DTC POD: How The Best Brands Are Built

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 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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 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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

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 and 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 share chin and we hope to see you on slack 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 really excited for our conversation we've got parker t on the podcast and we are joined by c cofounder matt g and irene chen i'm really excited for today's conversation because matt and irene have bootstrap a business to eight figures over the last twenty years and you know one thing that we always talk about is the longevity of businesses right it's one thing to like spin up a business that you know may take off and then may come crashing down as fast as you started it but to really have to a bootstrap a business two eight figures and b have that longevity where you're able to have that successful business over the course of you know twenty plus years it's a really different and exciting thing i'm sure you guys have a ton of learnings lessons experiences all along the way so we're really excited to dig into the story so maybe that's where we kick off matt and i ran whoever wants to start i'll let you kick us off why don't you give us a quick background about yourself and how you guys got started building partner dutch i i'll start okay so my name is irene hi let's see crazy weird background that i have my first job out of college actually was at arthur andersen in a very tiny little group that did sort of consulting for their account that they did accounting for so very different from fashion and that's where i learn how to really sign manage and really learn how to do a great visit like a model and this spreadsheet that's when i kind of had the background on and then after two years i decided that i was gonna move to new york and start a career in fashion and so the way i got into fashion was actually through my modeling and excel spreadsheet skills and that's how i got into it and then when i got there i really wanted to learn all facets of this business and so at the end of my career in new york i became really proficient in product development so that's my and i worked at donna karen and at calvin klein in the like the late nineties which is there were like top three different you know businesses there it's ralph calvin klein and donna karen so i kinda got to play in the to the two two houses there so that was great and that's where i really learned you know how to make a product in all aspects of the fashion business you know but not you know it's different when you have to do it yourself how's that and so after the year around the year two thousand that's when i met matt in new york and mac could kinda tell you a little bit about himself and then we and then it you'll see how our skill sets kind of mel yeah and how we started business that's perfect so matt why don't you take us back to the year two thousand you guys meet and and yeah talk talk to me about how things started to come together yeah for sure so provide just a bit about my background so i had come after a lot of schooling in in different domains sort of the confluence of ultimately the technology a technology and design and sort of as informed with a liberal arts background and with a focus on visual visualization of large sets of information so at i've been trained as a graphic designer have been trained computer science and been trained humanities and then i had gone to work for at that time in the late nineties intel research up in oregon and we were visualizing hey look if the user interface for operating systems didn't have to be two dimensional if it was a three dimensional experience and what would that be like so that was sort of our focus of of research and this was before social media is before i mean i guess it was like nintendo sixty four if you wanna put it in terms of game game consoles right and did that for a while and then i realized i it was an amazing experience intel realized that for my own life i was probably less corporate focused and wanna be taking my s swing get entrepreneurial so i rejoined with a bunch of friends from undergraduate days and at that time it was the concept was called an accelerator so this was before companies really had any sort of online retail capability if anything if they i had any website they had an informational just marketing website so we a back group called the cast group we would come or we'd approach people and we did this for let's say jay crew or or fe or barney at the time we would build out their e commerce capability and sort of have all those positions for a year or so and then roll off so that they could take the reins from there and that's where i and i met at that point so irene in her own journey had come to to join the company up first my dog there he wants to be part of it had had joined and we met and in fact my boss the boss the founder of the accelerator was my college friend and also at the time dating irene sister and was that we met we met at a we met at to dinner and that's that's how that happened yeah and then so go ahead no no take me to the next part well there's a matt and i and through you know our personal journeys matt's mom brazil and then we went to australia because that's where they live and meanwhile one point o is exploding that's when the first bubble yeah popped exactly exactly so we're in the middle of australia we're like what do we do because we both had just quit our jobs and we're like are we crazy like we would have done all these crazy things you know and then now we're like what do we do so we're sitting at the kitchen and before we left australia matt always sent me like east state like kinda stationary notes through email and then so i don't know why where you talking about was like you know although they'll it'd be so great if we could really kind of make a business out of this you know where people can send basically would you say it's like paperless post but in the year two thousand and so basically matt then we're like okay let's do it so that's how we started our business at the kitchen table at my matt's father's house in australia so matt built the the e stationery basically is what we called it and it was just the beautiful designs that you would get in email form but at that time we're like okay let's charge ten dollars for a year you know but at that time everything was free so nothing was working let's say that's our first failure like we had a beautiful concept but no one would even like to think about spending ten dollars the for a full year for this for this service so we're like okay well we can go back to our jobs or let's just continue pushing on so what we did have was a lot of people asking like hey could we get these beautiful designs but in national stationary form and we're like alright we have to survive let's do it so man and i really like out of our then we're now back in california and in my parent basement and this is mind you that we've been out of the house for ten years so no back in my parents house in my bedroom that i grew with i think just gone for my parents house yeah and we're like what are we doing you know so but basically we started a stationary company out of those designs and had physical paper and then that's how we started our business and then that led to then home goods and you know various other products for you know with these beautiful designs on them and so that's that was our business for a while so i i love this i love the the pivot because if someone were to think about you know an online email sort of service turning into a luxury goods business like it that it's just like wouldn't compute but but like i've been there like in businesses that pivoted from one thing like my first business the one that we were chatting about a little bit before seated it started as a group chat up and now it's one of the biggest restaurant reservation booking platforms in in the us and again you wouldn't think those two things could go together but you know sometimes it just happens you just like follow it follow the path of the pivot so that's one of the first things i like i like that you guys kept at it because i think everyone is like building startups sometimes it's not immediately clear the direction that you're going and what people want what the market wants and the other thing that you just pointed out which i think is so so important is just like the timing of products and markets generally speaking right like there was a per yeah there was a perfect time for paperless posts and if you were just a couple years too early you could have been building it but like the market appetite like wasn't there for it and so much of like people who build the most successful companies is finding that magic kind of confluence between timing and timing and the product and the market and and everything so you know i i just that's something i think a lot a lot about is market timing and especially i think we see that so much now and in in apps because again the first businesses that i was building was in the apps space and it was like right before people were like really willing to like pay for consumer apps right just like you were saying when you guys were building your service it was like before people were buying like saas prop products like i remember when i would buy software and you'd like buy a disc buy a license to it and like that was it and you're like oh i hate having to pay for software it should just be free and then yeah you know it was the same thing with like the mobile app store and then now like everyone's got their credit cards hooked up and if there's a correction it it's like whatever click it ready to go so it's just so interesting how you know markets and timing and consumer willingness to pay for whatever service that continues to evolve and really interesting on pivot front so those we would dovetail also i think it's i couldn't agree more with you and if i were i sitting here listening you i was thinking here if i were to talk to you know from my perspective now to myself twenty plus years ago i would definitely emphasize those points and in fact those two are together so it's like if the timing is not right then you've gotta be had finding yourself to do the pivot rather than just ride the plane all the way down right and it and it's a tough thing to to stomach because you're so focused on the idea that you've started with and you really truly believe in it and i just think that that entrepreneurial resilience for way to describe it is just absolutely critical absolutely and you know one of the next questions that i have for for you guys is so you've got the e stationary business running you you know you start turning it into a stationary business and then you start exploring other products in the home so you know irene what did that what did that look like what were some of the first like you know core products that you started to branch out to that were beyond stationary where you were like okay parker that is now becoming something different than you know what we first set out to do person pursue well before that we also had a a name for the company that no one could spell nor pronounced okay so that was one thing that these are all things where like what in the world right so we have this come who was called i w and it was just difficult to pronounce what we just light out it looked okay so this is what i'm telling you is like also note that like you need to have something that could be spelled out people could you know remember it and search for it quickly so anyway so that was an issue we had trays we had ice buckets we had all sorts of like mono and customized products for the home it's basically what we did we so it was like first it was paper and then it just kinda led into all these other products we did most of our business through the web but we also wholesale through an and the marcus for a while so that's what we did and then what happened was a confluence of things it's like what you were just saying bla blaine it was like timing right so matt along the way had a really great fortune of meeting aca and andy spade through our business and they became really good friends and they both said hey guys we love what you do but you guys need to change the name of this company like i can't even share this name because i don't even carry a rumor house spell it so they really helped us in kind of pushing us towards changing that so we did change our name to parker that it's the same company but park and that was the name of that's the name of our daughter and our son so it's very kind of personal to us also so so what happened was we were mono a lot of things and that came to me one day and said hey do you have any use for if i could print our designs and customize on cotton goods and i was i'm hell yeah you know like i'm waiting for this what can i make you know because that's my background it's clothing and bags and stuff and so what happened was i was like i think we could do a bag and let's let's mono a bag with a stripe on it but we didn't have the money or the manpower to make a bag so again it's really being crafty so i noticed that my dry cleaner that this girl's was really good at having my pants and i was like they make a go to her and ask her to help me make a pattern so i noticed off the wall she had a little a little like a thing and it said it was a degree from the san francisco fashion school so i went to her and she made a pattern and matt and i got rolls of fabric from joanne anne fabrics with coupons and she made her first bag and that bag is our mini bag and that has been our bag our you know bag for a very long time we only had that one bag on our line and that's really how we started our handbag business was through that one bag at the dry cleaners yeah and and and and i i think it's also so important like what you guys were saying about being scrappy and figuring things out because like it's the same thing for every business it's like how do you validate there's some product market fit so you know where to focus your time attention and resources like that's the fundamental equation it's like okay there's people out there that like one our service in some capacity how do we focus on what is the most important thing to be like working on right now where do we allocate our time our efforts our energy our resources all of that so yeah what why do you walk me through a little bit about what happens then you've got this bag clearly it's still around today which is which is awesome so walk me through the the trajectory of like what happens once you develop that bag where do you go to sell it or you like are you selling it to people who had bought your stationary before who your customer list or you are you focused on wholesale like what what's your strategy now so fortunately throughout this entire time we've been doing the home goods and the stationary the editors you know before influencers and before you know instagram magazines were the only way that i think most companies could get out there in this field and really get notice so we had fortunately great relationships with a lot of the editors at most of the major magazines so we're that's what we did so we had this bag and we're like alright let's just hail mary send this bag out to every gift guy let's go and it was just like you said timing it was christmas and it was just every gift guy showed it and that's how we kinda of started this whole journey with our handbags and so that bag from from from the get so from two thousand to onward we've been selling direct to customer and there were periods where we're also did big wholesale business and that's changed and of all through the years also oh yeah yeah i was direct to customer and at that at that time were you selling direct you have a commerce site setup because again this is before like e commerce is super super mainstream but you guys i know you'd been working in commerce for a bit so you guys were selling online at that time but yes the back was solely through mostly direct business direct to customer and walk me through a little bit about like how did you because i think it's something that a lot of retailers are thinking about now right they're they're managing this strategy between what do i sell direct what do i sell in other channels they're dealing with amazon they're dealing with you know wholesaler so what kind of decisions did you make when you were thinking about allocating in inventory and just like building your business like how are you thinking about wholesale versus like what you were selling online were you thinking separately was it like one strategy how did you navigate that but we it was interesting because this bag was mostly you know the way we had made this bag it was all mono so there was isn't it difficult to do this at scale so everything had to be done one by one so we did it direct to customer and we still had an even marcus account so we did whole through them but it was also mono grant so those were our two main channels of distribution and that's where we really started building up this great customer base through what we were doing with this bag and then talk to me a little bit about the like one thing we were talking about is the fact that you guys are bootstrap right like this is a business that you you guys built to be profitable to be sustainable like you wanted it to work and you know you you guys were building and putting your own resources into it so tell me a little bit about how you guys thought through capital allocation at this time right like you've gotta produce the bags you've got you know to sell them you've gotta ship them you've gotta price them you've got you're working with wholesaler so what did what did it look like from a business building and a bootstrapping and cash flow perspective when you're at this point in time in your business i think we greatly benefited from irene background and fashion and her discipline that she and acknowledged that she had developed around costing and margins that was super helpful especially as we move more into the bag space and it's really just you know keeping and knowing what your costs are you know taking the time to make sure you have that up to that spreadsheet know what your margins are these various partners that you may work with or these different channels that you may consider they each come with pros and cons you know mean back back in the day when it was more of a focus on wholesale these some of these larger companies such are huge dedicated binder of how you must work if you want to work with us right so we really evaluate each of those i would say opportunities or potential channels case by case based on our numbers is based on our capacity and it's just i think the huge part of it is knowing the importance of paying attention to those numbers and then having the discipline of looking at them all the time so that you can manage them responsibly but then also costing wise is that's interesting you know manpower wise it was matt and i for a very long time we were everything design mac could do the web so i think this is a other thing that when people ask me about you know building a business man and i booked did ten you know ten plus years you know at other you know at bigger companies and that's where we really learn how to do certain things and i feel like it's all about connecting dots i really feel that way like why was i even spending two years at a place building spreadsheets you know i really like that wasn't my jam but honestly that foundation allowed for us to build this business in a weird way because i could time manage there's only things you learn at the various places that you have you know worked at i i really believe that and i feel like it's all about doing your your time and your learning your skills and honing your skills so when i was at donna karen and one thing i learned was if you're not sure about something invest in grayish goods and grayish goods allows for you to be much more flexible than you know taking a bet on red yellow green black right so if it's gray you could always diet it so that's why honestly it was like two things we didn't have a money to buy fancy fabrics and i loved pedestrian fabrics but we used canvas because canvas you could print on you could do things with it maybe you could diet it if you wanted to so that allowed for me to have a flexibility of taking a risk on a larger bet on one thing but i could turn it into other things if things went sideways and i think that's a really important thing to note because that love from both a product standpoint and also your another message for my younger self would be it's almost humility in resilience because like irene said we we had already put our multiple thousand hours in in our various careers and here we were now back at a position where we're leaning on each other heavily to take the mail out to do every possible task that you would imagine and that's a humiliating experience right where when you're when did you stay like yeah exactly what i'm just saying that that's you gotta be aware you gotta be ready for that if you wanna do this journey 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 i i love that in terms of just thinking about flexibility in inventory especially when you're a younger company and you're start well i mean it really applies to everyone but especially when you're younger you maybe your business doesn't have the cash flow or revenue to support a mistake any mistake in the early going can be yeah you fatal dev so i i think that's so smart because you don't wanna put yourself in a position where you over invest in any sort of product or inventory that is just like no good which is why so you know so much today we'll see people who are like even testing products before they develop them they know they wanna know there's market demand for something maybe they'll do a pre sale maybe they'll run some ads around something to see if it's something that resonates before building and investing in product line but but i think a universal rule of thumb is like any decision that you're making especially when you're allocating or committing capital is making sure that there's some level of flexibility because if you get caught holding a bag an inventory bag that's too big you know you could you could bankrupt your whole business that way one hundred percent one hundred percent that's so critical and just you know again dean flexible being flexible being flexible i love it like and and it's great because like that's something that's really important as a business operator but that the that the the customer they like they don't know yeah because like you said you you could dye the fabric you can yeah there's things you can do with it right yeah and even just something as simple is knowing your colors in the beginning start with neutral don't go too crazy give yourself flexibility and even to this day i was just having this conversation and they with one of our product development team members and she's like okay you know these are the choices that you have and and i told her i said you know what i really kinda like to stick to very few choices still to this day because that allows for me to be very creative with what i have i find when i have too many choices and leather and materials then you're you're not so focused you know you're not so focused and you can't use all your creativity and like hey this is all you got what can you do with this and i think it's really interesting that i'm still like that and i you know and i really believe in that and another interesting thing is even if you just look at product data right like there's so many different tools that you can use to analyze like what's selling from like major major other retailers and sites sites that are doing serious serious volume like you know millions of hits a day that sort of thing like you'll see the long tail where the basics are what sell and then maybe you've got like this obscure skew but like those businesses are at the scale where they can support yeah you know having this obscure you that like yeah yeah because to them it's like they can they can the business can support it there will be enough demand right they're gonna keep people happy for the people who are looking for that exact thing they're gonna find it but again if you're if you're just starting your business out and you build something that's super obscure yeah you're gonna have a lot harder time matching for that demand a totally agree i think i think that's that's really the that's really great and that's something that you can just bought people can follow data around and yeah use different platforms to investigate what what's selling what's not selling but okay i love that so let's let's keep going so you've got the bags going tell tell me about the evolution of the business then over the last fifteen years what's it been like you got the bag that started to work you're selling wholesale direct you know walk me through how you start you scale the business in terms of when you're introducing different products what those products are and how like now that you guys kind of establish that product market fit around that first black flagship bag product what the continued trajectory started to look like so what really happened was we had this bag and it had to be mono one by one one by one you know and really a lot of hand work and a lot of our time was being spent making these bags honestly matt was on the p press for how long matt would you say and so i think he think and matt's you know and i i'm much more a safety type person and matt is probably the bigger bigger like gambler type or it's like let's take a risk so one day he came to me and he's like irene i'm not doing this anymore and i'm like what he's like i'm not pressing more bags and he like gave me a time he's like he wrote it down he's like this the last day i'm not gonna do any more of this we're gonna have to figure out how to do this without me pressing these bags and making these one by one and you you know making all the designs one by one for me to make these back i mean it was the horse re road in on but it wasn't the horse i wanted to ride and and like irene said it was the there's whole you know fundamental about when you're an entrepreneur entrepreneurial business is always a bottleneck yeah no matter how great your business is to follow the bottleneck right so this this this mono and customization had been with us since the very very stark be stationary and it allowed us to grow to the level that we'd had but at this point it was from my view holding us back and we had to and it was scary because this was ninety plus percent of our business yes and and it's scary because both of us were doing this it's not like one guy had a job and we had any safety that fall at we fall i got two young children and i have to make a living from like what okay so then i was like okay alright that's fair you've been pressing these bags for ten years i'm gonna have to figure you this fat so we started in you know before k died she she always said to me you know irene i really liked nylon but you know you should look at leather because i didn't wanna do it either because i wanted to stick with nylon but maybe look at that and i was like okay so i always have them back on my head so when that came to me and said i'm not doing any more of this pressing i'm like okay this is when we should start looking at other materials so we took our hero back and i started working with different materials and different colors and different strat colors but still with the same body and that's really honestly where we started taking off you know and that was really scary and to really jump in and really believe that we could keep going but that's where we took off because that's where we started to you know we could scale and we could actually utilize what we were actually really good at versus you know pressing bags and taking boxes out and spending all that time doing that work which is really important but we could actually use our skill sets that we were trained with you know and i think this is that's where we started like you know started rolling into the best and i've gotta say this year because i wish i could tell this to the people who were starting out so this is back in the late nineties there was a book called emi the myth and there's been many things variants on this and sort of it's evolved into systems thinking books and there's great references but i wish that from the get go i had taken those messages to heart and really from the beginning try to apply those learnings in there and this is this it you know but sometimes you you you're comfortable in with the way you're doing something and even though you know you should do it better like you're you just have momentum right and this this was a lesson the kept coming back and knocking on our door over and over again in different forms and it's just you know just to some i'm it's like you know the limits so say service businesses or if you're a baker right doesn't matter how hard you work like you gotta you get up at three in the morning and you can only bake so many breads in the day and that's all you can do right so how do you expand well i don't know you can franchise in all different ways of doing that but that was the kind of thinking that we were forced to make either we're gonna continue to do what we're doing or we had aspirations to scale we had to take that leap and that's that's what that was really what characterized that chapter i think thinking in terms of scalability is is so so important because one of the trick things to solve for is like when something's working and you've got a process you're so scared to like break that process that you know it it's really tough but it's something that you need to do to get the business to the next level so you know that's why i think it's so important especially to like you wanna think about what scaling looks like before you reach that scale right and then and then mh you wanna anticipate okay we because that can cause if you scale you know don't place and it's everything's trying to kill you but it's like it's like this thing where it's like okay things you're working and then the more they're working the more the less time i have because i'm manually doing whatever it is that i was doing and i'm gonna keep doing more of that and it should like you really need to be disciplined and sometimes force yourself to think in systems rather than like earlier than you may even have anticipated because things happen for life what happens and you know you wanna be ready so i i think that's a that's a a great example yeah the pearl of wisdom is you want to work on your business not in your business exactly how you get there for your business is that's your journey right but that that's what you should do and i think it something that like humans inherently have is this idea of like hard work and how it is actually affected the business you feel like maybe because i'm working so hard like that's a net good thing but if you're working hard on something that like you were saying maybe it's not even your true core competency you're just like working hard it may not even be the best thing for the business right no but like you know but like we're just trained to think like the harder we work the better it necessarily is but sometimes that's not always the case so yeah it's very something yeah no you're right and that's something you as an entrepreneur you need to be especially gonna given our backgrounds and how we come through the schools and the jaws we've done that is the case right if you're working really hard typically there is a c sensation you know to your success right but that that you when you're an entrepreneur you quickly running into limit to that way exactly so i wanna hear now about this next phase of the business where you've really discovered you know that next sort of like line where things are starting to work you found some scalability and you guys are able to respectively tap into your own core competencies call it so like what does that next phase look like walk me through walk me through it dom i'll give you so imagine ten years i'm on this know we're doing everything right but ten years i'm on literally on a heat press mono grounding bags right so all at hours a day into late in the that night to get orders out now i have that time freed up oh suddenly i can start focusing on things like three p right instead of like packing and shipping everything out of our location what's it mean to have all our inventory now that we're free of customization at a at a trusted third party vendor who can do that for us and i think that's where the systems place came to you know like we started focusing on that wow how do we system what we're doing and really focusing on how do we you know what are all these all these systems that we have to build and make sure that it's really efficient and and be really disciplined in building those systems and that that really was very important for us because i think you could scale and take off like a rocket ship but without those systems in play again not gonna work so what do what were some of those like core systems i know we got we have like three p coming into the fold now you've got streamlined in terms of like your inventory but like irene from a systems perspective like what were those things that you think were really really helped you guys out i think getting major you know people and play to help us like identifying the the big buckets that we need to what how do you take a product from inception to the end you know so let's say we've got product we have you know the people were in charge at three p we had to get all those little buckets into play and getting the right players into play so that everyone can focus on what they're good at and we can start really moving forward and i think that was really critical and then that can be supported by the scale so then there's an unlock for okay well how do we now get more customers well then that was the next thing i turned my attention to after was alright what's their potential here with you know direct marketing you know the performance marketing brand marketing what can we do feed the machine you know you can have all the systems but if you're not feeding it with business yeah and and i think that's always the the interesting thing about consumer products is that you're you're playing this game between marketing on the demand side and the more demand you have the more of more to fulfill so now that we've solve their fulfillment issues and we've got the scale there matt why don't you talk walk us through the the next chapter of like what did that demand in direct marketing look like now that you have the you know the systems in place to support it what what does the strategy look like and would you guys you that's right so now finally we have the capacity to scale in areas that we didn't before but now we gotta get the customers coming through the door and we had been you know experimenting dabbling with this kind of marketing from i was just before this call i looked it up because i remember it being called adwords this was like the year two thousand year two thousand two when google first release you know this is the thing and it had never really worked for the type of product or the service offering we'd done but we'd always would kept our feet in that world along the way you know something now it's a pinterest now it's instagram now it's as all these new shiny things came little along the way and to you know or good fortune at the point where we had put some of these systems in place the offering let's say at meta or at google in terms of how we could utilize their tool became more relevant to us so we played i mean i played around myself by doing the trying to do what i could with and very quickly reach sort of the level of look i gotta do this full time or i gotta find a trusted hands that i can work with to do and so we had to get fortune as we scaled our investment in that that we would have access to internal teams both at meta and google where we could meet with that in a regular cadence because they have visibility into the capability capabilities let i'm sure they're inc to have you spend more but they have visibility into capabilities that we would never have and then to partner that with not an agency per s but an expert on the other side of that to complement that and then that's how we've really unlocked several levels of growth through that sort of call it a marketing system and how would you guys characterize your business today right like would you say are you guys primarily direct you guys still do wholesale like you know do you work with affiliates what is the you know if you were just characterizing how you generate demand today what is what does that ecosystem look primarily direct customers still and i think you know we just have this amazing community that we've sort of built ever since covid started i think that's where we really started connecting really deeply with our community and we have this like just through those last you know since covid to now just this amazing community that we're just really connected to and you know i and i really we have like it's it's really remarkable what what we have a community and how amazing they and that speaks to another fundamental change too which was growth driven by product and service offering versus growth driven by mission and i think since covid and since we went through what we did with the spade that really sort of that was a real wake up moment for us and then that had us looking internally and it it just so happened that that's when lockdown happened soon after covid and and we really sort of explored more of a purpose driven model for what we're doing and of course it's still all product that that that product sums out of the purpose as opposed to being driven by the product i think that was a fundamental shift also and you know you think about things like inbound marketing based on content it's like without us signing it to be that way it became marketing largely around irene personality you know and and her journey of of self actual virtualization in parallel to what we're doing i mean building the business was part of it but also personally know i don't know it remains to this day as is you really important part about what we do absolutely and how would you how would you characterize that community right like who is your your by like if you had to just characterize like who the ideal customer is for parker that's like who is it what do what do they have in common what do they like and what resonates about the brand with them i think it's just the commonality is everyone's really busy like i always wanna say that you know like it's a it's a busy mom it's a busy grandmother it's a you know and i love the fact that it is not one generation it's very inter generational which i find really interesting and the product we put out there really works with that mindset because what we do is functional products but they're luxurious so it's for a very busy person but then she needs something that actually really works in a functional way but looks really good and i could do it really fast and i feel like that's really that's that's the main crux of our customer you know just really busy women and men too so it's cool no i i i think that is cool and i think sometimes it's not immediately obvious to companies right because like you start with a product you start with a problem that you're gonna solving but to like really come up with a brand identity and really understand who your ic or your core customers and what their value sometimes it's elusive and it's hard to pin down and i saw that when you guys had functional luxury and i was like oh like yeah that makes sense so once you figure that out as a brand all of a sudden everything you make starts to make more sense and it may take a while to get there yeah some brands get there faster than others some brands get it right out of the gates other brands and it takes longer like i've obviously seen and i've worked on several brands or maybe some of my brands still don't have it but when you can when you can pin it down i think that's when everything starts to click and then you can like ladder up to you can ladder up all your decisions into you know who is it what do they resonate with who are we making things for why are we making things and that's really how you know you could build and scale scale a brand it allows you to be strategic it allows you to transcend just being tactical because then suddenly all your tactical decisions can be made through the filter of the strategic imperative and it's it's just like you said it's freeing and it's really important in once you can get yeah and and sometimes it's it's with a lot of things sometimes simplicity is like the hardest thing to find and really what we were just talking about is it's simplicity in a way and and way of thinking about business but you know it's not always the easiest thing so for anyone who's building a business like just because you haven't found it yet like you will get there and it and sometimes it takes that trial and error to get there and then all of a sudden one morning you wake up and you're like wait a minute i can just boil everything down to like this one thing and like that moment when that's a great day never well you're never you're working on something that moment is like hell yeah like i figured it good but that stat takes blame that takes a lot of consistency right it's the practice of mu on it it's okay like this isn't working right now not giving up and i think you you hear it over and over again and it's like okay sure don't give up but it really is i think it's the consistency and coming back to it every single day and then like you said molding and then some at some point you'll figure it out but if you gave up too early you may have not come to that point you know so you really have to really believe that that you're gonna get there and it's okay that it's hard totally and part of it just knowing that it's out there and may maybe knowing that it's okay that you don't fully have all the pieces yet no but you know you're looking for it and then that way when it hits you over the you'll know you have it and you're like okay that's that's great we got it the the last question that i wanted to ask you guys you guys are a husband and wife founding team you know so what does that experience ben like what's it like working with each other you know really bringing together personal and business mission all of it together what what advice what tips typically a new on this okay you go first i think one word to start the answer to that would be boundaries so the other way that we've that we've expressed that in the past is that we have separate areas you know of focus but then i was thinking more of that was like that really in itself boils down to this concept of boundaries right and first of all having full trust in your partner in respect for your partner right and then that you guys carve out you because like we said for longest time we've been doing everything right so you have to take a a quick accounting of all the things that need to be done and make sure there's sort of an equitable distribution and then once you've got that distribution of of tasks you you can always help you can always question or whatever but ultimately you have to have faith in your partner that they're gonna do the right thing and get it done and their way may not be the way that you're gonna do it and that's a a growth opportunity there where you're like alright that that's that's her she's gotta get it done her way that's my thing i gonna do it my way and you gotta be okay it's not being done the way you would do it so i think those are some key aspects of of navigating that dynamic yeah i think that's key what what about you are any any other perspectives on it i mean i think that's had it harder than me because he's had it he's worked with all women okay he's a we're were just talking about that and so he really needed to not only you know do what he does that then also like really learned this new like you know there's no men like you know in where we work it's so interesting right so i think if there's a larger plan to that because i'm in an only child i went to an all boy school like i think this was just something that i that was in my destiny i had to experience yeah but i think matt and i have a great fortune and we definitely have our boundaries and that he you know the tech stuff the business the marketing that's him and i do the product and and so we we we already came i think even together when we first built the e stationery we came with our own skill sets and that's where that's how we always worked together so there was never like i wanna be involved with the tech like okay you know like i just been and for back he's not telling me what leather to use like he'll give input like i like you know this feels good or yeah this may work but we both have our skill sets that we already actually came with and that's why i keep saying when people ask me you know i just wanna do my own business i always say like go out and learn you know like go out and work for other people to really hone that skill and learn this particular skill set because then you'll come to a business that you're building so much stronger so matt and i both had very strong skill sets coming into what we were doing we we probably had to learn how to do all the you know packing on all that stuff and now i could like you know it's so funny because yesterday i was slicing a box open and someone was like oh i was like yeah i i think i done this civilian twice i could do this you know so it's just really funny that yeah i think having your skill sets is key that is funny and the last question i have for you guys is what do you you know what are you focused on for twenty twenty five and beyond like you guys have bootstrap the business successfully eight figures growing like figuring a lot of things out in terms of positioning branding products operations what comes to mind in terms of like what are the key focuses of you know this year and and and and beyond this year i think i could speak to the fact that we really are focused on increasing eyeballs to our bt tv that's something that we do every friday and we do sort of a it's a if you could think of it as a q and a talk show mixed together that's what we do and i really i believe in it i really love the community part of it i love every friday and i want to bring more people to the pt tv wait and and just just for people who are tuning in and it may not be familiar with that could you could you tell us a little bit more about pt tv yeah totally so we do it it's it goes live on instagram and also on youtube and what we do is every friday we'll you know pick a time usually it's whenever everyone's kind of after work and i'll do an hour of questions and answer show new product talk about new product talk about whatever it is that we're you know thinking and this year we really wanna expand that we wanna bring more people into pt tv and you know just really build a larger community in there and i feel like it's really important to us that's awesome and it it goes beyond behind like the founder led content thing and community kind of like you guys have been talking about so i i think and a little bit of social commerce as well so i've i was checking it out in it's really fun yeah thank you thank you cool so that's what we're working with this well well guys for anyone who's looking to connect learn more why don't you shout out you know a little bit more about the brand where do we find you online and your own accounts like where can we connect with you guys individually thank you so we're at parker that dot com and that's on instagram youtube that's primarily where we are and where else are we i would say join us on kt tv on fridays and that's through youtube and also instagram live but we're supposed that's where you could find us honestly right matt yeah and that's a way to directly connect with us during you can get a sense of what we're all about in the brand and then we monitoring the comments and we're responding in real time so if you're like asking questions i'm then i'm behind the laptop irene in front of the camera i'm passing the questions on irene and we're responding to and then he can follow up with you know as appropriate with dms after that that's how we can good but nate start with our our website parker patch dot com links to everything pg everything from there awesome yeah and that's a great way to like get involved with the brand you know like you could see if you're like hey i'm interested in this bag i'm not sure what straps go with it we could definitely help you guys out with that super super cool strategy i like it just you know everyone's on youtube everyone's on online so like having that as part of something that you guys do as founders every week i think really really cool stuff so guys thanks so much for coming on the pod this was a blast and and excited to see you guys continue to grow this year in beyond thanks so much for i really appreciate really appreciate it thank you 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

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 caleb alvarez the founder of shadow light studios a creative studio specializing in high converting paid and organic content caleb has worked with some of the biggest d brands and just big consumer brands that you'd know maybe like monster energy snapchat samsung on the brand side and some big names like tony hawk logan paul rob ice cube and many more to help find their creative strategies and maximize return on all the content that they're putting out in today's episode we're gonna break down how to create better content out to build and scale a content engine and how to find the right balance between organic content and the content that you're using to ben run your ads we're gonna unpack everything from finding the right creators to optimize and creative brief measuring campaign pain success and why so many brands are leaving money on the table by ignoring organic content and caleb also gonna help us unpack how he helps scale nectar seltzer from two million to five million in revenue just using organic content without any paid ads so i know there's a lot i'm really excited for this con caleb i'm gonna let you kick us up why don't you tell us a little bit about your background how you got into this space in the first place and then we'll jump into everything content perfect i love that i appreciate the the kickoff for myself i originally got into content out of a spark of curiosity honestly i played sports my whole life i've genuinely didn't believe i was creative if you asked me going through school i would've have told you i'm not creative whatsoever and then as i was playing sports i started to realize if i were to break it down through a sports lens i was actually very creative i was doing things playing on the field that i couldn't even recreate it couldn't tell you how i was doing these things and i was like wow that's that that is like a former of creativity as i started to to learn more i'm and go through my personal development of just learning more about myself right and so i got her playing soccer i had a variety of different scholarships decided to not take any of the scholarships and go and work at a diner and make waffles for twelve dollars and and fifty cents and it was very interesting because what i decided to do was the opposite of what everyone else was doing right it was go to school get a job and this was around twenty eighteen and i just saw this lens of instagram and social media and i was like there's gonna be this huge break where this is such a high demand and and it's gonna be needed and hit me when i was watching the super bowl and i said wait a second someone has to create these commercials that like you know i'm not paying attention to and i realized that there's so many different responsibilities when it comes to the creative world and and film and i said you know what that's that's what i wanna go and pursue right i wanna i wanna find something that i get lost and i can i can sit and and and edit videos and and be creative right and so i decided not to to go to school and pursue film and through that job i bought my first camera started editing videos on my iphone i didn't have the proper gear i didn't have the proper tools at the time but of through through compounding time and and results like i acquired the right tools and acquired the right skill set and so i'm originally from indiana i have four brothers and actually in the company i worked with some of my brothers as well on the creative side so it's been quite the journey over the last seven years of of building what exists today to be able to work with some of these top brands like you like you said and and it's really just come down to a growth mindset and continuously getting one percent better every day and and adapting i'm so that's a little bit about myself and i'm excited to to be be here with you guys awesome so caleb blitz let's let's jump right into it what do you what do you guys do like how do you work with brands what would you say your core competency and main focus is when you're working on brands with different campaigns great question so when it comes to the brands that we're working with we're really coming in and working with a very specific type type of brand and in what it really comes back to is having a unique selling point what we've seen time and time again for for content the brands that are really emerging and having marketing advantage we could call it whether it's ads whether it's organic content they all have unique selling points right and we're coming in and we're taking a brand that says hey we have these unique selling points we've tried to do this creative we have some ideas right we're posting a few times a week on on instagram tiktok but you know we're we're maybe at like twenty five percent out of a hundred right there's so much more that we could be doing what we're doing is we're we're partnering with those brands acting pretty much as an internal marketing solution on the fulfillment side from prep production strategy and idea aviation the actual filming side of it in the post production we've built a team and that's all we've done over the last seven years it is that right so we've turned it into a full service agency that comes in integrates with the company and isn't just a freelance contractor that's coming in and working on your project or you know you're hiring one full time employee and they can only do you know a small amount of of output right so we're really scaling content through systems and creating content that converts through through the strategy yeah and i'm really excited to talk about systems and content it's something i geek out and nerd out on all the time as someone who works in consumer products and saas products and i mean we're doing content right now so it's like how do you even take this and create the other content pieces around it so i really wanna get into what those systems look like but first i thought you know maybe we could even clarify when you're saying you work with brands on content like what does an organic content strategy look like from a brand because when we were chatting offline for example you know you say oh you wanna be on tiktok but there's so many different ways to do it we were just talking about how you know we had jimmy farley from creators corner come on d pod and you know the strategy they use they find a pod of creators they set up a discord they go in they launched this creative brief and they're creating all sorts of like random tiktok content to try to go viral and then as soon as one hits they'll double down on concepts and like that's a whole different strategy but you were saying like you know that's just one way to do it how do you guys take on what's your take on content strategy and yeah we're walk me through that yeah great question so for the brands what we've really seen succeed is founder led content right and the reason for for us the reason why we doubled down on founder based content is because at the end of the day the founder is the one that typically has the vision behind the company it it was their initial idea at one point you know whether they started it in their garage you know or or their bedroom for example and they then they went on to shark tank right and got investors and now it's this company that that consumers are buying from there's a unique story for all of these companies right and and really what we hone in on and this is why i got into content in my first place was i wanted to to do documentary content right i wanted to tell stories and as i evolved and worked with different creators influencers as i saw that brands have stories right founders have stories and so many individuals don't ever get to tell that story because they're so focused on the day to day and so you know we take a variety of different brands like i i'll just give you an example nectar seltzer nectar heart seltzer has been dropping beverage products in costco ag g b in the line to for people to buy their product when this product launches in store wraps around the entire store hundreds of people right and it comes down to having a story that people feel a apart right and so the founder led content slash this is one content pillar right one content type there's many that we could we could dive into you already get the example of like the influencer marketing side phenomenal strategy it works right founder led content it also works and so i think as a brand especially going into twenty twenty five obviously it's being aware of the different types of content that you can be implementing but also understanding that people buy from people right and that's why influencers work as well that's why founder let content works as well and the main focus shouldn't be what is the perfect strategy in twenty twenty five but it's more so on the system side how can we develop a system that allows us to play and implement ideas and concepts bring them to life get them out on the social media because social media just gives us data of what's working what's not working right and a lot of brands slash companies don't wanna emit that you know they don't have the content figured out and that's why it's not performing right they don't have the right strategy and so it first starts with having a very clear strategy having a very clear message in terms of who does your product serve why does what benefit does it get to them that unique selling plan right what is the story behind it because that's where where the y comes from and then on the back end having a system to be able to deploy concepts ideas out into social media to get the data as fast as possible well so it's a breakdown yeah you know and and this is something that i'm really excited to get into it and i'm glad you kinda brought up the differences right like because or a brand like you're saying there's no necessarily one way to do it but you're saying what you're seeing is founder led content being successful and i think what a lot of i think it's a trend that a lot of people are seeing and i don't think anyone doubts that founder led content is a good thing but i think what you when it comes to implementing it and getting it done right i think that's the hard part because you've got creators that are professional creators that like that's all they do right and then they wanna launch a brand so they're like they're a professional creator so they've already got that figured out like that's what they do and so when it's a creator launching a founder lead product like they're a creator first and a founder second so then like the content comes naturally but like you're saying for a lot of a lot of operators who are like oh man now i need to learn how to make content they're learning to become a creator and it's not easy to to do that and pull that off so the first thing i wanna kinda stress is that there's a bunch of different ways to you know introduce content into your brand whether you're you like you were saying whether you're partnering with influencers to tell your story whether you are you know doing this crazy stuff and partnering with a bunch of face list people to create content on tiktok like that's one way to do it but for the purposes of this conversation i wanna go all the way in on founder led content and how to build a strategy that works if that's the strategy you're pursuing so why don't we just start there who is the right person to create founder led content is it everyone are there certain people who are just like you know what like your product is great but you're maybe you're better off working through other channels and paid and whatever like who are the brands that founder led content is perfect for and who are the people where it might be better to just you know say hey founder led content great for ninety percent of people but like maybe you know for you guys focus on a different strategy yeah i love that question and as as much as i wanted just say it's this type of person what what i've seen and what it really comes down to is and a out preference with saying this i've seen accounts and founders perform really well and i would bet against them right and so what i've seen work is the passion behind the story right and having an emphasis on what is it what is your unique selling point right because that's where the the foundation comes from if you have a unique selling point with product that's assume that you do then the next step is gonna be do you wanna create content if the answer is no well there's a dilemma here why do you not wanna create content and getting to the root issue of that is it that you genuinely don't have enough time or is it that you genuinely maybe are afraid to get in front of camera or tell your story right and depending on the root issues gonna be two different paths let's just assume for the sake of this example you say hey i i'm more so just afraid honestly i don't really wanna get in front of the camera let's be honest like in terms of the time aspect you can hire someone internally for this you can you know partner with an agency like ourselves they're you don't have to do everything right what you do have to acquire the skill set of is that communication aspect of talking in front of camera right i'm and doing it in a manner that is clear concise and holds attention right and so it's not you know a particular personality type or specific individual that should be creating content i genuinely believe that everyone should be creating content we're doing it right now you're you're consuming this is coming from content right and what the skill that you will have to acquire is that retention side of things you know you're gonna have a hook in the first five seconds of the video i actually think it's even less than five seconds now with retention it's more like one second to three seconds where you gotta capture someone's retention and you can do this in a variety of different different ways you can have a visual hook right you can have an audio hook in in in your the post production process but the hook is gonna be the most important part and then your main bullet points i firmly believe that especially when it comes to founder led content brand specific content you probably don't need his tele prompt because all of this you've limp it right and so it's actually just sitting down and saying okay for this particular story let's just say you know i scaled my company from zero to a million dollars and twelve months ago it was just an idea let's just say that's the hook right i then gonna have you know three four main bullet points of my concept my idea that i wanna get across and this could be delegated to a copywriter this could be delegated to a creative director this could be delegated to chat gb you could train a prompts a chat prompts you know based off your story your language that's something that we do for all of our clients to make their the writing process more efficient and so i genuinely believe believe that it's gonna come down to feeling led to create this content for the sake of number one sharing your message sharing the the learning lessons and it has to come from a place of like you wanna impact people right you wanna make them feel a part of your company you wanna build that community aspect of it right if you just wanna generate dollars i would say go create ads right i would say hey like let's just run facebook ads right let's go let's go on mid meta and like let let's let's promote the this type of content right at the end of the day they go hand in hand and the brands that are doing both are our gen are are building the community they're building longer health tv with their customer they have the trust aspect and that's what we seen time and time again yeah so one interesting part here is basically what i'm hearing from you it's like you gotta find a you know you got the first thing is nailed down your story but then you have to figure out how to get in front of camera even if it's you know maybe you feel a little bit uncomfortable in the beginning but that's where working with the right content team comes into play you know just a a quick little sidebar maybe anecdote on my side is that we have like we've worked with people on like personal brand style content and everything like that and i think there's a fine mind because like one part like you're saying is the content strategy and like the scripting and what you're doing but another part is the production so you need to like understand if you're a founder and you're creating content like what you know a how much time and energy you can invest into this sort of thing because again you've got a business to run as well so you need to them in a setup where you're not you know this is a net positive for the business it's not like you're distracting yourself from running your company so you can become a creator but then also on the production side right i i think one one thing that's really important is you've got a team or editor can kind of understand what you're doing and be able to like implement and get that content across the finish line because if it's just like hey i'm your strategist here's a bunch of ideas for you to take and run and then i'm kind of like you just created like all this work for me and like i don't even know when i'm gonna be able to squeeze it in versus you know having an operation in place where you know you can be thoughtful but you can be time efficient you can get your story out and you know you can you can actually produce content consistently because consistency is such a such an important piece and i've seen so many different founders myself included sometimes where it's like we wanna take on a new content initiative and just the the barrier of you know work whether it's on the editing side or the production or the script isn't quite there and you're just like oh my god it's taking so much time so how do you how do you balance that how you make that work great question i mean you you hit one piece of i wanna dive into really quickly on the consistency side when you said who should be creating content it's anyone that wants to be doing it consistently and when i say once like it goes down to that desire asking yourself what is the actual core reason here right consistency is what's gonna allow you to grow very very very quickly i think of social media is like digital real estate right now right you you matter for about twenty four hours then you your algorithm doesn't care about you right now you will have some content generate millions and millions views and that could happen five days after you posted it right i think like understanding the expectation is that you know the odds of you posting a video today and then in twenty four hours it has a million views it is pretty slim however it does happen and it can happen and i've seen it happen a lot right but it's a very unique strategy that comes into play the only time it actually happens is through consistency like it's three we're we've been warming up the account warming up the account posting every single day and then thirty days and a video hits a million within twenty four hours right five i could tell you story five million views off of one founder led piece of content and it would cost the the the the brand that we were working with about a hundred and twenty five thousand dollars to generate the same amount of views and it was basically one of the assets out of the thirty that we created for the month right and so seeing that like with what you said it's that consistency aspect right it wasn't just turned the turned the the organic on and then a million butte right it was ten thousand and a hundred thousand and five thousand improving from the data right and transitioning into your your next point you're how do you structure this great it's it's it's actually something that is why i built my agency the way that i've built my agency and i actually just wanna share with you guys the structure that i have because i create content i've been doing this for eight years over eight years and i have a camera rolling off to the side right now and i'm recording like my own version that will be cut into long form and short form content and everything like that right but the main thing is that i have a videographer that films with me consistently so after i'm done that this podcast were actually filming more content going into the evening i my meetings are done for the day and he's worrying about all of the production right he's he's worrying about the is there enough storage on the camera does the lighting look nice says x y and z you know meet the the standard that we've set in into place and i've developed with that over time with them the last thing that you wanna do is yeah like you said higher creative director they dump a bunch of ideas on you and you're like great i just paid for a google doc right and that happens a ton it happens a ton because the execution doesn't exist on the back end to actually fulfill on that so what we personally do our our team structure we have about twelve clients that we are reoccurring working with and what i found is that each client has to have a creative director right each and one creative director can manage about two different brands so let's just say for your your brand you know you have one department and another department i'll give an example like we have an ad tech company they focus on marketing content and they focus on learning content one creative director is responsible for the idea idea the strategy the scripting making sure the pre production everything like that takes place and then we have the videographer that's filming that content going and actually going to set your creative director and videographer in a perfect world should be merged for us we structure it's like different because if we split their their attention depending on like the pod structure and so we have the the the creative director the video editor excuse me the creative director the videographer then we have a lead editor the lead editor is responsible for maintaining quality and working directly with the creative director right to make sure that the style is actually being implemented the way that needs to be implemented and then the lead editor has an assistant editor right and the assistant editor prep the project right so if i give you a podcast and you know it's two days worth of filming we have eight hours of content the assistant editor gonna prep the entire podcast do like the dirty work we could call it like the mono a lot of this actually can be leveraged by ai now but it still needs a human operated so we have the assistant editor prepping for the the lead editor and the lead editor is the one enhancing it and you can think of the lead editor as like an artist to painter right you're are not you're not gonna send your painter to like go and pick up the paint the painter needs to be painting right and so what i see a lot of brands make the mistake of is they assume that one person can do all of this and then they wanna have five different marketing initiatives they wanna you do tiktok instagram facebook they want that creator doing ads as well and then the creator get burnt up honestly the creator usually won't with a voice how they're actually feeling and they're gonna look bounce companies until they find something with a little bit let less work and more pay that's what they're looking for at the end of the day right and so having a healthy balance where you understand exactly what needs to be done for the job right for your specific content strategy and then saying and being realistic like if you were a video or getting consulting right getting someone else's feedback and saying hey this is like the scope of work is this reasonable for this particular role right and and asking another brand asking someone like myself which you can you guys can reach out to me and i'll i'll literally give you the breakdown if you're listening to this of how you should structure it but it's gonna be being specific what what the responsibilities are and what their kpis are right so if a video lead editor for us right we know that if it involves heavy animation and the video is more time intensive they're gonna do less videos off for for a month right but an assistant editor should be able to do like double the amount of videos because they're they're about quantity and the lead editor is about quality same same with the creative director the reason why we can't have a creative director work across ten brand is they wouldn't even know what's going on with you know six of them you know fat five they would be like this this is not fun right and so when you when you have your brand it's it's understanding that there are rules that can be merged together but it's finding the right individual that can actually merge merge those roles together based off their skill set and and that's gonna come from their past 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 brand so anyway keep listening to d t pod and more shows like us on the hubspot podcast network at hubspot dot com slash podcast network yeah and i think that part is so interesting and oftentimes overlooked in just you know how many real core skill sets are it's like you see a a a video go up and it's like if you just wanna pull a creator and you can but you know that person is they're the creative director they're the social media personality they're the editor and they're that the you know they're they're they're the script they're they're doing everything and sometimes to get that the scale really tough so i i like the way you guys have set it up because like again that works to create like a single video where a two videos here or there but like if you're trying to find scale which we're saying we need consistency and we need scale to be able to tell our stores and give the algorithm a chance to like you know push our content out like you can't you can't burn out and a lot of times it's really easy to burn out if you have one person who's overworked and trying to manage the entire process across the stack so like i've seen that myself and i think having you know a team who can you know like you're saying if if you get someone who's really good and they can be the videographer and the editor and then maybe you're working with them as i was the creative strategist then sure it can work and it's not it's not always gonna be the same thing for every single team it depends on the scope how much volume need to put out what topic you're covering and everything but i think one of the biggest you know assumptions that people miss on is like oh i can just get you know one person to be able to run this whole thing and they can do my pay they can do my social they can like do my organic they can do my tiktok they can be my instagram and it's like wait a minute there's so many moving pieces here right that yeah and and it's it really comes back to like that that individual can't even go on vacation because then you're not gonna have content right and so and so like it really is gonna depend on what where you at as a brand like what are what are what are your goals right i i'm a huge like the brands that we work with the perfect fit are they have paid running and it's it's already working while the generating revenue right and it's not like hey we need organic to work to drive revenue it's hey we need organic to work to put fuel on the fire and you can think of your ads is like your ads are gonna hit mass amounts of people mass amounts of people are gonna see your brand see the story and you should be funneling that attention and using organic to nurture to actually build a relationship with the customer right if you only are running ads if you think about it and i you go into my instagram and you only see me running ads every single day like eventually you're just gonna be like dude it's just i've seen this guy so much that like i don't care about this product like it doesn't matter how many times you put it in front of me i'm just not interested right what the paid side allows you to do is have someone click the page and then go through new types of content and not just get hit at with your ads every single day and be like that guy is annoying what it allows them to do is go deeper and actually be more curious and learn more about the product which then over time when you do have those ads they've already explored your organic at content you've built that trust you have multiple touch wins with them and instead of them just feeling like you're constantly pinging them on ads like i'm sure we revolve walked out of a store and then we get ads from that particular store like if let's just say i walk into a a sporting store and let let's call it nike right walk to nike i'm gonna buy these shoes i end up not buying them i walk out four hours later i'm like nike on my ad ad page right and they hit me with an app on instagram and i clicked the ad and i'm like y like nike what's nike been up to and nike doesn't have any content on organically like there's no like aspirational stuff like there's no story to it i'm gonna just be like another ad right but nike takes this approach like if you go and look at their their their social like their stories talk they're representing their brand through social and so organic yeah you can generate millions of views you can generate tons of attention but organic is like the the your profile is like now it's what used to be the newspaper the heading of the newspaper is your social media platform right it is how you represent yourself your brand in the story and and where you wanna go as a company so i do think like adding that in is is a sent as well yeah and i like that just just as an easy thing for people to think about it it's like if you're running paid right people are gonna see those ads and click go over to your profile like there should be content there that helps move them in the right direction instead of the wrong direction so just think think of it like a landing page i like that caleb one thing i wanna talk about with you is now that we're kind of covering the topics of founder led content organic storytelling there's definitely like a lot of buzz words like i wanna let's get actionable right i wanna talk about like let's imagine that you know i've got a brand and i'm a founder i wanna tell my story like walk me through your intake flow like what are you doing what questions are you asking to establish like the value prop the founder story etcetera and then how do you go from that to actually building a content strategy that works with a particular founder and i know i'm being a little bit broad but let's just kind of use the standard base case we can talk you know think about founder is building some new sort cp g product and they wanna get their content out like you know walk me through how you'd approach that great question so first of all what i would identify is you your unique selling point right what is that unique selling point write that down on a newspaper cool you now have your unique selling point i now wanna know why did you start this company in the first place because you have this unique selling point now it might not have been the whole reason why you started the company initially but you have your unique unique selling point why did you create the company and why are you still building the company right so why you initially built the company why the he still pouring time money and energy into this so why do you believe into it believe in it because you have this delusional belief right that that is what pushes the company for what we have to do is extract what that delusional belief is and put it into a format that can live within sixty seconds and we can tell the story of variety of different ways and create content consistently right once you have those three pillars you then wanna look at what are the thing what are the things that you do consistently right let's say you're a founder you're consistently on calls all day like all you do is sit on calls right like i can't create content out of i promise you you can go look at ne hard seltzer content on on tiktok scroll down and you'll see how we've created these vlogs that are founder led and it's literally giving updates with where the company is at where it's going and it's a series right so look at right out what what are the things that you're doing in a day hey ham i'm doing sales calls i'm doing some travel like i'm going and actually like working with the physical product that's huge then what you're gonna do is you're gonna develop content types content styles right i'm gonna break this down and and make it as simple as possible we we hear like these buzz words content pillars content types like it's a fancy way for these strategist to like get you to pay them money and make a few thousand dollars and then you're off on your own don't do that instead what you need to do is like go on instagram go to your four you page your instagram reels go to your tiktok and just scroll and actually be conscious of what you're scrolling what stops the scroll like what type of video is that right what is a video that you're like y that's like a great video i would love to create this type of video for my for my company right what you're gonna do is you're going to scroll and it's a you're like scroll mindless basically like what interests you what doesn't interest you what interests you you're gonna send to your team right if you have a creative director if you don't it's just you you're just gonna bookmark right you can bookmark saves the video and create a folder called marketing content right you're gonna save that content into a folder or send it to your team and you're gonna do this consistently like when you get on social media now you're not just getting on social media to to consume you're actually putting in time and energy to growing this this business that you believe in and and it's why you're still putting time and energy into it right which goes back to like the second prompt which is like all of this has to have a really solid foundation or else we're gonna get burnt out right and the goal is not to get burnt up so send that content so when you sit down to do an idea aviation session you're you'll don't have to think of new ideas what we're gonna do is we're going to model what is already working a lot of founders a lot of brands get stuck and they don't create anything because they think they have to reinvent the wheel i promise you you don't need to do that there's a basically a science to creating content that converts and people are already doing it so what you have to do is find that content through scrolling and then the second step is going to be setting a bi weekly strategy session and you need to decide how many pieces of content are you gonna focus on are you gonna focus on five videos a week are you're gonna and this is not static i don't want you to think about static at the moment i want you to focus on video because of the algorithms right now right so we're gonna post five videos a week three videos a week seven videos a week right then from there that meeting is gonna be reoccurring we call these sprints okay if sprint is an agile environment which is basically a flexible due date and there's dependencies along the way let's say we're gonna do three videos a week and excuse me three videos a week is what we're gonna do the sprint is two weeks long so we have two we have six videos that we are committing to k over the next two weeks two weeks that's one sprint and then the following we you have another sprint that's starting you have another six videos right when you move into your sprint you have to first identify those concepts versus gonna come from your scrolling and you're gonna find those videos then what we personally do is we we title all of the videos slash edition we use click but you could use google docs you could use your notes on your phone it doesn't matter you're gonna title the the videos it's gonna be sprint one underscore v one underscore title right sprint one v two underscore title and the title can be a placeholder in the short term this is the part where your content types come into play there's really only a few different content types there's podcasts there's voice over there's vlogging there's trending audio with b roll and i would also say there's just like more u g talking directly to camera right these are like content types the the way that you can think about it is when you go to create your content you need to have something registered in your brain that like identifies when i see this audio or this video on instagram i know that that's a vlog type video i know that this is a trending audio with be roll and that what that would be is trending audio and b roll shots of the company right or or your story right so these are gonna be your content pillars you can write those out you can literally cross reference the ins sp that you pull like that's how simple it is and then what you're going to have is you're going to have the content we have the content types you're going to have the the like format that it's gonna be right because we could do thirty seconds sixty seconds ninety seconds some of the i've had a video do two hundred thousand views and it was six seconds long right so we don't wanna over complicate this process we need to know hey roughly the duration is this we set it up in quick up so there's a dashboard if you're if you've listened this far i'm happy to give you like a template and we can figure out how how you guys can get access to that in the description i'm sure blaine you have a way of doing that but i'm happy to give you guys a a template that has all of this as well the sprint planning side is the most critical part like it's it's almost more important than creating content because if you don't plan if you don't manage it nothing is gonna get done and you're not gonna have any action items right so in your sprint you're gonna be you've already identified the the the strategy and idea that's gonna go into the content or the next two weeks you have six concepts you either are filming that video those videos you've already filmed the content you need to edit it it's just a post production step or it needs to be like created like the v needs to be created scripted etcetera right so that's happening within the sprint then you're managing it through a simple status check through it checklist like in progress blocked needs v i can give you these statuses as well we don't on to dive into every single one then you're gonna have about a week to work on the content your team is gonna work on the content and in mid sprint you're gonna say where are we at in the sprint so week later you're gonna where are we at on everything we have six videos only six right where are we at in this in this process and you're gonna start to review the specific action items for the videos you're gonna review the net the the the blocker any potential bottlenecks and then you're gonna go and work and resolve those with your team at the end of this sprint you're gonna do a retro what work to what didn't it work what's going well what's not going well right and then you're gonna move into the next sprint that sprint is now completed let's say we can we were a hundred percent completion rate and we're like this worked let's keep doing it your your six videos are gonna go out while sprint two is being worked on so we've we've now built a backlog of six videos that are already like we're not scrambling because we just finished sprint and we're a whole sprint ahead right and this wasn't like i have this great idea let's do it tomorrow right because that's where being reactive to the content by not having a system you're reactive you're panicking you're trying to push out count content as fast as you can and and it feels like you're running around like crazy your sprints are gonna give you a framework in in a a way to navigate through month over month and you have two two sprints within a month right and by doing this process we've seen clients go from editing their own videos like to getting a few few videos out a week if that and feeling burnt out i don't even wanna create content anymore to be able to do ninety pieces of content because the only thing that changes on the fulfillment side the more comes from having more edit editors right if you wanna do more videos you need more editors right and so once you have the team structure that we broke down you then are just plugging and playing more resources to create more output and so we like i said we've seen partners go from editing their own videos to ninety videos within a month and doing seventy five million views in their first ninety day right and it all comes down to that exact process that honestly you can build it out very you can build it out internally just by having those steps yeah i i think that's super spot on the way you think about it in terms of sprints right i mean it's something that you know we take super seriously in terms of like you know you've got your content pillars they layer into the content types you're producing you understand what type of things that need to produce you basically move them along the content pipeline until they're published and then you assess how did they perform and you redo it right it's and it's just that productivity sort of thinking like just like you would product manage a software or anything it's the same thing right it's it's just the same thing and it's just content and and i and i think that's spot one thing that i wanted to cover with caleb is the difference between content that performs and content that converts so when you're creating content how do you think about you know do are you thinking about what type of content is like where it sits in the funnel is this content that's just gonna because i've seen pieces of content i mean i've even made pieces of content that have run like super viral like millions of views and then like zero conversion just because like there's nothing in the content that you know really is gonna get people to convert meanwhile you you can create a video maybe that only does like a thousand views but it like converts like crazy so walk me through how you guys think about conversion when it comes to creating con video content yeah so what we really look at is how's the video performing from like a top of funnel standpoint because once you have this attention you can funnel it wherever you want if you don't have attention you don't have anything to funnel to right and so i've actually changed i put my stance on this quite a bit because i'm like conversions is more important no attention more important it you have to have both at the end of the day right and and i know that a lot of brands who will only focus on conversion other or a lot of agencies will only focus on viral let's say right and this is where like having a team internally that you're building out or partnering with someone that understands what are your specific goals and metrics that are gonna allow you to gauge success right because some people they only want use genuinely and they wanna grow an attention and then once they generate attention they're gonna launch a product right like that influencer model that we kinda discuss and so like for an influencer it might be that for a brand specifically how i really look at it is i looks create as much attention top of funnel and then be funneling from there right so what what what would maybe be like an e comm or a a brand blend that i could give a quick example of because i i i can give like a direct example that would be well maybe i don't know you how about some of the stuff you did with like either poppy or or nectar either either one of those let's take let's take nectar for example right next we had a video do five million plus views and it was this airport video and there is negative feedback and there positive feedback right what we were really focusing on by by implementing that it was just go viral create this viral piece of content we know it's gonna go viral we know that you know there's gonna be some happy people there's you're gonna be some mad people but what we care about is the attention because what we did following that was we put all of our brand specific content which for them it's repeatable content series called sailor fail where it's just product tasting it's customers in costco and he they're tasting the product it's interaction based with the founder many brands could be doing this as well like go go check out that style and we we did back to back videos and every single video that was product specific then performed half a million a million two million three million four million views because we had this one video that was funneling so much attention to the main page that anything else that we were posting at that same time was generating views and attention because people were watching the video then they were clicking the profile then they were looking at the profile maybe going through three four videos and the goal with the the content that isn't quote unquote performing at this moment is to nurture and and and think of it like a tv series that people can consume your content because instagram tiktok all of these platforms all they want you to do is keep people on the platform so if you create content and it doesn't perform and someone scrolls off of the app instagram is like they watched your video and they got off the app like we're not gonna reward you right whereas if you keep someone entertained you go that high level viral vitality five million views as this airport situation it didn't have anything to do with the product but we knew it generate attention we then funneled it to the product specific content that it still perform generates millions of views as a standalone but it enhanced like every single one like the odds of us getting back to back million view videos like that doesn't happen very often it's like you have one offs this one did a million because someone thought how they this one person reacted was funny and then it they sent it to their friend and and just the snowball effect right so if i'm a brand in twenty twenty five what i'm really looking at is how could we generate the most eyeballs that's the first thing right you look at like do duo lingo for example you look at nut butter for example i'm not saying go do what these brands are doing but i say that and you probably know the exact content that they're putting out because of the the the the amount of attention that it's generated right and so their name is associated with that and so someone like nectar seltzer sir like if you're listening to this and you are familiar with ne seltzer sir is because we've gone generate as much attention as possible and we're funneling it through the content system that we have on the back end to other types of content collecting emails collecting phone numbers which becoming easier and easier with the world that we live in right and and you have to have eyeballs you have to have people consuming your content in order to do that yeah i i think that's spot on in terms of thinking about it like you know if you get something to go viral it's not just about that content piece it's about all the other things as well that are on your page and it it's almost like content beg gets content morality because it gets morality so i think that's a that's why you need to be consistent that's why you need to be putting out more content it's like do you get one to hit like don't stop keep going my last my my last question that i have for caleb love is one thing that you just mentioned is like thinking about it like a funnel you got your top of funnel you're getting content to get a a bunch of attention you're funneling that to your page and that's where you can you know convert whether it's emails whether it's sign ups whether it's purchases whatever so don't you talk to me about how to optimize like how you guys were able to like optimize to capture you know different leads or conversions or like what did the bottom of your funnel look like when you were working with a brand like nectar for some of the others yeah great question so traditionally a lot of the brands that we're working with have an internal team that's like running their ads and working internally this is something that we're actually moving more into now which is owning this side of it because we are generating so much attention like if we can take on this side as well it's it's even more opportunity for us as a company to add more value increase lt over time i can share with with you what i know a lot of these individuals are using and then from there you know this isn't this is something that i've seen by working with the partners that we've worked with it's not something that we're currently deploying however if you're if your company does at i we'll love to speak with you so what i've seen is obviously man chat right using instagram using mini chat to automate the response time give free resources add value in a timely manner i've also seen brands not wanna do it and i am leaning very heavy to this interaction of using auto response dms be because what it allows you to do is it allows you to have more touch points and have more value and so if i'm a brand in twenty twenty five like let's just take an e comm brand with unique selling point where they're in the health health side of things right and their product is let's just call it electrolytes for simplicity right what i would be doing is like i would be creating ton of free resources and content around like fitness plans like mindset goals and then it's a free pdf that you can be running ads to which then you're then have mini chat set up and it's you know you you comment you know goals right and then the mini chat is getting sent through the dms you're building a touch point with that individual and then they're naturally gonna be consume your content because they have to go to your page like first right so you're building interaction which what that is telling social media and all these platforms is that these people are interested in what you're doing show it to more people right so you're gonna get rewarded for that and so i've seen many chat obviously everyone if you're not familiar with that and encourage you to go check that out and then another one that is more on the cp g side is big c it's a way of like tracking phone numbers it has sms texting it has email big code is another very very solid but one that we've we've seen be implemented and be very effective they also have their own feature like mini chat or it integrates with mini chat but yeah i would say that on that back end side of things if you don't have that set up you're missing out on ton of opportunity in really collecting data the collecting phone numbers collecting emails and so i know that for one of our partners that did these drops they would have people lining up outside the door in order to even get the address to show up the specific store you had to text the number in order to get the address right and that's just one simple way instead of you know saying hey this is what's going on respond here if you want the information you can start to ga file you can start to build that that lower part of the funnel where you're collecting the information that you need building your email list building your customer database and it it's becoming easier and easier in moving into twenty twenty five which is very very exciting caleb i just wanna thank you for coming on really enjoyed the con for anyone who is shooting in wants to learn more about content founder led content or geek out on anything in the space with you where where do we follow you on social why don't just shout out your socials yeah i appreciate that so happy to help if you guys need support on strategy aviation or whatever is if you made it this far obviously there's hopefully you're learning something but if you have more specific questions to your brand to your particular situation you can just follow me on instagram it's at caleb alvarez with two these at the end and then you can also follow follow me on linkedin it's also caleb alvarez linkedin dm is gonna be the best way to reach me or instagram dm and i'll get back to you very very quickly that's where i'm at and i appreciate you guys tuning in sweet thanks for coming on the show thank you 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 ben matthews who is a general partner at night ventures this conversation is gonna be really interesting because knight is one of the vc funds that's kind of at the intersection of everything consumer creator and culture they've partnered with some of the biggest creators in the world and launched some businesses you guys may be familiar with mister bees and feasible as well as they are now inc innovating other sort of businesses so they really touch everything from commerce to consumer to saas and even things in ai and now they're even inc bait businesses so ben we're gonna have a lot to talk about why don't we start a little bit about with your background tell us about yourself and tell us about how you gonna got involved with night ventures and what night ventures is all out yeah first off huge fan of the pod longtime time listener a first time caller so excited to be here and really excited to to jump on today and talk to you about a lot of the brands that we built other the brands that we've invested and just kind of what we're seeing happening in the market there's a lot of interesting stuff going on so my background i came at this from venture capital so i was a vc i worked at a well first a long time ago was a product manager at google outside of that though i i kinda fell backwards into into bc i got a a job at a phenomenal fund which is called be and i worked at be doing a lot of different types of investing early stage software early stage consumer for many years and really noticed that a lot of the power of our dollar when we were investing capital was going right back to facebook and and google like fifty cents a their rent dollar was just eva and i was watching this this kind of tier of money as it came from like rl lps us to founders founders sending it back to those platforms so i watched the tax accumulate over year over year and just marketing and customer appreciation getting so incredibly hard to these brands particularly direct to consumer brands and notice that the ones that were having most success the portfolio founders that i worked with that seemed to be thriving were really finding hacks on on acquisition and primarily they were finding it through content and they they were either generating their own content they were kinda like founder led or content led ceos or they just they really understood how to navigate this new emerging world of influencer creator i call it content you think about it any any content that's created as a as a vehicle for us through customer acquisition so i noticed this trend and and kind of dove deeper into it and realize that you know a lot of the world was moving towards towards a a world where if you didn't really understand how to make content if you didn't understand how to use it really you weren't gonna be in a position to win as a consumer brand so i left started to fund with these two guys who really were at the forefront of talent they started a business called night and night media is a talent management company today reps like two hundred and fifty the most popular people in the internet and these people are anyone like a like a mister beast we kai so huge lifestyle creators youtubers twitch streamers ig tiktok any platform we have massive you know podcasts hosts that we rep and these people have tremendous amounts of influence and what we did is a fund is we started working with our founders instead of helping them with the normal things that a venture fund helps with we did some of that but also more importantly we help them figure out how to acquire customers and how to kind of peru through the forest of influencer and get what you need out of it so we've been doing that for about three years now in a as an early stage fund we invest across a whole bunch of different categories but most interestingly i think we we started about halfway through the life cycle of the fund realizing that we actually had a lot of the the leverage as a fund and we started inc bidding companies and what we noticed is you know we could we could get a brand into the eyeballs of you know hundreds of millions of people with some of the people that we had represented as a management company so we built we've built fourteen companies in the last three years as incubation we've worked with people like mister beast we've worked with both a menopause company with hall berry we've done you know cp g businesses we've done marketplaces we've done did a a legal tech ai saas business so we've tried all different types of things with this strategy and have all the scars to show it have a lot of lessons around building brands with talent all the kind of the pain the glory the joy the struggle and and really just watch the future consumer brands unfold before us both as a fun and there's an e incubator so it's been a really fun ride and yeah i'm stoked to be today to talk about it awesome and i'm super excited to talk about building brands with talent what that looks like and picking digging into some of those lessons but maybe we start with some of the businesses that i'm sure you know our listeners and everyone is super familiar with maybe like this why don't we start with mister beast brands right like bees burger and feast right in the cp space i think everyone knows what feasible is the you know chocolate bar that's kind of taken over everything from d to retail as well as the beast burger which i that came before feast right and that was yeah yeah and bees was a complete accident so beast burger was almost a it was like a stunt it was a it was a video that mister beast was gonna do or that he did and what happened was there was such a demand for it i think the team at night woke up the next morning and kind of said i think there's was actually a business here we should we should look into doing this so that is a business that was really a a ghost kitchen a ghost kitchen direct to consumer business where we were utilizing all of the kitchen space that was empty and unused during the pandemic for all these small businesses and putting together a really good menu for people around mister beast bran and mister b's name and again that thing jumped from being a stunt to a nine figure business extremely quickly and you know never intended it to be a business in the first so i think we learned a lot about you know the way to set up a business how to do things right how do you think things wrong and pretty quickly after that we i think we realized with with jimmy with mister beast we had somebody who was you know possibly becoming the most popular person on the internet you know sight on scene period and stop like there's no debate about it and when we saw that you know he had always talked to us about wanting to start a snacking business it was a huge part you know something was authentic to him you know he had grown up with a gas tesla disorder you know snacking was really important to him but healthy snacking was even more important to him so he wanted to build a business in the snacking space we actually initially looked at doing jerky we looked at do a bunch of different things you know i have old mock ups of of all sorts of funny different packaging for all different types of flu products that we considered but ultimately just give it his audience and give it like what we all got really excited about was con it was chocolate it was building a business around a category that we felt like had a tremendous amount of opportunity to be innovated on and whether we just really weren't seeing anything that was fun frankly you know like chocolate candy is meant to be a really fun category and we felt that everything around that category was fairly serious it's stale and stiff and that he could bring something really economical to it and i said the last thing is you know much like any beast oriented idea the seat of it really came from a video it came from a stunt and that stunt was the idea that you know we could give away a chocolate factory that he could kinda be the modern day willy won and that is exactly where we went with the bad brand so we launched the business we launched a business in i think the the business was launched in let's say twenty one and we started with direct to consumer had a massive you know massive this massive sellout with with direct to consumer starting a shopify page and pretty quickly realized like we were gonna need to build a retail business here to to build something big enough to meet the demand of of his audience and then launched with walmart across all doors pretty shortly thereafter and honestly the truly the beast was least unleashed after that like we the business scaled extremely quickly we were you know we had a team at night who was who'd gone from effectively you know working on a lot of different company ideas it it took up all of our time we were hiring tons of people quarter after quarter and really kinda of building the railroad tracks as the train went down it so that that was an incredible experience and i think even today you look at the business it's changed so much we've changed the product would change the brand you know there's a lot of different things we can get into but i think the most important thing to know with any one of these these sound brands is like i truly believe that you know there's probably only twenty people on earth that are big enough to build their own brand as a singular human being where you're not doing collaborations where you're really just kind of putting your head down and saying this is my brand go out and buy it looking into a camera and asking for it and and beast is one of those people and and it's just been incredible to watch that translate and and every retailer we work with every online channel we work with i think is continually blown away people most people we talked to our forties and their fifties they have no idea what this person is and then they see the people flush flooding to the stores i think they're they're pre overwhelmed most times and that's exactly what we wanna do with with our customers well and that's something that i'd love to kinda pick apart so you just said there's probably like twenty people on earth who can just like spin up a brand and like do it whatever they want and be like hey go by myself and they'll go do it what do you what about for everyone else right because i think the idea of companies launch with creators and partnership i think a lot of people have you know seeing what you've seen in terms of getting distributions difficult here's the way to do it let's partner with a creator but you know it's not all it's not all roses and it's not easy partnering with creator necessarily because you might you know give a big portion of your company to the creator your partner with maybe they drive a little bit of an initial interest but like you're saying if they're not one of those twenty people who can like you know they themselves stand as a business what does that look like for you guys how do you think about it you know how what what things have you seen in the creator space where creators are partnering with brands to like launch and you know what works and what doesn't work in that in that case yeah it's a great it's a great topic and honestly something i spend a a ton of time thinking about i mean like ninety nine point five percent of talented that companies will fail we have a tracker internally where we're keeping track of every every one of these brands that's launching and and there's a lot of really interesting stuff out there but the challenge is is it's just as you know it's exceptionally hard to build the successful consumer brand most good consumer brands that we interact with whether it's in online or on a retail shelf have been around for over ten years you know it's been slow growth it's been a grind it's been growth through debt and and giving up equity here and there and barely surviving sleepless nights it's really hard you know in in kind of a want it now culture that we have right right now these days in twenty twenty four to build these brands that just pop up overnight and you know what we see aside from like in my opinion a mountain of ideas that are not gonna work ultimately what we see is you know we see brands that again either do one of two things extremely well i think the first thing is they they partner with one of these colossal giants right you have to have somebody who not only is a huge audience right you don't need to have an audience as big as kardashian you don't need to have an audience as big mister beast but you you what you really need to do is you need to find somebody who has a real authentic message that connects with a product and more importantly has experience looking into the camera and asking their audience to do something you know asking their audience to pull out their credit card and buy something or take some action a lot of times we work with huge talent internally and you'd be shocked they get twenty million subscribers on youtube and they can't sell more than six thousand dollars worth of sweatshirt and that's just because it's not the type of content that they make it's not the expectation that their audience has from them so i think like the brilliance of like a kardashian for example is that he has been spending her entire career as an influencer asking people to take actions and and all those are commercial actions so as a result when you build a business like skim i think it was a beautiful execution not only in the actual product but really picking somebody who had an authentic story around shape where and who had an audience that was used to taking that call to action and that was a huge challenge even with festivals in the beginning right feast doesn't have an audience that's used to doing things you know that jimmy asked them to do during his videos but you know that took training that towards certain types of certain types of content certain types of advertising you know changing the call to action and changing the way that we did promotion ultimately getting a customer point where they just they just thought about feast and mister beast as one entity and you know he was he was speaking about enough that that really kind broke through the chasm of of where you need to get to to really have an impact on having someone's changing their buying behavior yeah i think that's such an important point about like the real not just the reach of the creator but the relationship between the creator and their audience right i mean i i was actually just chatting with a friend who like i guess launched a a dog supplement brand with like a massive like dog creator but like again it was like he he was like you know we're not doing as well as i thought we were doing because like people are coming to this page to consume content like fun friendly content about dogs they're not like they don't know who's behind the account they don't know like what this supplements about it yeah it wasn't like there was a trust there to buy so like sure they're doing some volume but it's not like blowing it out of the park from a partnership perspective the next thing i'd like to you know follow up on is you know once you've nailed the kind of alignment in terms of the creator the authenticity and being able to like speak to the audience and you know get an action out of it what else do you need to look for in a creator to ensure that you know the business is gonna be sustainable because once you tie a creator too far to the brand if something happens to the creator if they lose interest in the business like how do you think about that in terms of the long term yeah so like so you know whole thing is like three things right it's like right talent pick the right talent pick the right business and then write execution and we could talk to each one of those we're talking about talent right now so in talent you know first of all we do a huge deep diet to understand someone's audience who they actually are like the data that most social social media platforms give you about who person's audience is is completely broke it it oftentimes doesn't match up and align with the actual audience that person is is pitching to you we're we're creating content for so we do a lot of research surveys trying to understand who actually is in the audience how is that how is that audience engaging with the content and that the actual creator do they have a lot of reps selling things like merchants an incredible proxy to understand whether or not people will pick up their credit card and pay so you you get to see really buy somebody's portfolio of work and their content whether or not they you know will they shi i think is the most important question we ask will this person stare into a camera and ask somebody to do something you look at somebody like logan paul you can say what you want about them the guy gets up and he shi product it's incredible same thing to with dwayne rock johnson he'll go on the today show and have a glass hear love terra tequila he has no problem doing that and he recognizes that that's directly tied to the conversion of the product i mean dwayne incredible he just he just did a forty million dollar year with a shampoo brand he doesn't have a piece of hair on his head it's just because he's incredible he's incredible i just promoting again and again and understands that really when it comes to earned media it's reach times frequency so you have to hit that frequency you know a lot of these people have to reach they just don't wanna talk about it enough because they're either shy they care too much what their audience thinks they don't think it's cool you're really just need somebody who's shameless so so we always talk about the shameless shell as an important part of talent and then i think the other thing is you know probably a second most important question but it could be the first first most important question is like will they give a fuck about this after one year because what i see with most of these businesses is somebody's excited about it at a point in their career maybe they're in between albums maybe they're in between movies it's a lull they've always wanted to start x type of brand and they treat it as like a three month project they do some promotion about it and then they start a new album or the nba season starts and they kind of move on with their career so a lot of the a lot of times the the question that we ask ourselves when we're picking talent is what priority does this take in this person's life not just this year but next year in the next five years and i think it's really hard to start a business like this with an nba player who has a sixty million dollar contract with the warriors on the other end of all the other things that he's doing versus the thing that i love about digital talent is for a lot of them this is it this is the thing that's going to make them a legacy generational wealth player and it makes it so much more important that priority really matters so that's a huge piece of the puzzle when we're we're thinking about town well and i think another big thing about the difference between a digital creator and like an nba player is like it's also like what you were saying about you know the nba player might be making fifty million dollars a year right so like when it comes to building a business like yeah it's obviously cool to like build a business but like for a lot of these digital creators they are directly monetizing their brands through the businesses that they're launching through the venture so finding like true long term alignment and that's why it's like it's like kind of the same thing if you're looking to start a business right like you sometimes you don't wanna just start a business with someone out of convenience because it's like oh i wanna work on this right now and this person wants to work on it right now it's like you wanna think about like what are the values behind your partners that you're working with and how are you gonna establish longer term alignment hundred percent hundred percent the net the next question that i wanted to talk about as it pertains to some of the talent stuff is how do you how do you identify the products that you wanna work on you said once you figure out the talent that's important but also it's super important to figure out the business that you're building and the products that you're doing so how do you figure that out it's a great question and i think that that it's tough it's like you know i i see certain broader getting launched with with huge talent who i think live on that list of twenty people in the digital space but they pick something that is terrible it's just a terrible business it's really hard to execute maybe it's cold chain it's just it's really challenging from a unit economics part of point of view and i'm always cri because i'm just like god they got bad advice somewhere along the line so know the picking the right business is no different from what i've been doing in in venture capital for fifty years which is really understanding you know where is there an opportunity to build a business that can be a hundred million dollar annual revenue business with great unit economic margins right so something that is probably not too heavy to ship i think liquid is extremely difficult the cold chain working with storage and cold storage and and grocery store people don't recognize that there's just not a lot of frozen section in a grocery store to go around and then just understanding supply chain kind of where opportunities for innovation is i think you could have a talent slapped on a brand we call a logo slap you could do a logo slap but at the end of the day if the product is not better cheaper more convenient you know kind of falling in the category of what makes of good consumer products than your free screwed so gotta also pick something where there's an an area for opportunity in an area for for innovation in a category and we really treat it like making any type of venture investment that we we do we we spend a lot of time talking to buyers in the space buyers from walmart target grocery and c store talking to other venture funds talking to other founders understanding where there's opportunity in the market to build something really compelling and you know sometimes we start these businesses because we work with a talent and that talent really has an idea they wanna build a business in x space and we we generate ideas from there but a lot of times where we come at this is we really wanna start a business in the nicotine space or we really wanna start a business in you know the noodle space or you know whatever it may be and we'll go out and we'll try to find like who we think the five most interesting talent in that space is who who really kind of hit all the qualifications that you and i just talked about so sometimes it's talent sometimes it's it's it's business model first but really it's any type of business you think about in the same way you think about it as a venture capitalist we are really excited to announce that d t pot 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 t pod and more shows like us on the hubspot podcast network at hubspot dot com slash podcast network totally and then the last question was i know we touched on like management and execution of these brands to like how do you like when you guys are inc bait or you're working with talent like what does the structure sort of look like how do you set these things up to make sure that you guys are incentivize the talents incentivize and that you're able to like bring on the right management like what is a typical thing look like and then how do you find that you know team to actually run the run the operations in the business it's a great question first of all incubation i think is like it's like it's an art it's like really difficult to string these things together a lot of people ask us like what does a typical deal look like and the reality is like every deal is a snowflake every deal has its own different and id centric is like it all it all has interesting shape and form to it but most of the time what we're doing is obviously we have a cap creating talent wants to has some ownership the incubation fund is gonna have ownership the investors lab ownership but the most important part aside from getting those things right is that you have phenomenal operators and i think that the opportunity that we've seen with early stage cp g and early stage consumer is that right now if you're a if you're a phenomenal five star founder and you go out and you're trying to raise for an early stage pre revenue pre seed cp g business you know unless you're the rx bar guys i know you had on recently like it's it's extremely difficult extremely challenging to raise capital for that and as a result you know when you have a interest studio like knight who can immediately day one give you an unfair competitive advantage a really well diligence business idea and then also capital it does attract star players and that's really what it comes down to we wanna find people who have just an absolute dogg and who we're otherwise going to be starting a business by themselves and really you you take them through a a four to six month process of inception where you start talking about the idea you start talking about the talent everybody starts meeting each and then over the course of meeting that person to working with that person they flipped they ultimately end up knowing way more about the space than you do they're spending way more time thinking about it than than you you are they can't stop start thinking about it they can't stop texting you about it they can't stop calling you about it they're obsessed with it and when you find somebody who is phenomenal operator and they've been inc that's when you leap at the opportunity to work with them and start building a team around them so that's that's how we've done it in the past and you know we've gotten extremely lucky we've found phenomenal operators to to run our businesses and i think a lot of is because you gotta find the right the right form of packaging we talk about our business you know when we when we meet as a talent management company and we talk to people in the entertainment industry they're they're like what is this what's this incubation stuff you guys do over here what is that and the way we talk about it which i think is not too dissimilar or not too off base is we talk about it as packaging back in more old hollywood days you would have you know these talent management firms they would package movies right they'd have actors and writers and directors all on staff they'd work with the studios and they'd package together these films they'd they let's put leonardo d cap with matt damon and we're gonna create the departed we're gonna create whatever movie and we're not doing anything too dissimilar right we're we're basically packaging based off of what we know is a need in the market with a talent that's authentic to that need and an incredible operator putting the right money behind it and pushing in the right direction and hoping that we can strike gold one other thing that i'm just curious about i know you're you're team some of your teams manila you're in austin and one of the other guys that we recently had on the pod nicholas from they did a partnership where he i think he was his business he had been around for like five years in the y monte space was doing really well and then he got a cash infusion from tiny and they brought on hub to like kinda of partner together and blow that brand up and since then it's been doing really well it's taken off you know nationally that's kinda how they'd like did their launch into the us and just in in massive retail etcetera so i'm curious is that a model that you've seen that you guys are interested in or do you typically only inc bait from scratch yeah what what are your thoughts on that sort of model of you know finding a talent finding a brand that's like kinda got some of that supply chain chops and everything going and then you know marrying the two yeah we actually raised capital for effectively what you're talking about as a private equity firm to to go after the strategy and we've done a we've done we've done a a lot of diligence on deals we haven't found anything yet but it's something we're extremely interested in and i think that it's it's extremely difficult to start something from from scratch but you have a lot of brands that exist today that have great products incredible founders and a lot of times all it needs to happen is that final piece of puzzle in terms of packaging an example i'll give that i think is you know kind of right in our wheelhouse that that we saw straight from from night's roster was ryan t and i think what ryan has done with joy ride has been in a remarkable case study in that which is you know you take a product that was it was doing well it was a great quality products in terms of the candy space and you brought in somebody who is a founder that had a real authentic love for it and was willing to put in the time to make it successful and joy ride is sold out in most places it's sold now it's trending to become one of the best selling candy brands in in target and ryan might be one of the most brilliant founder creator business operators that i've ever seen he just understands the assignment which is i need to do everything in my power use my leverage to push a brand forward so you know ryan is done an extraordinary job with that and i think there's tons of opportunity in the market again it's really challenging to find the right mix i can't tell you how many emails we get from dying direct to consumer businesses or dying cp g companies that are looking for kind of that that last gas if only we had x talents come in it would make everything better those are not the right model the right model is when you you really find an authentic match and the connection works and i'm gonna we're gonna see a lot more we're gonna see a lot more things like that in the future i particularly think like you you mentioned the mats opportunity you know i think wellness is got an endless opportunity for that i think the other thing that we're starting to see is they don't need to be mister beast level to make that type of private equity deal work i think those deals work with smaller talent and work with talent that it's more specialized to the audience of of of the actual product so we're gonna see a lot more of that in the future it's super cool and then one other thing that you had talked about obviously if you're not inc you guys are investing in companies so why don't you tell us about some of the companies that you've invested in what's really interesting and then how does you know how does it work you are you able to kind of like bring in some talent where it makes sense or like what what does it look like for you guys in terms of just investing traditionally in companies yeah i mean we we've been running a venture fund now for about three years made about forty investments across all different types of categories and we like you said we we help our founders navigate the world of influence there the irony is there's a lot of people come to us and they're like oh you get mister beast to promote x products and i think the thing that's that's changed a lot even in this time that i've been doing this job about the creator economy is you know a lot of the value in promotion used to be at the top of the market it used to be at the type of people that frankly knight represents but over time i think all the value in the creator economy has moved to the middle it's a messy middle it's extremely difficult to navigate it's hard to get a hold of people there's twenty five different saas companies that pro proclaimed that they can organize the creator economy for you but that's really where the value is that's where the arbitrage is where you're catching somebody that is frankly creating better content than they were currently getting paid for a cpm basis and that's really where we direct a lot of our portfolio companies do whether it's through ag partners or just our own understanding of who the best talent is i mean the funny thing about the management company here at night is you know i come from the world of venture capital and a lot of times at vc funds you have these analyst teams and if you ask some a partner of venture i'm like hey does an analyst team do the reality is they just sit and they try to figure out what's gonna be the next big company and not too dissimilar from a venture fund in the management world we have an entire coordinator team like junior junior manager team here at night who when people ask me what that group of people does i say they're basically trying to find the next viral moment on the internet the next viral sensation and they have a tremendous understanding of internet culture and where things are trending where things are moving a lot of the times we offer up that team to our portfolio companies to give them access to understand okay where is the value where's is the arbitrage opportunity in somebody that i could work with that's not gonna dry out my bank account because i'm an early stage start up i don't have a lot of capital but where's is the where is the arbitrage opportunity in that messy middle of the creator economy and that's a huge value add because just understanding who to be working with is ninety percent of the battle the execution on how to do it is certainly important but a lot of it is around the who so that's that's a huge part of our value at something we've been able to help out with and what do you think like what are some of those big trends you know or creators up and coming creators or you know more broadly like what are some of the trends you'd say you're really excited about as it pertains to like the creator commerce sort of landscape yeah so you know we spend a lot of our time in in this world we you know we we spend time in content we sent time in we spend a ton of time in commerce as you mentioned and other consumer categories i mean i think the first thing is you just seen an absolute everybody has the same as same answer but you know sixty percent of the people that were lower level employees that are doing very rote manual work i just don't believe they're gonna be necessary as full time roles in the next couple years today i have a friend that runs a a content agency that shared on linkedin you know that they basically have replaced a media buyer whole wholeheartedly they replaced a media buyer with an ai agent do manage a hundred million dollar account so i just think you're gonna see a lot of changes when it comes to you know the types of applications the application layer software that's currently assisting with marketing or assisting with assisting with media buying assisting with with your your financial books assisting with insurance i think what you're gonna start to see is people just whole you know in whole stretches replacing roles whether that be a media buyer or a brand wreck or talent coordinator so that's that's a that's an area that we're spending a lot of time on we're frankly just thinking about all the different companies that we work with all the different employees at those companies and asking ourselves are these jobs gonna be around in a couple years and what are the second order derivatives of those changes so that's been a huge space for us that we've been we've been watching and yeah just a remarkable change with some of the technology that's coming out yeah it's wow especially on the you know the operational side i think that's what everyone's like looking at right now it's like a you know there's especially for you guys you you can look at it both ways a what business should we be investing it in two how can we like optimize all the operations of our own business and all the businesses that we own and then on the content side of things are there any trends that in a content creator landscape that you're excited about like i don't know like live shopping or other platforms or social commerce or like what are some of the trends that you might be seeing in the creator landscape that have you guys excited yeah we spent a lot of time in live shopping which i think live shopping is really interesting i think the one of the most interesting areas in kind of where content and commerce are clad i just think that tiktok is building with tiktok shops they're building the first true connective layer between content and commerce i think we've talked about it it's been a huge buzz word for over a decade now but there really just has this single platform where you don't really even need to do anything as a brand as a marketing manager for a brand where you can coordinate an entire campaign and create tremendous amount of conversion all within one platform with the right incentives aligned and and that is you know i i've been keeping an eye out on a lot of the the recent conversations around the tiktok band because i think that tiktok is halfway through absolutely breaking the commerce model and doing something that you know facebook kind of tried to do didn't really succeed ig shops didn't really get there with but you know i spend probably twenty minutes every day opening up my dashboard and looking at which brands are trending on tiktok shops and the amount of people that are making money off of it the amount of brands that are starting to engage with it at first it was really kind of low level brands and things that really cheap and knock offs but the amount of brands that are starting to engage with it i really hope the platform stick sticks around in whatever form it can because i do believe that's where commerce is headed i don't see a world in which if you're running a brand fifty percent of your marketing outlay isn't going to be through a channel where you're getting somebody to speak directly to an audience through their content it just seems inevitable yeah and i i think another big thing that like tiktok shop was able to do is you know like you're were saying a a align incentives like people are so tired of like everyone wants to work with creators sure you've got ads that you can run and you can maybe white them but like you know the fact that they're were able to like align incentives between that entire creator business or relationship has been really big what do you what do you think is gonna happen i know you said you've been keeping up with it if you if you had the guest today what's your what's your guess is tiktok getting banned or is it is it gonna be around for a while i i watched the trump i watched the trump speech i don't know he could come out and say something completely different but he was starting to back away from it which made me believe that they're they're not gonna do it that that tiktok will end up being fine i think he's much more pro business and and i don't believe that it will be banned if anything it could be sold to an american entity just for for for safety reasons but i i truly believe nothing's gonna happen to it you know people often add me because i spent a lot of time in my career investing in social they're like one is the next tiktok and come around my hot take is that there's not just there's just not gonna be another social media platform and i i know that's crazy because there's always been another social media platform but when you consider what was required to get tiktok off the ground the people's republic of china a communist nation having to invest tens of billions of dollars in customer acquisition is just not something that an evan sp in a a dorm room at stanford even with the power of venture capital and and and all of that cash can really accomplish anymore so i think i think tiktok is here to stay i think tiktok shops here stay and it's really gonna be disruptive because as far as incentives align and again there may be a day in which they're opening and changing prices that they don't allow as well but if they align as well as they do right now it it's a great living for people who are looking to take advantage of their audience and i think i think that's where the market's headed yeah absolutely and i think the other you know sort of interesting there i feel like originally in trump's first term i think he was thinking about banning it especially specifically because of the china thing and then i think when he was like getting in their reelection process i think tiktok was one of the platforms where they were actually allowing content to be like somewhat positive about him so he's probably in this kinda of catch twenty two where i think then the current administration was the one that wanted to like res surface the tiktok band it's been kind of all over the board but i kinda tend to agree with what you're seeing i think it'll be around in some sort of format whether there's a forced sale or not we'll see you but i think the the infrastructure should be here to say so ben as we kinda wrap up here this has been an awesome con in terms of you know just kind of really breaking down the the creator commerce landscape what you guys are seeing working what's what's not working you know do you have any last thoughts here like anything that you're real anything else that you guys are really excited about this next year whether it's you know specific companies that you guys are looking to launch different trends that you're looking to jump on companies that you're inc incubator your companies investing anything else that we may have missed that that you get that has you guys hyped up i think one of the companies that we inc anticipated that i'm particularly excited about that i'll finish it the first thing i'll say is i i think i have a lot of times people ask me younger people ask me like what can i do like how can i how can i build a brand or how can i do anything in my career and i just think having an audience is tremendous power i think it's the ultimate equal elisa and i think that if you're successful professional ten years from now and you don't have a social following you don't have a presence i i think it's gonna be extremely hard for you to be relevant so i always encourage everybody to like take advantage of content take advantage of an audience and it's it's it's like the lifeblood it gives you so much opportunity in access every single one of my friends that i've gotten to you hundreds of thousands of followers on twitter you know they just are such weapons anytime they need anything if they need a film videographer they need somebody to do a quick design you know they just tweeted it out and it's done within minutes so i i think it's the most incredible thing you could do and it's it's one of the things that i always recommend to people the company that i was gonna mention really quickly that is actually you know something that's growing really quickly in our portfolio and something i really surprised us because we weren't expecting it it was a pivot is a company that's called t and what t does is really interesting what what they realize is that you know they had access through what they were building before to a lot of data a lot of video data and we're selling it in a way that didn't end up working in the market but what ended up happening is these huge ll companies whether it's open ai or meta or you know insert any of the five hundred companies that have built they're building foundational models today in video they started contacting t and i said hey we really need data we're starving for data and really the problem right now with the internet is most of these companies have scrapped all of the data on the internet and there's not enough data to train models to build good enough large language models and foundational models that do video know you're seeing it right now with open ai and so but they're frankly just they've run out of data so the thing that's really interesting is if you talk to any creator any production company and studio any any any university film program they'll talk to you this thing about no i do this thing about it that's called shot ratio shot ratio is for every one minute of video that actually gets posted how much is left on the cutting room floor and that other forty nine minutes that other forty nine hours of of footage is what's called dark data and what t does is it ingest all the dark data in the world by collecting it they're shipping tons and tons of terabytes of hard drives and movie reels and they're using it to train these models because there so much data out there that never sees light of day that was created think about the amount of videos that just exist on your phone and all of that is extremely powerful data so it's just like it's just one of those stories one of those great entrepreneurial stories of kind of tripping into this some remarkable business opportunity and i think what it really proves is that you know if you're a content creator today if you're you know if you're somebody that makes their living doing that you know there's more than one way more than just adsense in order to to bank on for monetization there's gonna be a lot more ways for you to monetize your catalog in the future and continuing with that trade is like the absolute best thing that you should do coming back to what i was saying before because having an audience is absolute power absolutely yeah i mean we're we're all about content here i i i know that how powerful creating content can be content can you know scale your own brand help you launch a business and in the case of what you guys see you can you know if you're one of those top twenty content creators in the world you can literally build anything you want so ben wanna thank you for coming on this conversation has been a blast for anyone who wants to connect with you find you why don't you shout out your socials work and we find you on linkedin and twitter that sort of thing yeah absolutely would love to connect with to anybody that's interested in this world my twitter is ben twitter b e n t w i t r find me on x we'd love to chat my dms are open and next so much for having it's been a blast sweet thanks 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 t pod dot com to join our founder community and access resources from every episode we'll see you on the next pod