no dust statement you're either building for ipo or you're building to be acquired and i think both are a okay i think you just have to be really honest with yourself your team your investors your investors investors about what these are i think so for example like hugh chocolate wasn't wasn't building to get you know ipo and chocolate around that stuff it was absolutely building to get acquired and the like so they were building something that no strategic would have the fort or frankly said with respect the taste no pun intended to build it themselves so did did an excellent job at that and that was like a i think it was like a five year thingy for year thingy no two was not building something to go ipo that was a five five year thing but it's being really really smart both of them both of them building with the potential acquire a mine there's only the three there's only three people that would potentially acquire this and making sure they're building something that is a value to those people and it doesn't mean hey i gotta build something profitable what you need to be doing is building something that is rich with consumer desire that has been able to go through the emotional crucible of a strategic going hey that thing's dumb no one's gonna don't want that hold on a second let's go to let's go check that out ourselves and then wait let's try to destroy it nope okay great let's go try and buy it like that you you'd be able to go through that four to two but you you need to be able to build through that journey that they're gonna take too which is very real and it's all a big part of it and part of that is just having interesting things that are beyond just like hey look at our low cost of acquisition and are low cogs if you just focus on that stuff you'll be doing that forever and i think that's that's the timing thing that's really bad because that's stuff's never gonna stay and it's never gonna be that interesting if you build a culture that is focused on c and cogs you're not you're you're not gonna build a business that's really attractive i think and and you're definitely not gonna build a brand but if you if you have a a culture that's focused on ao and c you could potentially grow extremely fast and i think the like peloton focused on ao and cl you know the anti grew extremely fast at had a very interesting business model on top of a mega trend that was happening not just in category but you know john fully thought about what he was doing was like replacing religion at a certain level i hope that you know that i i don't business ob anybody but like he saw like sundays are gone and like what this is how people commune in the modern world is through fitness and category i'm gonna do this irrespective of the space i'm gonna link everybody up with this crazy content it was crazy bike you know this crazy software and that that was like a huge ao c business and allow them to grow incredibly fast because then it does become a math problem where you're like alright we can count on about three thousand dollars of value from this person so you know we can stay in the pipe a little bit longer to get a really high value customer pay a little bit more for them that we know it's gonna be very profitable for us in eighteen months and and because of that we're able to do bigger things that make a bigger bigger impression around those things and i think some of the techniques are the the best brands that that go on that life cycle in the journey they think about innovation sooner they thinking about what's the next product i'm gonna make and this is where p fails them because p is like you stay on that one product you make that product you and the the and like you so they start thinking about innovation one they start thinking about partnerships and then they they really start thinking about getting really good design and create talent in house like so that they can be really really strong brands yeah one thing that you brought up that i think is also super interesting is you mentioned you can build for ipo and like we just talked about like a peloton or you know harry's as a platform and you know some of these other companies that you've been in involved in or you can build for an acquisition and one thing that you mentioned about building for an acquisition was you know you just mentioned it casually which i which i appreciate but i'd love to dig in a little bit more what does it take to build a brand for acquisition because there were a couple stages that you mentioned of the acquire going through like you know their logic of like oh like what is that you know then they write it off and then they're like oh we'll just copy it and then they realize that they actually can't copy it which is why having a brand is so important right so you need the brand to be able to to really stand out where where you are needed to be acquired so i think when a lot of people think about acquisition they're like oh yeah i'll just build something and then i'll be acquired but like if you're a brand and you're strategically thinking about you know getting acquired a what types of brands are well suited for acquisition like what requires kind of looking for and then b if you do fall in that category like you know what does that journey look like and what needs to happen on the other side in order for you know an acquisition to take place yeah it's a great question i think the the i there's like eight different ways i wanna answer that so the the i think the thing the thing the thing about building for acquisition is like the when you when you sit there they're like oh we you'll hear some m and a people will be like we we buy profitable brands and it's very it's very involved to be right now like oh i gotta get to profitability and you should capital isn't free flowing as it used to be and it's always good it's always good to be thinking about profitability i think you can't switch your strategy midst stream so like there's a bunch of vcs that are like oh we go after profitable brand like what are you like you shouldn't be in venture capital then we like we put money in and we make them unprofitable so that they can come out you know it's a joker boom boom so they can come come out big and i think coming out like they wanna see a path profitability and that's really really important so one i think it is do you have a culture of cl over c because they'll think that they can fix c for you they'll think that they can fix cogs for you but what they can't though what they can't usually do is have an amazing ao v and amazing cl and you should be building and i think this is true for ipo i think this is this this this is the actual phase we're in in d and consumer investing but like we're going through the trough of we're coming back out the these are gonna we're we're all gonna be making really really strong really really strong consumer brands but we're the this this thing that they can't do well over here is that that's the stuff that's it's really really valuable so when i when i talk to m and a or talk to talk to them what what is most interesting is oh my gosh this customer base keeps it coming back for more because what that says to them is like okay great that means there's this there's demand here there's natural repeat maybe we could get these people to come back with an email i'll just spend a ton of media to do that stuff what what what is attracted to them is a path of innovation so that they have the next products to make what is attracted to them is this brand gets potentially our portfolio into partnerships we couldn't normally get into again it's access so most of the strategic don't have distribution they don't have relationships so what they're looking at is a brand to create that new opening and those new relationships for them either with higher value customers either with an an adjacent kind of world that they're trying to get into that their their house of their their house of brands can't get to or creating an allowance for other brands to come into those customers as well too you know elegantly done i was six i think non nam is a great example of that non no is something that mars took off the table you know with an acquisition a ten x extra return for bullish at our investors and that was basically saying you know totally vertically integrated premium dog food right fresh dog food delivery to your door they don't wanna build that and but what it what it is is that customer base is is an extremely valuable customer base they're really well educated they make really good money they're very discerning customers and not all the brands can the traditional brands in the pet food space can access those those people so boom now you have some access to people and no as a brand in the space with the nutrition nutrition words and the vet nutrition words has cache a too because it one of the founders of a vet nutrition so it's it's a legit recipe and whatnot so it helps create some more credibility billing and some access around there as well too i think those are the things like those are the things strategic look for is they they look for that relationship with a customer that they can't normally get they look for distribution that they can't normally get in in kinda like mind space as much as as like retail space and then they they looking of in a in a future of of kind of partnerships and tactics and techniques that they're that they normally can't too i think that becomes a really interesting acquisition target again if it just comes down to like wow this is really good branding and the c and the cogs are good they they're always gonna feel like they can make that and that's not that that's not interesting to to be acquired yeah no i i think that's spot on especially with like that's the ultimate question is like how do you build a brand that's worth buying as opposed to like oh like cool product like we've got the distribution we can take you out and that's where brand really really comes in that brand loyalty and and and what you built brent my next was yeah it's real if i can too i think a lot of it also comes down to like doing things that are worth people talking about and the if you just s that to your brand name and your packaging and the way your website works it's not that interesting you you have to keep taking shots on goal you have to keep trying to release crazy limited time cultural offerings that express who you are and maybe low margin but get a flywheel of relevance for you you have to go and do partnerships and collab and make that in your dna you you have to keep making plays and the that's what i think a lot of brands get home i love that i think just even just thinking about it it's cultural relevance right like i i think that's so undervalued because you could be evaluating a ton of different businesses they could all look the same on paper but like cultural relevance is that's it's it's tougher to measure right but that is kind of the that's a secret to us but also having a culture that's committed to that right as opposed to like oh let me just optimize my next ad because like sure you could do that you get a couple more customers but you're not you're not you know optimizing that cultural relevance where a lot of the brands and i think that's why a lot of the brands that you mentioned they all have cultural relevance right like when you think of a peloton or a harry's or a casper or any of these it's like boom you you think of them and there's like there's that massive amount of relevance sir yeah and maybe it's not as relevant to you or i don't know but one of the brands i haven't talked about in our portfolio who's who's a really good example of of being a ao c kinda culture is bubble and bubble beauty and shot shy is amazing shot shy is a apps people say force in nature by the time she's done with you you're like yeah i i think want that lip balm i do i absolutely what pump and i think i need it and i need that sunscreen too she just is incredible she's spent two years in development she was a software founder and she saw that was going on in skincare was kinda weird and at of out of step with where it what gen z wanted and she became a natural researcher she's was doing stuff when the report when the when the analyst came in they're like oh you're gonna love shy she she just taught herself how do consumer research she'd folks soup folks you'd could go folks swoop teens parents all the stuff and she she's like oh there's there there's a beauty brand to be created here two years in research to to create i think the first pro i should know this but better but i the first product was just a lotion to create a to create a lotion and she has a she has thousands of people on a whatsapp she's doing she's talk constantly talking to them doing constant product innovation well she she launched she she was very first on the whole like micro influencer thing and she just keeps she's got really traumatic branding and she just keeps putting innovation after innovation after innovation into their keep making the same place so you you don't have to do these crazy collaborations and whatnot that that's one tech you might write for you but she's just got a pipeline of innovations they they keep coming up and again that's what's interesting strategist was like oh there's a real road map here like they have an incredible relationship they they have a really strong map and there's there's like a there's a big kind of emotional brand being built as a result of it she's doing a great job on that on that stuff and that's a that's a that that is a hockey stick kind thing for us and a mark to mark kind of stuff on paper it's that might be one of our actually best multiples better than peloton wow yeah and and another thing i'd love to talk about that's kind of in in that lens is about capital structures and like what that sort of stuff should look like for for the founders right because there's scenarios where you raised too much money and the founder kind of like gets wiped out it's not a good scenario for anyone founder vc or anyone there's a scenario where you raised you little and you don't you know you get beat out you don't you don't make it and then there's you raise the right amount create exit for the you know your your capital partners as well as the founders themselves so based on the stuff that you've seen you know characterize what it looks like to raise like how do you raise the right how do you determine the right amount to raise and how do you raise that and how do you get to the the next stage like what what does that look like when when done right and what does that look like when done wrong yeah oh my gosh you're asking all the hard hard ones these are really these are these are good questions man it's always gonna change i i think i'm a i'm a fan of of raising enough capital that gives you courage to take to take shots and so there's a there's how about that for a very non specific answer i i think it really is about the state that you're in it's horrible for founders to be diluted we are not fans of that at all we have seen stuff at the gestation stages where founders don't have enough equity and we've been very candid about that when people trying to done incubation and whatnot like this doesn't this isn't right like the the founder needs to have a lot of equity it's it's important so i think the the thing about the money is it it you're always thinking about it and you're always thinking about running out of money or if they'll run out of money and it's just having enough where you're waking up and you're going i think this year like this year is a year we can try this thing and having enough money to try that thing is really really important because i think when founders go sometimes what i've seen sometimes founders not be successful it's because the last big swing they made was to start the company and they don't make any more swings some of that's a personality issue so some of that is they don't have a right kind of funding around them but i think it it's really important to have that money in place so that you can keep trying to take those big shots on goal again and again calculated calculated shots but but shots leaps nonetheless and if you have too much what can happen is you're like okay now we got money now we're gonna now we're gonna stop everything and we're gonna do it right that's not a great way either the we've we've we've been in those situations some have turned very bad and some have been fine and some might be good hold you know stay tuned but where we've we've been we've let around of capital that's come in and the team basically took the next year to slow down and really plan for the next three years careful once you once you lose momentum it's hard to get it back and there's a there's a lot of opportunity cost to to stalling out on the business and and sitting down and really testing every one of your decisions and going through all the rigor and the role of that stuff so i think i successfully not by purpose giving you a non specific number and what i've drew tried to emphasize is is what i really do deeply believe is that it's a the right amount of money for you to stay really really courageous about this brand you're trying to build not the model you're trying to make right you know i i i think that's spot on and especially just being able to take shots right i think when you're like you can do it you can bootstrap a very successful business but like you know that it's it all all comes down to your cash conversion cycle because you're financing everything at that point yourself and it just takes a while to get that flywheel going and there's several so many examples of like really successful bootstrap business where the business can grow at its own pace but like you have to be diligent but in a lot of these markets where you know it's closer to winner or take all or there's like really a one stand out brand that takes eighty you know eighty twenty rule takes eighty percent of the market share like that's kind of you know you wanna be able to get there and to get there you need to be able to take the swings because if you're waiting you're right like momentum kills right like momentum when when it's like when a business when it loses the momentum to get it back it's almost like three times harder so so yeah that that that that's a really great way to think about and i know it's it's always tough to be very specific in those sort of situations but i think that's like a good sort of like frame of reference and then the last thing i'd say about when it comes to capital is you know you've seen a bunch of these brands that have obviously like raised a bunch of capital for themselves but they need there's a lot to deploy it on how how do you how would you say they've like spent their money like it do they have alternate sources of financing for like when it comes to the inventory and like you know fulfilling the pos and like would you say the cap like where does the capital that they're raising where they allocating it to yeah a lot a lot of people are are allocating it towards products you know and and and that's great and there's venture debt for that and financing and and all all that stuff and it's great we've had a lot of good success with that with our companies a lot of people are doing it towards marketing spend and you know it's it's kind of a funny statement given my background and our background but like okay the i would say put it into innovation and that marketing spend will will go work a lot harder for you because it'll be more interesting and and really that second third fourth product that you're doing you know when and i love marketing and marketing is fantastic and it works extremely well it just has a short shelf life that's all and it's a beast that needs to constantly be fed and it's not the kind of thing where you're like oh we can turn off for a while like you can't like it just kinda needs to keep going and it's it's re but it's really like the innovation spending it in on innovation where you're able to you know put a piece of really interesting news into your marketing spend that isn't just like a change in messaging or a change in image or a shift in down it's like real fundamental stuff that actually someone can go by again that was a wonderful example of that like really really iconic kind of branding and like she just keeps putting interesting product news into her marketing machine which is very grassroots y very micro influencer like varies very like ground up tiktok social kind of thing so most of that money i think is is what we see is going in an inventory or going into marketing and i think there's a there's a the the way to split that difference is make it go into innovation and and keep putting more and more money into in into building your next great product in your next great product in your next great product in your next day product you paid the z a bunch of money for this customer so now they're yours so stop paying him to keep their attention you know do it with your your insight and your empathy and your innovation no i i love that and i think that's a that's a great place to to wrap things up for today really really insightful stuff for what it takes to build a you know generational sort of brand brent for anyone who's listening building in the space once they connect with you guys at bullish why don't you shout out your your socials like where can we find you and where can we learn more about you and bullish i'm mostly on linkedin so under brent var you can find me pretty easily the that's i do write some stuff out there i'm not on twitter or x or really anywhere else i benefit from social media as a business person i also have a very complex relationship with with it as a human being and a father so the that's where you'll find me all all on linkedin and you can find us there also our our our website bullish dot c c and i would also like check out our newsletter we we put a newsletter out every week and we're talking about some of stuff we're we're seeing in the consumer space and we're talking about some of the creative work that we're doing too in the work that is helpful and very lift and usable as a as a as a set of principles in brexit i love that well thanks so much for coming on the pod it awesome avenue thanks for having me blaine great questions man you us hard ones really appreciate it it's sorry about that was good appreciate it it if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond following and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

this is d pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linked in the show notes and now let's get into the pod what is going on d pod today we are joined by ap gov who is the founder in ceo of best ever ai today we're gonna be chatting a lot about ai and how it pertains to e commerce things like scaling ads coming up with creative measuring and analyzing all that good stuff and app has not only built an amazing platform she herself has been a tactical lead an engineer and all sorts of great places so before starting best ever she was a technical lead at uber and his experienced as a lead software engineer at apple and before that you were at nvidia too right so you've kind of seen a little bit of everything i started my career as an intern epic so why don't you talk why don't you take us a little back to you know maybe your experience and what led you to starting best ever and then we can get right into it awesome yeah so i've been in tech for over twelve years now always been sort of on the stem side of things i started writing code when i was seven or eight years old obviously as most of us do these days and yeah so and and then i my first job bought a school was at apple i graduated from carnegie mel and started my first job at apple where i did i put on a few different hats at apple i worked on itunes side of things i then worked on apple pay security software so bunch of different things and then i went to uber to work on the self driving cars the security of self driving cars after some time i realized it was a little bit more research oriented of the time and i like getting my hands dirty with like products that ship in a short period of time so uber eats was up and coming at the time and very exciting felt like a little startup up so i moved within companies i moved to uber eats did a lot of really cool stuff out there a lot of shopping and grocery and i was i was leading a bunch of these products when i was there and then i started working on my own thing and i quit uber started bust ever and yeah here we are okay so couple quick things that i think are timely that would just be fun to chat about so number one what do we think of the ios twenty six like announcement the apple's kind of overhaul their entire ui for like this like glass morph sort of aesthetic like what do we think i think it's really cool right i know i was i also was shitting on it a couple of days ago but i i think the idea is cool but the execution is obviously you know very lacking i would say especially knowing sort of back in the day when i used to work at apple and this is almost like at this point over ten years ago there was this sort of rigor of what is ship able and like well isn't and the bar was really really high and as a customer in the last few years i feel like the ideas are there there is always an attempt but the attempt doesn't go all the way and that's kind of the feeling with this whole the glass ui approach it's very future if it feels futuristic it's something that everybody when they talk about the cool cyberpunk future there's always some little glass or transparent ui have to think it's it's always been this fascination but i think the execution kind of falls short at least from what what we've been seeing the other disappointment for me honestly is just the not putting ai at the forefront as they should be i feel i know they i know craig was in some interview a couple of days ago saying like you know we'll release it when it's ready but siri kind of falling short which is super important the the the the reason why siri and natural language stuff is really important is because it brings a lot of non tech native people to tech and it makes it very accessible like your grandma or whatever if she wants hey call my grandson type of thing it's much easier to just say it than to go find the button and that's why siri and natural language as an interface is super important from an accessibility standpoint and instead they went off with like freaking glass or whatever or so and i don't know i i feel very sore about siri being still so unusable that yeah i feel a little disappointed no that's a i like that perspective and hopefully you know they'll they'll have time to iron out the kinks of both i think absolutely well i i'm sorry in a year from now we will all eat crow and say oh my god this glass thing is a amazing i i i i think i will be wrong about what i just said now but that but this is how i feel most yeah and and i think on the the voice front i think it also isn't available i think siri was probably a couple years ahead of its time in terms of like where it you know it was but and now that the text caught up i think we're gonna see some really amazing interactions with the devices and then over onto the the self driving stuff i'm just super curious in this question because i've always been terrified of getting i actually have not gotten into a self driving car no have not and one of the reasons is like i mean i always said like i love driving my own car because i don't no one's gonna hack it so the less like a computer my car is the happier that i am as a driver so just talk to us about just in general like where things are headed security of a self driving car obviously that's something that's really important you don't wanna be in a car or something hacks yeah hacks the car all of a sudden you know you you've lost control what what is that world shaping up to be what is it going to look like where we go yeah i i am a hundred percent convinced that my children will never learn how to drive a car i already know so many of my friends about ten years ago us trying to convince this friend of mine that he he he he used to live in paris and he moved to and in paris the the public transportation is so good that you don't actually need to drive anywhere so he grew up in paris and then he moved to san francisco and so he never learned to drive and i remember in twenty fifteen telling him like hey you gotta learn how to drive like i can't be driving you around all the time and he said no the self driving car is gonna be here why would and then i i remember thinking man he's crazy there's just no way and then i went to work at uber and they they already had in pittsburgh at the time before they sold it obviously so they had this whole like it would do lapse and stuff like that that was my first experience with like self drumming car then i was like holy shit you all i was doing is just doing laps around the parking lot it wasn't even and and then after that i remember a second trip to pittsburgh he was actually taking us around the city and i was like okay this is this is going to happen and that was i would say in twenty eighteen so it's like man that was a long time ago that's when i started to really believe that this could be a thing in terms of security i do think that i mean as you can see most of the wars of the world is not fought in the physical anymore there's no humans it's about it's about getting access to the systems that keep everything going in in the civilization right in and of course they're going to be from from i'm thinking more from like a security like a nationals security standpoint they will definitely be things that people will try to hack we'll try to control and we'll try to get access to to behave in certain ways so that i definitely believe having said that i think the fact that we have gotten really good as engineers and and as ecosystem tech has gotten very very good at building sick pure stuff obviously there's like we are talking about this as like our systems are down today for i think maybe it's a cloud fair issue we don't know yet but but despite that things have actually gotten very secure hacks or not as common anymore and as an ecosystem we're getting very very good at building secure secure products and and like somebody like google google some of the best security engineers that i know off potentially even tesla as they kinda ramp up in the self driving side of things i i am not so worried about security honestly any given day humans being idiots like driving drunk or driving when you're high or whatever these are way more off a vector that you need to be worried about on the road than i think like a hacker getting into your car and trying to kill you like i'm not saying it's not gonna happen but i just think it's it's more likely yeah yeah i totally agree and i feel like you know there's stats right like how much safer that the self driving cars are than your average driver but then you kind of losing the agency it's like when i get on the road i i consider myself a a much above average driver you get got what i'm saying and it's it's like i like having the agency of understanding what the other cars are doing where they're going what they're driving in the future do you like even now where like how good are self driving cars with also not only predicting themselves but understanding that like maybe every other car isn't irrational you actor yeah i totally yeah i think what you're saying about agency makes total sense and then there are certain people who are obviously always gonna be better at driving than any car like the situational awareness or the little things like oh that driver did not make eye contact with me so maybe they don't know i'm on their in their blind in their blind side or whatever those kind of things it's so distinctive that i do think that humans will still be like really solid drivers will still be better than than machines but at the end of the day you your average driver doesn't do it for fun right like the same way riding horses used to be a thing that everybody used to do and it's not so much anymore and people do it for fun because they enjoy it so i still think there will be in twenty years from now or whatever there will still be drivers but they do it because it's fun and they like it or whatever so from an agency standpoint the people who want that agency will continue to have it but it would just become rare and much rarer and in terms of the hey will the cars be aware of others around them who are not potentially good drivers which is this is going to be the friction point i think and we're already seeing that in san francisco right sometimes you'll see these people who wanna see how the car will behave and they will on purpose c go and block it or sometimes they're just not paying attention and they're just bad drivers and they will like in a rear end a way more or whatever we've seen these incidents already happen and i know it will probably be politicized where they'll be like oh look the self driving card did this but that is the adjustment period that will be painful and that's the part for which this society and just regulators in general have to be very cognizant that there's going to be an adjustment period that may be like three to five years from now and once we pass that adjustment period there's gonna be more self driving vehicles on the road in general than like humans and then i think truly we will reap the benefits of the self driven cars and buses and trucks and whatever else right and that's the utopia that ideally we want for our children so like if your thirteen year old wants to go somewhere on their own they wanna go to a friend's place whatever you don't have to drive them you could continue to do your thing at home and they will just go in the car and they will be safe and that's that's a good that's a good place for the society to be no that's that's awesome and por okay so with all that sort of technical foundation that leads us to what we're all here to talk about and that is ad creative and ads and how to scale as a performance marketer as a brand so why don't you talk a little bit about how you go how you guys first started kind of n on the problem what you guys saw where you guys saw the opportunity i am you know one of the reasons i was looking forward to this conversation is you hear everyone in d and commerce talking about ai ads every time i open up linkedin i see a different person claiming that you know they're scaling their brands with a a hundred different you u ad creative that are totally ai and you know they're like this is the best thing ever i don't need i don't need you know i don't need creators i don't need anything i'm just coming up with all these ad concepts and i'm making all this money and i kind of look at that skeptical but you know i do also realize that the world that we're going into like ai is gonna is a big part of creative workflows of ad workflows of all of this sort of stuff so why don't we just first talk about you know how'd do you end up in ads and paint the landscape of where do we stand today and where are we going yeah for sure so the intention for us was never to be in ads actually so we originally the original idea of best ever was this consumer product where we were like hey we wanna build a tiktok but specifically for products where people can come in make reviews they would make honest reviews of whatever product that they used during the day and then we would kind of like build this network of truth telling kind of creative right we started building this as our first attempt obviously over a period of time we realized one we were a very technical team and we didn't really have the dna for a consumer product like a consumer product requires a lot of growth dna and what we had was a very business oriented sort of things so we we after a year and a half of working on it we kinda of pivoted away and we were like okay we know every time we would make videos and like there would be these reviews because we were trying to seed our our content platform with a bunch of videos and then we had all these videos that we were generating of people doing reviews and constantly brands would ask us like hey can i use that video that i saw on your app for an ad and i would pay you for it and we were like i guess sure but like what is this kind of like we were not add people at all and we started to realize like there's a huge demand for content in general that people want to share so that the authentic voice gets out there right but the problem is like with the small team like ours we were like five at the time and then with a five people team getting the products to go to somebody like a creator for them to make a review and then to get the review back every agency knows how painful this is every brand that's ever worked with creators knows the operational pain that it is to send products get reviews back and then we were thinking okay well if we're really only making ads like a review concept makes no sense because like sometimes people may not like the product and that's not a video that anybody would use and so kind of the evolution of this idea was what if there was a way to get these life positive or like reviews and like creator content without having to go through the entire operational effort of sending them stuff and then turning it back in the at the end of the day because at the end of the day they're all just actors right so we were trying to emulate and this was before chad gp was a thing right we were trying to emulate creating content using ai to make it look very authentic right and this is even before all the the only things that was there was maybe i i i think diffusion like stable diffusion was a thing at the time and it was generating some videos think this is the time of like will smith with the spaghetti thing right this was before that this was like six or eight months even before that so we we had that vision and we were kind of like we knew this was coming and it was just kind of getting into like how do we make it happen so over a period of time ai like just exploded in literally six months things changed and we were like holy shit we can actually build this and that's when we were like let's try to build videos using using our ai like whatever ai technology we had at the time they're like let's try to build creative using that and slowly we built that and then we launched it last year around october and then the big question so we would go with show our product to people and they would say oh yeah this is good this is great for my ct ads or this is great for my linkedin or facebook so people would say that but but then they would say you know i'm not so sure that this will convert because of blah blah blah and i would say like what do you mean it won't convert like why do you say that you haven't even tried it right and then they would say well i kind of know that this kind of hook works for me i kind of know this kind of actors work for me and i wanna be able to provide that information so that i build creative that converts and like just randomly generating creative with ai is not gonna help like this is yes sure it's nice it's easy all that stuff but so what so what if creating shit is easy if that shit's not gonna take me somewhere right so that kind of got us thinking this is around like october of last year where we were like holy shit like yes creative is important but creative that converts is way more important right and that's when we started kind of okay how do we build creative that converts and then we put on our engineering hats and we're like okay let's get the data on what actually converts right so we started building integration with facebook we started building integration with linkedin and so now any advertiser can come into best ever and pull the data from facebook and then we said okay let's analyze let's look at like all of their three months of data six months how many ever a year's worth of data and see what drives conversion and we started analyzing we built systems to analyze you know tons and tons of videos tons and tons of images right we had to build this system which we did earlier this year so now on best ever we kind of use the input of what drives conversion to then make creative with ai so i you this is the kind of journey where we had where we were like start with just making ads realizing any random ad doesn't convert you have to have data to back it up as a reason and then from data comes to creative so that was our journey to get here and the state of the world the the your second question was like where do you think it's gonna go right and and you're and you also mentioned you were a little bit skeptical about like you know everybody saying they're trying to scale their brand with ai this and that i think the excitement i i believe what is going to happen is that creative is going to be cheap it is already cheap before the thing that was preventing you from reaching full potential was the lack of the ability to generate creative a big brand could throw money at creators to get a great amount of content smaller brands couldn't afford that now the playing field is very much been equal for everyone so it's it's democrat any a small brand can generate creative a big brand can generate creative there's really no excuse anymore to not experiment but does just does it mean that the creative that you generate with ai just because now it's cheap to generate creative you'll now scale your brand no i don't think so what you still the first principles still apply just because you have content is not equal to this is the content that will drive conversion you as a brand you still need to think about where in the funnel are my users who what is actually working for me so far what is not working for me so far and then how do i use what is working for me to scale to make more content right you have to be there is still the strategy part that is core sure making content gotten easier but if you don't strategize to make the right kind of content you end up spending all this time making shit that doesn't actually drive anything and then you become frustrated thinking oh this ai stuff is bullshit like it doesn't work well it works if you back it with the right strategy right and and the strategy part is why we focus heavily on the strategy part at best ever we're not so like we generate content we generate images with all the modern cutting edge image generation models they're accessible on vest ever same for videos all the cutting edge models will be accessible to to to to the people it's available on bust ever what we promise you is that we will generate creative that is driven by your strategy and data and not just random creative right that's the promise of best ever and i i think that's where the future will go is strategic content generation and you can already see facebook did you see the wall street journal article where facebook said they're gonna do creative like they're even like you know you don't even have to do creative they will do creative for you miss that wait what what did they say it was they're just they're gonna have a yeah they're have a suite of tools that actually helps produce creative so you don't have to do it yourself yes yeah i'll give you this article i think you should this is very interesting where they basically said that hold on let me share my screen share screen can you see my screen yes there it is they're so they aim to fully automate ad creation using ai so you can see that the vision is to help brands and advertisers not spend that much time they wanna help brands create create advertising concepts from scratch so facebook is promising that they're gonna try to build tools that will do creative from scratch for the users so i'll send this to you later if you wanna read it but yeah if yeah i i i definitely do and it and i it kinda makes sense i mean i think even with the tools that they have launched like their advantage plus and stuff like that you can see they're you know starting with like little text animations and taking static and making videos and like that sort of stuff but i mean actually and you know what meta has been so good at is finding the right buyer the people who are in yep market for a product like yours show serving them your content and getting a conversion and optimizing the campaigns for that but being able to now introduce the creative part it's it always feels funny because it's like they've got this super powerful platform that's helping on the optimization side and then you're kind of like oh well what creative do i create i don't know let's see how this idea works let's see how this idea works and you're yeah trying to just turn out enough to test to to to match it so that's that's really interesting i'm sure that you know they can say that they're coming out with stuff like that i'm sure the marketers and people with their own creative tools are probably gonna come up with you know the true truly standout out ads but i think it'll that that's an interesting wrench that's gonna be thrown into the mix and a cool tool for people i think it's really important too right like for example if you're a small smb and you're trying to make ads you know you're spending like two hundred bucks a month you don't have you don't have the money to pay somebody like bust ever to to like do the creative analysis not not that we're that much more expensive but it's still like an additional cost if you only have two hundred bucks to spend on ads you're better off just putting all that money in facebook and letting facebook come up with what creative works but if you're a bigger brand with who who has like teams internally and you know your user really well obviously you don't care for like facebook's generic creative right you will take tips from them when you're probably advertising on multiple platforms and you still wanna keep control of what the messaging is and the strategy is and stuff but i think i think it's great that they're gonna do it for at least this smaller advertisers will definitely benefit from from these type of advances so yeah i'm i'm excited for them so i want you to take us from the perspective of maybe like an advertiser who's like kind of just getting started scaling up their accounts starting to work with a brand and let's kinda go through that journey from your perspective because like now like we're saying like things of change things are changing you might wanna start with a couple concepts so maybe you have a couple static that you wanna run right and now you're like okay do i go find u g that i just wanna randomly run see if it converts or i wanna spend a bunch of time scripting and coming up with my own ads and sending those out for creative development do i wanna try myself and work with something like one of these ai tools and just see what comes out but it's maybe not even gonna be on brand like where where do i start so if you were working with a brand or maybe some brands that have seen success working with you guys where do they typically start when it when it comes from a creative strategy point of view like what does their ad mix look like and how do they get started how do they you know figure out what concepts to go with and how do they actually build and execute on that strategy yeah so for any time there there is brands who are just starting off and then brands were trying to scale so the strategy differs based on who you are and where you're starting right if you're a brand who just like we actually meet a ton of these type of brands where are like hey we're just like you know we just finished all the packaging things are starting to work websites up now it's time to spend some money on user acquisition well the first thing for anybody who's just starting off and hasn't spent any money whatsoever my recommendation is always to say like keep the best brands that that eventually managed to scale up in our experience what we've seen is they tend to have extremely thin operations like they are super thin it's not more than like three or four people working on it like it's really really like you know very tight teams now if you're in that position my advice to you would be to start with looking at what your competition is doing be honest with yourself look at who other people who are the people who are winning or starting to have traction in that whatever if you're cp g if you're doing beverages who's having success with beverages kind of go and look at their strategy and then look at who they're trying to target what is the messaging they're trying to target especially when you start with competitive analysis which is something you can do with best ever is you understand what is the high level thing they're trying to do that you can literally just copy that as somebody who's starting off because they've probably done a huge amount of research they've probably thrown a ton of money to get to the point where they have the insights that they have right now so if you're somebody who's just starting off and you don't have a sense of where to start then i think it's a really really good idea to look at what your competitors are doing even big growing brands already do that they constantly look at what their competitors are doing and try to emulate that or try to counter that right hey they're trying to go after this audience maybe we should try to go after a different one so that we don't cannibal each other so those are kind of like the decisions you get to make so you start if you're somebody who's just starting off my recommendation is to run at least like two hundred dollars to five hundred dollars worth of ads yourself with your team with your like you know putting your heads together just because you have to get a sense of what works and what doesn't work for yourself and nobody cares about your brand as much as you'd right and and there's this kind of like a lot of d brands when they're starting off they they also are sitting on a little bit more money than they would be otherwise because there's it's still the very beginning so there is this tendency of like wanting to go with like an agency immediately to say oh we can the agency will do growth agencies are very good scalar in my opinion and they are not very good at figuring out who your your audiences are and that is still up to you right so until you have managed to get i would almost say like until you've managed to make let's say like a like a fifty k or so from sales like i'm still thinking because this is d i'm still thinking like cp your and this kind of thing like get to your first fifty k on your own through your own ads even if they're not like very good ads even if you're kind of like losing money the experience of having done it yourself is super super valuable for you to know your customers really well and once you have that understanding like okay these ads seem to be working let's say you're literally copying what your competitor is doing work toward but you're just swapping out the branding and things like that that is still valuable for you to go through the process of setting it up targeting looking at it like are we measuring well did this actually come through the facebook campaign or did it come through the tiktok campaign right to ask all these questions yourself internally you can always hire an engineer or somebody to help you with like i know like attribution has become a really hard problem for all a lot of brands so probably the best way to do it if you're starting off is just pick one really good platform stick with it so you don't have to worry about attribution and all this stuff like you're only doing one approach which is like paying money to get advertisers and then you're doing a linkedin thing and then maybe some influencers right don't pick too many things pick like one or two things and if you're planning to spend on ads just start with one platform and then kind of scaled that to the point or you feel comfortable you've understood it and then maybe it's okay like if it's starting to be a lot and there's not enough people then of course go to an agency and ask them hey we've managed to get our ass to this point can you help us go from twenty five thousand dollars to a million or two million or whatever right and i think they will do a good job then but when you're starting off do it yourself use tools right there's plenty of tools like us like if you just wanna look at what your competitors doing and you wanna copy that word to word but to your brand you can do that using best ever so it's really simple to just get started start with static if videos is a pain if videos are a pain in the ass start with static in fact videos are pretty like you know you don't have to have like a really good creator or anything you can even just start yourself like if it's especially a very clear product like hey this product like you know it it increases it enhances your mood and it's a mood boosting drink or whatever that's it clean right one value prop pick it up pick up the camera do the recording yourself just so you feel the pain and then what is the thing that's not resonating you feel all these things for yourself immediately what you'll goes you'll go fix your website immediately you'll fix the copy you'll fix all these things when you try to make the creative yourself you drive so much of that like the messaging aspect of it like what is the messaging that needs to be it gives you a lot of clarity so if you're starting off do it all yourself until you get to a certain point where you have a lot of clarity and then hire maybe an agency or whatever and even with an agency i have seen this happen so many times where our brands go in with like expectations that agency will put in sort of the same level of thought about the messaging or whatever as they do really good agencies do an but some of the average agencies that are dealing with like twenty different clients for fifty different clients and they don't have the same level of like intention to give you so sorry attention to give you so what you want to do is you still wanna be on top of the reporting use tools like us or whatever to to like keep track of the progress right hey this dashboard last week we said the best performing hook was did you know blah blah was the best performing hook but then this week it's something else why is it something else who what changed right you have to be on top of those things so then use the tools for like keeping track of progress that that's kind of my overall what i would yeah i love the whole concept of getting your hands dirty with with the concepts a lot of like the best founders like they've they've they really understand their product they understand they get their hands dirty in the beginning before they just pass it off and that's not to say that even if you work with an agency from early on just make sure that you're you understand what concepts are working it's resonating back to your product pages the value prop that you're selling it's just you know it seems like most of the most successful founders in in consumer just have that pulse of like what their cuss who their customer is what they really want and what it is that really makes their brand so that's not something you can outsource so i think blurb of it to your point like that's a that's a great way to think about things and then one thing even that i've seen that i love in in best ever was you know i've worked with different agency partners in this exact kind of workflow and one of the hardest things as a brand owner is going in and being like well i know what's like i see the numbers moving on my store like great but like what creative are driving this because like i wanna make more of what's working i wanna make less of what's not i wanna refresh my creative before it goes stale and how do i have a really good idea and you know sometimes you know i could go the ad manager myself but the way they have everything split out it's so confusing because they have all different sort of campaigns some for top of funnel top some for mid funnel some bottom of funnel and all this sort of stuff targeting different audiences so when you're really trying to just get an understanding of like okay sure i get that we've got a lot of great data in there but like what is it that's really working and why is it working and how should i create more of it so i was really pumped when you were showing me best ever and we just hooked up the ad library we could see the row as of the different ad creative and then the full breakdowns of why they were actually working and was actually something we both laughed that with our with like my agency partner and we're kind of like well this kind of replaces what i all these like slack messages and text about like hey what's working can you give me the update so what why don't you tell us a little bit about that kind of creative process how you guys are able to you know diagnose what's working and how you're bringing that transparency to the app the the brand owners so they can just you know scale up what's working and kill what's not absolutely yeah as i told you earlier one of the core things is to high the what the what is driving conversion closely to a bunch of things like the style of the creative or the messaging in the creative or the colors maybe or or the hook whatever right there's so many different aspects of it that could impact the creative now what we what we do and how we are able to do sort of like like to to give a little bit of context there was one of these one of our clients who came in and said hey i don't know why this specific message works more than the others and then we had to like you know we've built the system that looks at all aspects the common things between the working creative and the common things among the average creative and then it takes the best insights like what is working the common parts of it and then it summarizes that so the way our system works is we pull data and then we build a correlation matrix with the creative so in in non technical words what that means is you probably maintain like for all the creative that you generate imagine that every aspect of the creative was saved in a huge database of like information so let's say you ran three u creative every aspect of each creative like how many seconds or what was the hook or who was the actor and what was the messaging all of this information is broken down piece by piece and it's saved in a huge database so when the user comes in and says what is common across like you know what is the working hope for me from the last week we will first generate a report of the best performing videos or the best performing creative from the last week and then we go to this huge database that has all the features broken down and we try to pull the common features across the different ones and then we summarize it we use like l m's to summarize the commonalities to simplify what we found because oftentimes what we find is like a bunch of like you know tech tech gibberish that needs to be translated into human speak so we will use l to then simplify our insights to give to the user to say these are the commonalities we found right and that's how the system works it's it's actually the first thing people do when they come into a best ever is go into that insights page and ask like what are the best performing creative from like last week and why or what is the best hook that has worked for me in the last two weeks and why like people are always so curious and there's they always have a hypothesis and like sometimes for example they will ask have a hypothesis like oh a smiling woman in the first two seconds makes a difference versus like a smiling man or something like that and then if they have a hypothesis it's really simple they can actually ask our ai hey is smiling woman has better better ro or is it the smiling man that has the better ro and then our ai will interpret that look at its huge database of features it will pull every every smiling woman and smiling man creative and then you will look at the metrics and say in fact it's the smiling man it's not the woman you know and he will pull that and tell you the answer for it so that's the huge advantage of best ever is like amy hypotheses that you have you don't have to wait for someone to like look at the data and tell you the answer for it the ai will do it in like one minute less than a minute and then that's it you're good to do what you want with it with that insight it's so cool and then talk to me a little bit about content generation right so we talked about analysis strategy how you can use it to make better informed decisions but talk to me about where are we right now like so let's say june twenty twenty five with ai content generated sessions what's possible i mean we've seen all sorts of crazy you know models coming out where people can you know take their image and take you know create their own avatar and put a voice behind it it's still not like wouldn't call it a hundred percent of the way there like people can notice the difference but there are a lot of advertisers who are starting to see like actually successful like you know whether it's organic creative or actual ads where it's actually starting to work and then you've got you know text to video so things like v three which is like you know super impressive so like where are we right now where are we going when are we gonna be there and how does a tool be because like also when you're actually coming up with an ad asset like that's a little bit different than just like when you type in like hey give me a video of x y z will actually when you look and you break down a real converting ad you've probably got maybe a voice over script maybe you have captions maybe you have several scenes you have product features there's a lot going on there from a like purely just like just like what are the ingredients of like a high performing creative so yeah just talk to me a little bit about where we are what's possible now what do what do we need and where are we going yeah so i think video generation is going to be a solved problem in the next year like i have no doubt it could even be sooner maybe even six months but video like generating video that looks extremely human and genuine is going to be a solved problem in a year so what advertisers have to focus on right now is not so much about like oh is ai video gonna convert or whatever i'm telling you from a tax standpoint it will be a soft problem where you won't be able to tell the difference if it was a human who was in the video or whatever right so keep in mind that with that said if i were an advertiser if i was a brand if i was an agency i would start investing in workflows i would start investing in working with products that are going to give me the best of all worlds right what does that mean now v three is amazing which is great okay let's go pay two hundred fifty bucks a month for v three okay hey jen is decent for u gc let's go pay another fifty bucks for jen now what is happening is all these new products coming out gets all this excitement out there but then you're also you're gonna stop you you're gonna stop paying like the the thousand two thousand three thousand dollars just to have access tools right so instead if you're are a large enough agency like your you're very big like million millions of millions of dollars a year you should start investing in workflows that can leverage different tools and not get attached to any one specific foundational model you want to find tech partners or tech products that are already keeping this vision in mind that they wanna bring you the cutting edge newest us tech for you to use in your workflows right so marketers should start investing in workflow tools and not just in like creative tools like obviously creative tools are amazing now and that's what is there but like the vision for companies like best ever is like we realized this earlier this year when we couldn't keep up we are an ai company and we couldn't keep up with all this new tools that are coming in and we said you know what we're actually going to build a platform that any marketer can come in and say okay i want with v three generate me a video and then we will and then they can say actually this is not so great let's switch it out to like some other model cli or something can you generate the same script with a cli and then we generate that too so what we like platforms like us which aren't many in in marketing the ones like us we are focusing on building that user experience where they can do all their workflows in one single place and they can pick and choose what model they wanna use for different things so if you're doing u you use one model if you're doing more cinematic thing you use runway or something so like you want to start investing in tools that will make your life easy and not worry so much about what is behind the scenes like is it v is it this it's that just assume that you're gonna use everything you're gonna use gp you're gonna use claude you're gonna use google right jam you're gonna use all of these tools just assume that your job is to build out workflows on good platforms that are gonna last a while for you and invest your time and energy finding these platforms that work for your team and business right that's my recommendation obviously it's very self serving of me to say that but that's where we're seeing all the ai tools go right if you see cursor which is sort of like a workflow tool for engineers they let you choose what model you wanna use to develop on right same for if you go look at rep it's the same thing they let you pick the model so everybody realizes that there's gonna be a bunch of foundational model providers and a lot of things will get built on top and the marketers probably wanna sit on the workflow level and not on the foundational model level so don't build too much into gp because tomorrow gemini might take over and have the better model and then you're screwed for building all your workflow on top of one so build it on top of the obstruction layer is what i would say i think that's that's such an important insight and it's not something that everyone necessarily picks up on because at the end of the day obviously you the you know the most important thing is getting creative or content or whatever it is that that's gonna help you convert but what's so important is you can be out there chasing different workflows and playing whack mole all day looking for the perfect piece of content when in reality what what it is that you're saying is at the end of the day worry about finding the right platform that supports your workflow because all of these tools and all these function functional functionalities are eventually basically the it's it's all coming in and wherever you have the most control and consistency and can build a workflow on top of that's where you can be successful and that's something we we it doesn't really matter what field you're and whether you're a marketer or whether you're a developer or whether you're a content creator it's like look for those places where you can store your content library you can build your workflow with your team you can add your team members you can build these creative workflows so that as the models and as the you know specific tools improve those platforms are gonna incorporate those and ever it's gonna be a rising tide for it for everyone right exactly hundred percent hundred percent yeah i i personally would not get too attach to any one specific platform and just get you know build teams around platforms that can abstract that away from you awesome poor as we wrap up here you know why don't you share where we can connect with you i i think you're on twitter on linkedin so where can we connect with you and also learn more about best ever yeah so i post often on twitter but you may not like my personality tends to be a little brush but if you wanna keep it strictly professional connect with me on linkedin and if you like to see a slightly spicy side i'm also on twitter i am a app g ninety nine a p p y g nine nine on twitter and por gov on linkedin i post about best of her all over the place so either one of these channels should be great yeah awesome so wanna thank you so much for coming on chatting chatting everything ai and creative i've had a blast using as ever so for anyone who who's listening and wants to check it out you guys do have a free trial so i would go ahead check it out out start click on with your ad library create some reports start generating some creative go nuts it's really cool and yeah we'd love to you know you know as this space continues to evolve we'll have to have you back we can do breakdowns on everything because the space is just moving so so fast right now and i'm really glad we got to do this car awesome thank you blaine appreciate it if you enjoyed the show we'd love your support a rating and review would go a long ways as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

this is d pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linked in the show notes and now let's get into the pod what is going on d t pod today super excited for our con with chris koch this one's gonna be really fun because i've had the pleasure of hanging out with chris several times in miami as you know we explored d brands creator led brands all that good stuff and you know we're kind of going back and forth and all of a sudden it came across my desk that chris is coming on the pod today and i was like oh my god hell yeah like i was super excited for it because i know we'd never gotten the chance to do it had talked about it but now we're making it happen so quick background chris is the founder and ceo of avoid and they work with massive talent celebrities to launch trans transformational brands in the direct and e commerce and retail sort of space so chris i'm gonna let you kick us off why don't you first tell us a little bit about your background what you're building with void and maybe some of the brands that you've worked on and how you guys think about doing things at void yeah happy to and i'm glad to be here finally so a good background on me i i i'm originally from new orleans most of my background and it's was actually in sport plane tennis actually boarded not too far from here in florida and brad at i g for a period of time and ended ended up playing through college and got injured and found myself in new york at a boutique investment bank background was in finance and did that dance for a small period of time and my my one of my closest friends from childhood also played a sport and was was drafted into the nfl and kinda persuaded me to to think more about representation in sports and entertainment and through that had met somebody named sandy mont who became a mentor mine sandy ran talent at i g for many decades before the acquisition of endeavor and and and from that he he kinda spun out something called the mont group which was more focused on broadcasting and so that's where i kinda got my footing in all things sports in general entertainment from a managerial and representation perspective and ended up working with a handful of nfl players primarily in your giants focused on everything off the field marketing endorsements brand strategy and through a lot of those learnings felt like there was a a a broader gap when it came to big agencies that really weren't equip talent with the ability to develop their own ip and felt like there there was an opportunity there to develop a venture studio model that was focused on standing up brands across cp agnostic that would be serviced by talent as kind of a utility so our focus is is standing up brands that are solving a true consumer problem so we like to say we're product first talent is a utility that we use to drive awareness so more or less some mega phone for the brand but the brand needs to be able to stand alone so if it if you want repeat the talent might be able to drive the initial purchase but if you want them come that they gotta like the product so we're we're pretty intentional about the categories we get into and how we stand them up and then ultimately finding the right talent based on their audience profile to make sure that they're aligned from a customer acquisition perspective to allow ourselves to become profitable early in the business and ultimately scale into retail because talent also play a huge factor in terms of being able to open up doors at retail as well so that's that's kinda what we're up to today building a couple fun brands fortunately on the back of our recent series a and and have have one brand market right now called one up candy that's that's created a little bit of noise for us which which has been fun yeah and i i'd love to i mean we're gonna go into one up candy i mean that brand has been blowing up you guys are nationally distributed you partnered with one of the biggest creators on youtube to pull that off so i definitely wanna go into that story in the in the candy space but why don't you talk to us a little bit about like this venture model like right like what so just at the business level what is it that you guys do you raise capital you identify products you find operators you find talent and you launch brands quickly or how does it work yeah so i tried to model void not too dissimilar to something like sciences as of venture studio model they were a good benchmark i think our differentiator is just talent but the idea was to create more or less a shared service model so how do we stay lean at the hold c level but have a strong virtual bench of people that we tap to bring into each port code so void is an llc that we raised at this point with our series a five million into and our what we intend to do is is inject capital anywhere from two hundred fifty to five hundred k checks into each new portfolio company that we spin out of void and that would be a c corp and so the idea from there is we first look to identify what that consumer problem is we'll then go source supply chain to see if we can actually build that business and based on unit economics if we think that's a profitable business that we can go to market with we'll then go seek out the right talent based on consumer insights so we'll use some specific software to identify who are the best ten candidates for a business like this while we'll narrow that down and then we will get to those talent directly either via management or agencies or sometimes directly based on certain relationships to to have that conversation to see if there there's interest in bring them in and bring it to market alongside them as a as a c compounding partner one thing i think that's super important that you said is that you guys are product first and this is what i think separates like you know brands that can like really live and sustain themselves versus brands that might be more of a flash in the pan that are more talent driven right i think you said something that's really important is that we want brands that can live by themselves right brands that inherently have strong dynamics strong unit economics strong strong profitability and the fact that and strong potential for repeat purchases with or without the talent so when you bring in the talent the talent can become and acc as opposed to you know the whole thing in of itself and i think that's a really important distinction because what with the amount of traffic that a lot of big talent can drive you may not be able to separate the signal from the noise in in a launch right and i think we've seen that in many talent led consumer brand launches where there's a lot of noise they take off really quickly and then they sort of sp out because maybe the product isn't there they didn't build the supply chain the right way or or something else right and yes they're driving so much traffic because like the you know the amount of views they can pull is just absolutely insane but you know maybe the market isn't quite there for their product so so i think that's a really important distinction for you know whether it's you guys thinking about launching products or anyone else thinking about you know just because there's a talent and just because they might wanna launch a certain product you know maybe that's not the right way to think about the prop the the the product maybe you wanna actually start with the problem and make sure that it's something that the market really needs yeah it's it's it's interesting at at this point there's so many talent and or creator driven brands and market that it has become quite saturated so to be able to differentiate yourself requires the product to really stand on shelf and so it's i think a lot of people to this day will build based on passion points as opposed to true up true market need and so it's it's something that and it's tough right because you're talking about talent that you wanna get bought in on the idea and a lot of times talent are only bought in on concepts that resonate with them and so we'll you know our process although has worked it it does take multiple hits because you're you're or multiple swings in order to get a hit really because to find the right talent that resonates with that category that can drive value into that core category but then also have the level of appetite and aptitude to drive you know meaningful eyeballs to that business is is is hard to find you you kinda have to strike gold across multiple areas and so that's why we're pretty sensitive to to how many businesses we launch and and what we're getting into specifically and with and with which talent because sometimes we're pretty excited about an idea and we think we have the right talent and we quickly find out that you know they have a lot on their plate or there a million reasons you know they're touring and they can't dedicate as much time but they wanna attach their name and a lot of times i don't think can't really realize that they need to be in the weeds with with the operating team and if if they think they don't need to be that's typically a red flag for us yeah and and and another thing just because like you know i've spent a lot of time looking at this space as well and it seems like can't you know not all talent is created equal when it comes to launching your brand in the sense that you know if you're just looking at the follow the following number like that doesn't tell the whole story it's a question of like how aligned is the talent with the product they're doing like is there that authentic match but then also like is that talent like are are they a good storyteller are they someone that can actually get people to pull out their wallet or are they you know maybe you know known for something else and they'll just like you know take a little picture and they're not like really engaged and like sure so you get some brand awareness but you don't get like the full power of like driving that you know purchase behavior all the way through conversion so is are there any ways that when you guys are evaluating talent other ways that you think about things when it comes to like really pairing up talent with the brand yeah it's it's definitely from a metric perspective it's there's not many things you can look at behind be beyond looking for possibility of like any level of conversion have they have they done anything that's converted in the past whether it's merch sales ticket sales private a a previous product they've been pet attached to maybe as a licensing deal there are ways to look at it and this is another way a way in which we can find red flags is if their teams aren't willing to show us any conversion data and because there are a lot of talent with a lot of followers you can obviously look at engagement good engagement can only bring you so far and you have to see whether or not people are willing what what is that kind of consumer behavior with that talent can they actually drive someone to purchase something and not many have that ability and so we we typically look at any track record or history through those those different areas i just mentioned to to help us understand whether or not that person has that ability and sometimes they don't in terms of they don't they've never done it before so we don't have that history so we're taking a bit of a bet but again that's why we feel pretty confident in terms of the way we try to structure these deals with talent and standing behind an idea that we think regardless of that person this this product is needed in market because at the very least if they're not converting the talent at least they're bringing massive awareness to a product that that that could eventually lead to purchase sweet so you know obviously i think everyone's gonna wanna hear about how you structure these things now we talked about how to like you know potentially find them vet them understand that it's the right fit but before we do that you know i wanna kinda talk through one up candy right you launch it with face rug super successful you know eight figures within months rolling out nationally and it's a candy brand right so i'd love if you would just tell us a little bit more about the brand itself how the project came together just so we have like a real sort of example of how how this works in practice yeah it's this one's a bit of an anomaly because it was we launched it before we had real funding so at that stage we had raised just our family and friends round at the void level so what at that point we had about one point three million dollars of investment capital and and void we were very small very lean we identified an opportunity in non chocolate con infection and phase rug it was a part of a larger is currently part of a larger organization called phase clan and they i was very close with their team and so they had mentioned phase roku who is kind of their largest creator of that cohort was interested in building something in liked candy and we had already identified something in candy that we thought was interesting so we had a conference real quick and who like for people who didn't know because i didn't know phase and then i looked him up and i'm like oh my god i'm an idiot like how did i not know this so who is he like you know tell me about his channel his audience like what does he do he's really he really vlogs his life he's very family oriented so a lot of what he does is family oriented challenges but then he's also done a lot of candy challenges which is why this resonated so well with his audience he he really started to gain attention when he partnered with face clan hence the name and fay phase rug and they they're kind of an engine that's kind of just prop up a lot of these massive youtubers or at this stage streamers and kinda took a life of its own now he's by far kind of an anomaly with within the face crew and he he shoots out three youtube videos a week long form videos he's got you know he's growing month over month at a pretty set exceptional rates i'd say roughly somewhere between three to four hundred thousand followers a month he's got roughly about thirty million subscribers on youtube i'd say collectively across tiktok instagram twitter etcetera he's got about fifty five to sixty million and they're very engaged i mean he's he drives several thousand kids to a location on a spot so he's and he had conversion data based on a prior licensing deal he had with g fuel so we knew he could sell something and we knew that he resonated with gen z and gen a based on kind of his back end data what what what age those in terms of the kids that that actually follow and engage with his platforms and he's always kind of been a candy fan so as we knew that the content from a candy perspective and had performed well on his platforms in the past and and so we we kinda made a bet on the fact that he was our our right person to disrupt kind of what we would call effectively novelty candy so we're we're we're looking to bring kind of experiential novelty candy to gen z and gen and we're doing that through new innovative flavors and textures so look if you look at something like in the beverage aisle for instance something like mountain dew or oreo in the snack aisle they're always coming out with these new innovative flavors and textures and collaborations and but you don't really see any of that in the candy aisle and big candy just moves exceptionally slow and they come out with the same things there's no real new innovation so we wanted to kinda be that new almost like the liquid death of candy that's coming up with new interesting things a twist on the familiar if you will that's resonated very well with the consumer and we we ended up bringing cash app the fintech company as a marketing partner so we effectively gave them an exclusive to market their visa cash app card upon purchase for a d challenge called the sour gummy challenge did did you ever hear the pack one ship challenge no what what was that so the pack one ship challenge was it was a chip part of the pack chip brand and it came in a coffin coffin packaging and it you it was very viral i remember there was a video shaq doing it on on whatever it might have been it could've been cvs and it was like he started sweating on the screen it was basically can you handle putting this chip in your mouth and swallowing it without you know effectively having to go to the hospital and it became super viral because a lot of people couldn't handle it but then people started to really get really injured and some people were going to the hospital and so but it was a really good marketing tactic and so we wanted to replicate that with like can we create something that's incredibly sour the most sour thing on the market and can people handle it for a period of time and if you do you'll win prizes and that was whether it's to meet fay rug or you're winning x amount of cash dollars cash i've got involved and starting to to get do get to do some like in kind give backs and it was a very successful campaign for us that generated close to a billion views online specifically tiktok and that that raised the the the attention of of walmart so they actually wanted to take in our sour gum challenge and we convinced them to to bring in freeze dried candy so at the time when we were selling this in freeze dried was very popular on tiktok but there was no brand that it brought it to retail yet at scale and specifically within walmart and so we were kind of the first mover to do a land grab real in terms of real estate at walmart by bringing in our free dried candy line just because we can move so fast and the fact that we had phase rug so we effectively sold the fact that if you guys want to have a new consumer driven through your doors via have phase rug we could do that because they were they were they were basically vetting ten of us that could do freeze ride and we they went with us for the pure fact that we could move fastest and that we had a a creator that could help drive unique traffic through their doors and that allowed us to secure walmart and at that stage they we did two thousand doors on a fourteen week kinda test period they call it fourteen week mod test mod and we did very well outperformed what they projected they scaled this to every door just over four thousand doors and from there the business really started to take off we went into circle k then we did a a roll at at five below an now we're in about twelve thousand doors we'll be doing north of ten million in trailing twelve months and the biggest part of that story that i think is resonated with the market is we're eb positive so we've been even a positive actually since day one and that's because of someone like fay rug who's acquiring these these customers for for zero dollars we've not done any paid marketing for that business so it's that's been a big value add in thesis that we wanted to test in market that's that's played well into our favor and so now our goal is to continue to scale our retail and we're raising our our price our first price round for that business to allow ourselves to to bring on some more firepower from an operating perspective and and continue to ex bringing in some other talent to support phase rug because our our belief is it should never be one face or name i think we we're always looking to acquire new customer demos and exploring new ways to generate different types of content and and that's that's we'll we'll kinda see where that takes us yeah and i i think a couple really interesting things there number one you know what you just said about wanting the brand live on itself and not being too close so you wanna work with the creator but you don't want it to be just solely the creator brand because if something happens to them or whatever you've got brand risk whereas if you can set it up to say to accelerate your brand with the creator but really be a standalone product and brand in its own right i think i think that's that's a really unique value prop and then the other thing that i was kinda curious about more clarity on so at the hold c level you guys raise money there you launch brands the hold c has ownership in a brand for example like one up or any of the new brands that you're launching and then once those those brands themselves start to take off you can recap those c corps as need be is that correct correct yeah at that stage we're typically not investing further at the later life cycles of the business we we we would bring on strategic growth partners to to help further for instance in our price round that we're raising right now for that business void isn't participating any further we're we're bringing in outside partners and that that's kinda the idea is we'll we'll take on the initial risk up to about five hundred thousand to to get things off the ground and once we have validation in market once we reach some some type of inflection point we'll we'll look to to bring on some growth capital unfortunately we have some good partners there awesome and you know another thing i'd love to just know about you said about five hundred k to get a project like this off the ground but you know you guys are in all these doors you've got the creator you guys are scaling super fast why don't you walk us through just like operationally like what is what does it look like like how much is going it like i know we said you know marketing becomes sort of irrelevant because you partnered with the creator but on the supply chain side of things on the manufacturing you know how much is going into inventory how much is going into logistics you know how much is going into you know back a house stuff like what what what does it look like to truly get a brand like that off the ground because you know like you said four thousand doors four thousand walmart going from zero to four thousand walmart like that's a lot of scale really quickly right it is yeah it's and it wasn't easy i mean we had we spent about three weeks trying to nail down kind of in in an inventory financing partner to allow ourselves to take on the amount of units they were looking to bring in indoors which we couldn't afford to do without without a financing partner which that's that's a different conversation but i think it really varies per business in per category generally what we like to say we wanna do it's just not ever that cut and dry is is we wanna launch d to c to test and learn because we can do small mo queues we can do that sub hundred thousand dollars and see if if we can get validation there to then bring it to retail because that way if we fail we fail fast and we can move as opposed to doing these major swings at a retail or multiple retailers and if things don't work out it's it comes back to hit us our investors and the talent much more directly in the face so that's kind of the idea but it it it it does depend on category because for instance we were we are exploring something in the beverage category and typically in beverage you need to go to retail and the costs behind that business are are alright exceptionally different than it would be even for candy and so it's it's i would say generally even if we're writing two hundred and fifty to five hundred k checks it's not enough to fully capitalize the business it just gets us from a to b to then figure out do we need to raise an additional one point five to two million around this business to get ourselves to that next inflection point but it is it is something that we're constantly having to work through because as we get into new categories we're realizing some more capital intensive and require not only more resources but it just depends on the channel that you're looking to go through but i we also are as much as i like to say we test and learn d is the model i we also are a believer of if you can do a controlled launch at retail with a specific retailer that's just as valuable and that could be a regional launch it doesn't have to be a major rollout and i'd say it all depends on the relationship you have with that buyer at that retailer at that time so it's there's multiple mechanics that go into that but you know we're we're we're early so i think there's there's still lots of to learn on our end yeah and i and i i think it's really cool that you guys can also take the perspective like in you know one up scenario you've got that opportunity you've got massive digital distribution and you've got a retailer that's like ready to go so in that case you're like okay let's roll it out but if you're just you know validating ideas first before you really wanna pair it with talent and scale it up you've got opportunity to tinker with the brand tinker with the product do all the things that you need to do to get those proof points that you need to say alright let's you know pair this with the talent put the final branding on and then scale it out in in in retail or whatever that first kind of big test looks like to truly validate it once you've got that there's some of those initial proof points solved for yeah yeah exactly because you can do consumer testing as well to an extent but it's it's there's nothing better than being able especially if you have a talent that's willing to do it for to test across their consumer base on an amazon or on a tiktok or just even via website to to kinda see how things gain traction but there's a couple things right now that we're working through but there it's it's i think we used to say it's always gonna be d but and now we're actually going through a circumstance with a beverage where we're going direct to a retailer and so we're no longer gonna stay true to that statement but yeah may i mean it makes sense for beverages is actually funny i had aaron no from breeze on the pod last week and we were just chatting about it he was like because they have a a beverage a cannabis beverage brand and he was basically like yeah we picked the one thing that would be really hard to do on d but he's like we're all marketers we made it work and now they're like scaling out to retail now nationally but it it's just kinda funny because beverage like you're saying it's it's true it's a much more difficult thing typically to due d to than it is retail and a lot of beverages it's like okay you go to buy your thing and and that's that's where people discover that's where people drink and that's where people find you so especially depending on if it's alcoholic or non alcoholic i do love that brand actually have some yeah it's good it's some good stuff okay so now that you know one thing i also wanted to talk about with one up and you know i'm sure a lot of people are really curious about this is like what does it take to actually structure a deal with a creator right because you know there's no one playbook like we're saying before every creator is a little bit different they've got different interests you know affinity for the brand different ways of putting in work but like how do you having worked on the talent side having work now like on the the hold coin and the void side of things like what does the successful structure look like is it something that you guys generally can have a playbook around is it you know one by one how do you make sure you're retaining enough equity for to like you were saying you're like we might wanna bring on other partners in the future but like at the same time you know how do how do you negotiate and structure one of these things to not only make sure you're you're usually set up in the creator set up for a long term success but also that you know the business is in a position where you know it it's set up for success as well in the longer term yeah it's it's a good question and there's not one answer and that's for sure because it depends it depends who you're speaking with on their team how they're incentivized you know what they're looking for at that time is it a category that's competitive for them that they already get large cash guarantees for where your might you might be taking in them out of that category there's so many different factors as part of that negotiation but generally we try to create a template some type of playbook that we can run by each talent that we're having a conversation with but there's always pushback so it's it never ends up being exactly the same but how we typically look to work is once once we've already formulated something that we're confident about and think we have a go to market strategy around that business and then we're approaching a talent at that stage you know we're we're we're we've already put a decent amount of money behind that business and it we have a bit of leverage going into those conversations with talent but we it's it's there's always a balance of what's what's a what's a way in which this business can still win while making this person happy year over year to stay involved and engaged to get us to a bigger win and so that's that's it can be complicated i think for us we try to one incentivize with with some type of ownership structure so they they have some some form of founder equity that's vested over a period of time but we lit we leave like a a talent pool for future talent and we carve that out in advance intentionally because we want other talent to help service this business as we continue to scale throughout the later life cycles of that of that brand so it's it's we're just of the belief that not one talent could help drive us to to a future acquisition and the more power we can have behind that brand as well as you know tapping different demos is having different types of talent is important and so we're pretty intentional about how we do that but outside of any form of of ownership upside we would typically look to give them some type of distribution royalty that would allow them to see to see upside year over year as opposed to hey just take a bet with us and you might have an outcome in five six years because that's a big bet for any talent to make and it's it's something that i think is fair for talent to to see some some upside year over year in a distribution format because just as it just as our operating team gets paid a salary to to to run the business or or void for instance we get a shared service model and and to pay ourselves as a as a as a hold c the talent should be paid as well as well as you know they have upside for a future outcome so that's that's typically how we do we try to stay away from any money guarantees it just for us as soon as you start speaking about cash guarantees it comes across as a as a endorsement less so of you're really in this for the long term outcome of the business and and so if if they're coming to us with hey we need x and guarantee typically for us we're pretty turned off because it's i think they're just not looking at it in a way that you should in order to build a business because ultimately you're taking from the brand that you're also receiving equity and especially if it's pre revenue and they're asking for that it's it's you're you're only hurting your own business yeah and i think that's so important right because like you know like you just said and i've i've done that i've seen this many times right like i've spoken with talent managers who are incentivized to get as much of the company or as much of the offering for the talent but sometimes that's not even actually in the talent best interest because you know they could be like oh well i've got my fifty percent and and now what and now you go operated and like that's it and they can like leave you high and dry so in an outcome where the business you know grows can scale to a massive exit and everyone's happy the talent because they helped you know distribute it the the builders because they're operating it as well as the team who's identifying the product gap and like really you know making everything happen it's it's it's a full team effort and i think to your point you know over indexing on anything and self cannibal almost is is kinda the what what you wanted to avoid so do you have any tips when like you know if if someone else is they have got their own brand and they're considering you know bringing on talent like you know do you have any tips for how they should think about structuring when they talk to the manager and the managers like give me fifty percent of your business like right out of the gates or something like that yeah you can't get woo by the name you gotta remember that you have to treat that person as effectively a marketing vehicle and if if if you can compartment analyze that and not think that the world might change because you're getting in a list talent on on your business you gotta you gotta go back to the basics of how are they gonna drive dollars or acquire new customers whatever that business model might be in into this business and i would say going back to those fundamentals are important before making decisions but i'd say one of the most important things is make sure you're getting on directly with the talent and if that talent is not willing to do it or if that manager or agent's not willing to make that introduction then that's that's a no go for for us so it's there has to be to me that's that's a a clear kind of money grab opportunity on their their end or or the or the talent not really bought in or sometimes unfortunately i think managers or agents are the barriers of entry and are not even really bringing that full opportunity to them so it's i that's why a lot of times i tried to try to see if we can go direct to the talent and if there is interest and then i'll speak to management so there is proper context but not everyone can obviously do that so it's it can navigating those waters is always difficult but making sure that you have a direct conversation with talent before moving forward and understanding their level of commitment in any back end data always ask for as much data as possible on the talent before committing they typically require they every agency has a media kit for their talent and so that will give you their entire audience demo background i'd ask for any conversion on any prior concepts or things that they've been attached to because then you'll the you'll start to une earth the realities of if that person is the right person or not yeah and then do you have any other sorta of red flags hook up for i love that one you know you need to talk with the talent because like ultimately they're gonna be the ones that are into it and if they're not into it and their managers like hey you need to post about this like once a month and like it's just not gonna work so the talent really needs to be bought into what you're doing so i i love that but are there any other red flags i mean i know i've heard stories of friends who you know will launch a business with talent and they get in maybe the talent makes a couple different sales and then kinda gets over it and then you know the owner kinda stuck holding the bag and having given away a bunch of equity and and that sort of stuff so is there any smart things that you can do when you're structuring around you know sweat equity or setting targets or just aligning incentives so you know it works out for everyone and you don't end up with a situation where you're like oh my god why did i do that yeah there's that's a good question there's definitely ways in which you can structure the deal mechanically to where one obviously vest schedules are important but two even if for instance if their brand were to take a hit let's say they got caught up in some bad press media and then that in turn affected this consumer brand that's a big deal and a lot of times that comes out of nowhere and it's unexpected and there has to be some somebody has to reconcile that and so we typically put some some type of provisions within contracts that state if x y and z happens there are ways in which we can call back portions of equity obviously you can't be overly greedy because if they did provide x amount of value to date you got to at least award that but there's we put as many protective measures as possible without getting too much in the details that allow allow ourselves to feel comfortable moving forward with the talent yeah and i i i just think that's that's really important that's something that everyone should think about like if you're choosing to like partner with talent like making sure the incentives align making sure you're structuring things to protect yourself and don't get too excited just because oh my god we've got this big talent because at the end of the day like you were saying it's on you to build a business build a great product build something that people wanna come back to and return to and the talent becomes an acc for that so if you're banking too much and like oh my god i'm just gonna sign this this big creator and like we're all good like no right no you can you can never especially in today's day and age it's just not how the us market works anymore it's it's they're not gonna buy based on name alone totally chris as we wrap up here and we look to the future for you and void like what else are you excited about you know now you've got the the series a you've got a success under your wings with one up and it's something that you wanna replicate i know you said you're looking at beverage are there any other categories creators any other things that you know you're excited about looking for as you guys scale everything up you know we're we're excited about some of the new concepts that we'll be bringing to market over the next six to twelve months which we'll be sharing more publicly soon you know without going too much into detail we're we're really excited about protein so there's a couple things we're working on across that category within protein that that we really like and we're we're kind of playing around with some different ideas you know we're speaking to larger folks in market that have major distribution channels where we would partner and explore testing product so i think because i think ultimately as we continue to scale we like the idea of looking at existing brands not only building from inception but distressed brands that we could help bolt on our services and talent to to help scale so kind of like a new formed ag so we're we're kind of excited to see how some of these things shape up but we're just looking to get some first and second base hits at this stage no home runs yet we just need we just need to be be away from home plate and and hopefully hopefully from there we'll continue to scale i love that and and that's actually a super interesting model as well looking at distressed brands or brands that maybe you're kinda humming along but could really use an acc in and just you know fine tuning a couple of the operations and really blow up i know one example that comes to mind is nicholas bow from mate he came on the podcast and you know he had a super successful brand they were killing it in canada they hadn't entered the us market had a great year monte and then you know they got an investment partnered with hub men and now like they're blowing up right so i think you know brands like that it's like a great example and a potential opportunity for you know partnering with brands that exist that are already doing their thing that have found their place in the market that could really use some some jet fuel so anyway really cool really cool space to be building in thanks so much for coming on the pod sharing all these lessons and frameworks for building creator led brands for anyone who's looking to connect with you where can where can we learn more why don't you shout out your socials are you on linkedin ex like where do we connect with you i am on linkedin it's probably the best way to re reach me i am also on i guess instagram if if if you wanna find me there i just don't look at it as often in the t but if it's easiest to shout it out it's cd ko but yeah that's that's where you'll find sweet well thanks so much for coming on the pod yeah of course thank you for having me if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

this is d pod where the worlds of creators consumer goods and brands collide we get behind the wheel to show you how today's biggest products and ideas are made launched and scaled if it's shaping the future of commerce and culture you'll hear it here first catch new episodes weekly on spotify apple podcasts or d c pod dot com be sure to check out our newsletter for weekly breakdowns and recap linked in the show notes and now let's get into the pod what is going on d pod today we are joined by aaron os who is the founder and ceo of breeze breeze has been one of the fastest growing brands in the cp g cannabis sort of social tonic sort of space so i've been really looking forward to this conversation for a while on today's episode we're we've got aaron on so we're gonna break down all the strategies that they've used to grow how they've unlocked their growth so fast over the last couple of years i think you guys have only been in the market for you know just over two years now and yeah let's let's get into it aaron warren why don't you give us a little bit of background about yourself how you got involved in breeze and and what you guys are all about yeah absolutely so first of off thanks for having on show i'm super stoked to be here it's it's it's it's an honor yeah it's my background i've been an e commerce since i was pretty young i started at thirteen on my myspace and big cartel so like back when big tart was like one like the early shopify it was like an e commerce solution back in the day and i started by making t shirts like designing them in photoshop and then my dad would fund my orders and i would like there like three hundred bucks to get thirty t shirts and then i sell the t shirts online and just played backing game for a while and then that was kinda like my entry point until you internet marketing commerce centered up branding building online brands d to c etcetera fact think we didn't call d to we didn't even call it i think the other name is d v digitally native virtual brand or something like that so you know it's in whatever that was and so so i've i've been doing it since then we really cut my teeth with a brain called monk it was a portable aroma therapy diffuse her we essentially took vape tac took the nicotine tobacco out at essential oils led you to feel the way you want the therapeutic air really cool product really fun learned a lot you know this was while vape were just kind of on the rise and we were kinda of positioning us this like in ent of a vaporize like the healthy alternative and so that was in d c scaled to zero to fifteen million in three years as cmo and then i got pushed out i didn't know how to dot my eyes didn't know how to cross my t's and kendall was fl for a little bit trying to figure out what's to do next and so i've started a bunch of other startups ups one of those was a cbd brand in twenty eighteen and i tried to advertise it on facebook and i kept getting shut down and i was like this is such a pain this is such a big problem and you know that startup up kind of fizz out but i realized that this problem was pretty grand this this advertising of hemp and cannabis product cbd at the time so i kept working on it built an agency called lou and wrapped around that specific problem that's solving cannabis and hemp advertising scaled lucid for six years to the largest cannabis social advertising agency in the world run eighty percent of the meta ads for for cannabis and google and twitter a bunch others as well and and and then i started breeze in april four twenty of twenty three so just over two years ago now and you know i i had tried a few other products that were similar and i met some amazing people to help formulate something that we think is better and then we just leaned in used all the tools that i had and that my partners had at their disposal to just build a best in class direct to consumer first grand it was a beverage which i later found out like three months after launching that that was like a really bad idea to do a need to see beverage brands but but thankfully because we didn't know that we found a way to make it work because if we really built it off of the principles of what makes the direct super brand successful rather than a product itself and that was really the delta necessary to to to to succeed and then the fact that we've built the product that that i wanted that that we wanted which really was a feel good alcohol alternative that was not gonna have you feeling terrible was gonna have you feeling excited and happy and you you forward it but then you'd sleep better and wake up refreshed and you know this is the this was what i wanted to exist in the market that didn't and so we made it and i i think and and i know that a lot my team resonates with that so anyway there's a long winded way of how we got here no i i love that and i think one thing that you just mentioned that it makes the the story even more impressive is like you were saying beverage is typically not the easiest types of brand to brands to scale on d and you that today you know you guys are on track for well over fifty million dollars annually and you've done you know eighty percent of that through d right which goes against everything convincing you would you would hear about how to do beverage how to launch etcetera so tell me a little bit about you know the landscape first you said you're were kinda solving your own problem looking for the product that you really wanted so first why don't we start with the product opportunity like what did you see there and then another thing you mentioned was like how it had all the characteristics of like a d brand that could be successful so yeah what was the problem and what were those characteristics that you know tee you up for success yeah absolutely so so luc had been advertising for the hemp in the cannabis category for six years since twenty eighteen or twenty nineteen and you know and this was twenty three so five five years whatever that is and so i was kind of like seeing the market and how folded and kind of looking like okay i know i wanna participate in cannabis i know the i'm gonna do another brand i'm gonna do it within cannabis up but i didn't really know when the right time was so but around that same time i have a stopping drinking i think it's been three or four years now i think stopped drinking twenty one if i'm not mistaken but i've been i remember i stopped drinking that it i kinda like left the space in my social life it less space space in my my life overall like this thing that i would go to to find relief to have find connection like a good thing to thing i would do after work the thing i would go do on the weekends it's like it's just not there anymore and so it's like okay well i'll just use cannabis which is fine until like you don't have enough cannabis buddies like you had alcohol buddies and like it's like okay now this kinda feels a little isolated it's smoking smoking is not really good for the lungs like regardless of your viewing in cannabis like smoking is just not inherently a a good thing especially not consistently and so so i so like you know i and i had tried these a few other functional tonic in the space i tried to know thc beverage in the space and none of them like really gave me that feeling i was looking for it and that feeling i was looking for was a sensation or pre relief while so eu euphoria clear headed not anxious not paranoid not heavy not sluggish and so so i i met i went to this so i had this idea in like november december of twenty two and i was started searching for people to support it in january and february and i went to this cannabis and psychedelic conference in like february and met this guy travis who brought some really unique extracts and compounds to me most specifically this manual lions because it was like this is super unique compound like no one's ever done it before like let's and know i heard you're working i i he is like i heard you working on this beverage let's see if we can collaborate there and so he he so he we started working on a few different formulations and i you know prescribed this kinda like goal that i was trying to achieve and we had a workshop then what we came back with initially wasn't not very good at all like it was super heavy hey hit you like a truck like you drank one you're at down for the account like hey that's not social that's not you for it's not like it it was relaxing but it was missing the market of that so we went through a bunch of iterations and then eventually we landed on this product that hit all the marks we're you're looking for and like and i'm pretty like particular on my experiences like i i had a very clear goal in mind it's like i an infected mind yeah and i we just workshop to week till week out there and then we passed it out at two hundred cans at a conference and people really resonate with it back then it was very it was much more better than it is today so there was some feedback of like it's too bitter it's too bitter but even the people who were say it was bitter or like like they would want two or three cans from us just because they like the effect so much so that's funny when i knew we had something on that regard and so you know i think there's like when you find success in business it's usually a balance between two things a great product and great distribution or i know can said says it's good innovation and good distribution like you can't really have one without the other you have a great product and you don't distribute it and no one ever knows you have a great distribution and a shitty product you don't last very along the business like you know it's it's one or the other so so so we kinda got to this place like okay we have the product and then at this time i had been building the the infrastructure to for the direct to consumer aspect of it assuming we would get there on the product since january and you know i had a few things in mind like costs are continuing to rise on every advertising channel and the future is gonna be dictated by brands who have large ao like the higher ao the more they can spend and and the advertising is an auction i think a lot of people forget this because we're like a little we can the front end they're other than the back end but it's an auction and a quote ryan dice used to say a lot from digital record dot com is he who could pay the most wins and i took that the heart and i had seen all these other the brands that we've been advertising for at lucid and right i've worked on previously and the outliers the ones that were always scaling had strong ao they had subscription first they were sticky products they were super intentional to make sure that the customer was having an exceptional experience at all times and and they were simple you know and so that was the intention like one page one pdp one lander going into it because we have to have custom landers for compliance on the advertising side subscription first high unit economics that supported a good ao and in insane customer service in good retention so like those i think are the building blocks of any successful direct to consumer product and i think you can actually put any product in that matrix as long as it hits those other things the one exception that i didn't i was aware of but didn't fully factor for with shipping costs and like i was super like oh obi i offer free shipping to the direct to consumer brand it quickly like came to realization like there's not actually a way to do that at just for across the board and actually get these products to people and if people actually want these products and they're not necessarily available to them where they're at they will pay the shipping costs to get them is was the epiphany which is kinda obvious and so so then i just started passing with the shipping costs of the customers so now we have the ao now we had the shipping cost covered by the customers at least eighty percent of it and and we were in business you know and over time we offered free shipping on a hundred plus and they're kind of like really started game find that so and be the lowest buried entry for the customers while still protecting the business's interests so that way we could serve the customer better i think that's something that like i really took to heart i've always taken heart but i've really kind of with business but really have been a essential focus on breeze someone put it to me this way recently which is like if we don't have margin we don't have mission and i love that like if we're not building a profitable business if we're not building a business that can support itself then how are we supposed to so supposed to further the mission and at breeze like we have a very clear mission like we are here to reducing human and suffering and maximize human potential which might sound lofty but it's not like people are drinking things that are not necessarily good for them at at abusive rates like those people could use an alternative that still gives them the solution that they're looking for without the cost of of to the to the health or of the relationships and so it's like you know like getting our product into people's hand like like we like we very much intend to make a very successful business but like at the end of the day what we're actually trying to do is make a better world fundamentally and like i know that the outcome of that is value and i'm sure that we'll get paid in that process but like you know the nice part about me and my partner is like we had lucid nick had his structured had his success agency like we all had made money in the internet game and so like we came to it not from this place of like we need to take from this opportunity but rather we need to give as much as we possibly can and trust that that would be the the most valuable thing to everyone and thus us long term yeah i i love that there there's so much that you just covered from you know starting with a problem building a product for you know yourself that you yourself would wanna buy all the way through the the core pillars of like what a d brand should be all the way from retention to customer service to business models to ao vs and everything so i know we went through a lot but i wanna start with i wanna go back to when you were you know not only in the formulation stage but like when you knew this was like a brand that you were gonna do basically like now looking back right you guys at fifty mil looking backwards like you don't just get there in two years without a like experience and b like a really solid like lunch plan and execution right like stuff out like stuff takes time in the the atoms in the physical product world so you guys being able to like scale up and launch that fast obviously great you you you guys have experience in the ads but there's so much that comes to it in regards to the supply chain in regards to having everything right the brand together ready to scale and you guys have already started introducing your product so let's rewind a little bit and i wanna go into what did it take to actually not only like launch the brand but like forecast and make sure you had you know your supply chain in order make sure you had like enough money ready to go to like stock inventory like what did the what did the pre launch to launch chapter look like yeah i don't ever think it really looks the same is what i would start with is like you you have to be more like and and even in this conversation like you should pay more attention to the principles than the individual actions that happened because like it it i know for most brands i don't think it generally looks the same so for us i first knew that like the way that i run business success successfully is like finding the right people to be part of that vision and mission like it and so you know one of the first things that we did well so right of gate we had lucid and and you know my partner or being of and they can some of these other guys sort involved at lucid and and i the first thing i did was like okay we gotta come with some money for this so i had i took a a loan out from luc said so the company that that i found it and and owned but my other part owns be a piece of it too is so we'd we made a loan from that to to produce one two i put in so that was probably a hundred thousand i put i'm probably another a hundred thousand from there and then nick gave me an additional fifty thousand from there so that was kind of like my initial seed which is like two fifty which i don't always think it takes that much money to do something like this but beverage is heavy it's expensive it's there's more to it i also think that like i often under shot what it actually does take in order to do something like this and i didn't have my god often didn't have enough money so i think you could probably get away with a hundred thousand dollars from most products just to get in the game but like two fifty was what i needed to kinda like get the flywheel turning which is radically fast and radically cheap in the bigger picture but but so that's how we did so so i had i had so and that was like installed over three so initially i had like a hundred k and then i had another hundred k and then i had another fifty so that that initial so that was one aspect that that's where the money came from initially the the next aspect of it was production so i met travis in february travis just happened to be working at a nail altercation lab so he was working with a people who could already em these materials and give us the active ingredient that we were looking for so he had strong connections to supply on the thc in the hemp front he had strong connections to lab equipment and into sourcing the actual bolts supply material and so that was a big curve that was a big time saving you know in and you either need to find people who have those connections and and i can kinda run that area the department or you can to find strong enough people that can go find them quickly with you on your behalf then he also travis had a at home gaming line so he had like a a candy line that you can do nothing serious with like five cans a minute or something like this or at most but that was enough to make two hundred cans and so we were able to start with two hundred initial cans kind of making it at home still testing it still doing the lab test still doing everything but but we're able to make small batches of like two hundred cans labs us our an additional batch that's like unheard of like you know when you're doing small batches in the with a c packer you're usually looking at you know something like at the lowest i've seen is like twenty thousand cans and like that's that's crazy low and most c will never even take that deal because they don't have a lot of faith that you're gonna be ordering more from them in the future where that that's where they make their actual money so so you know we did a we did a small batch there then like we did a bigger batch within that small batch of environment i made two thousand cans again like a crazy small amount to make but because i was doing that i wasn't making i wasn't investing a shit ton of money into inventory and so i did so i had like less money and the inventory which allowed me to have more money to actually sell the products and then skip that flywheel running so that way as the sales we're getting in i could kinda return that investment right back into the the inventory so we did that we from two hundred to two thousand and then i think we did our first batch of nineteen thousand or or it was it was forty five thousand cans total night there's was like a twenty thousand another twenty five thousand cans and then and then that was enough to kind of like snowball us into into production but like lean methodology and like i just kept it simple like i had one developer that worked with me at lucid who built the website and i paid him directly and he was really smart guy i had one designer who i worked with closely to design the website i have one designer that i worked with same same designer that i worked with closely to design the packaging and we just like just we kept it like and i think that the thing is like i had enough experience in the space like it wasn't my first rodeo nor my first direct to consumer brand you know i think it it it popped up at such a overnight success that a lot of people see just like oh my gosh what happened how do these guys do this but like you really look at the situation like i've been building e ecommerce brands and saw it's thirteen which was eighteen years ago you know so it's like there's been this wind up here that that it's heart so all that experience that i've gained all those over those years allowed me to know exactly like this is what i mean to do this is what i need to do this is what i need to do and the savings of time and money by not doing all the other things that probably was the real secret to success i mean i also find that like when you like i was saying earlier none of these really things really look the same like anytime i've ever had success in in my life there's a combination of like five to ten variables that all have to kind of like click together to make it work and it's it it's sounds impossible until it happens and so you kinda just focus on okay let's make sure we get the product right okay can we can we get enough inventory oh great we we have the website set up okay is like this enough is this sufficient cool alright it's could be let's run a hundred dollars a day in ads let's see if we can get this to convert okay we can get to convert for three days which changed this okay now fourth day we got it to convert great reinvest here you know it's like what so just a lot of like micro optimizations and quick iterations until you get to that kind of product market fit point and then once it happens you you you unlock a certain level of market growth and so and and it's not always and this is kinda where i really appreciate that quote of do things that don't scale it's like you know whatever it tells us to take you to go zero to one just to get market validation is not gonna be the same thing that you need to do to sell ten million to sell three million cans or five million cans or ten million cans and so it was really just on unlocking that zero to one knowing that if we got there we would have a new vantage point in new information that we could use to design the next phase of growth and then i'm that's just what we're doing today as well you know it's like and this goes back to account on my core principle with the brand is like keep it simple stupid like like don't over complicate the thing like you make a great product use innovative technology to get it in front of people care deeply about the customer and like and then every opportunity you get to do that better do it better yeah and and i think a couple things that like really stand out there number one is don't ask for permission like you can just start you can just do things right and in your case it was like i know how much capital i need to kinda get this flywheel turning it doesn't have to be anything crazy but like let's just do something so we can go validate that there's an idea here enough to have a product and enough to like spin up and run a couple ads to make sure that like there's something here and if that's the case i've got everyone waiting in the wings to like scale this up all the way and and and i i think that's so valuable because a lot of people might say oh i can't launch my brand until i get the investment or i can't launch my brand until you know i do x y and z and and really there's no there's nothing from stopping you from just going out and doing something even if it's a smaller scale right like if you can't get the investment you're like i can't finance my inventory do pre sales right like figure something out like work with try to work with creators and scale something to you know a land and capture leads like there's things you can do where if your resource constrained that you can get going faster so i love that in terms of like getting of just like one modification i put on there is it's like i did before i started my cb brandon before i started i lucid it i tried to start three different direct or two or three different direct to consumer companies most of which failed and i made this was post monk so and when i look back at those times and like why those companies failed i didn't have enough money that was really point blank the issue and and like that's kind of a sticky situation because i don't think that supplies to everyone all the time i think that sometimes were but the issue was i had money coming in i was married at a young age but i was three or four years married i i i had i had money coming in that stopped all a sudden i was fully reliant on my wife's salary to pay the bills and keep things moving while i was trying to dump more money that i didn't have into businesses that i didn't have validation for so like what i learned from that that i applied to greece that i think was super critical was like i did have money coming in from blue head so even when i was building breeze i was still earning from blue head i had saved some money so i had some money to to put in and then i had people on call ready to give me additional money if i needed it so i i do think that some strategic planning about your adventure into business and making sure you're prepared for it is critical i don't think it needs to look a certain way i don't think it has to be two hundred and fifty thousand and it doesn't have to be making an x amount of money per month or have this much money saved up you just need to know that it's like you're kinda going out into the desert and learning how to survive so like like be ready for that and know that it comes at significant constraints and i wouldn't i like if you actually want to succeed don't take that lightly like be prepared for the journey ahead make conditions for and like you know i i like that quote that's like burn the lifeboats as well so it's like how do you balance those outside ideas it's like being prepared for the journey that you're heading into and being fully committed to its success and seeing it as kind of like it's this is a winner a learn situation we're gonna keep learning until we win but we've created enough resources to ensure that we can do that so it it's kind like burning the lifeboats books but make sure you get the resources off them first yeah a hundred percent and and i think that's a a really important point about you know making sure that you've got the resources to make it happen so if it's a if it starts as a side hustle like that's cool like you know maybe you have a couple hours per day but the the interesting thing a lot of these brands when they're just starting in the beginning and you're trying to get that validation sometimes it takes a little while right like you're testing different you don't have all the resources you're testing different ad concepts you're testing different products you're going through product iteration you don't have a lot of money so you're not scaling instantly so it's something that you can definitely like do on the side as you boots bootstrap and test demand and all that sort of stuff so yeah i was so convinced that like i just didn't wanna get another job like i didn't don't i wasn't gonna go work a job i wasn't gonna go w myself into slavery like i was so hard headed about that that was the wrong thing to think like the the smarter thing to think was i'm gonna leverage this thing that i'm spending and training this time over here for this capital that i can go real over here that was the smart way to think of and like because i think you know fear becomes like a strong driving force otherwise and you're like oh i if i don't just lean in i'll never reach my dreams but it's like no like let's absolutely reach our dreams how are we gonna ensure that that's a non negotiable reality and if i need to take the vehicle of employment in order to help you build that then great also like changing the perspective of like not everyone wants to build that you know and that jobs really arc this awful thing they're the perfect thing for the right people and sometimes they're and sometimes they're gateways other people so i i like looking back i i would have not been so resistant to work for someone i would have been i would have been resistant to letting that be my end be all for me personally and i think that that's you know that's the advice i think pass down it's like don't be scared of like trading your time and skills for money especially if like like just see it as one part of building your masterpiece well yeah and you and you need time in the game right and if you're if you're out of the game you're like i'm going all in right now in the market timings right or you get delayed on something and then you run out a a capital like you're out right so apps like do do what you need to do to stay in the game and then as it starts to grow you'll you'll be in really good shape so erin i wanna kind of double click on something that you had said so you'd gotten you know initial production you've run you've you've kind figured that out how to get a couple cans of your product walk me through what was going on because you guys have experience scaling brands on the d on the ad side so what did that ad motion look like in the beginning how much were you spending what were creative were running were you keeping it simple like what did that recipe look like and walk me through what getting your first call it like month worth of sales like what was that like like what were yep just walk me through that so so we had two hundred cans of this latest batch we went to benz z cannabis conference and like i'm literally had forty eight hour label dot com semi me labels that i'm like slicing in my room with a paper cut i got from office depot just ten minutes before putting it on the the cans and been past so that was step one during that process i collected a bunch of business cards in those business cards when i got home i entered two hundred business cards into k and so i had my initial email list of two hundred people just from the business cards that i collected so like super gorilla marketing and style and not just like one was kinda cool here is like all those people just made a name the face recognition as well some of them tried the product so like these people that i was gonna email were kinda warm already like they probably would buy my product if i know them about it so so that was first you know and then and then i had i had the website built and ready to launch which was subscription focused which was ao high ao focused like the so it was it was all wrapped around there and then i and then i had a few initial ads so now what i did with this initial ads this was at the time where high production fell off so this is twenty twenty april up twenty three so high production fell off u was happening but it kinda getting saturated founder ads were an idea but they were usually super like stiff so my failure was this like i need to have a conversation with my potential customers as if i was facet timing them that's it and then you know like i so i just made videos that felt like that now the part that some people don't always know we're here is like i have seventeen years of marketing experience so like even though i'm having a conversation with a friend that i'm face timing i also know how to speak in a cadence in in a way that's both per per per persuading but also holding of their attention and able to and like playing on desires but not but also being authentic so i was able to kinda integrate this like authentic voice and like truthful while also being mindful of like technique of how to be convincing and and conversion focus and i think that that's great because like reality is is people don't wanna spend a lot of time listening to things that they don't think matter to them so it's like to be hyper valuable to people like tell them what they like tell them why you're talking to him and what they wanna hear if if if it if it would be valuable and what they would need to know to know if it wasn't so i was just very clear i mean like it was literally just like a lot of videos like me talking to my camera i had one viral video that was just like me putting the camera up against the fireplace and i would do little things like i would try to like make that frame so you can kinda see my knees and my knees have tattoos on it and it's kinda odd that someone has his knee tattoos where i i'd wear a shirt that says dope and i'm making a video about a cannabis drink and my shirt says dope so like little like bugs that kinda are like worms that kind of like cook on and people like what's going it kinda captures so these are kinda like the little things that i do think are super important when doing this like if you just film you know a poor video of you talking about a product poorly and like nobody's one's gonna buy from it but but i was trying to really focus on what would be the most like here's something that i've created that i think that is so that we've created that it is really valuable here's just how i think it's valuable to all humans and how might found to you and then the way don't we just run this as at so so rain ads i had that and then had a few static i had some good three d animations and rendering and and then we just spend a hundred dollars a day you know like i think there's a lot of people like you gotta spend ten thousand dollars and then you have enough data in meta to really determine whether it could be i don't buy any of that i'm i i tell right they just clients i don't think that that's true like start with a low spend get the initial data whatever data and points that you're having make make iterations based off of that have enough budget to test don't get me wrong but like no you can make tests from micro learnings along the way so i did that and like the other thing is i have that email list so you know like med and needs data to know what worship doesn't work so by emailing two hundred people at once getting them to the website pixel them seeing which of those turned into customers and then that fed some initial data to the system that i had for free and then i was able to compound that with the ads the first so we launched on four twenty the first day that we launched i also posted on every social media channel that i i have nick post on every social media he channel he had nick had a a a decent following i had a smaller following often then my other partner had a little bit of a falling so like everyone just posted all of our social media i had for friends and family like you have to be relentless with this shit like you have to just like push and you know momentum is a funny thing it's like you're kind of like pushing you're kind of like pushing until there's enough momentum that it starts to carry itself and and but you have to keep pushing i mean to this day like we're pushing today like because like i i know that that's what leads to ongoing success and momentum at the end of the day so so we pushed heart and then we just kept pushing day after day keep beating that drum of with day after day and that was like what facilitate us to to keep going so the the initial day we did like four thousand in sales which was really exciting then we did eight thousand in sales or ten thousand in sales in the first like ten days and then the next month it's seventeen thousand in sales and then we did i think like i wanna say forty thirty five forty in sales right about mh then we ran out of inventory for the first time because like we had we didn't have the cash to buy enough inventory we're kinda like using it as a flywheel and so so you know we were on ads pushing forward that so then it was now okay like we need to go on pre order and keep selling the stuff even though we don't have it because our money's locked up in inventory and we gotta get so we did that and thankfully that worked we now the thing that that could have killed the company though like and there was a couple of iterations of that i wouldn't even recently but like you have to be very careful of that like if you sell a lot of stuff that you don't actually have available to sell ray at that moment or or you know like production can get delayed like ingredients suppliers could not show up or or whatever it is so we were just in a position of so you have to be very careful and very communicated to your customers about the scenario with as much honesty and integrity as possible so they can trust that you're steward in their money correctly especially whatever it becomes whenever and and getting gonna get the product to them also like you get be really willing and able to solve the problem if they want their money back give their money back like you know and so you know and thankfully we had a lot of these kind of like if for us it was it was always like buying inventory or inventory was already made but it need to go through proper testing is we're you're holding it until you got through testing so you know just you gotta be super mindful of those cash cycles and i i'm smart enough on those areas to be dangerous but like not an expert in those areas by andy mean so like how i as a ceo like vin for that is i find really smart people to then come in and run point on those different areas and at the early phases if you don't have the money then you trade equity the later phases if you have if you have the money you trade money and so so yeah i just i tried to in like i'm so like heart centric with how i lead and operate and like run my businesses that i try to just attract people that kind of seems to be operating in a similar way and most of the time that that leads to finding really really strong people that i can trust that's that's amazing and you know i love that the concept of your launch being able to just push push push like you gotta do it right no one's doing it for you and and like letting that drive momentum and then just keeping the foot on the guest could you just characterize as you said you're doing like four thousand bucks a day and it looks like your your products are like forty or fifty bucks per like for for the six pack to get started how many orders of that and like were you doing that on like a hundred bucks of facebook on meta spend or were were you cranking it a little bit more just in the early days as soon as you started seeing sales pick up you're you you were like oh these are these ads are kinda working so i'm just looking to see if i can get the the actual data for you here but so in april so we launched an april twentieth of twenty three three and so the first day that we launched we did four thousand two hundred and fifty five dollars in sales which was a combination of social media combination of email blast and then ad spend we were probably spending i would say probably something like two three hundred dollars that day like not nothing insane just like enough to like so then the next day i think we did like two thousand dollars in sale so a big drop off like all these people had just bought it okay and then the next day it was like five dollars in sale and so then like you know had this initial burst and then we had it kind of like so i think we were probably spending i don't have it exactly but somewhere between like two hundred and five hundred a day for that first week and then just as soon as the cox made sense we were scale like at the beginning it was so novel of a product that the cats were pretty good like even when we were first just starting out it was like sixty or fifty and i think our ao was like fifty or sixty so it like a one x and like okay cool like we i can't scale too aggressively against out but like let's keep entering let's get some more data and see you can get that lower and then eventually we get that down to like seventeen dollar tax and twenty five dollar cash he's like okay great lean in you know and that was great so i mean we've leaned in and then you know that's and we just kinda like followed that path you know i think that most people overthink this shit if i'm being honest like like whenever i'm dealing when i talk to a lot of other people in brands and other like it there's just so much there's so much focus on like why is it not all working now like do i need to spend more i need i think that like it really usually comes down to like it comes down to three things always it's like like is it really clear like do you have a a good valuable thing that you're offering for people and is a very clear what that is and like just do you have a do you have a conversion focused and friendly path to purchase it doesn't have to be that fancy it just needs to be clear it needs to be like per persuasion focus like like if the if the if the product is really the offer is really as valuable as it should be to start and this should really just be like speaking that as clearly as possible at a very clean path and in and then third does your is your creative communicate that in clean and compelling way and it's like most of the time honestly no matter what stage you're out of business in the direct consumer world that's the problem yeah it's just and and like so you know we just put full focus on that we just went full focus on like like it like understanding what was happening on that that initial data that we were sending and then like just refining and refining and refining that and the better we got that the further we kids scale and like and then we had targets like we needed to hit i think at the time it was like we needed to hit a three x and b so for every dollar spent we need to have three dollars coming in and so it's like if we were hitting that great we spend more if we're not hitting that we're optimizing and iterating on those three areas and that's kind of what we do today still like there's a bigger macro picture that we're working on now but at the end of the day it's like are we what determines whether we scale or not that day it's like are we hitting our target if and if not okay great all energy and focus should be going to optimizing those three areas to offer the the landing page in the in the creative and we keep it already those until we walk more better better performance and then we push it back up see how far you take it no i i love that keep it simple and you know just just put something out there start testing and as long as it makes sense from a a business perspective i like how you guys have you know your guard rails are like very clearly establish you're like we're gonna be a profitable we're gonna make sure that when we're spending we're we're bringing more dollars back in that's gonna allow us to reinvest into the business production into all these other places so now that you guys are scaling up you guys have obviously you know the majority of your revenues is coming through shopify but you branch out to other channels you're starting you know with retail you guys have had a really big push into retail what is the mix starting to look like and how do you see it developing over you know the next couple years yeah so beverage grains are made in retail is really what it comes down to a lot of the stuff i didn't know out of the gay i was really focusing and just building strong of a direct consumer brand as quickly as we can and at this very key moment i think that's something else i didn't really mention but like timing of your product is you know super important like things happened in different ways people's awareness become aware of certain solutions so gotta find how to time that like we definitely timed this one well and we had that opportunity to do so because lucid was overseeing what was happening in the category so when it became clear that this is a time to act that was able to act super quickly so super important like you know it's like i don't know i like i wouldn't there's there's certain businesses i just definitely wouldn't start today due to that so i would always keep that in in mind but i'm kinda figure to your question can you i ask me more time yeah yeah it was just like well actually just one thing on timing like timing is so so important and i think that's something a lot of people underestimate and they'll over attribute like oh i'm so smart i'm dumb or this of that but like so much of it is the market and when the market's ready for a product like doesn't really matter who's there who's ever is product is there and ready is gonna take off but yeah my question was about now that you've kind of you know locked up d you probably scaled more to more d revenue than pretty much most beverage brands maybe any beverage brand i know especially with the your subscription component and for some big game is on that brands but yeah for sure yeah on amazon but i'm talking about like d c like you guys are killing it for especially for you know how young you guys are but you know my question was you know how do you think about channel mix like where you've like really leaning into i know retails definitely part of that playbook but you guys are on amazon you guys you know are in tiktok you guys are in other sort of places so how do you think about the mix where are you like focusing and what are what are your sort of plans beyond d in the next couple of years yeah absolutely so the the you know the thing is beverage brands were made in retail like the the at the end of the day that's with like the you you know probably you and as well as your listeners like how many beverages do you actually order online like for me it's like what like i ordered a coconut water off famous on and i have brace you know so it's very few so i think that like you know the way we think about it is like we're investing heavily heavily and aggressively in retail to to get in a good position for the continued growth of the category so we started investing in retail about one year after launch so we were one year pretty much need to see built cash reserves like got profitable we're in a good position there found and then we focus on finding a really strategic hire someone who really understood retail had been in the game for a while you know this type of guy and i was lucky to find this guy brian tu who just an exceptional guy who was previously at stone brewing and had experience in cannabis so so he came on and he took over our retail department and so we had the retail department run for about one year so far and we've been able to get it now to merely about a third of the business which is awesome and like really i think it's gonna flip to where it's two thirds of the business and maybe even seventy five percent of the business over time not because we're not gonna take our foot off the ass of about deep but just retail becomes such a for beverage brands to become such a a big channel over time you know the other thought was like i wanted to get off meta as soon as possible like i wanted to not be reliant exclusively on meta there's a balance there like you don't you wanna use a single channel strategy to get to scale and sustainability and start building the infrastructure that brand needs to succeed another ways but you have to you have to do that first and so so we focused really intently on meta a a little bit of google a few like minor channels but really a lot of meta out of the gate but then as soon as we got there the question was like okay how can we diversify as quickly as we can effectively to other channels and other revenue sources separately and so initially we did like direct to retailers through our website so they could buy our products online and having them shipped because we had all this attention coming from consumers and they often had retailers that they were connected to and and then you know it's probably a hold another conversation but beverage distribution is like a crazy beast like i had to learn so much so quickly thankfully i had some good friends and i had some competitors that were kind enough to to kinda show me the ropes and then brian he had all the experience to to really take it home but you know like in beverage like you you work with a distributor who covers specific region and then they now they're kind of like a delivery service but they also do some marketing but they represent like fifty other products as well at least and so it's like so then you gotta start building this kind of like retail army to then go represent your brand with those distributors in different regions so it's a totally different game that i'm used to on the d side but but thankfully with the right people and just like you know like trying to to realize i know nothing about this that i was able to learn pretty quickly what to do and then we figured out how to s our direct to consumer reference with retail which really i think became like our competitive advantage and i think it's super undervalued in the direct to consumer landscape is like he get so focused on the d vibe like channel as like an exclusive channel i don't think it's really meant to be an exclusive channel like i think can work for brands but really where d shines is when it fits into a broader ecosystem and broader mix of of revenue because then you can use it to different things for example you know like all our direct consumer success i e like getting for example in florida like i had twenty five thousand customers in florida or fifty dollar customers in before whatever whatever it was at the time and we rolled out to all total wines and all of florida and like i sent one email to all my customers and said like hey by the way how we're available at total wine you can go to any of these locations and and i emailed that to to all my customers and because i had their address i could say total wines within the total twenty million or twenty mile radius of them and then you know we sold out total wine in twenty four hours so then it like the fastest sell that they had you know it's like so then so then it's like okay cool like we know if we can get the like we have the mind share if we can get the placements so we can activate that and start crossing those paths and training your customers on how to buy it in retail while also continue to buy it online and we found like that has been really us our secret success i think lately is is like because we're able to generate so much demand ongoing and have a way to turn that sales online and when we're on the retail shelf but people are already kind of aware of our brand when they see it and then they're they're there and also customers that like don't necessarily wanna keep buying online now have a vehicle where they can keep going buying in retail and then that becomes a really nice value add to both our retail partners and our distributors and i think a lot people initially like oh fearful like oh these guys have d if i put them on my shelf that they're gonna take my customers it's really doesn't work like that even most the time at my experience what happens is most the ds customers become retail customers sometimes it goes the inverse way but not usually it's usually that way but i find that to be a good thing like retail revenue is durable revenue it's valued higher like i know my customers are gonna buy more frequently like it saves the cost of shipping and it's gonna help us get to that next space of growth so my intention is for breeze to forever be a strong due to sleep ever a brand and like really showcase what's possible and continue to innovating what's possible but i also intend to do that because i think it's gonna give us massive flood richer retail that most people especially in beverage just don't have cp outside of beverage you this this exists but most beverage has been insulated from that for up until now so it's been kind of regulatory in that regard i mean it's a huge flywheel and i mean you'll hear of some like you know like celebrity brands that are like launching a new cp brand this like oh everyone goes shop my new thing in the retail but like you're actually talking to customers people who have tried your product it's not because like oh like this creator just told me that i should go do something which obviously like works at at you know really sizable scale but you already have the fans there so that synergy in that flywheel that you're building is like super compelling so i just think from a a strategy perspective being able to you know scale the way you guys have on d have that pair it with the retail launch it's really good it's it's it's it's awesome and congrats on all the the the growth and success so far so as we wrap up here i know we could just chat for hours so maybe we'll have to have you back in the future we can break down everything that we need to know about retail but you know for anyone who who's tuning in once to follow along i know you do a great job of like doing the build in public stuff and sharing a lot of valuable insights where can we connect with you where where can we find you why need shout out your socials yeah absolutely for breeze it's drink b r e z drink b r e z so you can find us anywhere twitter instagram myself personally is just at my full name so erin a a r o n j and then no sp o s b i s c h aaron j no yeah like like you were saying i post all everything we're doing in real time measure our revenue numbers monthly i share where our spins is going what's working and not working and you know and that was like another kind of interesting aspect i was really just trying to like bring in as many people into the story as possible and often like that was what i felt like wasn't available whenever i was getting into the game that i was wish did exist so we figured it'd be cool to tell the story once it happened but cooler to sell the story while it was happening so i love regular there i love it so congrats man and appreciate you coming on the pod of course man thanks for having me if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d t pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

hey everyone we're super excited to announce the launch of our slack community for d pod this is a space exclusively for d founders and operators to connect share ideas ask questions and support each other you'll be able to engage with the best minds and operators in consumer and currently we're on a way and it will open up the community once we reach a hundred and fifty members so apply using the link in the description and we hope to see you on cloud so before we kick off today's recording i've got one more for you keeping up your momentum this year starts with the right selling tools and if you're looking to increase revenue grow faster build more pipeline and close more deals check out the all new sales hub from hubspot you'll be able to manage your whole sales process plus my favorite part the reporting it's super intuitive powerful and customizable plus the whole thing is powered by ai so your teams can spend less time on tedious time consuming stuff and more time on developing relationships also no one likes a clunky platform that takes months to onboard on to but getting set up on sales hub is really quick and easy it's free to get started the pricing will scale with your business and with more than thirteen hundred integrations and add ons you can tune it to your exact needs visit hubspot dot com slash sales to start selling with sales hub what is going on d t pod today we are joined by martin is who is one of the team members over at inspire brands so mara been really excited for this con because you guys have successfully scaled tons of brands in terms of ads and performance and growth in the d space and that is kind of you know one of the the big levers to growth something we wanna talk about something we love going in depth on things are always changing so yeah why don't we kick it off why don't you first tell us a little bit about yourself how you got into the performance in the ad space and then we can get into some tactics for some of the best ways to scale your brand profit yeah sounds good appreciate you having me i'll let just mention that at the start so i was in my senior of college studying computer science and trying to figure out what to do with my life should i go that career which is kind of like safe route you have a steady job ninety five should i kind of like try try growing professional because of we bring a semi professional in in second creation division i was playing soccer so was just kind of like in in between the roads somehow i'm stumbled upon digital marketing started learning everything there is about it it got my attention to the extent that i even changed my topic of my thesis to the digital marketing as i was learning and soon after that i've i had some practical i had some theoretical knowledge but not practical luckily friend of a friend was doing facebook ads probably at that time only guy in croatia that was doing facebook ads so he started working with him it was great for him because he was give giving me all those like small tasks you know upload the audience find the next interest take the post id and stuff like that it was great for me because i actually got the practical experience soon i started freelancing connected with matt who's the founder of inspire agency so i was there like a part time then junior mid senior head of performance currently partner at the same agency so basically my whole journey tied within fire all the way from freelancer to the partner and the agency we a boutique agency focused on paid social facebook is our bread and butter we do some tiktok ads google ads but facebook code is what we are world class i spent personally over one fifty million dollars on facebook ads combined for our clients and for our internal brand because we realized that through the years we can scale other people businesses so then we thought like okay why why not start our own and we basically we hit thirty million in our third year which is definitely higher than what we expected but i cannot complain about that sweet yeah so super exciting you guys have you have a ton of experience in all the way in the weeds from just starting out to you know being able to build out your own brands and see a hundred fifty million dollars worth of spend across multiple brands so you know i'm thinking for purposes of this conversation you know why don't you tell us a little bit about maybe we can even talk a little bit about how you approach growing a brand right like you guys have done it yourself when you're starting your own brand you've gotta start from somewhere and now like you said three years to thirty million dollars so why don't you walk me through like how would you approach growing a brand from zero to the start to get it to the point to being able to like really invest dollars and spend you know it's really scale your spend yeah so i would say like i'm a media buyer but facebook ads are just cherry on at top they are amplifier first of all you need to have like product market fit offer dialed in and creative how to have a product market fit it's always easier to find something that has a demand in the in instead building demand we tried launching one brand memory thought like okay there's no competition we have an amazing product it's gonna crush we're gonna be the biggest brand in the world it turned out to be it failed miserably just because there was no demand although the product was great so you don't have anyone to sell to so that's why we found the product that has a demand we just made it better for example we added some additional features we made time of the use shorter and we made it cheaper and we build an app that goes with so basically right at the start we have four differentiator compared to all the other products in the mark that gives us unique selling proposition and that it gives us leverage because when people starting comparing options like you have to be better than something else so the first thing is actually to be differentiate your product once you do that then you have to figure out your offer so basically there are a lot of people you know they give like let's say thirty percent off but if you frame that bite you get one in theory it's again thirty percent all but you increased your ao and it looks more appealing to the customers and it's not hurting your margins so much so when you kind of like position your offer to the way that's interesting both the user and it makes sense to you from the margin standpoint then obviously you can start investing into add into influencers into creative and then kind of like that flywheel just goes on but i would say product differentiator and offers are two main gordon things yeah and i really wanna so couple interesting things that you've said there that i wanna dig into the first was on the product differentiator side so if you're starting a brand basically there's two there's a couple school of thoughts either you know start something so innovative that like you're gonna be the product that dominates the market or pick an established market where there's already demand and just you know do it better than everyone else so it seems like you guys have found a lot of success in being able to identify existing markets where there is demand is that something you know how how do you think about that because for a lot of people who are like creating products and especially in d c right like people are creative there there's a reason behind why they wanna build a brand there there there's a story that they wanna tell so how do how do you think about you know i guess the brands that like really perform are a lot of times do you see them being brands that are incremental improvements where a market has already been created or do you see like that first time the first mover advantage being a a really strong strong thing so yeah i think it really depends as i said we tried being of first movers but i think like we were let's say a few years too early if we try that again in a few maybe that would be in a good position so it really depends like how at what level of saturation the market is and like we're you you need to kind of like get there when start climbing up so you need to be there when like things are like talking when people are talking about about that let's say currently hydration is like super popular so people are jumping on the high hydration train but like if you try to do that three years ago like probably that would not work so both could have success obviously the people that are first on the market they usually end up being the biggest brands but it's also way harder to to get to that position because you need to invest so much into education of your market of your customers that a lot of people that try that do not really live up to to those to kind of like harness all the benefits of starting first well and i think this is really interesting and this goes for any field you're and whether you're d or another sort of business it's like you know i there's this analogy that i heard that i absolutely love about a there's a boat captain and there's a boat and there's a river right and a lot of startup founders they think that you know it matters who the captain is or who the or what type of boat you have but the really the most important thing is like where's is the current going like where where's the market taking you so you know i i think that finding or as i i think the way you you think about this is you have to understand as a i founder like what you're trying to operate towards if you're in it for the long game and you see a market that's developing and it's gonna be there over time and this is something you wanna be in for you know ten or fifteen years then i think it's absolutely great to get in on the ground have that infrastructure set up so when the wave comes like you said you're ready and you can be a category leader if especially if it's something you have conviction in that you just believe will take time but otherwise if you know you don't wanna take on that uncertainty and it's maybe something that you just have a better idea and you wanna just try something to scale up a little bit quicker than go where the demand is move faster and outperform the market so i think that's a really good framework the next thing you talked about that i wanna dig into is offers right we hear it a lot it's not just about the ad creative it's not just about the product how do you build an offer that sells so could you just talk to us a little bit about what makes a good offer i know you gave the example of you know percentage off versus something else but just based on what you see based on spending you know hundreds of million dollars across meta what makes for a good offer and what should brand founders be thinking about when crafting an offer yeah so basically an offer is like i tell people that asked me it's just justification of the price so you have to present your product in a way that it sounds like an amazing or a no brainer deal to the customer so think of it like if you're selling for different products all at one hundred but then like you decide to create a bundle that costs three hundred so basically they're saving twenty five dollars for you it's great because like even though it would eat up a bit your margins you have a high ao but then for the customer it looks amazing because they're saying it twenty five dollars and they're thinking they're getting a good deal so in theory it's actually a legal that's good for both you and for the customers again let's give another example that's like super used in supplements and in skincare if you have let's say one month two month and three month supply so one month can be let's say ninety nine dollars two month in theory should be one hundred and ninety eight but let's say you put it for one hundred and fifty nine so amazing it looks like a great deal but then three month in theory should be almost three hundred but you put it on one hundred and let's say eighty nine so i guarantee you with this price anchoring ninety five percent of people would buy a three month bundle because it looks like a no brainer it looks like they tricked you but you actually treat them because you forged them to buy the biggest bundle that actually have the most margin ons and you have the highest ao that means you can spend a bit more compared to your competitors that they're are just selling one one month bundle one month supply so in theory what you should do frame the offer or like frame the price that is great for you for your business and it still looks super appealing to the yeah that that's super interesting on on the bundling side especially as it pertains to subscription i'm curious if you have any sorry obviously it varies product by product but i'm curious if you have any insight into like if say you're doing a subscription business is do you wanna be you know do you want a three month cadence do you want a one month cadence is it in fact better to like discount and do three months where it ships one product every three months i know for example like i use some like hair products up and they'll ship me like once every three months but then there's other you know maybe supplement things i'll take that they'll ship like once monthly so i'm just curious if you know if there's a difference that i think that depends on like how much the package how big the packaging is and like how it actually how much time do you need to actually go through the whole packaging what i wanted to mention now that we kind of like touch base on subscription product i have some clients that are okay with like cross zero point four zero point four zero point five they know they're are losing money on a front end but they know their numbers they know their lt they know their retention that that customer would stay let's say six months with them so even though they're losing money interior on the front end they know they will make that up and like they're ultimate up let's say return on the investment would be three x if someone buys six times and stay them six months so there's no way the brand that is starting out and doesn't know their numbers can compete with these guys because they will outs everyone because their target was is lower also i have one client that is spending one hundred k a day on facebook ads on a break so people would say like hey you're crazy but he has an amazon listing and all of these all of this facebook bank has a such a big spill over and the amazon that he's making money on the amazon basically he's he's breakeven his business model is like spend as much as we can on a breakeven because we're gonna make money on amazon because we don't run to ads we're just gonna like scoop all of that revenue that would usually buy on on facebook on website obviously if he doesn't have an amazon thing that could not be possible but that's why it's important to know your numbers and to know to know your business model because some clients tell me hey i need draws for and i need to be like profitable on the first basis so some i'm say hey like i just need zero point four yeah i i think that's that's that's so so important is understanding your business and your margins and also who you're competing against when it comes to like that ad marketplace because like you're saying there's certain businesses that you know especially for higher ticket businesses where they might be okay with like a five hundred or a thousand dollar cpa just because that's the name of the game for their business whereas for if you're a business and you're selling one time products for you know thirty bucks or something ao v it's gonna be a very challenging to to really scale that so the next question that i have around i think i had another question around subscription is yet typically what do what do you see i know it varies but have you ever seen i've i've had some friends who like you know have subscription products and they'll even do things like first month free sort of offers to get people signed up does that stuff work what have you seen with with free offers so we are just testing that on on our internal brand because if we have a product that we believe is amazing and that would have a high retention so we are testing one month for free obviously you can i would not necessarily suggest that when you're starting out but at our stage we can afford ourselves to kind of like test with that and again i would suggest that only if you believe that product will have a high repeatable rate of customers that will coming back otherwise you're just gonna like end up losing more money than just running the running the ads and again this is not necessarily something that you want to promote with ads you just like maybe send it to your email list or something on bad because it's easier to test that way then hey let's run the ads for something that we we would give away for free and day return and now like you're in like know two times two times trouble sweet next question i have for you i think i think don't quote me on this in case i get it wrong but i think you said you don't have product market fit in e commerce unless you're spending a thousand dollars a day at least one is my number right and two what what do you mean by that yeah i mean your numbers your number you remember that correctly it's just like something that i feel that like you'd be usually on the agents signed do not onboard clients that are not spending at least one case just because like maybe you don't have a product market it if like facebook that's the biggest like and most robust machine learning in the world that like is finding customers like this and like if you cannot spend one k maybe your tam is not big enough maybe your offer is bad maybe you have a product market fit but your like website is trash and the website low time is bad so like something is wrong if you cannot spend at least one k so in my maybe like using a wording you don't have a product market if it is wrong but like something is not dialed in and as i said in my eyes facebook ads are just an amplifier so in this case maybe it makes sense for you to hire a ser agency or like get like invest that into an influencers or like find someone who's gonna build your better creative like ads are just a cherry on at all awesome no know that that that makes a bunch of sense the next thing i wanna get into is obviously i wanna talk through creative with you guys how you guys scale it what makes sense what works how you craft different creative or different sort of brands but now that we've kind of talked through offers and we've talked through you know what product market fit might look like i'd like to talk through conversion and website stuff like you had just talked about how important is it to have you know how do you think about landing pages versus just normal checkout where are you sending this traffic provided you have a a given creative and how important it is is it for conversion to you know are you spending up tons of landing pages or are you just sending them to the product page where do you send this traffic and how do you get this traffic to convert the best way possible yeah so it really depends what the product is for example for all the commodity products that are self explanatory like jewelry shoes all the upper l one toys it makes sense to send them to product page because there's not much proceeding that needs to be done so when you send the product page pick a size like it's like the the less friction the better for some brands that are that have products that are problem solving we found that like having tutorials work the best so it's like a personal story tutorial okay i had this problem i tried everything think it did that work until i real until i find this and then you explain the product and its unique mechanism you kind of like educate the customer obviously you're gonna lose percentage of people that would not proceed from that tutorial to your product page but that those debt proceed they would have very higher conversion rate because they're are more educated about the product they are sold on product again instead personal story tutorial you can use list ten reasons why this product is whatever best or or something like that that again works for for this kind of product problem solving there are people that are sending people to we health basically you have a ba of thirty minutes and like you cannot even skip it like again the bounce rate is very high but the people that stick they're gonna buy literally everything that you put in front of them because they watch twenty minutes of your video so i i would definitely say it depends on the niche and the product what kind of landing page are you using in terms of the landing pages tests so we usually like to do all of our tests in the back end with intelligence that ensures that like traffic is split let's say fifty fifty in the back end so i don't have to create new ads leaving them to a new page because then the social proof resets yeah starting from scratch so it's not a really good indicator so think if i can test it in a back end i would test it you know a back end because it gives me clarity hey how my revenue per session how my ao and profit your session are actually behaving and i want to compare those and determine to be them winner that way my other question about landing pages was gonna be how do you typically build these like let's just say you wanna build a either a vs esl or you wanna send traffic to a landing page are you building these directly on site are they built with an other tool and where is that page hosted you know what are how how do you spin these up and how do you how do you make sure you're you're you have the right tools to be able to build and deploy these things yeah again that depends on the client some client is using using web workflow some is using un bonds whatever client has the page we are gonna use that fine and it's like a third party tutorial then it will be hosted on a different domain so it looks more credible because then like it's not used selling yourself your product if someone else promoting use it doesn't make sense where you push them to your product when it's a personal story tutorial it depends sometimes it's hosted on a website and it can be like you know code through through shopify and sometimes it's it's usually easier to use like un bounds and web flow because most people that are running tutorials they already have a template they just won't text and and images there are some brands that are using quiz pages for that you can use obtained basically for whatever you feel makes sense to use you already have a tool that that can help you do that in terms of the vs it can be just hosted on any work wordpress site you just have to like make sure that the loading is not too long due to that on long cell but as i said i don't think that makes a huge difference as long as the page is loading fast it is just a different tool that has like slightly different capabilities so it doesn't make a huge difference what it makes a difference is actually the content on that page we are really excited to announce that d t pod is officially part of the hubspot podcast network the hubspot podcast network is the audio destination for business professionals and we're really excited about being part of the network because we're gonna be able to keep growing the show bringing you guys amazing guests and obviously helping you guys learn from the best founders marketers and builders of the most successful consumer brands so anyway keep listening to d pod and more shows like us on the hubspot podcast network at hubspot dot com slash podcast network yeah i'm i'm actually curious not to get too technical here but i think you know one of the tricky parts about shopify like you were alluding to is like building these custom sort of page experiences but like when you're also thinking about a conversion you know a landing page one of the things that i've seen on some of these like you know sick reasons why sort of pages or that like convert is one thing they do a really good job of is one obviously the design but also like the elements where for example they'll always like as you scroll down the page there's always like a checkout button so like once you get a major your decision you can do that so i'm just curious like i know you mentioned web flow or like have you seen brands like that are doing com do a good job of like tying in web flow and then how do they like link to their product or is it just easier to like you know use something that's more typical in e commerce like an unbalanced or something like that so again it really depends i know like all the guys that are from a drop shipping background they pretty much on on web workflow most guys that are like from eco com side they're like mostly on red some people are like recently starting using fair vermont which is kind of like combining that shopping experience with a landing page so again it doesn't i don't think it makes a huge difference it's just like what people are used to using and like where they can find a good developer that it can execute all of those stuff that's that they want yeah the next question i had you also mentioned you know advert maybe an advert tutorial or maybe it's take your take you're taking traffic to a page that's you know somewhere else but it that has like external trust so what does that flow look like i guess you know we could call that white listing what do you see how do how at what stage should you consider white listing how does the conversion event taking place because a lot of times you're you know is it is it something where the like say let's just say it was like a white listener article are the they're linking to the product in line how do you make sure that the the if you are taking on white listing how do you make sure you have an asset that is worth running out store there any like things that you need to identify before you start your your white listing campaign before you're sending traffic to a page to make sure not only is it gonna give you the information but after the customer is you know convinced because they've read this content on a third party site that they're gonna be able to to convert yeah so basically the most important thing is that those ads that are linked to editorial or that kind of website that's on third party page they should look like an organic piece of content you cannot just talk about your product like you're like what you're doing with your brand page and with your website it needs to add it needs to act as an independent ad so basically something that's not connected to you because if like you're just talking about your product especially if it's like five different i don't know headphones we you five different headphones i'm like you're just talking about your product people which you'll see through it that it's kind of like a paid editorial so you need to like make it as organic as possible obviously you put your one on the first place and usually that type of content works rated with google ads because people are often searching hey top five headphones for top five something like that so when you have a website or like a tutorial that's kind of like reflecting the search and that works great on facebook it can be a hit or miss obviously important thing is to have a pixel that's same as on your website on that page so there's no drop on the facebook side in terms of the tracking and yeah like the conversion is happening on your website so you're not really you don't have any any problems people go on that content it looks like it's coming from a third party page they click on it they and up on your website so to them it looks like an organic article but you know it's a it's kind of like a tutorial that you built for the purpose of running pay okay so now we've kinda covered all these bases one thing i'd love to kinda get your thoughts on and i know this obviously changes by the type of product and the type of business but at the level that you're seeing things what's the typical mix you could call it of like you know ad formats like how much are a percentage of budget or people putting into white listing versus just normal pay ads versus you know bundle offers versus all these other things if you you know let's just imagine that you're running a successful brand and you're thinking about allocating spend what's your ideal split knowing that of course it obviously varies by by business yeah so in terms of the offer offer is something that's like tested in the back end so it's not really something that you can leverage on the front end on the paid side in terms of the mix so facebook is actually preaching creative diversification which means like you want to have as much as possible content pieces and style of the ads and different angles that you want to promote so you want to have unboxing video white listing u us versus them podcast broadcast style basically you want try to hit different pockets of the audience with the same kind of messaging or you want to use different kind of messaging let's say you can use the same product and advertising as anti acne you can use the same product advertise it as like anti wrinkles then you can i don't know use it for acne car so basically you want to hear different types of people that are still interested in that product but they're just coming from a different problem you can use it as an antibiotics so basically that way you unlock different pockets of the audience in terms of what kind of content you should use that depends really on the product as i mentioned same for what type of landing page we use for all the commodity product clothing and toys and jewelry images work the best you cannot really be them for the problem solving products it's gonna hard to solve it's gonna be hard to sell the product we are just an image because you cannot explain the product the product requires education you need to showcase how it works then obviously videos work better when there's a like a deep product deep problem then like dsl cells work the best obviously you still want to have a in your mix boxing that's gonna like amplify the social proof you could have us versus them that's gonna like compare you to options but it's gonna resonate more with the middle of the panel bottom of the funnel audience so it really depends what niche you are what your product is but the goal is to actually have that creative diversified got it the next thing now that we've talked about so you said medi one's creative diversity talk to me about advantage plus and some of their ai features i know they're trying to push a lot of merchants to like leverage and use these sort of things what's your ex experience ben is this something that you've seen success with in scaling i know at like a limited scale like you'll upload assets to there and they're kind of like repurposing them for different formats and maybe they'll animate some of your text and like do these sort of things but like what's your experience ben with advantage plus how do you think about and how do you think about their you know ai experiments that they're running yeah so facebook recently like renamed everything to advantage plus there's an advantage plus campaign audience even like cb budget is now called advantage plus budget which i would really understand why but like they're branding that that way in terms of the advantage plus campaign that's actually one of the best feature that's basically implemented within in the past four or five years and it really be got some good results the thing is you want to limit how much it spends on existing customers because it has a different way of setup compared to regular campaigns so most people not most but like some people do not know that you have to define your existing customers and set a percentage that you don't that you want to spend on them if my client cares about new customers then i would put zero because my goal is to acquire only new customers i don't want space would spend any money on people that we already acquired in terms of the advantage plus creative enhancement honestly i hate them like i don't want facebook putting some using using behind my image clients hate that like especially when they put some kind of like different text overlay on top of the image they just like looks unprofessional they are now playing with those like ai generative images but i still think it's like it's not where it should be so it creates more damage than and than what is helping also oftentimes there want to be how they say that feature should be helpful but then it ends up pulling i don't know catalog from clothing brands all them selling supplements and the clients tell me mikhail like what's happening here and like it it is becoming son annoying that you have to like turn off like all those features manually and like add creation like definitely extended so if you ask any marketer they will tell you that they hate all these ai enhancements but they love advantage of plus campaign that's funny i've i've i've seen the same thing with a couple brands just like swapping different things that aren't even in the catalog because advantage plus got a little too excited but yeah yeah that's fine okay now i wanna pivot the conversation to creative we've talked about you know all the things that you need to be successful in running out in terms of your strategy your business your offer your landing pages your conversion your mix of the types of ads you're running talk to me about creative how do you scale it how do you guys yourselves a handle creative do you'd handle that in house you collaborate with the client to do that and then you know i i'd love to talk about like what what your process looks like and just being able to manage and scale creative when you're spending at the levels that you guys are so it really depends on the client side we don't do creative production we help with to creative strategy but we don't produce anything on the internal brand we have a creative strategies two video editors and graphic designers so like pretty much all the content creation is done in house we do a lot of seeding of our product then we get a lot of content from the influence and our content creators that that feed repurpose as an ad that helps instead of hey like just to mash ups and stuff like that internally on the client side they either have an in house team or they work with an agency but we are there to support them with the analysis and beat the next steps so in case client has an agency they deliver the content to us we launch everything we always like to have multiple of variations of the same concept so let's say if i have a uc review i would like to have either like same world with two different quotes three different hooks or i would have like i like to have like three different hosting doing the unbox video i always want to test something because for me facebook ads are just a set of assumptions i get the data then i doubled down on the winners and if i give facebook more choice than facebook can pick rich variation it makes sense to spend on instead of just uploading one variation then it's a hit or miss when you're forcing facebook to spend the money on that variation when we are doing the creative and when we are suggesting in the creative strategy to our clients they usually start with like checking the subreddit of the of the niche that we are selling as well as x ex reviewing exporting customer reviews from the website feeding that to child gp and kind of like categorizing into different angles and trying to find key phrases because it doesn't make sense to to like talk about your product in a way what you think is about important about your product you want to sell what client what what existing customer think is about important about your product you will get so many content ideas so many like phrases that you should use in your ads because that way the customer will feel more understood so we usually pass those key phrases with images once we get once we see that like certain angle is getting traction then we move that into video when we see the video is getting traction then we move that to a landing page so basically but everything goes from the research like everything goes from that customer review mining where we actually okay we understand that like i know fifty percent of people that bought this product they bought this a gift so i'm not gonna advertise hey this is great for you i'm gonna advertise hey this is great gift for valentine's great gift for birthday or whatever so like your customer you would dictate the messaging that you're using i love that just in terms of the strategy piece that you laid out it's like very because i think a lot of times when you're thinking about ads you're thinking about creative if you're thinking about all the things you need to do it can get super overwhelming but i think that's a very solid framework start with the you know existing customers what do they have to say about your product because use that to generate your phrases take your phrases test the static the static that perform take those and create videos because videos are a bigger lift than static obviously and then once you've got of the the video winner and you've prove that you know it's something that the customers like that facebook lights when it comes to static that it also likes when it comes to videos then you're like okay now let's take this and build an entire landing page around this concept because again that's an even bigger lift and then you know you're sending traffic all the way there and you don't wanna be sending traffic to a you don't wanna build out a landing page if you're not totally concern yet so yeah i i think that's a really great strategy and great way to think of it martin as we wrap up here last question i have for you is like you know where what other tips do you have like is there anything that we didn't cover that you think is like important or helpful that you know you would tell yourself of last year or the year before things that you've learned that you think are just like you know really important advice for anyone who's trying to grow and scale profit on meta yeah i would tell them to like understand your numbers like as i mentioned some people scale with zero point four because they know their numbers also understand that as you scale your cpa would go up but also it means that like with a higher spend you can potentially have a lower us and still make the same money because your op pics are not rising proportionally beat your cogs as you sell the same item so basically understand your numbers it would unlock so much efficiency in your ad account because it's easier to like negotiate with your supplier ten percent discount than like lower your cpa by ten percent unless you unlock some additional crazy good creators so definitely know your numbers know when to spend know how much to spend for example weekends are usually better than the weekdays so we usually scale during the weekends that unlock some efficiency even the performance is pre the bad during in the weekdays and like observe the patterns and if you're interested in like learning more like tips and tricks and all the strategies and you're sharing those like on a daily basis on my twitter and on a weekly basis on my youtube recently so see if there if like you want to learn more about the call you want to learn more about facebook ads brian i i assume you can put that thing as show up yeah yeah why don't you shout out shout it out and then we'll definitely out in the show notes as well where where do we find you on twitter and linkedin yeah so basically you just type my name i don't know how to spell it in english sorry about that yeah you just type my name and i'll be there alright so in english it's marin m a r i n so and the last name is i s t v a n i c so we'll drop it in the show in notes and thanks so much for coming on we learned a lot i appreciate you counting man and was real fun if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d t pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

hey everyone we're super excited to announce the launch of our slack community for d pod this is a space exclusively for d founders and operators to connect share ideas ask questions and support each other you'll be able to engage with the best minds and operators in consumer and currently we're on a way and it will open up the community once we reach a hundred and fifty members so apply using the link in the description and we hope to see you on cloud so before we kick off today's recording i've got one more for you keeping up your momentum this year starts with the right selling tools and if you're looking to increase revenue grow faster build more pipeline and close more deals check out the all new sales hub from hubspot you'll be able to manage your whole sales process plus my favorite part the reporting it's super intuitive powerful and customizable plus the whole thing is powered by ai so your teams can spend less time on tedious time consuming stuff and more time on developing relationships also no one likes a clunky platform that takes months to onboard on to but getting set up on sales hub is really quick and easy it's free to get started the pricing will scale with your business and with more than thirteen hundred integrations and add ons you can tune it to your exact needs visit hubspot dot com slash sales to start selling with sales hub what is going on d t pod today i am really excited for our episode because we're covering a topic that has definitely been in the news in top of mind for all sorts of operators you know of the moment one one of the reasons we're excited to do this now it will a couple reasons one i've got justin sherlock here who is the c cofounder and ceo of cas which is an ai native duty drawback platform but prior to that just had experience working at not only in private equity but also working at flex port so this is really justin's domain of expertise and one thing that we were talking about is just as things have been changing so so quickly we're finally starting to get an idea of what this future landscape may look like we've seen kind of the ripple down effects through a lot of the consumer brands and consumer world and today we're gonna really unpack all of that so i guess without any further ado justin why don't you kick us why don't you give us a little bit about your background what got you into the space of trade and duties and customs and all this sort of stuff and then we can take it by there and and and pick apart what's going on in the world today yeah awesome thank thanks so much for having me blaine i appreciate it really really excited to to help folks understand the the tariff landscape or the global trade landscape and and and macroeconomic how affects their business it's something i'm super passionate about and and so yeah if i'm happy to be here gosh i mean there's there's only two ways that you get into the custom space one is that your your family was in the custom space or in the second one is that you know random random chance led you to discover it and you realized that it was something that that you are excited about because you're in economics or geopolitics or or you know you do read the jobs report that comes out every month like if you're interested in those things you you it it customs is a really cool place to be the my my exposure to it really came through my my time in flex sport like he said i i have a finance background i was an investment banker and private equity investor and i had done a lot of work in logistics when i was in in finance but i hadn't i didn't really get close to supply chain management in itself and and when i was a sport actually my first project there i was telling somebody today about this story i i acquired a customs brokerage in canada and that was flex sports launch into canada was actually through acquiring a customs broker there and that was when i started really learn about about this whole space and through my time there ran flex for capital the lending group where we were financing working capital for for growing brands we did over a billion dollars in loan volume was managing the group we scaled it up to d twenty countries and the you know i started finding out how much parents were affecting brands and their margins and and your there through the covid years when supply chain was just all upside down and and inventory was totally backlog and ports were choked up and i just felt like finance operators and owners of brands didn't really have the tools they needed to understand their duty exposure or how to reduce their their duty exposure or or access tariff refunds and and and so that was where the idea for cas starter to form in my in my brain and then i brought flex back in the end of twenty twenty three and ended star cas in in march about a about a year ago a little over a year ago and we've been building ever so it's sq it's kinda a blast and yeah why don't why don't you tell so what's the what's the general concept behind cas what what do you guys do why do you exist what's the thesis behind it yeah so the the high level is is that we we're building an ai trade advisor so i believe that trade advisory has a service as a consulting service or a value added of service that forward or consulting firms will will provide to to companies it's really been excessive access by fortune or five hundred or like public companies or really large you know private companies and and the average company out there doesn't have access to the expertise or the tooling to take advantage of all of the different tax strategies related to your supply chain and you know so what we what we're doing is product sizing this expertise to bringing out that every everyone else and you know i i talk we we're we focus on duty drawback right now that's our initial initial product which is we can get into it and it's a refund for businesses that sell products internationally from us stock but ninety over ninety percent of of eligible businesses don't take advantage of drawback they're either they're unaware of it or they can't actually get a provider to pay attention to them they're seen as too small and so that's where i just feel like there's this huge opportunity to take what historically like a fortune five hundred consulting service and and use ai to bring it out to to everybody so everyone can benefit from from these these savings awesome and you know i think right off the bat you're you've dropped a couple terms that i wanna kinda define and make sure everyone you know understands what they are so first like you know what's the customs brokerage right what's a a tariff what's a tariff and you know what's a duty drawback and what are like the differences between all these different things and how do how do they relate who who do they apply to all that sort of stuff yeah so such to zoom it's to zoom all the way out i think it's helpful to understand like how dudes enter a country right i mean customs is probably one of the oldest professions i i think customs is older and money like i think in ancient times you would have someone like a a part of of produce like coming into a market in in a in a in a village and there'd be somebody making sure that you there's no illegal weapons or or part of legal our immigrants even coming in through in in in that in that cargo and so that that was really i think the the it's it's one of one of the oldest professions that and it's about security but it's also about financing the security of the marketplace so customs charges people money to bring their products into the country and that money goes towards making sure that if there's a safe and free place for folks to transact and and so it's a bear it's very you know rational why why it's set up that way every time you wanna ship products internationally from a factory into the into the country or from the warehouse into into into the us to to sell a product you have to file it entry with the government and that entry form the has the value of the products and the tariff rate which we can get into doubt that's determined and not generally it's a certain duty that is owed to a government and the person that does this work is a customs broker and it happens on every single shipment and that's it's just it's different and distinct from the person that's moving the cargo or coordinating movement of the cargo or that deal hear people call them like three p or freight forward or freight brokers like those are diff that's a different broker the customs broker is the person that deals with the payment of funds to the government and it's a licensed you have to be licensed there's only i think like ten or thirteen thousand of licensed individuals in the country in the us i mean every every country has sort of a a a similar framework to protect their marketplace and ensure revenues to to the to to the government so basically you know if i'm firing up a brand and some of my supply chain is coming from overseas in order for that those goods to even make it to you know me in the first place i'm gonna need a customs broker to help get those goods through the port into the country totally and and i think you know with now with services like you know amazon marketplace or or some of these larger platforms there there are a lot of operators who who actually never in interact directly with the customs broker but amazon is the person that i'm actually contracting with the customs broker where they have a whole customs team in there that's actually doing that work and so some of it in and especially like way down down market and d to it sometimes abstract away and and brands don't actually really talk to the person that's clearing their cargo but it's actually a comply as a matter of compliance every every business that is bringing cargo into the country is liable for paying these duties and making sure that it's compliant with the law and so you know there there is i think a a lot that goes unnoticed or un watched in down market and i think it's only for business owners to especially in the current environment to to to be aware because you know tariffs rates are are going all over place so now why don't why don't we talk about tariffs like how does that tie in with these custom duties are they the same thing are they different what do you need to know about tariffs and how they relate yeah that's it's a good point so i used the tariff and duty interchangeably rest stylist sick it's the tariff the tariff is sort of a duty weight it's like a percentage and and it's like when when sometimes people both say duty drawbacks and it's like no it's duke it's drawbacks here like hearing plural multiple drawback claims so there's like lingo in the space that we wanna cut through right times i just call it tariff refunds or duty your refunds but but yeah the the tariff the tariff is determined by the product to the the type of product so that's called a classification and and and and every class to the way you classify a product is you use something called the harmon tariff schedule h t which is basically like the government's attempt to structure all things in the world into like a set of numbers and you you have an ten digit h t code that is your classification and that that tariff rate combined with the country of oregon general determine sorry that classification combined with the country of origin will determine your duty rate and then your duty rate can be either a percentage of the value of the goods or could be like a per unit duty rate so your or agriculture it's like cents per kilogram there's how the tariff for that the actual duty owed is is calculated but there's free trade agreements that are in place with certain countries i mean there's a lot of complexity here to just figure out exactly how much duty is owed seriously and that's like the job of a customs broker is to look at all of these free trade agreements the h to h the harmon tariff schedule and figure out for every shipment that's coming in exactly exactly what it needs to be paid cool and so now taking into account what's going on why don't you just sort of set the stage in terms of what's happened over the last few weeks with trump coming out announcing liberation day there's tariffs dropping what he's calling reciprocal tariffs on literally pretty much every country so why don't you just talk about what happened there and how that actually impacts brands that are dealing with this sort of stuff yeah so the last several weeks have been a a wild time in in global trade i think it's it really needed to rewind the clock a little bit like to go back to actually to trump's first term there trump trump increased tariffs aren't on china in his first term initially to seven half percent most goods coming from china but then all i'll up to twenty five percent and it those were called the section three zero one tariffs they were put in place in twenty eighteen and they covered most imports from from china there are are other classes that of tariffs to that he implemented that i won't get into because they're less relevant for consumer goods world but point point being tariff rates were going up in twenty eighteen there like forty billion dollars of duties paid to the federal government in twenty twenty two there were over a hundred billion dollars paid to the federal government and that's gonna continue to go up i think this year we'll get to a quarter trillion dollars and duties paid to the federal government and and and in potentially rising faster than than that when the biden administration came in they actually didn't stop trump's trade policy at all they continued it and they and you know this has been kind of a bipartisan thing for years now that we need to reassure critical industries and bring you know pharma ag technology manufacturing back into their into the us and and because these things are know in covid we didn't have ppe like there's things that i think are now viewed down by but both both sides of the aisle is like we need to have some of these some of these products being made here and so that the by administration put a hundred percent tariffs on electric vehicles lithium ion batteries and solar panels and from china and and continued kind of this policy and did not let any of the trump tariffs or go away they kept them all in place and then trump obviously ran on hey we're gonna increase more tariffs even more and and so we sorry cas in march kinda seeing all of these teams saying you know it doesn't doesn't really matter who gets elected this is this this is gonna become the tariffs are gonna keep going up was basically our view and that's this proven to to be correct the recent cast in last two months has been a cup a couple of a couple of things trump and his first term negotiated the us mca the us mexico canada agreement which was a free trade agreement that basically super seated nafta the north america free trade agreement before it and it made a lot of goods duty free between canada and mexico and the us a lot you know the the majority of of us trade is actually in in north america in in and out of the country is it's important export mine is with mexican canada and so this is kind of a big free free trade agreement trump ignored that and put or didn't ignore it but put you these twenty five percent tariffs on non us mca eligible products from mexico and canada and that was sort of seen as like a really provocative like step back in the free traded relationship between countries and and he was doing this because he saying you know that no is a is a big problem but we need to secure the border like i need help from next canada do that he also at that point in in february put twenty percent tariffs in addition to the tariffs you'd had previously put in last term on on chinese products and so that was like his opening sal and then there was this whole build up till the liberation day where on the liberation day he came out and like have that you know crazy cardboard or thing with all these like a shockingly high tariff rates on on all countries for the most car pretty much all countries the us trades were yeah and you have like so getting a ninety nine percent or whatever like just insert absurd stuff for shock and awe i think and and so so that's really it been the last several weeks has been well i does where gonna go into place are they are they going to get delayed which you deal it you know he delayed done last week another ninety days and then china has become a focus and now tariff rates but china have gone up to you know about about a hundred and twenty five percent in addition to the original twenty percent that he did in february now it's at a hundred forty five percent total for china in his first two three months in in office on top of the old tariffs and the base h etfs tariff so just to keep that in perspective so hopefully that's like a helpful overview of the our history of all and it's super helpful and there there's so many ways that i wanna go here one thing that i wanna start on because you were mentioning now mexico canada china one strategy that i had been hearing a lot about in the e commerce space was you know chinese people real or chinese realizing that hey maybe there's stuff we can do in mexico because mexico is closer to the us so for for a while people were you know setting up warehouses building supply chains that way what's the current status of that is that something that trump was you know looking to kinda make sure it didn't happen not wanting chinese factories on that's american court exactly so what what ended up happening with that saga yeah that i mean i think that's still kind of up there as an open issue so and and that's because if there's this other debate don't wanna over complicated but this other debate about this section three twenty one demand in this which is like something that i think you people will hear a lot about or see the news and he's like what the heck is that it's basically this way for brands to ship by parcel without paying customs duties directly to customers in the us so so if you're sheen or t you or walmart or amazon or whatever you can ship directly from your factory in china directly to the customer and get around all the duties and that loophole has been exploited for all sorts of different purposes and the trump administration is is is closing that and certainly to china actually on may second i think is when the that you're no longer allowed to use this section three twenty one provision if you're shipping from china and so these so yes this is caught sort of causing brands to really have to figure out well shoot how do i how do i fulfill directly to customers without having to pay it on my duties and then of course the mexico piece and our factories chinese investment in mexican factories there there this is could coming part of that conversation with mexico that the trump administration is having around this twenty five percent tariff rate that they put on non us mca covered mexican products and and i think that one's still still still live still out there so so and it's not it's it's also the south southeast asia like it has had significant chinese investment in vietnam thai title you know thailand and malaysia cambodia like their their because of his first sal of par his first term there was a big shift to to southeast asia and mexico and now you know the this this concept of substantial transformation where is a product actually being made and produced or is becoming like is going to get more heavily and forced moving forward so you won't be able to just like ship stuff to mexico and then clear cleared into the us and say it was made in mexico you're gonna have to prove like no it was made actually in mexico and and yeah it it's there's a lot obviously quite a lot of of change in in how this is gonna be be be working moving forward yeah and i know even i guess less on the brand side and more on the just like what what i've been seeing in social lately it's like on tiktok there's been all these like you know people blowing up who like who are making the goods that like end european factories and they're like screw we're just gonna sell directly to the us using three twenty one i guess because like they're not able to move their goods anywhere and there's more trace coming into place so it's gonna be interesting to see how all this shakes out but now let's get to the brand side you know it's with escalating tariffs on china that obviously has a major impact because like we said so much manufacturing especially in the d in the consumer world it's very tough to have a a supply chain built without some component of it being in china and just anecdotally what i've even heard from you know friends that are in the space people running brands like you know good sometimes they're just like they don't even know what's going on in china so they're just like we're not even shipping anything out like just forget it like we're gonna wait till we have more clarity but for now like nothing's moving it's not about like how much we pay like goods are frozen so what do you see like happening right now what's the current state of affairs and what are some of the most egregious sort of examples that you're seeing because again this doesn't like you know it's easy to say oh like we're just putting a a a massive tariff on china but so many of american goods right now are made in and without a plan i think i was hearing something like even like gatorade like all their bottles are may are made in china so it's like yeah this isn't just affecting like a random drop shipper or someone who's like you know crafting their direct to consumer brand sourcing some element in china it's like literally all and all the way up and down the the consumer supply chain so yeah what are some of those examples that you're seeing on the ground and where do you see this going and what does it look like in the you know short immediate term yeah i mean i think this is i don't know always say like cast this opportunity i think if you're in a position where you're unit economics are really healthy and you have some insight into how your competitors price and your competitors unit economics like i've i've talked to multiple multiple companies that are seeing how their competitor is reacting and saying oh wow i actually can pick a bunch of share right now by not increasing prices and stop doing inventory states added when they're now not shipping and so there's like thought as game theory and there it's it depends a lot on your margin profile and and how you're you're you know what's what your sales channels are you know if you're going so you're to wholesaler and you have to make certain commitments to keep stock with a retailer you you know you you might not be able to just stop shipping or you'll lose your spot in your aisle you know there there's there's a lot of really difficult it's hard to generalize it's always hard to generalize about about the supply chain and it's especially hard right now because it it is so dependent on your margin profile your sales channel how you're able to pass pricing it through or not and then and then yes where you're shipping from there there's is definitely right now like a massive pause on inventory buying and shipping and freight rates are are plummeting and so it is it is also an opportunity right for people that are that are that are positioned well the other other obvious thing is exploring new factory relationships but that doesn't happen overnight and that takes quite a while to dial in the quality the the the i love the i love those like meme that are not even memes this clip of chappell from like a couple of years ago or i think in the first round of trump terrace saying like don't give us chinese jobs we don't don't wanna be like making making things in factories like and i i love that because it's it kind of represents this this idea of like gatorade bottles they china has a competitive advantage in making gatorade bottles to like a really really high level of quality with low evidence of every manufacturer process and you know the that's not well that's not what i think is the goal of the tariff policy the goal of the tariff policy is the reassure some of these more critical items and so i suspect that that's where the conversation will go and it will be hopefully i'm hoping that it will be less about you know these broad tariffs on apparel and things that we we will not quickly build the competitive advantage of manufacturing here and more about let's bring these you know some some of these capabilities near shore for semiconductors or you know a computer processing or or equipment that is used to build data centers like those are the things that in in your nvidia had a huge announcement this week about say out investment for some of these things like that's where i think this is gonna go but certainly in the short term it's really a scary for a brand to look at a you know a hundred and forty five percent increase in their cogs since they're shipping from china yeah like how do i how do i get around that we are really excited to announce that d pod is officially part of the hubspot podcast network the hubspot podcast network is the audio destiny mission for business professionals and we're really excited about being part of the network because we're gonna be able to keep growing the show bringing you guys amazing guests and obviously helping you guys learn from the best founders marketers and builders of the most successful consumer brands so anyway keep listening to d pod and more shows like us on the hubspot podcast network at hubspot dot com slash podcast network yeah absolutely and it's like one of those things like you were saying it's not just like you know china for for all the problems it has like they have they're they're amazing at what they do and build and doing some of those manufacturing processes that you can't just you know say okay tariffs so like yes there you would be incentivized to like you know start building those out in the us but like still even with a hundred percent tariff like you're not gonna be able to pay a us wage and get the productivity that you would for the price versus a lot of the goods that are being manufactured and even if you were to expect that it's not gonna happen in a short time right you're looking years and years and years yeah but mu hart has i i it's your familiar with him somebody but he he's a or founder of a somebody called via hard so i i believe apparel mate primarily here and he has like a super long close on linkedin recently it was like the fifteen reasons why manufacturing not coming back to the us okay it's it's really really awesome keith but it his his set he's has got several different points in there of course and he and he does offer some solutions of of what we should do but but i think he he talks about you know basically this this is this is economics one zero one like you have specialization of labor in the global economy that's that's undeniable and and so you know how are we gonna work our way at work our way out of this the the other the other thing is that the ten percent tariff rate on all countries is still in effect that that's a new new new item and the average profit margin of the every of an average us businesses is like ten to fifteen percent it's there's not there's not a huge amount of of wiggle room and in margins in in broadway speaking across the economy of me and a ten percent increase in cost of goods or capex depending on your industry is is pretty substantial and that's that is an effect that i suspect that will stay in effect for quite some time and and it's sort of not talked about because the china headline is so shocking but if you talk to businesses in distribution or wholesale or logistics or or where they where they where they don't they they operate on maybe less than ten percent eb margins and they operate profit this is a really big issue for them and and they are gonna have to pass some most prices through so i think just the the overall scope of this is definitely there's there's there's they're solutions right i don't wanna just be be here in this whole session it'd be the the boo man and but i am empathetic to the pain that people are are feeling fro from all this yeah absolutely and there's certain products that like you know like you just couldn't make them in america and there's just like non non american goods right like they're that american consumers want and all sorts of other things but let's bring it back to the tariff side so you know you said tough like tight margins at least ten percent hike across the board so where does that get split out and if you're a brand what are you doing are you you know i've seen some brands that are you know adding a trump tariff surcharge i'm seeing some brands that are like writing founder letters i'm seeing other brands that are like you know what we'll we'll take the hit we'll figure it out and we'll find other arbitrage to scale right like you know so how do you see things shaking out is it you know if it's call it ten ten percent is like are we going three three and three across the you know the supplier the the brand and the consumer is yeah you know is someone else absorbing more of the cost if you're a brand obviously it varies across industry but like if you're on the brand side of things how would you be be thinking about positioning yourself and and having the right strategy in this environment yeah isn't it i mean yeah and and it's it's a great question and it's so hard to get specific answers and i've absorbed a lot of content in the last several weeks myself and it's hard to hard to get specific answers and or strategies without having the specifics and have a customer in in front of you that i that i can advise right that being said like let's just create an example for the sake of it so let let's let's let's create like like it like an instagram advertising based e commerce brand fulfill directly to customer you directly to consumers i think that that's that's one where that the pass through pricing makes a lot more sense and you're sort of allowing the customer to vote on the issue and you do need to ad test it and you can because there's plenty of technology out there now to allow you to test different pricing frameworks on on your website or in in parts i was at shop talk a couple weeks ago and it's it's it's honestly in mind boggling what's happening with with ai for website marketing in in the in the comm space so that that's that seems like a more where you might be able to pass a larger share of it if you are in a really if you if you are in a competitive space where you have the a solid margin profile i think a lot of companies are gonna end eating eating more of it and that's so that'll happen a lot in eco comm b2c brands that have you know they have a giant markup over their manufacturing cost and and like i i talked to it this is not an eco i talked to a a manufacturer in the us recently who said like there's no us alternatives for the parts that they need there's no really there's no alternatives of quality anywhere else in the world that because they need very precision made components and the the tariffs could go to six hundred percent and they would still source them from china so like the and not change their price and not changing their pricing so i think it it really you know that that's that's a that's a counter example to the to the pricing the the other the last piece is like the vendor of relationship well you also have supply chain costs and then you the vendor relationship so supply costs there's all sorts of different things you can do you're not gonna be making drastic changes to your margins but you might be able to switch from ae lc or you might be able to rearrange where you're stocking and fulfilling out of to that have better efficiency of your warehouse turnover and then reduce like time you know the time that inventory is sitting in the warehouse there's things like that that you might be able to to to look at then there's the the supplier relationship which is really there's a conversation about turns and working capital in there that actually impacts the cost of the product there's things like buying out a consignment where you can actually you can actually kind of pre sell the the the product and then go and and get it from your supplier remove the working of capital component for yourself also the supplier can ship in to the country are their cost on you know deliver duties paid terms hangs and and you and you are importing at a lower lower valuation then you would be if you just bought the thing directly and then imported it yourself it is like games that you can play there that are totally compliant and legal and that's where the trade advisor piece comes in is is thinking about okay well oh is all this set up and what are the different levers and what impact will not have on delivery timeline and quality and outs stuff logistics of and how does that flow the tariff exposure so yeah and where do you see this going right now like we said right now china is at like that one forty five level and you know they've been trump and she have kinda of been going back and forth so you know if we just had to look like where where do we see this going is it gonna continue to escalate like we saw a pause on the tariff for you know an extension for you know for a couple months while people figure it out like do you see it do you see it escalating do you see more clarity ahead what are you what are you kind of thinking i think the short term is that the trade war with tariffs does escalate because it's it's not necessarily just it's not just about us and china it's about the rest of the world as well and and and the trump administration is creating leverage for itself to negotiate deals with other other other countries and so i think that it will take a number of agreements with other countries to get signed for their docs should be movement our china and that's why i think you're seeing like such low engagement between both sides is that they both know that this is is is really like it's not about resolving the trade war with car immediately it's about lowering tariffs for us exports across the world and building back a competitive advantage in manufacturing that the us has lost in the last several decades and so i that's why i think the trade war china is gonna continue to escalate and in the short term and with i'm i'm hoping that in this ninety day period we'll see some some real progress on deals with with other manufacturing hubs i think if we saw japan has been engaging i think if we had to some some combination of japan taiwan india and and vietnam get major progress in the next three months then then that would be huge to know that this is gonna end sooner but but i think like that's kind of the i'm not expecting a lot to change with with china i think china's is that they they actually said today yesterday other they're not gonna increase tariffs on us products anymore on their end because it's already damaging us to to their to their their businesses and it's just sort of pointless where to you know or at a a hundred plus a hundred percent here it's effectively putting in place an embargo and they don't actually want want that they wanna be able to buy a us agriculture products and some of these other other in manufacture or industrial you know raw materials or we that we provide so there there's there's i think my i was asked recently like ending year from now where where are we and i think we're in a place where we we have signed a a set of new free trade agreements and the the and the and there's and there's been some resolution in progress with with china because like to be very emphatic like i don't think their tariff rates is higher are really good for for anyone and they should only be in place as long as we're trying to make them go away if that makes sense no totally yeah and i mean it's it's so interesting and i'm i'm i'm curious geopolitical like where this goes right it seems like trump's been more isolation is and i think the one thing you know one thing that led to the rise of china such a manufacturing power was the fact that like the us basically provided the world with like freedom of navigation when before that wasn't something where you could just you know cruise wherever you want in the world and in china was able to grow but all of a sudden now because china is like our direct competitor it's like we're basically providing the security that enables them to like eat our launch and trump doesn't want that so it's just kind of interesting to see where you know from a geopolitical perspective where this matures to in the future it are like are we be is the entire world becoming more isolation is is it mh you know are we gonna be just interacting more in our spheres or or you know yeah how i see i have that you an opinion i mean i mean evan then smith the ceo of autonomy they're they're a chief appliance software company that helped do supply chain tracing for for brands to make sure they're not you know using forced labor or or human trafficking in their supply chain it seems like that very cool company and and and he he put out a or or he he gave a keynote recently and he said the globalization is is broken or or or we're let's fix it where and i think like that's sort of i i love that attitude of you know okay we've the us has been seeding seeding ground any manufacturing capability and has been providing really fair favorable tariff rates relative to other countries for quite a while now and has also been financing the security of of of the global economy with our defense spending and so like there's some middle ground here that that that that is reasonable and and i think like it was in the within the trump administration there's there's like warring parties you saw like elon coming out against peter navarro the last couple weeks and hook calling him all all sorts of names on on twitter and stuff and you know it's there there's there's there's part of that social right that does want to rewind the clock to the lady hundreds or early nineteen hundreds and have a more isolation economy i mean it was a hard to get the us to participate in world war world war one and world war too and that's that it they they there's is a there is an element of the the republican party that wants to go back to that world and then there's the element of the republican party that is actually like i pick a a much more aligned i think as far as you know let's let's let's let's let's let's improve this system so that it works works well for everyone and so that we don't have to call the rust belt anymore like it it the it's like rusty because it's out of use and like we're not you know there's shutter factories that like so so that i love that vision i really do and i i resonates with me personally a time and and i think like i'm hoping that that's the side that that wins on this conversation with china because i believe that globalization is good for the world i believe that connection between humans of different cultures and races is is like a really positive thing for everyone and i would love to that to the the story that wins the day here totally totally okay moving forward i wanna get into now what you do and what you specialize in let's talk about duty drawbacks specifically what are they why is this so important and how do they factor in in this escalating tariff and duty sort of environment yeah so yeah this is this is definitely the the the technical piece because we're starting out and we have to be really specific and where we start out in global trade which you know types of customers we wanna work with what types of duty refund opportunities do we wanna chase after the regulatory mechanisms for all of them are complex so building software for is is is difficult so we've chosen to start with duty drawback which is a refund for products that are imported that in later exported basically if you're a cluster of you're a business that has international sales and you fulfill those international sales from your us stock and you import products to either make those goods that you're selling or you import finished goods and then store them and and centrally and then ship them back out to canada or u uk or wherever those international transactions are all eligible for tariff free fund and this is one of the oldest export incentives that has been around it's been essence since the seventy hundreds and most developed economies have a provision for this type of of duty refund because it's it's really kind of the idea as well you're you don't want a a domestic company to have to pay tariffs multiple times on the same sale and you know if i'm selling products into the uk i'm getting tariffs from the uk and i already got tax them the way into the us you know it makes us competitors and so that's why this refund exists so so justin just as a like an example so if you're say you know an apparel or an accessories brand and you're in the us and maybe some of your supply is coming from a china or southeast asia mexico you bring that product into the us you do the assembly you brand and now you're exporting it globally as an american product under your brand that is what you're saying is eligible now for a duty drawback that's exactly correct yeah and and i think to keep it's thing to keep in mind is that you know the the way that the refund is actually calculated is based data on your on your h hhs based on your classification so if it's not necessarily that the exact unit came in and went back out it's that you imported stuff on these h hhs codes and you exported stuff on these other hhs codes and that's really actually like an important piece because it opens up what you're able to claim on dramatically and you could be importing a set of skews from from abroad and domestically producing another set of skews that you sell internationally and you can use the domestically produced skus that are selling internationally those exports to claim on the stuff that you imported and so it it's it's hard to wrap your head around but but like the opportunity i think is most people look at it and they're like that's not relevant for me like this sounds like the pain but and you know it it it it can be it can be a lot larger than than you think you can look back five years at all your exports and use each of those exports to they'll find a relevant import that you can match to so it's almost like a tax write off for for exporters right and and it's it's especially relevant for brands that are you know maybe have scaled up their operations in the us and then are starting to sell internationally so that's like it gotta be the sweet spot for you guys yeah totally i think if you're launching internationally it's it's a great thing to consider with with how you price internationally too because i've heard a lot of companies say how hard it is to expand into europe because they give vat and some of these other provisions and if you know that you're gonna get a drawback on that sale you might actually be able to price more competitively with the domestic businesses in those foreign markets so yeah that that's that's a that's one shit i think there are there are also international companies that ship in and out and for a variety of different reasons just for like inventory management or they need to move luxury products the high value products you're you're okay paying taxes because you're gonna be making like huge margin on on you know that role like sale or whatever it is and and i'm sure tiffany has a whole team of people in house that's doing this because they're moving high value products around the world and the tariffs aren't really like the the important the important thing but they can get all of that back and and once once the sale is completed so so yeah there's a there's a couple of different areas that i that i that i that i like i think outdoor kit or even like made in the usa brands they have a lot of brand value internationally so we've hire of customers that are we'll be seeing on cosmetics for example in the us made in the usa with foreign source packaging and components and that's actually oftentimes in cosmetics the packaging is actually secret like worth more than the stuff in the bottle and the stuff in the bottle is all brand value i sure a lot of people on this listening to this snow dutch and and so you can actually get a huge refund for for that international for us made product so there's a couple of different places where i think it makes a lot of sense yeah and strategically it's it's really interesting because you know with tariffs going up on imports right if you're a brand that has the opportunity and scale and you've built out your supply chain in such a way that you know maybe you're thinking about making that next step and moving into exporting all of a sudden it gives you a way to start you know not only making money in different opportunities in different regions where there might be appetite for your product but also it helps you kind of offset some of those wild tariffs that we're seeing yeah totally yeah i i i think the more as international sales becomes a bigger petty piece of your business that's where it's relevant and the the number one you know not there's there's a couple of knockout for us in the in in aren't when we talk to brands where it's like oh this isn't really gonna be the juices are gonna be worth the squeeze or we won't actually be able to get it for them and there's things like you you need to have good inventory records so you need to have some type of inventory management system where you can show the products that you've imported the documents that you get you get those doc are able to get those documents from your freight forward and then those documents tie with actually like ledger entries in your inventory system there's kind of a scale at which businesses will invest in that type of technology and visitors that haven't done that yet it's really hard to get the refunds approved you you can do it on excel and get that approved but it's not ideal then the other the other piece is about returns like if you home ming all your returned inventory with your unused stock that customs looks at this and is like well you're cleaning on these exports but how do you know that they were actually unused and they're you know they're actually like not not a like like basically they they validate your whole inventory pool if you come ming so so that's that's a another key thing that we work through with brands and but it's kind of like a cut on the low end where once you are at several million dollars of revenue or depending on the level of sophistication of your operations team this starts to make sense and and i think like you know getting to and knowing the revenue as a brand you're you're starting to make some of these software investments and the duty spend is actually material to a point where you're like okay we need to look at so what if you had to you know talk about like where you guys are at now and like who you're serving now and then where you see this expanding to in the future like who's your you know who are some of the people that you know are like kind of sweet spot for you guys right now that you're kinda helping figure out all these duty drawback things and then in the future as you guys continue to build scale out your platform your software your brand recognition everything where do you see this going yeah so so the the sweet sauce rep for us right now is really with you know upper middle market middle market that's kind of how i how i characterize it it's companies that they don't tend to have like customs brokers in house or a trade compliance team in house they still have kind of a marine operation at front sport i used to joking or refer to these businesses as was like five guys in a and a warehouse business where you know someone's doing like a hundred million dollars of coconut water to costco and they have you know five employees and like that's that's even just operationally like a little bit too early for us but i think the scale of the business is kinda where we like to play because there's really you know millions of dollars of duties for us to to look at and figure out how to how to explain back and then there's systems usually there's an erp there's some inventory management happening and and i think the other thing that's nice about that middle market profile is you don't have a huge amount of logistics vendors just yet once you get really big and you have multiple brands and selling your multiple geographies you end up having this kind of expansion of of of logistics vendors and with withdraw we have to get documents out of all those vendors and and crews that the things actually did lead the country and they were on this ship and and that and that exercise is really hard me having go chase down dozens of dozens of companies so that's sort of what i would say is like the nice sweet spot for us is you know we're all of our customers there's a senior stakeholder that is a c level or vp level decision maker and then there's usually some one or two people in the day to day and finance and operations that are that are helping i get the get the projects across the line and and yeah that's i think where where we go with this is like drawback is inherently an audit of your supply chain data we're gathering your electronic records of imports and exports inventory receipts and fulfillment and then we're gathering the documents from your logistics vendors i'm making sure that they tie and using ai just parse and match the documents against the rows of electronic data and dot audit uncover so many different things that could be improved about higher supply chain setup up so are you using the right tariff code the most optimal tariff code are you using are you taking advantage of free trade agreements in the country of origin or or is your broker equation when you're like missing that those those those pga or fta flags is just easter egg for customs people listening like it's one there other ways to reduce your landed cost and can you actually track your your landed cost regularly and and so the products that we've launched after drawback will be things related to that audit layer that will be related to viewing your data and and running quick analysis and having more integration over time within each customer whereas as right now it's very drawback deal focused and there's automation in the deal process and in the drawback claim creation and mission but we wanna get to a point where this is a system of record that's constantly ingesting him in the flow of your trade data is they're not not copied on their email with your freight forward and storing that centrally and that's that's i think that the piece that is missing from supply chain tech people have talked about for decades is like disparate systems with unstructured data like how many times have we heard that about supply chains and how hard the problem that is and how many tech companies have tried to address it i believe that john is the product that does the dang such a huge carrot in front of companies that they want to centralize their data to take advantage of it it's like this is what is this is why it's worth it for you to centralize their data and and not just that it's like also ai like the perfect enemy it perfect innovation because when you're dealing with such disparate data and trying to match records and doing all this stuff like it's really hard when you know you've got a data system set up but then like one thing's different and it it's not compatible and it just doesn't work whereas ai i think does a really great job of you know handling unstructured data and and you know taking images or pdfs receipts emails or whatever and comp piling it in and building it so as that tech continues to improve i think you guys are are building in a super super interesting space justin wanted wanna thank you for coming on and and sharing all these insights as they regard to supply chain tariffs duty drawbacks i know we learned a ton for anyone who you know is looking to connect with you learn more where do we find you why don't you shout out your socials and where we can get in touch yeah absolutely linkedin is it a great spot to find me just just justin in sherlock lock on linkedin and then our website me cassie dot com we we've got our waitlist list up right now so if you're interested in exploring the product and getting a you know free consult of what what tariff refunds might be might look like for your business you can sign up there and and we will we will be in touch we will you'll be launching the the product more publicly in the next couple months so excited to to hear from you sweet well thanks so much for coming on this was awesome and we'll have to have you back once you know everything sort of the air sort clears around all the tariff stuff and and we've got brands that with with real strategies in in place so thanks again and we'll see you soon absolutely thanks blaine if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d pod dot com to join our founder community and access resources from every episode we'll see you on the next pod

hey everyone we're super excited to announce the launch of our slack community for d pod this is a space exclusively for d founders and operators to connect share ideas ask questions and support each other you'll be able to engage with the best minds and operators in consumer and currently we're on a way and it will open up the community once we reach a hundred and fifty members so apply using the link in the description and we hope to see you on cloud so before we kick off today's recording i've got one more for you keeping up your momentum this year starts with the right selling tools and if you're looking to increase revenue grow faster build more pipeline and close more deals check out the all new sales hub from hubspot you'll be able to manage your whole sales process plus my favorite part the reporting it's super intuitive powerful and customizable plus the whole thing is powered by ai so your teams can spend less time on tedious time consuming stuff and more time on developing relationships also no one likes a clunky platform that takes months to onboard on to but getting set up on sales hub is really quick and easy it's free to get started the pricing will scale with your business and with more than thirteen hundred integrations and add ons you can tune it to your exact needs visit hubspot dot com slash sales to start selling with sales hub what is going on d pod today we are joined by peter who is the founder at fl which is a an agency that helps d brands and also of the brands actually for that matter scale up he's also runs his own brand called on typically a lot of their brands that they've served or some of the most popular and largest brands in the d space you know oftentimes spending between fifty to three hundred k month on ads as it's profit as they've scaled up but he's also taken brands from zero and launch several brands starting out so you know peter maybe that's where we can start the conversation why don't you give us a little bit of a background about yourself and how you kinda got involved with the the d world and then let let's get right into growth stuff cool yeah so i started working in house for brands mostly e commerce businesses was that a company called bespoke post which is very large nine figure subscription commerce business and then moved to much smaller premium baby brand called healthy baby where i was their director of growth freelance for e comm businesses the whole time so eventually went out of my own it started flight in march of twenty twenty one and since then yeah like you said we've scaled north of twenty five brands launching from scratch on meta to profitability and more recently have absurd to as we've grown work with larger businesses in the fifty to a hundred fifty to two hundred k in monthly budget range than even software company so had quite the journey yeah and i i'm really excited about this because you know one of the things i love about d is because the space inherently is so competitive a lot of times you've got the best marketers who are selling comm products maybe there is a little bit of innovation but you know when you translate some of those tactics over to saas where it seems like a lot of those tactics are maybe a little bit behind the ball it's really exciting i think one great example that we've seen recently that's really taken off is like in the in the creator in the social app space like a lot of the concepts that we're working in d where creators we're you know creating a bunch of viral content organic content that's we're seeing that playbook play out in the you know app sort of space right now especially like tiktok accounts and how do you replicate and scale up content but again you can do that stuff in the ad space as well whether you're on google meta etcetera so yeah there's gonna be a bunch to talk about there and then yeah you guys also have experience working with some of the biggest brands like i can just see on your site you know having worked with brands like harry's todd snyder momo bespoke and a bunch more it's it's gonna be really exciting i'd love to unpack some of these strategies that really work so why don't we start off for you know the people who are maybe launching a brand what does it take to you know get your out of account account set up and prove out concept of a product where like what do you need to spend to like prove that you've got some sem of product market fit if you're a brand starting out how much should you be spending and what do you need to do to get you know an out account ripping yeah i think the first thing you need to do is make sure you have the diversity of content to ensure that you're giving meta the best possible chance so a lot of brands test like five to ten ads on meta they spend three hundred dollars and they think they don't have product market fit you wanna make sure you're at least giving the channel as big of a swing as the bigger competitors in your space before you rule it out entirely so i would say think of yourself as a media company that happens to sell a product not an commerce brand once you have that in place and you have i would say north of twenty five unique assets at launch is like minimum necessary amount of creative to scale in twenty twenty four unless you have a really amazing product moat so if you have something really unique i think that the brand zest is a great example it's a delayed release caffeine pill that you take before go to bed and then you wake up and you feel amazing like that's gonna sell itself in many ways and have a much easier path to profitability through meta ads but if you're probiotic number eight on the scene right on meta or like number probably twenty five at this point you're gonna need a really large diversity of content to properly test the channel once you've basically done that shotgun approach testing messaging testing formats making sure you really like left it all out on the field messaging wise i always recommend marketers who are fairly you know beginner stage take all of your most promising creative from that test round throw them into a single advantage plus campaign and just try to exit the learning phase meaning at least meta says fifty conversions per ad set per week to exit the learning phase but often you can do it at a lower volume if you're just not touching your campaigns as much so if at that point if you've tested that really wide variety of creative at least twenty five v concepts and then you've consolidated your winning ads into a single ad set kind of taking your hands off a it i'd recommend using the advantage plus shopping campaign format if you're still not close to profitability at that point it might make sense to pump the brakes pause look at what the issues are in your funnel is it a conversion rate issue is it a honestly ao issue is it really come did you price things correctly and and and make a decision there but that's usually how we recommend brands come out of the gate so talk to me about so you said twenty five assets right so i'm a brand i'm starting out i wanna get set up i set up twenty five different concepts or or ads how much how much should i be spending to you know guarantee that those twenty five are at least like getting the reps they i need how long should i be spending it for before i can really say i've got winners or i've got losers and you know like and how long for right yeah it's a good question it's a question that every client asks us and i think a question that you don't really need to ask that early so my reasoning for that is two let's say you spend two hundred dollars a day that could potentially be thousands of impressions per day that meta is getting on each of these ad units so even if it feels like a pretty low absolute dollar value the amount of impressions that meta can get and serve across different cohorts and identify like which of these ads are going to have the highest estimated action rate is actually pretty significant so i say if you really need a minimum budget probably a hundred fifty a day i don't even care if that's spent across twenty five ad worth of creative of course that's really fragmented of course they're not gonna get a high absolute dollar value spent on each of those but as long as they're using campaign budget optimization and you know you're not selling twelve thousand dollar like furniture products is just some normal e commerce product within the normal threshold that someone might buy in a single session on facebook or instagram a week of running you know fifty plus ads at a hundred or fifty dollars a day is actually a really significant amount of data for meta even if you get no conversions all you're looking for is that initial spend allocation that you get across all of this concept so we look at like spend allocation as the number one signal of quality ahead of anything else even purchases that early on in the journey so so basically rule a thumb you should be spending at least somewhere between a hundred fifty to two hundred bucks a day on you know somewhere between around twenty twenty five different assets and that in over the course of the week should give you some initial data to know what ads people like and what ads people don't really you know buy with i think so i think if i've learned anything from running meta ads it's that meta is really amazing at identifying creative winners in a very short amount of time and we almost never uncover what we call false negatives so ads that are d prioritized in the auction and then we retest them and all of a sudden they become a big winner especially that early on you're going to scale from zero to probably five ten k per day on like one or two creative concepts and so that will make itself very clear very quickly once you've you know created that concept so yeah so let's talk about that next phase right so we've kinda we rolled out our tests you're saying meta does a pretty good job of figuring out what creative works and what creative is flop now that we know where where we've got a little bit of signal what are we doing or we we're creating a different campaign and you know how much money are we pump pumping into that now that like let's say we assume that we like what we're seeing in terms of a initial like ro or ao it supports this motion of growth and we wanna continue to invest in it what's the next you know what's the next hump step in terms of ratchet up that budget yeah so for most advertisers for your average e commerce founder you're going to discover maybe three to five of those ads from your round one had any traction at all meaning we're given a significant amount of spend in the auction compared to the long tail maybe a few drove conversions and for those brands then the next thing i recommend is either leaving those ads on in that structure so pause the things that aren't getting spend my meta pause what's getting d prioritized so reduce the number of sets in your creative testing campaign or if you're not even close to your cpa target or your profitability target whatever that is scale those into an audience testing campaign these campaign types many people say are like outdated going by the wayside but the fact is if you're launching in a new ad account meta doesn't have the historical conversion data for things like advantage plus to work for your brand yet so you don't wanna move too quickly to an advantage plus campaign i think that's another really common mistake early advertisers make what we wanna do is test a few different audience types i always always always recommend really four buckets test broad test the engaged shoppers cohort which is an interest audience you can target which is anyone on meta that's clicked to shop now button in the last seven days so that's just people that are in market to buy something so i think of that as broad with purchase intent so we test broad we test engaged shoppers we test a interest stack so usually a stack of similar brands to your own really like brand based interest versus like generic interests like you know physical fitness and then the third or the fourth would be a stack of upper funnel custom audience lookalike alike so maybe a lookalike of anyone who's watched more than fifty percent of any of your video ads maybe a lookalike of people that have visited your site in the last hundred and eighty days a lookalike of people that have in engaged with your facebook and instagram ads so we'll stack all of those lookalike likes into audience number four we test audiences all the time hundreds a month and those four are probably the highest success ones that we can actually scale behind occasionally you get a brand that's around one created is so strong that they can simply scale in their creative testing campaign structure which is great like don't throw you know all your learnings out and launch a new campaign that's testing audiences if you're doing really well or off to a promising start with creative testing but that's usually people that you know they are like an agency founder as their day job or someone who really understands creative at a deep level awesome my next question is around so you covered the audience stuff i think that was something that i was definitely curious about but talk to me a little bit about advantage plus for people who are listening in and may not understand it like what is it how does it work and you know should you use it should you not use it yeah just talk to me about that yeah in terms of how it works i don't think anyone knows how it works but except for maybe like three high paid engineers i meta a headquarters somewhere but in terms of what it is so advantage plus shopping campaigns are essentially meta like ai black box targeting campaign type so if you're familiar with google ads it's kinda similar to performance max on google it's where you essentially give meta a target country you give meta a not even age range or gender i think you can only select an age minimum you give meta a group of ads and you say go find me purchasers and this is different than broad targeting and that it generally at scale tends to perform much better so for mature advertisers advertisers that are spending i'd say more than ten or twenty thousand a month profit advantage plus campaigns are almost always the majority of our ad spend on that account when you are at scale advantage plus campaigns typically outperform most other what we call manual not advantage plus campaigns however they are not as incremental as what we call manual campaigns so campaigns are using things like broad targeting interest targeting look like targeting they tend to shift a little bit towards retargeting or middle of funnel as you scale on them so you just have to be really careful with your exclusions when you're defining your existing customers in bench plus and also with making sure you're building top of funnel through other manual campaign types even if they're not as you know efficient in the platform so yeah short answer is a advantage plus campaigns otherwise known as as campaigns early the black box targeting campaign type that's probably gonna get your brand from like ten k to a hundred k in monthly ad spend it'll be on the back of the advantage plus campaign type so you would say basically you don't need to necessarily work with advantage plus when you're just starting out but once you've got some traction and you're looking to scale up then it's it's better to to bring in as you scale is that right exactly it's usually when we switch a client from that audience testing campaign two advantage plus maybe after two or three weeks once we've got at least fifty conversions that we see step improvements in return on ad spend or cpa awesome the other couple concepts that you mentioned that i'd love if you could just kind of flush out a little bit one you talked about exclusion list right for like current customers and also like ad frequency you know sometimes you're like running an ad and the same people are seeing the ad like a million different times so how do you how do you guys think about you know setting up or having a strategy around those two things like who should who or what should you be excluding and you know how should you be thinking about ad frequencies yeah so in terms of exclusions for advantage plus campaigns we define the existing customer as past hundred and eighty day purchasers so we use the maximum duration of the pixel exclusion for purchasers and then we'll also add in the client crm list so if they're using cla we'll add a cla integration of all of their customers i've started to hear and we're seeing this that cla actually has really bad match rates on meta so if the client can afford shopify plus or has a shopify audiences adding in a shopify audiences of their lifetime past purchasers can be an effective exclusion or even if you don't have that just export csv list of all of your customers from shopify and upload that as a manual list that you would update maybe quarterly that's so we use for existing customer exclusions for our manual campaigns we've actually started to even exclude sixty or a hundred and eighty day website visitors just because incremental mentality becomes more and more of an issue as you start to scale up these campaign types so that's what great for exclusions can you remind me your second question free frequency right frequency so for frequency we actually almost never look at ad level frequency because i think every major campaign in meta is almost its own ecosystem where certain ads are driving more top of funnel like new customer impressions and other ads are what we call closer so ads that are retargeting people that were brought into your funnel maybe from like a video ad and so you're going to see much better in platform performance from the ads that have higher frequencies and from the ads that are is you know incremental in in capturing new audiences but they're just as important and the overall ecosystem of a prospecting campaign as maybe an ad that's getting more spend has a less efficient return on ad spend but has a much lower frequency so what we actually track is account level frequency over time and if we start to see that degrade or even campaign level frequency is okay as well because you're gonna start to notice for example your advantage plus campaigns will usually have a higher frequency than your manual non advantage plus campaigns that are targeting like regular audiences and so we look at those two numbers over time and once we start to see those decline we'll start to do things like maybe launch an more upper funnel campaign or just shift budget allocation a little bit more into more incremental campaign type i think where you could get into too much confusion is trying to decide if you should pause an add or not based on things like frequency is just not a really helpful metric for the value of that ad i think cool the next thing i really wanna talk about is is creative right what's working what formats but also like as a brand like you were saying there's some ads that are great for top of funnel and then some ads that are like you're saying closer that's like really driving the conversion so as you like how do why don't you just talk to me a little bit about a what what is what should a creative mix look like in terms of like concepts and and formats as well right like as you've got static and you've got video and you've got see there's so many different types of formats that you might book wanna be running and then the other thing is you know how do you think about like platforms as well right because like sometimes they get pushed out to see you know an instagram story versus an instagram in feed versus actual facebook ad so like how do you just think about the entire ecosystem of ads on the creative side and then like where they get placed yeah so we don't approach ad formats as scientifically as i think maybe the other agencies we are entirely focused on messaging that's where we spend most of our time in terms like understanding what why things are resonating what are the commonalities across top performing creative i don't think it's valuable insight to say like hey carousel ads work really well for this business like this comment overlay this tiktok comment overlay video seem to work really well what i care more about is what is the messaging that caused the user to convert on that ad that caused that ad to become a top performer so we identify first the commonalities in messaging that work for the brands which again like a simple and i know brands that have scaled to you a quarter of a million in monthly ad spend off of like two or three angles or just headlines that seem to resonate across formats so once you've identified to copy the actual ear product features like psychological triggers the benefits that those features translate to that get users to convert on your ads then the format part is easy i think that's just like have fun with it and test a diversity every month we don't think about it in terms of okay we need to get eighty percent static twenty percent video or eighty percent video twenty percent static it's what are all the different formats that we wanna test this month that we haven't tried how do we plug that messaging into these formats i think meta is increasingly valuing creative diversity over really anything else in the ad platform so whatever you haven't tested test it if your ad account is very static heavy you should start spending more on video concepts using the same messaging that was working in your static ads if a static ad works throw that at the beginning of a free slide carousel ad units and see how it does there if your video hook is working really well put that on five different static ad templates and see how the hook does is a as a headline so we're much more scientific around like messaging testing and cracking messaging first and from there we actually have an internal database of like two hundred out of formats that we basically prioritized by efficacy but honestly that vary a ton from brand to brand that we simply like rinse wash repeat plug and play that messaging into so i think in the same way that you know meta is a machine learning model at the end of the day so in the same way that you would if you wanted to teach an ai model how to be a chef you wouldn't only feed it you know italian food recipes you give it mexican food asian food indian food whatever it might be we think the same way about formats like let's nail our messaging and then just feed them meta is diverse and array of formats is possible so we don't really double down on a certain format that's working which i think makes us a little bit different than other agencies we are really excited to announce that d pod is officially part of the hubspot podcast network the hubspot podcast network is the audio destination for business professionals and we're really excited about being part of the network because we're gonna be able to keep growing the show bringing you guys amazing guests and obviously helping you guys learn from the best founders marketers and builders of the most successful consumer brands so anyway keep listening to d pod and more shows like us on the hubspot podcast network at hubspot dot com slash podcast network yeah but i i like that because i think the the concept and getting the concept and the messaging right is the like you can have the best format in the world but if it doesn't think it's like a similar thing to organic content right where you can create a piece of organic content it can go super viral but like maybe no one even buys it because like it was just an entertaining piece of content that doesn't actually convey the message whereas you can have you know a conversion focus piece of content that maybe doesn't go super viral it maybe only does like ten thousand views organically but like it'll get you a bunch of sales because your messaging was really good so i do think there is a lot of value like to what you're saying and first get the brand and the the messaging right so i'd love to know do you have any tips on like now you've seen a lot of like what type of messaging is working is there you know now that you have a pulse on this from multiple different brands what type of messaging is working like what do you look to do when when you're onboarding and you're trying to su out that like messaging market fit you could call it yeah it's a good question so we do two things really the first is simply translating the features to benefits so it's a high high protein collagen bar like we're not gonna advertise twenty five grams of protein we're gonna advertise you know i've never felt more confident looking in the mirror if it's an acne brand we're not gonna advertise you know get prescription acc chain we're gonna advertise feel confident in your swimsuit this summer swimsuit seasons coming up so the biggest one is that second order thinking taking all their product features and then thinking about what are all of the like actual personal psychological triggers that those features translate to for my life or for the customer's life and you can do some prompting with chat gp where it can be really helpful with that if you you know dump all of your products granular features into chat gp and just encourage you to go deeper with translating those features into specific psychological triggers or hooks that provoke an emotional reaction versus just like a feature which doesn't always you know sell that well unless you have a deep product mode like i mentioned so a lot of these brands have remarkable products can literally just describe their product and get to you know fifty hundred k monthly ad spend so that's the first thing i think once you've exhausted translating features to benefits what we call like ic call outs is lane number two so ideal customer profile in this case if you're an e commerce brand think about who are all of the different potential customer archetypes that are out there for your business and speak to them directly so make creative for you know the busy mom of three years enough time to make meals at the beginning of the day or make it creative for the young professional whose email inbox has absolutely swamped every day whatever your product is you know think about who that person is on the other end and try to build out like five or ten of those avatars and we'll literally just test like five ic call out iterations of you know five formats five different creative concepts and that's a a really great starting point for creative as well so i don't think any of this is like reinventing the wheel is creative strategy day one type stuff from what i understand but not a lot of people take the time to think that way when they're making ads i think there's a tendency if you don't make a lot of direct respond response ads to make copy that's like you know something don draper would read in mad men like overly clever you know they use things like iteration or they hint that what their product does but you really need to just hit people over the head with what your product does in a way that sticks in them like a knife in terms of how much it resonates emotionally i love that no those are really solid and actionable actionable frameworks my next question was gonna be what is it take to pull this off because like you just said for a brand you need a lot of creative you need to understand what the pain points are the hooks the benefits and really be able to scale up and iterate on that creative so for you guys on the agency side or if you're operating a brand like you know why don't we just talk about how you currently like work with clients like do these brands have in house teams that are coming up with the creative are you guys doing the creative like how do you how do you marry those two together because you can be great at you know selecting your audiences but like you're saying if you don't have the right you know add creative and you don't have the right in front place to be able to iterate and churn out those like winning creative then you know having a a great media buyer isn't gonna deliver the same impact so how do you guys think about when you're working with clients or you're trying to like really scale up what is the operation side of creating great creative look like yeah this is everything and this is where people's heads start to spin and it can feel like overwhelming right because just looking at a blank page and if to magically come up with a hundred ads which is terrifying if you don't do this for a living so for us i mean we have like seven video editors and graphic designers in house and making ads all day i don't know if that would be helpful to describe our process for your average brand owner but i mean i wrote this tweet thread a long time ago that was basically how to get profitability on meta for less than four thousand dollars and it goes through some really scrappy ways to source creative but you really need three things to start you need static ads guess what there's the banks online of like hundreds of really premium static ad templates that you can buy for you know eighty dollars not even that's phase number one download all of those repurpose them with your brand assets and just go crazy writing and copy make five to ten iterations of each of these static ad templates that were pulled from some of the biggest e commerce advertisers out there so that's the easy one that can get you to a hundred ads for virtually free with only your brain your copywriting ability in this eighty dollars number two you need raw inputs so what i mean by that is video content from creators humans on a camera selling the product that's a little bit more difficult the sources for that are yourself as the founder you should absolutely be making unfortunately video edits of yourself everyone hates that but the founder story at concept continues to be a top performer for all of our clients who actually do it you have your friends and family send the product out say hey please just record like a thirty second video testimonial you have u creators for fairly affordable prices across tons of different platforms i think on the very lowest end of the price quality ladder is bill below for maybe eighty dollars per creator if you wanna get a little bit more custom i love brands meets creators dot com that for me is my favorite one you can form a direct relationship with the creators you get their email they are a much more diverse set of creators the quality is higher and the prices are competitive so that's similar another place you go or use product seating for that purpose so a lot of these brands do mass product seeding from day one the goal being to actually drive growth so you hope you send out a hundred packages twenty five people post you know instagram stories maybe five of those generate meaningful sales for you take all of that content and run those as ads get the content rights for those videos once you have the ron puts then the third component you need as a video editor so you need someone to not only you know you you should not only be running those videos as standalone pieces of content but you need someone to cut those up into you new iterations to add text overlays to you know test different starting points within those video concepts to improve the pacing add background music and so those are the three components static ads you can make yourself net new what i call raw inputs which you can get from the sources that i mentioned and then a video editor to actually like continue to make use of those raw inputs which is probably the hardest one to find but i would recommend everyone goes on linkedin post a job in any country eastern europe any slavic country for a video editor you will find someone for an incredibly affordable price point who will churn out videos for your brands that are extremely high quality because they understand the us market alternatively there's platforms out there like constant creative which is a unlimited sort of design as a service platform there's plenty of places on twitter to find you know good video if you just reach out to people so those are the three places you i recommend people start awesome and this takes me to my next question which it seems to be all the the talk these days of like ai creative right what are you seeing i know there's platforms coming out like icon where they p report to you know ingest a bunch of your media library and be able to churn out a whole bunch of different ad creative i've talked to a bunch of my friends who are actually using them and it doesn't it seems like there's kind of a disconnect from like the brand operators and what they're saying at the moment versus you know what the the talk is on twitter like it's the fastest growing platform of all time and all this sort of stuff so i'm curious to see what your take is on like the ai ad creative platforms is that something that you know we're we're bullish on in the the immediate term is it something that we're more bullish on in a more medium or longer term time horizon how do you think about that as in terms of creating winning ads yeah the e comm buyers is the most sophisticated by run meta so i think for that reason the avatar the ai generated voice overs and ai generated avatars have not done as well in e com as they've done for you know like largely lead gen businesses you know if you run if you sell like do lead gen for you know high end law firms or for personal injury attorneys or energy companies those brands are making non brands that don't have physical products are finding a lot more success with ai generated creative right now but the e comm buyer i think is still very sensitive to like what's real and what's fake and we always always see ai generated voice or oh almost always under performs that exact same voice over done by human like it just is a little bit less engaging ninety percent of the time you can distinguish it and so the performance isn't quite there yet we're even further off with the ai generated avatars like that's even more obvious i know we're probably three to six months away from that not being obvious but as of right now i think most brands who talk say they're doing that are more talk than walk in that respect where i think ai has a really strong role right now in e com is video scripting at at scale and video editing at scale so the most redeeming redeeming feature of icon for me is its ability to find video clips that somewhat match the voice overs or inputting in the platform and i have tested it and i have actually found winning ads for my brand from icon like i think that feature in itself is legit and more effective than maybe the ai avatars of course but the other thing scripting is the one that i'm more excited about so what we do is we use this tool called a gum loop and it's basically like zapier but for more just ai geared and a little bit less less buggy like easier to use and it allows us to do things like for example scrape a competitor brands facebook ad library convert those videos into text transcriptions repurpose those scripts replacing the content with our brands name and features and then upload those in new google sheet so ai is allowing us to have really effective workflows for creative scripting which we can then give to human video editors and use actual footage of human u creators to make really quality ads of course you could have that be ai end to end if we fed those scripts into you know an avatar or something but maybe it's me i just haven't been able to get those really to work as well so i'm most bullish on ai for copywriting scripting at scale and then being able to again just take s synthesized a dry folder with three hundred influencer videos in it into actionable like helpful clips that match the content in the the video scripts yeah i think i think that's a really good point i think we're close i don't i don't think we're quite quite there yet i think even you know we're in the early stages of like ai generative video and when you ask and you prompt directly for an ai generated video it's like like as people are it look kinda weird the fingers like it doesn't quite have that right like you'll ask for like a bottle pouring something and you'll see like liquid pouring into the top of the bottle like it's just like it's a little it's it's not quite there i think there's you know you you have ai generated video creative that might start with a a nicely generated static so you've got image to video that that might create something that looks a little bit more natural because now you're adding you know movement to an image that like is better generated in the image generated models are a little bit better so but it'll just be interesting to see is all this sort of stuff comes together i think they'll be a lot of really exciting things but for now i i think you're spot on by saying that like the the buyer you know they know when it when it's a human it's a little bit different for versus like a tiktok that just goes super viral because of you know who knows maybe tiktok algorithm just pushed a random like avatar ai avatar video and it made it super viral but like that's not to say that you're gonna actually see the same conversion from it when it comes to a user making a purchasing decision yeah and to your point this space is moving so fast there's also the risk of getting stuck on the wrong tool so five months ago arc ads it was like the sexy u avatar sourcing platform if i had build out all these workflows to pump creative out using ads and then icon came out i'd be you know kind of upset so the tools that are being used for this are also shifting every few months and so you have to be careful how many eggs you put into which of these baskets do cool one of the last things i wanted to kinda ask you as we kinda transition out of like the ads and the creative and the strategy for d is like how did these tactics apply to other businesses right like say you're running us ass or say you're you know running an info course or or something else like how do you apply these tactics that you're talking about how do you see them translating what works and what doesn't work and what are some of your favorite tactics yeah so for saas and lead gen businesses specifically the biggest thing that works is just the content playbook so that's been the biggest revelation to us is we can take our same creative approach we use an e comm make very similar ad types like u same volume of static ads many of the same ad templates it's at formats similar video concepts and would we run those for saas businesses the performance is like tenfold fold because the space is so much less competitive people are not used to seeing these formats for you know selling enterprise software tools yet and then when you do get them to work the margin profile of a software business compared to e comm like infinite margins at scale compared to you know some e com product with a forty percent gross margin like it's just not even fair the lt tvs to to allow meta to be profitable so we have literally run almost the same format i think ten five years ago the saas paid media approach was like build out some white paper that's interesting to your ic run ads getting them to go to that gated content page and and download it capture their email and then run like an email sequence or have a sales rep reach out and i think that's no longer the case like the meta is becoming a effective enough platform or just run a regular direct response ads we're spending more than seven hundred k month across software clients right now and ninety percent of that spend has a direct response objective attached to it a free trial or a demo and so that's been really interesting for us even the audience targeting approach is very similar the things that are different in saas that you have to be aware of is number one the nuance with audience targeting related to email addresses so if you download this list of leads from your crm you need to enrich those at the tool like clay that will get you a personal email attached to that user so that the match rates are high enough on meta for those look alike to be effective that's number one then the other thing is event optimization is a much bigger game in saas than it is an e comm an e comm it's a no brainer optimized for purchases until you're out like a core of a million a month and saas sometimes we're optimizing for leads sometimes we're optimizing for qualified leads sometimes are optimizing for even lower funnel events when the lead ultimately converts like three to five days later we'll send that as an offline conversion bed so there's a balancing act between finding a high event that's gonna give you a high signal volume but that's also high quality in saas that is not something you have to worry about in e com but once you unlock that formula it's a lot easier to scale your business i think yeah and i think that's one of the biggest one of the biggest challenges for us is we've scaled up cast magic on the south side of things has been figuring out attribution and where the events are and getting the tracking right and that's just not something that it's like easy and shopify you just hook up the product that you're selling and it's like it's very clear but you know it's a totally different ballgame game we probably spent like a year just go like ripping our hair out over like trying to figure out attribution and then attribution breaking and going back and forth but i think we finally got it figured out but it's just it's a totally different ballgame and i think that's one of the things that's really important to get right to be able to successfully run an ad strategy right you need to have some visibility into you know what are the events what who are you optimizing for you know are they purchasing and even another thing is like a lot of saas platforms right like one one thing that we ran into before was our product is primarily a you know a web app but you know a lot of the conversions that'll happen on meta are gonna happen on mobile so it's like how do you also take that sort of stuff into accounts so you know while i totally agree i think there's a ton of upside and being able to run this strategies there's just things that you know if you have a saas and you wanna take those approaches and run those playbook that you that are just inherent to saas that you kinda have to work out and figure out and build the right experiences so that once you get the traffic once you get the brand resonating the right way you know you're able to scale it up effectively peter my last question is just gonna be about now how do you work like on the agency level right like you said you've got a bunch of clients like what do engagements look like working with you guys how do you guys charge how do you guys onboard who do you typically work with just walk me through all that yeah so onboarding is an intake form or we get you know everything we need from you budgets kpi goals brand assets information on like messaging what's work what hasn't an worth so once we get all of that intake data we then get to work on production of assets and landing page so we do three things for every brand to work with paid ads management meta talk in google obviously the big three their creative productions or making north of i'd say four hundred ads per month at this point and landing page design because we really feel like it's necessary to take the entire funnel off of the play of the brands to ensure that it's done in a way that's best in class is gonna give them enough of a chance to scale with us as possible especially in our earlier days when we were launching brands from scratch we really needed to bring those capabilities in house so we deliver all three of those things for each brand we also do things like you know white listing funnels so we own a blog called tested and trending where we run tutorial reviews and we found a lot of success going brands that way but when yeah that's our our general kind of service scope and then in terms of pricing it's usually a flat fee based on spend tiers so you there's a lot of con around like percentage of spend versus retainer and i think we're right in the middle where where a flat fee within different spend bands that i feel like require like drastically different levels of of effort so that's kinda how we we go about it awesome peter this was a bunch of fun have have learned a lot excited to see you guys continue to scale up more and more successful brands and as you know the the ad environment continues to evolve we'll love to have you guys back back on and we can jam on more of the updates so thanks for coming on why don't you shout out how to get in contact with you yeah just go to flight dot c o that's f l i g h t e d dot c o and books some time with me i'm also on twitter at peter if you can successfully spell my last name shoot me a dm would love to connect as well sweet thanks so much for coming on the pod thanks for the time and appreciate it if you enjoyed the show we'd love your support a rating and review would go a long way as we continue to host the best builders in d and beyond follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletter visit us on d t pod dot com to join our founder community and access resources from every episode we'll see you on the next pod