00:00:00:00 - 00:00:25:14

The reason community is becoming such a buzzword right now is because it's intangible, and it's like it's speaking to metrics that are actually important, that drive people to purchase and want to re buy the product. You know, we're all scientists. We want numbers to drive everything. And that is critical, critical, critical. I mean, numbers drive everything. And so the best marketers today are actually as much numbers driven as they are creative.

00:00:25:16 - 00:00:39:10

So I don't think you can ever turn a finance person into an intuitive, instinctive marketer. But I think that you have to do marketing people into finance and finding.

00:00:39:12 - 00:01:00:24

All right, David, well, thanks for coming out to New York. Have you talked to the guys at Fairmont before, Rishabh Jain? Yeah. He's got a cool business. They're backed by Greylock. I did the first, in-person with him. We just launched season one of the podcast. It's had a good reception. Yeah, I had a good listen to a few bits to see what you were talking about, and I.

00:01:00:24 - 00:01:24:08

I'm. I'm an open book. So it's been my career has been a lot of a lot of fun, a lot of challenges. But you know, yeah, I was fortunate. So I'm going to I'm going to take you through, you know, I think there's a lot to cover as far as like, marketing is concerned. And, you know, some of the different things that I think you bring perspective on just in terms of like life and, and, and building.

00:01:24:12 - 00:01:48:14

You have a book coming up called Unboxing. Yeah. That's right. It's kind of a synthesis of your what is it, three decades of of business, experience on consulting consumer and on the marketing side. Yeah. I mean, someone said to me, one of my mentors, I think you have mentors your whole life. And one of my mentors said to me, no one's interested in your life story.

00:01:48:15 - 00:02:11:17

I just, you know, if you were a super famous for something else, maybe they'd be interested in that. I think what people be interested in, in the lessons that you've learned in, in your, in your career and having really spent my entire career bringing new ideas to life. I felt like the best thing I could do is to focus on what does it take to bring a new idea to life and to build a business around it?

00:02:11:17 - 00:02:31:00

Because, you know, I've seen millions of great ideas in my life. Half of them, I thought were absolutely incredible ideas, but very few of them ever make it. Because the difference between a great idea and a great business is, is everything really so and the, everything that it is, I thought I'd try and share that in a book.

00:02:31:02 - 00:02:55:23

How do you system systematize that as like an investor, as an entrepreneur choosing what to your to invest your time in. Like how do you decide what's a good opportunity to pursue? That's an interesting question. First of all, it's about the people. And if someone comes along and I'm impressed by them as an individual, I think automatically you want to listen to somebody.

00:02:56:01 - 00:03:18:11

And so the first question is, is am I inspired by that individual? Because I think inspiration is a critical part of business success, because then they're going to have to inspire everybody, everyone who works for them. Everyone who buys their product. So first is do they inspire me? And if they inspire me, then I listen to their idea and the next thing I probably go to is there were a big need in the market for that.

00:03:18:12 - 00:03:42:13

And then I go to cost structure of can you meet that need in a cost effective way that has a high margin. So the business model and then ultimately it's you know, you put all that together. The demand the the person that you're talking to. The cost structure of the idea, the kind of business model. And then you say, do I really believe this person can execute and and I make my decision on that.

00:03:42:13 - 00:04:02:20

And then ultimately so that's my investment decision. And then ultimately, you know, they've got to get enough money and and then just focus execution execution execution. And and it's hard. So there's basically a different skill set between early entrepreneur and then like later stage company. In terms of the things that you need to be good at.

00:04:02:22 - 00:04:29:24

There definitely is. And in fact, that transition is a very hard one, and I don't think I've really played it well myself. Yeah, because I think I'm much more suited to bringing the new idea to life than I am. You know, the, the, the ongoing business. Basically early stage operator knowing how to come up with an idea, set good foundation, generate interest, raise capital rather than coming into something that's that's already been established.

00:04:30:01 - 00:04:52:12

Reflect on that, because I know you're alluding to your time recently at able and then also having started the Fascination and Lisa previously. Yeah. So I think I think that early stage goes perhaps a little bit more than early traction. You know, if I put a number on it I would say that there's a there's a difference between, you know, the first million getting revenue is tough.

00:04:52:14 - 00:05:16:06

Getting to sort of 10 million in a consumer business. Obviously it's different than a different side of getting to 10 million, you know, has its different challenges. And 10 to 20 is about the same. And then there's this kind of leap of, changing the management, getting different people and people with more experience. And that'll take you to about 50 million, maybe to 100 million.

00:05:16:08 - 00:05:39:08

And at that point, everything's different. You know, you don't have the same growth opportunities. You don't have the same. You can't get the same drive out of people. You've got to get all your processes right. You got to have you got to reward people differently, attract different types of people. People have different experience. You know, 20 million growth from 100 million is totally different from the first 20 million.

00:05:39:08 - 00:05:58:05

And as soon as you realize that, and as soon as you realize that, that, you know, maybe you're suited to one thing and not the other, you can maximize your strengths. You know when to get out of the way in your experience. Like, let's take Lisa, for example, or the fascination, where did you play there for Lisa? Was it 0 to 100?

00:05:58:05 - 00:06:31:24

Like, how did that go? Yeah. So the Lisa the early idea came from, you know, I had a service business. We were helping some of the largest companies in the US. This is the strategy consulting business. It was it was strategy and innovation. So we were working with companies like General Mills and Purina on, how to utilize the whole idea of socializing, socialization on, on, on social media, to build communities, to build growth, to grow scale, build e-commerce businesses.

00:06:32:01 - 00:06:52:14

We were helping them do that. So strategic, but also the execution and and I had a really tremendous team together. And we made a decision in 2013 where they would continue to serve those businesses. And it was very profitable for us. We were doing well. That was you. So you were working on that business for, what, 15 years on approximately 15?

00:06:52:14 - 00:07:14:19

Yes. Yeah. So and and then we said, you know, it's time to try and take all our ideas and actually launch our own. And just through some a business that I had previously came up with the idea to start lease. So the mattress company Casper was not launched at the time. In fact, they launched while we were still planning getting close to our launch.

00:07:14:23 - 00:07:34:14

But it was an obvious gap in the market. And so I was the, you know, that started as a single member, LLC to get technical. I was the you were the sole product. Yeah. And then, you know, my management team got involved and then a partner launch partner. Co-founder got involved and we launched that thing from scratch.

00:07:34:16 - 00:07:59:19

And that business went, 27 or 28 million in the first year. Way beyond anything. We thought we would achieve 78 million in the second year, and about 125 or 128 million in the third year in sales. So and at that point, probably I was done like, and, took me a little while to realize that maybe 1 or 2 other people realized it before me.

00:07:59:21 - 00:08:26:15

And I became the board chair of that company, which which was fine, still involved in helping drive sales momentum, but really from, from a, from from a distance and from, an advisory role. And, and I don't think they necessarily got all that people right first time around, when the investor that I brought, brought in started to get more involved in execution and choosing the team, but eventually I got a good team together.

00:08:26:15 - 00:08:47:19

It took them a couple of years. And had I realized earlier, I probably could have done it more quickly. How did you deal with constraints with that business? You said you exceeded expectations. Like, you know, year one was much more than you had anticipated. There obviously capital constraints, inventory constraints, advertising constraints. How did you think about, like unlocking those roadblocks when you saw an avenue to scale?

00:08:47:22 - 00:09:11:19

Yeah. So interestingly, in that business, it was almost the perfect business model for a while because it was positive working capital, because we were not making the mattresses until the orders came in. And so we had the cash from the consumer. And then the order went directly to one of two manufacturers they manufactured. And we had, I think, you know, 45 days credit, maybe even from the beginning.

00:09:11:22 - 00:09:38:04

It's crazy and fulfillment on that. They did all the fulfillment direct from time to time, though, to they, they the promise was to get it out of the door within within three days, 3 to 5 days. So infinitely scalable. It was infinitely scalable. Yeah, yeah. It wasn't, it wasn't that was not, capital became a problem when the cost of acquisitions started rise, which was you guys started in 2013.

00:09:38:09 - 00:10:00:16

You sold the business last year. So. Yeah. So we started it actually in, in 2014. Towards the right at the end of the year 2015, 2016, 2017, they were all all relatively straightforward and things started to tighten up in 2018. And then, and then we know what happened with, you know, third party data and iOS 14 changes.

00:10:00:22 - 00:10:19:18

And honestly, they make it. I'm curious just thinking about mattress companies, you know, what happened to Casper and like, like CLV on those customers. It's just it's pretty much like, you need to be net profitable on the first customer. Yeah, you have to be. You have to be. And you need solid, solid margin because you're not upselling customers with pillows or and you know, I.

00:10:19:20 - 00:10:41:19

Absolutely right. And in fact, you know, my favorite diagram is the unit economics in any direct to consumer business. I, I, I, I always put my, my, my ultimate sales potential sales price. So the advertised price at the top and then the discount and then you got to go through all the various other things, the transaction costs.

00:10:41:21 - 00:11:01:16

And at the bottom you've got Cogs that you can't do anything about. And then the actual automatic magic. Yeah. And then you get this gap in the middle. And that's and that is the kind of maximum allowable marketing to make a dollar. And as soon as you go above that, in most businesses, I would say, because I think that a lot of businesses should try to make money on the first or 100%.

00:11:01:16 - 00:11:21:14

Yeah. So I you're working with that gap. Yeah. And so I mean, Facebook really ushered in this new generation of business model direct to consumer, where you could have scale because you could reach so many different people. And if you were profitable and you had a fulfillment operation, like Lisa, you can do those those numbers that you mentioned.

00:11:21:20 - 00:11:44:04

I mean, you know, I hate to show my age here, but I don't mind showing it because I've been around this since the beginning of ecommerce, but it was no different from, television before, like television, the very first direct to consumer business. I started direct response business. Yeah, I was convert, was converting, viewers of television programs to buys of vacations, actually.

00:11:44:06 - 00:12:07:20

And I had a show on the Travel Channel three times a day. And so it's really interesting how similar those, you know, the ad programs for like those direct response TV ads or, you know, the, the same methodology is input into, you know, direct consumer Facebook ads. It you know, you know, when people build landing pages now and I help a lot of people do that.

00:12:07:22 - 00:12:27:01

The seven step messaging platform that I use is the same seven steps that I use for direct response TV to take that. Yeah. Take us through that. What is that? I mean, it's really common sense. You know, the first step is really understanding the consumer need a desire. Is it really there and that that helps you identify your customer.

00:12:27:01 - 00:12:50:19

But most importantly, if you're not, if you're not basically meeting a need or fulfilling a desire, you're not going to sell anything. The second one is what's wrong with the current solutions. So you've always got a you've always got to have something that is a better way to fulfill that need than a current way. And the third one of the benefits, so you can't talk about your product in terms of features or your service, you have to talk about it in terms of benefits.

00:12:50:21 - 00:13:15:04

And there are only three sustainable benefits that count in terms of categories. One is emotional benefits, one is functional. It works better than it did before, and the other is financial. But financial isn't sustainability that because someone can always come out with a cheaper way, the fourth area or the reasons to believe so it's the science, or it's the demonstration, or some reason to believe the fifth of the testimonials.

00:13:15:04 - 00:13:33:24

It's like, if you don't believe us, believe people like you, the six is the value. How are you going to present the value? And you got to not forget the call to action. And those seven things exist on landing pages that exist in and performance marketing assets they put they exist everywhere. Yeah. These are, you know, time tested fundamentals.

00:13:33:24 - 00:13:52:01

And if you if they're not there, like then you're not going to you're not going to not going to sell, you're not going to sell product. Do you have a way that you think about, coordinating those steps or they literally sequential linear, you know, interestingly, you have to know which of the seven steps you're working in.

00:13:52:03 - 00:14:20:07

So if you think of the consumer journey from first impression through to repurchase all of those things, you don't need every one of the seven steps every time. But you do have to know where you are in the process. So you know the first time you need a very strong hook. So you got to have a very, very strong way of doing step one, step two, and step three, which is people have to identify that this is something that I need or I want.

00:14:20:09 - 00:14:39:10

Then they have to identify that this is a better solution, and then they have to be kind of sold on a benefit to take the first step. And then as you go, as you go through the customer journey, you're also going through the messaging step. So it really depends on, you know, where you're working in terms of the customer journey and also how well people know your product.

00:14:39:12 - 00:15:11:01

Yeah. And I mean that comes back to brand. You said something interesting regarding like financial benefit. You know, most of these consumer verticals are becoming commoditized because, you know, barriers to entry are just so low today. You can launch a product on Shopify and find a producer. It's relatively easy. It's actually interesting when we talk to our clients who are really high growth, they try and keep it really low profile in terms of doing things like podcasts, because they don't want applicability and it takes time to build brand trust, right?

00:15:11:01 - 00:15:46:13

Yeah. I mean, this happened in mattresses, right. Like, yeah, I was I was always like concerned about other people finding out about what we were doing. But, you know, at some point you have to determine when does brand become an important. And I'm, I'm less cagey as I used to be. Yeah. And I used to be because I just feel well, I think brand now is it's more important when launching launching the venture because you don't have those acquisition economics before you were first to market and you could spin up a funnel and you had good unit economics and a way to fulfill, you could scale quickly.

00:15:46:13 - 00:16:07:05

It was almost like, how quick are you to the punch, to offering the solution now the fastest growing, most of the fastest growing consumer brands I speak to. They're growing by virtue of lifetime value. And just like getting people to fall in love with the community and community is just a word for retention. Retention. Repeat. I was going to say repeat, but same thing.

00:16:07:11 - 00:16:30:07

Yeah, look, I just got off a leadership team meeting and the latest venture that I'm running, which is a 14 year old startup, it's 14 year old company, but was, needed a massive turnaround and capital restructuring this year. Able and I showed them the new brand work that we're doing for next year and the excitement amongst the team is just palpable.

00:16:30:07 - 00:16:57:22

They can you can see it. And someone sent me a message during the meeting to say, this is as excited as I've ever been working for the company, because people still love brand. And if you don't intentionally think about your brand, think about what you want to mean to your consumer. Then you have nothing really. And, you know, I felt like coming into the company that a wonderful origin story, an incredibly supportive customer base because it's mission driven, it's all about empowering women.

00:16:57:24 - 00:17:20:19

But I didn't really know what to expect walking into the store. I know that other people. So we're now really intentionally working on brand. We happened to be Nashville based, so we're going to double down on Nashville and and presenting that, presenting what it looks and feels like even to the team working in the company, gives everybody this new kind of spring in that step, a new feeling of of excitement.

00:17:20:19 - 00:17:40:06

And, you know, the head of wholesale said, this is great. You know, our retail customers are going to get this. They're going to understand it, they're going to get behind it. And we know that the consumers already love the company. Well, and now we can talk to a whole new, whole new group of customers about what Bill is, because we actually have a story to tell.

00:17:40:09 - 00:18:15:18

So how many how many ventures have you been a part of now in consumer, you mentioned you started in strategy consulting. Give us a sense of how tenured you you are. You know, I had a company, once called journey nine, and it was I'd worked out that it was the ninth startup I had. And I'm and I'm, I'm a few years on since then, so, so, many and and and I get as much of a of a of a kick out of being with young entrepreneurs at a very early stage of, of what they're doing and mentoring them.

00:18:15:18 - 00:18:41:10

Now, you know where I am now. And I, you know, I was telling someone this story recently. It happens to be Katy. Yes. At V5. And she had called me very early on in her startup and, and it's, you know, interesting company. You can go take a look at it. But she had a, a supplier that was really screwing her that that was giving her a minimum order quantity.

00:18:41:10 - 00:19:00:21

That just didn't make any sense. I gave her one piece of advice about how to go back and cut that by ten, so that she wouldn't need quite as much capital. And I'm not saying that that had a huge impact on her, but I know that it got her out of a pretty difficult spot. And now, you know, she's doing great.

00:19:00:21 - 00:19:31:05

And so I love I love that. So in terms of the companies I'm involved in as an early stage investor and advisor, I'd say it's 30 to 40 today, and I spend time on maybe 5 or 6 of them and focus on 1 or 2. Yeah. The reason for my question is I'm kind of interested in how you see consumer evolving, like the general landscape having started and TV and original direct to consumer moving to digital now, actually being able as a retail first venture.

00:19:31:07 - 00:19:52:23

So I'm interested to learn more about that. But also just like with the amount of reps that you've, that you've had, like, I want to understand how you think about like compounded learnings and then staying excited about going into the next venture and how that changes your perspective in terms of like what you want to get out of what you're doing, you know, because you reach a certain point in your in your venture where you're like, well, you know, what am I?

00:19:53:01 - 00:20:26:13

What am I going to do with this? Right. And yeah, yeah. So I think that question is loaded in a couple of different directions. One is an easy answer in the you know, I have about 2025 plan for Apple as being 5050 direct and and wholesale. So in terms of omnichannel, I think omnichannel is critical. I think it's actually now potentially more contribution from the sale of an item through wholesale, through a retailer than it is on off.

00:20:26:13 - 00:20:49:05

And all right. So I think, you know, part of the answer is the, you know, omnichannel is important. Finding your retail distribution is critical for the long term in terms of, you know, my my own my own focus. You know, that's a difficult one, really. I know that I'm not ready to, you know, you know, hang up my boots and and and stop right now.

00:20:49:08 - 00:21:13:03

You know, I, I think there's an enormous amount to learn. And I think ultimately, you know, the thing about experience is, I mean, there is a line in a, in a, in a, in a musical style. I express that the trouble with experience is once you've got it, it's all you've got. And so, you know, part of the challenge when you, when you get older is how do you stay relevant.

00:21:13:03 - 00:21:38:17

So, so you have this kind of thing going on in your head that, you know, I don't want to try and be young, but I do want to be relevant. And I think the relevance is the idea of a duck, and that is that it is incredibly hard work to succeed. Things that are changing all the time. And so beneath the surface, you are running 100 miles an hour in each different direction, but you have to give an air of confidence.

00:21:38:19 - 00:22:00:12

You've got to inspire a team who's you got to inspire your customers, and you got to give this, this, this, this unflappable, not panicked. Most young entrepreneurs are A.D.D. if they're not actually A.D.D. that like it, they're kind of going from one crisis to another because, you know, management of a startup is like being a fire chief. You just putting out fires every day.

00:22:00:12 - 00:22:20:15

Yeah. And so, and so, you know, I always believe there's room for one more brand. I always believe there's room for one more. Great idea. I think consumers are constantly looking for new and different, and you have to give it to them, you know, like, so you've got to constantly innovate. You got to take your core products, and that's what you're going to see.

00:22:20:15 - 00:22:42:22

Able to take its core products, its bestsellers and innovate around them, make them more interesting, give reasons to come back and buy another one, or kind of different version of what they've already bought. And, you know, innovation, excitement, inspiration is key. And I think I can still bring that to, to to people. I think that, you know, you've got to have a deep understanding of the number.

00:22:42:22 - 00:23:04:05

I mean, that's what the fascination was all about in terms of just there are so many new products. Your point is that basically, human nature will always gravitate towards the new thing. Like there's always opportunity. Are our tastes are consistently changing. What the market wants is consistently changing, and therefore there will be demand for new products and services of some kind.

00:23:04:11 - 00:23:25:08

And so then it comes down to execution and that's that's difficult. And that's that's half the battle. Yeah. I'm look ultimately it's all about execution. You know, just because of sheer numbers, I've seen more ideas in my career that have not succeeded in ideas that have, because we all know what the what the chances of success are.

00:23:25:10 - 00:23:47:22

I've always like to feel like the the that we you and your advisory role. To me, when I'm advising, we want to give people a three times better chance of success than they would have without us. That was always my measure, you know? So like if, if, your barometer for if you're providing value. Yeah, it's tough on your advisor and you're like giving fractional time and you're getting some sort of compensation for it.

00:23:47:22 - 00:24:07:10

Yeah. But, but ultimately people want to say, you know, what can you do to help me? And I always would say, I think I could make it three, three times more likely that you'll succeed to fail. That still means failure is more likely to success. But I think I can help you and, you know, and and how do you do that?

00:24:07:16 - 00:24:28:11

You know, in a number of different ways that have become really important to me. You know, I think I've told you this in the past, but I hate the idea of minimal viable product to the startup. I just I just think that, you know, in from my days in the hospitality world, if I was selling someone a viable room in a new hotel, that would just not excite them very much.

00:24:28:11 - 00:24:55:21

And ultimately the the whole way that socialization of good ideas works, good new products works is that people, when they when they unbox it to take a term from, from from the mattress industry when they unbox it. And it's that moment of truth between what they were anticipating and what they experience. If the experience exceeds the anticipation, then they they want to talk about it, they want to share it and that and that and that's what.

00:24:55:23 - 00:25:21:19

And that's so the magic is being remarkable. And so one of the things I always say to startup, entrepreneurs and founders is be remarkable. Like, don't be viable, be remarkable. And that means the first time you talk to a consumer or your customer, if it's business to business, just make sure that it exceeds their expectations by a significant amount and that that means, you know, don't go until you're ready.

00:25:21:20 - 00:25:45:09

Don't go until you mean many, many consumer products companies go before the things already like customer service and and you know, even the box, you know, everything is important. Everything is important. I think people have become really obsessed with, you know, performance marketing has been part of the zeitgeist now, you know, especially in consumer, it's what a lot of people want to talk about and for for very good reason.

00:25:45:09 - 00:26:09:24

It's what I do by trade. But I think some of the more intangible KPIs that are harder to track are just as important, like word of mouth. The reason community is becoming such a buzzword right now is because it's intangible, and it's like it's speaking to metrics that are actually important that that drive people to, to purchase and, and want to rebuy the product.

00:26:10:02 - 00:26:30:15

But the more I think about community, it's like engagement. How much do people want to engage with your brand? How much do they want to engage with your product? How much do they want to talk about it with their friends? How do they derive a sense of belonging with your spouse? Values? That's more on the brand marketing side that I think may have been lost with the past generation of direct consumer brands that we're starting to see again.

00:26:30:18 - 00:26:53:01

You and I agree with you. I couldn't agree more. You and I have spoken about the changing role of like the marketer or the the even like the CEO too. In my mind, it comes down to like an understanding of performance marketing, brand marketing, financial engineering or unit economics, how you're going to integrate AI and then and then measurement.

00:26:53:05 - 00:27:14:05

I'm of the opinion that there are a lot of marketers who are being primed and can be groomed for the CEO position, which is, you know, I think, a fairly new concept. How do you think about, you know, the best and most effective marketers? And, you know, I'm interested to hear your take on, the changing role of the CEO too.

00:27:14:07 - 00:27:35:19

Yeah. So again, it's a kind of timing thing. So let's talk about companies that are, 0 to 100 million in revenue, because I think once you get above that, you know, the CEO is really a it's yeah, it's like a figurehead and reporting to the board and the process driven. And they're like a human resources person really because they're constantly dealing with people issues.

00:27:35:24 - 00:27:57:00

And you do that anyway even on the way to 100 million. But so let's assume it's all the operators. Yeah. So, so so I the reason why I think it's going to fall into the hands of marketing, whereas historically it might have gone the way of the CFO in terms of leadership. Is this the idea of inspiration and and gut feel?

00:27:57:00 - 00:28:27:19

I think that, you know, we're all scientists. Those of us that come from the consulting background, we want numbers to drive everything. And that is critical, critical, critical. I mean, numbers drive everything. And so the best marketers today are actually as much numbers driven as they are creative. And so when we talk about a CMO becoming a CEO, it isn't because their left brain is, oh, they're you know, it's not one side of brain of their other or the other that is is important.

00:28:27:19 - 00:28:45:00

Is that to be an outstanding marketer today, you have to really care about, you know, it's you know, it's three in the afternoon, whatever time it is. Where do our cells need to be to tell us that this week's campaign is going well. And if they're not where they need to be, then what changes can we make? What pivot can we make?

00:28:45:00 - 00:29:07:16

That's what great marketers do today. They're much more involved in the in the detail than they are about, you know, the, the, the strategy. But the strategies important too. So I don't think you can ever turn a finance person into an intuitive and secure marketer. But I think that you can you have to to getting people into finance if we're going through this exercise right now.

00:29:07:16 - 00:29:31:15

So traditionally, you know, in our in our consultants in the agency practice, we have like our senior resources are they're marketers, but they're trained on finances. They can work through a pal. They can cut out unnecessary technology costs. They can refactor your team structure to give you better, to give you more juice on on margin. As ad efficiency and advertising costs get more expensive.

00:29:31:17 - 00:29:58:17

We're having this discussion now where it's like and that that analysis for like a specific channel or like a specific part of the revenue equation, whether that's acquisition, that responsibility needs to move even further downstream to the paid media manager who's managing the channel. And so this marketer can become more of an economist and they're making more broad stroke investment decisions.

00:29:58:17 - 00:30:18:17

Yeah. It's easier to teach someone finance than it is to actually teach them how to roll up their sleeves. I'm I'm smiling because, you know, Abel's a small company. You know, we're not yet $20 million in revenue, but I have a team. This is incorrectly called the promo team because it's more like a campaign and promotional team.

00:30:18:19 - 00:30:46:18

But it's a creative person. It's the digital marketer, paid media. And it's the person that has all the influencers and partnerships. And above them, they have, you know, a senior marketing person who's all about insights. And, every week we look at last week in terms of the actual numbers, the and not just the top line and bottom line contribution, but everything in between the AbbVie, the conversion rate, everything we talk about where we are.

00:30:46:18 - 00:31:07:05

And then there's this kind of team that, the team that has to work to improve those numbers next week. And if they don't understand the numbers, if they don't understand the reason why able is improved is because things like the return rate has gone down, the RV is creeping up, our acquisition cost is coming down. Those are all numbers.

00:31:07:05 - 00:31:29:07

Yeah. They materially influence the outcome that the way to change them is marketing. You can't change them. Well look at I mean look at like conversion rate you know I mean or revenues just traffic times conversion rate times average order value. So like when you do I mean, you're a consulting guy, you know, like a MRR analysis, root cause analysis.

00:31:29:09 - 00:31:49:24

You know, when you're actually looking to improve some of these metrics, it comes down to how do we get people to click through our ads, at a higher clip and then convert? So yeah, so, so we were we were looking at our plans again this morning for holiday this month, Black Friday, Cyber Monday, Cyber Weekend in particular.

00:31:50:01 - 00:32:06:05

And the day what what day do we launch the campaign and what they do. We go heavy on the campaign. And I said, let's go look at last year, because I know one thing that you're going to see, you're going to see our traffic going up and then coming down, and then you're going to see a conversion rate coming up and coming down.

00:32:06:05 - 00:32:29:11

Because the thing about these massive consumer buying events is that people's propensity to buy is higher. So I call it you fish. When the fish is swimming and you and you fish where they're eating. So that's what you have to do. And so and they were and I looked at it and I said with, with planning this campaign too late because go look at last year when the traffic started to build, that isn't us being clever.

00:32:29:16 - 00:32:48:17

That's just more people starting to look around for deals with Black Friday. So we have to be there. So everything is a science. And then within the science is this, of how do you create an ad that's going to more people? Is the hook good? How are they going to click? Is the landing page going to drive them to where we want to be?

00:32:48:21 - 00:33:18:15

Is the RV going to be right? You know, if we see ROV starting to drop even now like over a weekend, if RV this weekend is lost, then it must be something we did on the page. We must have driven people, yeah, to purchase it. So everything is scientific and yeah, everything is created. Yeah. So a lot of these marketing challenges are like they're human problems too, because it's about who is running the programs and frankly, how much transparency do they have and to where you want to take the business.

00:33:18:17 - 00:33:47:08

Right. Because for them to know how important average order value is, they need to know the end outcome and they need to know the current state of affairs. So what I've seen, what I where I've seen issues with marketing teams is like a lack of transparency in the org chart to take those resources who are traditionally more junior executing on the channel, but they have material impact on the end goal to get them into the into the conversation, really, and explain to them how some of these things work so they know how important their job is to your bottom line.

00:33:47:10 - 00:34:05:23

Yeah. So, I mean, I know a lot of companies have flash reports, which is last week's performance. We have a flash report and insights and we share it broadly. I mean, if you I should have shown you today's flash report for last week before we started. And then showing you where it went to, it went far and wide in the organization.

00:34:06:00 - 00:34:30:03

Because, you know, people need to know and and also they need to know that we had a pretty good month last month, you know, like we're on a run, a fiscal calendar. So a month has already ended. October. And we didn't hit the top line that we wanted, but we was still profitable. And the reason that we were, you know, people will remember October 2023 as being a time when a world event really impacted a lot of things.

00:34:30:03 - 00:34:45:02

And I'm not going I don't know when this is going out, so I'm not going to talk about that today, probably like 2 or 3 weeks. Yeah. So it will still be living the world event that took place and ourselves were hit, you know. So that's going to happen. You can explain it away and then you just move on.

00:34:45:04 - 00:35:11:03

Yeah. It's empowering when you're in a position and you know all of the metrics that drive revenue and, you know, kind of you probably get into a business now and you're like, all right, I know how to fix this. I know how to turn things around. Yeah. I mean, you know, I call it flying blind or, you know, like, we I, when I, when I got involved with the latest company, I'm running Abel first company ever in my, in my career since business school a long, long time ago.

00:35:11:03 - 00:35:26:13

I went young to business school where I haven't had the team that I'm working with today. I'm working with a, a team that I inherited. And I went in there and I felt like everyone was flying blind, and that isn't the case now. So the first thing you have to do is get the numbers and be honest with yourself.

00:35:26:13 - 00:35:49:13

How are we really doing? You know, even I went back and I restated historic losses because we were doing a lot worse as a company than we thought. We were. And so first we corrected that, then we set slightly unrealistic goals, because I always like to be slightly unrealistic. I think entrepreneurs always are a little bit, you know, a little bit high on the expectations.

00:35:49:15 - 00:36:10:20

But saying, you know, somewhat realistic goals and then going after them and then being, being brave enough to say, how are we doing against these goals? And sometimes, like September was great, we were ahead of them. And sometimes like October, we're a little behind, but not disastrously behind. So switching gears here, you've had a couple of successful exits with most notably fascination.

00:36:10:20 - 00:36:32:22

Lisa, how do you like Prime the business for some of those events? Where they active goals you were working towards, did they kind of approach you and, you know, how do you think about that? Yeah. So, and I guess as an add on and I know I keep adding these really long questions, how do you think about, like building value in the business equity value that, you know, in this that gives you optionality?

00:36:33:01 - 00:37:00:04

Yeah. So so you know, both of those situations and many before a learning experience because I, I would say, you know, an optimal outcome is that everyone involved in the business, from the early employees right through to the latest investors, feels really, really good about them. And, you know, the jury's still out on the fascination because it was a largely equity based deal.

00:37:00:04 - 00:37:20:12

But hopefully everyone will be happy with it in the long run. And certainly in Lisa, I, I'm disappointed that it wasn't able to satisfy everyone in the process. That was a matter of timing, really, because, you know, timing is so important in an exit. I mean, building a company for exit is you can do all the things, you can put all the right things in place.

00:37:20:12 - 00:37:41:12

But ultimately headwinds happen. You know, we had a competitor in the mattress industry who just spent their way to growth and made life difficult for everybody else, and that eventually, when the acquisition cost just went through the roof, it changed the underlying value. So I feel like we did everything right to build value, but ultimately the outcome wasn't where I hoped it would be.

00:37:41:12 - 00:38:04:22

But it wasn't terrible. And quite honestly, it was reasonably good for me, personally. But not everyone got the kind of return you'd expect from that kind of growth. And so, you know, when I work with young founders today, I talk about not I don't really like the term bootstrapping, but when you choose your investors and when you raise capital, you you have to be sure you understand what you're doing.

00:38:04:22 - 00:38:23:19

And I think a lot of people raise money at valuations that are going to be hard to please everybody because, as you know, if you raise money, a very high valuation, there's something that's going to come with that. And I don't want to get into the detail of capital structure today. But quite often the capital structure of businesses is not what we think it is from the outside.

00:38:23:19 - 00:38:43:02

And what looks like a home run isn't necessarily a home run for everyone. So, so what have I learned? I've learned a lot of things that that I think I pass on to people, which is, you know, choose your investors carefully, protect the early investors as much as you can, know that you're putting a lot of value into the hands of the later investors.

00:38:43:02 - 00:39:08:01

They get better terms in the early investors. Get your timing right. Don't be greedy if you want an exit exit. But if you if you don't build a business forever and you know what my the greatest advice I can give to anybody today, particularly today, build a profitable business that you're happy to run for a very long time and live off the cash flow from that business, and make sure your investors are happy with that as well.

00:39:08:03 - 00:39:28:11

And one day, when you least expect it, someone will come along and put a check in your hand. Very, very early in my career, someone said to me, you know, I thought every day in business it was potentially the last day until someone came along and put this big fat check in my hand. And that's a, that's, that's and I've experienced the same thing.

00:39:28:11 - 00:39:54:21

I mean, building a business is so hard. You always think tomorrow could be the last day. You always do. Well, what keeps you motivated to, you know, jump right back into it? Have you ever taken time off? Yeah. I mean, many years ago, when I sold my first business. It's called the Vacation Store. I had full time off because I, I it kept me on as president, but it took me about three months to realize they didn't really want me around, and I wasn't really able to work.

00:39:54:21 - 00:40:12:06

I was too restricted from doing anything else at the time. So I had a few months off, my golf game improved, and my kids were young. It was a great time to spend with them. You know, I thought I was going to take time off, when we sold, when I was coming off the end of the out with the fascination.

00:40:12:06 - 00:40:40:06

And then, you know, I stepped into right into able so I, I have, I have in a way I haven't taken any sustainable time off, but I feel like, you know, I've had an amazing, amazing life. I mean, I, I've, I, you know, I've done all the things I was, I said to when I turned 60 and I'm over 60 when I turned 60, I wrote to my kids and I said, who had grown successful in their careers and said, the one thing I will say to you is say yes to everything.

00:40:40:08 - 00:41:00:01

Because I look around my friends today and I see them with their bucket lists and things that they want to do. Most of the things on their bucket list, the things that I've already done my life and I've already done and so, you know, I, I, I think that you can work life balance is a bit of a myth, but it's also everything.

00:41:00:03 - 00:41:18:15

As you if you love what you do and you love your work, you just got to live life around it. And yeah, you engineer your own balance out. Yeah, you absolutely do. So yeah. So I'm, I'm, I'm as enthusiastic today. I believe I'm as enthusiastic as I was when I started out on this crazy journey all those years ago.

00:41:18:17 - 00:41:38:04

And I always say to the team I'm working with, with absolute genuine belief that this is the best team I've ever worked with and it's the most fun I've ever had because I never look back and regret anything. I always love what I'm doing and enjoy what I'm doing, and I genuinely believe that today with the team, I'm working with, the able, I'm working with an extraordinary team.

00:41:38:04 - 00:41:56:21

I'm having a huge amount of fun, and they're an amazing group of people I'm enjoying working with. So you know that that's how it has to be for you to get up in the morning, do what you do. You obviously have a lot of exposure on the consumer side. What what consumer verticals are you are you looking at these days or and are excited about?

00:41:56:24 - 00:42:15:00

You know, I've like many people I've, I've moved to the platform businesses now, you know, I think that, commerce enabling business is a critical I think there's a lot of even even. Yeah. I mean, I mean, if you look at commerce enablement, I think you need to be a winner, though. There's tremendous amount of saturation in some of these verticals.

00:42:15:02 - 00:42:34:23

If you if you saw my inbox as a, as an operator, as someone with a brand, the number of I mean, just taking something like we don't have an app right now, we will do before Black Friday, Cyber Monday, but the number of different companies that can come and build an app for you today, I'm not going to call out the one that I picked because it would be unfair to everybody else.

00:42:35:00 - 00:43:15:16

And I also I don't have any experience yet, but you know, I, I, I pick one and, you know, my inbox is just full of the same message about the same commerce enabling idea. And there's just so many choices. And so, you know, as an investor, you know, I've picked a few again, and I went back to what I said at the beginning, the people, the idea, the the inspiration and how smart the people are, whether they understand they got to work with a team or it's interesting when you draw similarities and parallels between, consumer products and then, commerce, technology businesses, B2B, SaaS, like, it's there, you know, in a consumer business,

00:43:15:16 - 00:43:38:12

you know, we talked a lot about community and brand building today. That's a lot of the reason why people choose to follow and repurchase a product different in the software space, especially when, like, you know, you're seeing a commoditization of software and people can come up and build the exact same thing and offer a cheaper it changes the equation of like what software has always been product light.

00:43:38:12 - 00:44:05:21

It's like we need to build the best product. That's how we're going to create the most loyalty. That's tough to do in like a Shopify ecosystem. Yeah. I mean, and I, I honestly I honestly don't know the answer to that. I mean, I've been incredibly lucky. I mean, to name one, I don't know if you're aware it's not a direct competitor by any means, but the creative agency whaler and you told me about them, I haven't seen their stuff that they're that they're huge now.

00:44:05:24 - 00:44:25:07

I mean, really, really huge in terms of top line revenue and bottom line. The two guys that founded that business came along and told me about that idea. I was their first check, you know, on a very reasonable valuation. And I think they've done a lot of things right. And is that a weird. So that's a consulting business that does it is creative creative product, creative production.

00:44:25:09 - 00:44:54:03

It's a no. If they manage talent they do everything in the creative economy okay. Yeah. For managing talent for big brand campaigns. And then they and now they've even built it's something that you mentioned earlier. They built a measurement tool with Nielsen actually to actually measure in accurately the impact of, creators. Yeah. Creators. So, so, yeah, I mean, I, I don't know how you pick from one to the other, but you've got to love commerce, enabling businesses.

00:44:54:05 - 00:45:29:00

How you pick the winners. I'm not sure. And then in terms of categories, I, you know, I always say this, I always think there's room for one more lifestyle brand. So if you if you can find a niche and in a lifestyle and you can follow the trends of, you know, ethical business and sustainability in some way, shape or form, and you can find a, a niche for yourself, then, then, you know, there's, you know, we're we are always going to be astounded by where did this brand come from.

00:45:29:02 - 00:45:53:14

That's going to always happen. And it's going to be brilliant people, visionary people with great ideas. And going back to the seven steps, understanding, you know, the needle desire that that they're fulfilling and then doing everything just right. And, and the quality of the product is always going to be critical. So so last couple of questions. You're, you're let's say you're starting a consumer brand from scratch again today.

00:45:53:19 - 00:46:15:19

What are your where are you acquiring customers. Where are you going out. You built a great product. Where are you marketing it. What's your playbook. Yeah. So the playbook is, you know, I remember when I started the, the, the when I, when I started, Lisa, my business partner who was came from more traditional background at the time, you know, he used to say to me, how are you going to build this business?

00:46:15:20 - 00:46:34:20

I said, we're going to start with influencers. And he'd say, well, what's an influencer? Because it was back in that day when, no, I'm really sure. We're sure what an influencer was an influencer. They came and they sort of went and now they're back. So I think that, different kinds of influencers doing the right things and, you know, we could pull them.

00:46:34:20 - 00:47:01:11

I mean, and, and even performance PR, you know, the kind of affiliate influencer space people with audience, you got to start with where how are you going to attract audience? Because people are on their phones every day. They're reading certain things, they're following people. That's going to be critical so that that piece of the jigsaw is critical. And then how you amplify that and the assets that you create is critical to.

00:47:01:17 - 00:47:25:24

So, you know, you know, I, I still I was talking to someone about this recently. If I was to start a mattress company today, where would I go. And, you know, I would certainly go to TikTok as an example. And and the reason I would go there is that there's always a new group of consumers coming through, and you have to go see what media they're consuming.

00:47:26:03 - 00:47:47:04

So the beauty of Lisa at the time was that millennials were not well-served for mattresses. Today, Gen Z are not well-served for mattress purchases. So not that I'm doing it necessarily, but if I were, I would go to this next generation and I would say, how can I create the best creative to, you know, resonate with you go, you got to go where they are and you got to create creative.

00:47:47:04 - 00:48:05:09

And then ultimately it's all the same stuff again. You've got to have a great product. You got to have, you know, everything else, right? Yeah, I, I agree with that. I think you need to understand how you're going to create. There's more content today. Like you need to just be exercising that muscle daily and understanding what people want to consume.

00:48:05:09 - 00:48:35:02

And it needs to be less organic, I mean, more organic these days. The other thing I would say is like brands need to be building a business that's more enduring, and they need to understand, you know, that consumers, they have so many more options today, especially digitally, than they did. You know when when you lost Lisa. So you need to be playing to win the long game when the marathon that happens through, you know, hand-to-hand combat through com through through content over you know, a more prolonged period of time.

00:48:35:02 - 00:48:58:04

It's not just about, you know, launching prospecting ads. And I think in those days our content created audiences. So we were in much more of a partnership with the people that have the audiences because they were building their audiences up our content as well. So we will create a piece of performance. We didn't even know it was a performance asset then, but it turned out to be a performance asset, a great article or a great review.

00:48:58:06 - 00:49:19:21

And that enabled these media platforms, new media platforms, digital media platforms to grow their audience. Today, I just don't think we as brands help in the building of audience. So we have to go and find out ways that we can find audience we can't buy anymore. We've just got to find that audience. We got to partner in different ways.

00:49:19:21 - 00:49:48:01

We've got to be creative. But ultimately it's about turning audiences into customers. That's what marketing's always been. And so finding cost effective ways to reach those audiences wherever they are, making content that's relevant to them, and then delivering excellence, excellence, excellence, excellence on a business model that makes sense. Yeah, I like that. That's that's a that's a good place for us to, to cap off the conversation, one thing I'll say is just tell us about the book.

00:49:48:03 - 00:50:12:08

I know it's not out yet. But what are you writing? When can we expect it? So I'm writing a book called, unboxing, and the, the book is about, I mentioned earlier the relationship between anticipation and experience. So, it's, it's this idea that in life and in marketing, everything that we do is whether you've got plans to get one of one of my good friends is getting married this weekend.

00:50:12:08 - 00:50:38:00

And, you know, he sent me a text this morning, big weekend coming up. You know, everything is about anticipation and ultimately the experience has to exceed the anticipation for it to have been a great day or a great product. So the unboxing moment is the moment of truth between anticipation and experience. And the book is about how do you build the anticipation and how do you ensure that the experience is exceeds that?

00:50:38:00 - 00:50:58:07

And then how do you put the mechanisms in place to allow people to share that experience? And, I'm excited about it. I mean, I've, I've, I hope it will be it's not going to be a life story, that's for sure. But I hope it will be full of enough examples that people will enjoy reading it. And it'll I hope it'll make you smile and laugh.

00:50:58:07 - 00:51:18:24

And I read the I read the preface so I can say it's got a mix of, soccer, football and, branding, which we all appreciate. David, thanks so much for joining us. I appreciate it. Thank you. Thanks for having me.