Podcast / Social Studies

SOCIAL

STUDIES

Hosted by

Darkroom

Social studies is a podcast Deconstructing Commerce & Culture, hosting conversations with brand leaders and thinkers

SOCIAL

STUDIES

Hosted by

Darkroom

Social studies is a podcast Deconstructing Commerce & Culture, hosting conversations with brand leaders and thinkers

SOCIAL

STUDIES

Hosted by

Darkroom

Social studies is a podcast Deconstructing Commerce & Culture, hosting conversations with brand leaders and thinkers

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Social Studies

E10

Breaking through Business Barriers

Breaking through Business Barriers

Breaking through Business Barriers

Breaking through Business Barriers

David Wolfe

David Wolfe

David Wolfe

David Wolfe, CEO of ABLE and a veteran in brand building and entrepreneurship, brings his extensive experience from various executive roles and as an investor in innovative companies. In this episode, David shares insights on scaling businesses, from the initial challenge of earning the first million to the strategic nuances involved in growing beyond $100 million. He delves into the fundamentals of brand messaging, the evolution of consumer behavior, and customer acquisition strategies. Additionally, David discusses the changing roles of CEOs and marketers and the significance of community in brand growth.

00:00 --> 00:11 (Lucas DiPietrantonio)

The reason community is becoming such a buzzword right now is because it's intangible and it's speaking to metrics that are actually important that drive people to purchase and wanna rebuy the product.



00:11 --> 00:38 (David Wolfe)

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



00:39 --> 00:44 (Lucas DiPietrantonio)

Alright, David. Well, thanks for coming out to New York. Have you talked to the guys at Vermont before, Rishabh, Jane?



00:45 --> 00:45 (David Wolfe)

No. No.



00:45 --> 00:54 (Lucas DiPietrantonio)

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.



00:55 --> 01:11 (David Wolfe)

Yeah. I had a good listen to a few bits to see what people were talking about, and I'm an open book. My career has been a lot of fun, a lot of challenges, but, you know, very fortunate.



01:11 --> 01:38 (Lucas DiPietrantonio)

So I'm gonna take you through, you know, I think there's a lot to cover as far as marketing is concerned, some of the different things that I think you bring perspective on just in terms of life and building. You have a book coming up called Unboxing. Yeah. That's right. It's kind of a synthesis of your, what is it, 3 decades of business experience on consulting, consumer, and on the marketing side? 



01:38 --> 02:30 (David Wolfe)

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. If you were super famous for something else, maybe they'd be interested in that. I think what people would be interested in, the lessons that you've learned 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? 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 everything really. And the everything that it is, I thought I'd try and share that in a book.



02:30 --> 02:42 (Lucas DiPietrantonio)

How do you systematize that as an investor, as an entrepreneur choosing what to invest your time in. How do you decide what's a good opportunity to pursue?



02:42 --> 03:54 (David Wolfe)

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 wanna listen to somebody, and so the first question is am I inspired by that individual? Because I think inspiration is a critical part of business success. Because then they're gonna 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 a big need in the market for that, 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 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 I make my decision on that. So that's my investment decision, and then ultimately, they've gotta get enough money and then just focus execution execution execution, and it's hard.



03:55 --> 04:01 (Lucas DiPietrantonio)

So there's basically a different skill set between early entrepreneur and then later stage company, in terms of the things that you need to be good at.



04:02 --> 04:19 (David Wolfe)

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 yet because I think I'm much more suited to bringing the new idea to life than I am, you know, the ongoing business. 



04:20 --> 04:36 (Lucas DiPietrantonio)

Basically, your 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 already been established. 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.



04:38 --> 05:17 (David Wolfe)

Yeah. So 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 difference between, you know, the first million, getting revenue is tough. Getting to sort of ten million in a consumer business, obviously, it's different in a different style of business. Getting to ten 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 in, people with more experience, and that'll take you to about fifty million maybe to a hundred million, and at that point, everything's different.



05:18 --> 05:49 (David Wolfe)

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 gotta get all your processes right. You gotta reward people differently, attract different types of people. People have different experience. You know, twenty million growth from a hundred million is totally different from the first twenty million and as soon as you realize that, and as soon as you realize that maybe you're suited to one thing and not the other, you can maximize your strengths. You just need to know when to get out of the way.



05:49 --> 05:58 (Lucas DiPietrantonio)

In your experience, let's take Lisa, for example, or The Fascination. Where did you play there? For Lisa, was it zero to a hundred? How did that go?



05:59 --> 06:08 (David Wolfe)

Yeah, so Lisa, the early idea came from, you know, I had a service business. We were helping some of the largest companies in the US.



06:09 --> 06:10 (Lucas DiPietrantonio)

This is a strategy consulting business you're in?



06:11 --> 06:46 (David Wolfe)

It was strategy and innovation. So we were working with companies like General Mills and Purina on how to utilize the whole idea of socialization on social media to build communities, to build growth, to grow scale, build e-commerce businesses. We were helping them do that. So strategic, but also of the execution end, and I had a really tremendous team together, and we made decision in 2013 where they would continue to serve those businesses, and it was very profitable for us. We were doing well.



06:46 --> 06:52 (Lucas DiPietrantonio)

That was you. So you were working on that business for, what, 15 years then?



06:53 --> 07:24 (David Wolfe)

Approximately 15 years. So 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 have previously came up with the idea to start Lisa, the mattress company. Casper was not launched at the time. In fact, they launched while we were still planning getting close to our launch. But it was an obvious gap in the market, and so that started as a single member LLC to get technical. 



07:25 --> 07:25 (Lucas DiPietrantonio)

You were the sole prop.



07:25 --> 08:30 (David Wolfe)

And then, you know, my management team got involved, and then a launch partner, cofounder got involved, and we launched that thing from scratch, and that business went twenty seven or twenty eight million in the 1st year, way beyond anything we thought we would achieve, 78 million in the 2nd year and about a hundred and twenty five or a hundred and twenty eight million in the 3rd year in sales. So, and at that point, probably, I was done. Like and took me a little while to realize that. Maybe one or two other people realized it before me, and I became the board chair of that company, which was fine. Still involved in helping drive sales, momentum, but really from afar, from a distance, and from an advisory role, and I don't think they necessarily got all their people right first time around when the investor that I brought in started to get more involved in execution and choosing the team. But, eventually, they got a good team together. It took them a couple of years, and had I realized it earlier, I probably could've done it more quickly.



08:31 --> 08:47 (Lucas DiPietrantonio)

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 are obviously capital constraints, inventory constraints, advertising constraints. How did you think about unlocking those roadblocks when you saw an avenue to scale?



08:48 --> 09:12 (David Wolfe)

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, 45 days credit maybe even from the beginning. 



09:12 --> 09:13 (Lucas DiPietrantonio)

It's crazy. And fulfillment on that?



09:13 --> 09:36 (David Wolfe)

They did all the fulfillment direct from time. The promise was to get it out of the door within 3 days, 3 to 5 days. It's, like, infinitely scalable. It was infinitely scalable. Capital became a problem when the cost of acquisition started to rise. 



09:36 --> 09:39 (Lucas DiPietrantonio)

Which was, you guys started in 2013. You sold the business last year or so.



09:40 --> 09:59 (David Wolfe)

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



09:59 --> 10:12 (Lucas DiPietrantonio)

ATG changes, and honestly, they make it, I'm curious just thinking about mattress companies. You know what happened to Casper and CLV on those customers. It's pretty much like, you need to be net profitable on the first customer. You have to be.



10:12 --> 10:12 (David Wolfe)

You have to be.



10:13 --> 10:17 (Lucas DiPietrantonio)

And you need solid solid margin because you're not upselling customers with pillows.



10:18 --> 11:03 (David Wolfe)

No. Absolutely right, and in fact, you know, my favorite diagram is the unit economics in any direct to consumer business. I would put my ultimate sales potential sales price, so, the advertised price at the top and then the discount, and then you gotta go through all the various other things, the transaction costs, and at the bottom, you've got COGS that you can't do anything about, and then the actual contribution metric, and then you get this gap in the middle, 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 business should try to make money on the first order. One hundred percent. So are you working with that gap?



11:04 --> 11:21 (Lucas DiPietrantonio)

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 numbers that you mentioned.



11:21 --> 11:47 (David Wolfe)

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 e-commerce. But it was no different from television before. Television the very first direct to consumer business I started, it was converting viewers of television programs to buyers of vacations, actually, and I had a show on the travel channel 3 times a day. 



11:47 --> 12:00 (Lucas DiPietrantonio)

So it's really interesting how similar those, you know, the ad programs for those direct response TV ads are, you know, the same methodology is input into direct to consumer Facebook ads.



12:00 --> 12:13 (David Wolfe)

When people build landing pages now, and I help a lot of people do that, the 7 step messaging platform that I use is the same 7 steps that I use for direct response TV.



12:14 --> 12:17 (Lucas DiPietrantonio)

Take us through that. What is that? 

12:17 --> 12:55 (David Wolfe)

I mean. It's really common sense. You know, the first step is really understanding the consumer need or desire. Is it really there, and that helps you identify your customer. But most importantly, if you're not basically, meeting a need or fulfilling a desire. You're not gonna sell anything. The second one is what's wrong with the current solutions? So you've always gotta have something that is a better way to fulfill that need than a current way, and the third one are the benefits. So you can't talk about your product in terms features or your service. You have to talk about it in terms of benefits, and there are only 3 sustainable benefits that count in terms of categories.



12:56 --> 13:37 (David Wolfe)

One is emotional benefits. One is functional. It works better than it did before, and the other is financial. But financial isn't sustainable either because someone can always come out with a cheaper way. The fourth area were the reasons to believe. So it's the science or it's the demonstration or some reason to believe. The fifth are the testimonials, it's like, if you don't believe us, believe people like you. The sixth is the value, how you're gonna present the value, and you've gotta not forget the call to action, and those seven things exist on landing pages. They exist in performance marketing assets. They exist everywhere. And if they're not there then you're not gonna sell. 



13:37 --> 13:44 (Lucas DiPietrantonio)

You're not gonna sell product. Do you have a way that you think about coordinating those steps, or they're literally sequential linear?



13:45 --> 14:38 (David Wolfe)

You know, interestingly, you have to know which of the seven steps you're working in? 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 gotta 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, 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 through the customer journey, you're also going through the messaging steps. So it really depends on where you're working in terms of the customer journey and also how well people know your product.



14:39 --> 15:13 (Lucas DiPietrantonio)

And I mean, that comes back to brand. You said something interesting regarding financial benefit. 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 a really low profile in terms of doing things like podcasts because they don't want replicability, and it takes time to build brand trust. Right? I mean, this happened in mattresses. Right? 



15:14 --> 15:32 (David Wolfe)

Yeah. 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 important, and I'm less cagey as I used to be and I used to be because I just feel. 



15:33 --> 16:02 (Lucas DiPietrantonio)

Well, I think brand now is it's more important when launching the venture because you don't have those acquisition economics. Before, if 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. It was almost like how quick are you to the punch to offering a 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.



16:03 --> 16:55 (David Wolfe)

Retention. Repeat. I was gonna say repeat. Yeah. But same thing. Yeah, look, I just got off a leadership team meeting in the latest venture that I'm running, Which is a fourteen year old startup. Fourteen year old company, but was, needed a massive turnaround in capital restructuring this year, Abel, and I showed them the new brand work that we're doing for next year, and the excitement amongst the team is just palpable. 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 wanna mean to your consumer, then you have nothing really, and you know, I felt like coming into the company, they had a wonderful origin story, an incredibly supportive customer base because it's mission driven.



16:56 --> 17:39 (David Wolfe)

It's all about empowering women. But I didn't really know what to expect walking into the store nor did other people. So we're now really intentionally working on brand. We happen to be Nashville based, so we're gonna double down on Nashville and presenting that and presenting what it looks and feels like, even to the team working in the company, gives everybody this new kind of spring in their step, a new feeling of excitement, and you know, the head of wholesale said, this is great. Our retail customers are gonna get this. They're gonna understand it. They're gonna get behind it, and we know that the consumers already love the company well, and now we can talk to a whole new group of customers about what Abel is because we actually have a story to tell.



17:40 --> 17:50 (Lucas DiPietrantonio)

So 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 are.



17:50 --> 18:32 (David Wolfe)

I had a company once called Journey 9, and I'd worked out then It was the 9th startup I had done, and I'm a few years on since then. So many, and I get as much of a kick out of being with young entrepreneurs at the very early stage of what they're doing and mentoring them now. Where I am now, and I was telling someone the story recently. It happens to be Katie Diasti at Viv for your V, and she had called me very early on in her startup, and, you know, interesting company.



18:32 --> 19:14 (David Wolfe)

You can go take a look at it. But she had a supplier that was really screwing her, that was giving her a minimum order quantity 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, and so I love that. So in terms of the companies I'm involved in as an early stage investor and adviser, I'd say it's thirty to forty today, and I spend time on maybe five or six of them and focus on one or two.



19:15 --> 19:54 (Lucas DiPietrantonio)

Yeah. The reason for my question is I'm kinda interested how you see consumer evolving, like the general landscape, having started in TV and original direct to consumer, moving to digital, now actually being in Abel as a retail first venture. So I'm interested to learn more about that. But also just, like, with the amount of reps that you've had. I wanna understand how you think about compounded learnings and then staying excited about going into the next venture and how that changes your perspective in terms of, like, what you wanna get out of what you're doing. Because you reach a certain point in your venture where you're like, you know, what am I gonna do with this, right? 



19:54 --> 20:43 (David Wolfe)

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 our 2025 plan for Abel as being 50/50 direct 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 more often direct. So I think, you know, part of that answer is that omnichannel is important. Finding your retail distribution is critical for the long term. In terms of my own focus, you know, that's a difficult one, really.



20:44 --> 21:24 (David Wolfe)

I know that I'm not ready to hang up my boots and stop right now. I think there's an enormous amount to learn, and I think, ultimately, the thing about experiences is, I mean, so there was a line in a musical Starlight Express that the trouble with experience is once you've got it, it's all you've got, and so, part of the challenge when you get older is how do you stay relevant? So you have this kind of thing going on in your head that I don't wanna try and be young, but I do wanna be relevant, and I think the relevance is the idea of a duck, and that is that.



21:25 --> 22:08 (David Wolfe)

It is incredibly hard work to succeed. Things 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. You've gotta inspire teams. You've gotta inspire your customers, and you gotta give this unflappable, non panicked. Most young entrepreneurs are ADD, if they're not actually ADD, they act like it. They're kinda going from one crisis to another because, you know, management of a startup is like being a fire chief. You're just putting out fires every day and so I always believe there's room for one more brand. I always believe there's room for one more great idea.



22:09 --> 22:43 (David Wolfe)

I think consumers are constantly looking for new and different, and you have to give it to them. You know? So you've gotta constantly innovate. You gotta take your core products, and that's what you're gonna see Abel do. Take its core products, its best sellers, and innovate around them, make them more interesting, give reasons to come back and buy another one or a kinda 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 people, and I think that, you know, you gotta have a deep understanding of the number. 



22:43 --> 23:09 (Lucas DiPietrantonio)

I mean, that's what the fascination was all about. There are so many new products. Your point is that, basically, human nature will always gravitate towards the new thing. There's always opportunity. 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, and so then it comes down to execution, and that's difficult, and that's half the battle.



23:09 --> 23:38 (David Wolfe)

Yeah, 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 and ideas that have because we all know what the chances of success are. I've always liked to feel that you in your advisory role and me when I'm advising, we wanna give people a three times better chance of success than they would have without us. That was always my measure. You know?



23:38 --> 23:47 (Lucas DiPietrantonio)

Your barometer for if you're providing value. It's tough when you're an adviser and you're, like, giving fractional time and you're getting some sort of compensation for it.



23:47 --> 24:50 (David Wolfe)

Yeah. But ultimately, people wanna say, you know, what can you do to help me, and I always would say, I think I could make it three times more likely that you'll succeed than fail. That still means failure is more likely than success, but I think I can help you, and you know, and how do you do that? You know, In a number of different ways that have become really important to me, I think I've told you this in the past, but I hate the idea of minimal viable product to the startup. I just think that, you know, 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, and ultimately, the whole way that socialization of good ideas works, good new products works, Is that people, when they unbox it to take a term 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.



24:51 --> 24:53 (Lucas DiPietrantonio)

They wanna talk about it. 



24:54 --> 25:34 (David Wolfe)

They wanna share it. And 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 means, you know, don't go until you're ready. Don't go until, many, many consumer product companies go before the things are ready, like customer service and, you know, even the box. You know, everything is important. Everything is important.



25:34 --> 26:14 (Lucas DiPietrantonio)

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 wanna talk about, and for very good reason. 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 buzz word right now is because It's intangible, and it's speaking to metrics that are actually important that drive people to purchase and wanna rebuy the product. But the more I think about community, it's like engagement. How much do people wanna engage with your brand?



26:14 --> 26:30 (Lucas DiPietrantonio)

How much do they wanna engage with your product? How much they wanna 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 to consumer brands that we're starting to see again.



26:30 --> 26:32 (David Wolfe)

I totally agree with you. I just couldn't agree more.



26:33 --> 27:13 (Lucas DiPietrantonio)

You and I have spoken about the changing role of the marketer or even the CEO too. In my mind, it comes down to an understanding of performance marketing, brand marketing, financial engineering or unit economics, how you're gonna integrate AI and then measurement. 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.




27:14 --> 27:27 (David Wolfe)

Yeah. So, again, it's a kind of timing thing. So let's talk about companies that are zero to a hundred million in revenue. Because I think once you get above that, you know, the CEO is really a. 



27:27 --> 27:29 (Lucas DiPietrantonio)

It's like a figurehead. Reporting to the board.



27:29 --> 28:15 (David Wolfe)

And they're process driven, and they're like a human resources person, really, because they're constantly dealing with people issues, and you do that anyway even on the way to a hundred million. But so let’s assume we're talking about the operator seat. So the reason why I think it's gonna fall into the hands of marketing, whereas, historically, it might have gone the way of the CFO In terms of leadership, is the idea of inspiration and gut feel. 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. 



28:16 --> 29:03 (David Wolfe)

and so when we talk about a CMO becoming a CEO, it isn't because their left brain is or it's not one side of brain or the other that is important it’s that to be an outstanding marketer today, you have to really care about, you know, it's three in the afternoon, whatever time it is. Where do our sales 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? That's what great marketers do today. They're much more involved in the detail than they are about, you know, the strategy, but the strategy is important too. So I don't think you can ever turn a finance person into an intuitive and secretive marketer, but I think that you have to turn marketing people into finance people. 



29:03 --> 30:04 (Lucas DiPietrantonio)

We're going through this exercise right now. So, traditionally, you know, in our consultancy, 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 P&L. They can cut unnecessary technology costs. They can refactor your team structure to give you more juice on margin as ad efficiency and advertising costs get more expensive. We're having this discussion now where it's like, that analysis for a specific channel or 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. It's easier to teach someone finance than it is to actually teach them how to roll up their sleeves.



30:04 --> 31:06 (David Wolfe)

I'm smiling because, you know, Abel is a small company. You know, we're not yet twenty million dollars in revenue. But I have a team, it's incorrectly called the promo team because It's more like the campaign and promotional team, but it's a creative person, It's the digital marketer, paid media, and it's the person that has all the influences and partnerships, and above them, they have a senior marketing person who's all about insights, and every week, we look at last week in terms of the actual numbers. And not just the top line and bottom line contribution, but everything in between, the AOV, the conversion rate, everything, and we talk about where we are, and then there's this kind of team that are the team that has to work to improve those numbers next week, and if they don't understand the numbers, the reason why Abel has improved is because things like the return rate has gone down. The AOV is creeping up. Our acquisition cost is coming down. Those are all numbers.



31:07 --> 31:11 (Lucas DiPietrantonio)

They will materially influence the outcome that you want. 



31:11 --> 31:14 (David Wolfe)

But the way to change them is marketing. You can't change them. 



31:14 --> 31:35 (Lucas DiPietrantonio)

Well look at conversion rate, you know, or revenue is just traffic times conversion rate times average order value. So, when you do, you're a consulting guy, you know, like a MECE analysis, root cause analysis. 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 click. 



31:37 --> 32:17 (David Wolfe)

And then convert. So we were looking at our plans again, this morning for holiday this month, Black Friday, Cyber Monday, Cyber weekend in particular, and the date, what day do we launch the campaign, and what day 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 gonna see. You're gonna see our traffic going up and then coming down, and then you're gonna see our conversion rate coming up and coming down. 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 are swimming, and you fish where they're eating.



32:17 --> 33:04 (David Wolfe)

So that's what you have to do, and I looked at it, and I said, we're planning this campaign too late. Because go look at last year when the traffic started to build. That isn't us being cleverer. That's just more people starting to look around for deals for Black Friday. So we have to be there. So everything is a science, and then within the science is this art of how do you create an ad that's gonna get more people, is the hook good? How are they gonna click? Is the landing page gonna drive them to where we wanna be? Is the AOV gonna be right? You know, if we see our AOV starting to drop. Even now, like, over a weekend, if our AOV this weekend is less, then it must be something we did on the page. We must have driven people to purchase it. So everything is scientific, and yet everything is creative.




33:04 --> 33:47 (Lucas DiPietrantonio)

So a lot of these marketing challenges are, they're human problems too because it's about who is running the programs, and frankly, how much transparency do they have into where you wanna take the business. 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, 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 conversation, really, and explain to them how some of these things work. So they know how important their job is to your bottom line.



33:47 --> 34:44 (David Wolfe)

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 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, because, you know, people need to know, and also, they need to know that we had a pretty good month last month. You know? Like, we're on a fiscal calendar, so our month has already ended October, and we didn't hit the top line that we wanted, but we were 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, and I don't know when this is going out, so I'm not gonna talk about that today. Probably two, three weeks. So we'll still be living the world event that took place, and our sales were hit. You know? So that's gonna happen. You can explain that away, and then you just move on.



34:45 --> 34:55 (Lucas DiPietrantonio)

It's empowering when you're in a position and you know all of the metrics that drive revenue, and you probably get into a business now, and you're like, alright, I know how to fix this. I know how to turn things around.



34:56 --> 35:31 (David Wolfe)

Yeah. I mean, I call it flying blind, or you know, when I got involved with the latest company I'm running, Abel, first company ever in my career since business school a long, long time ago. I went young to business school. Where I haven't hired the team that I'm working with today. I'm working with 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. How are we really doing? I went back and I restated historic losses because.



35:32 --> 36:05 (David Wolfe)

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. But saying, you know, somewhat realistic goals and then going after them and then being brave enough to say how we're doing against these goals, and sometimes, like, September. It was great. We were ahead of them, and sometimes, like October, we're a little behind, but not disastrously behind. 



36:06 --> 36:20 (Lucas DiPietrantonio)

So switching gears here. You've had a couple of successful exits with most notably, The Fascination, Lisa. How do you prime the business for some of those events? Were they active goals you were working towards, do they kind of approach you, and you know, how do you think about that?



36:21 --> 36:23 (David Wolfe)

Yeah.



36:23 --> 36:32 (Lucas DiPietrantonio)

And I guess as an add on, and I know I keep adding these really long questions. How do you think about building value in the business? Equity value that gives you optionality.



36:33 --> 37:15 (David Wolfe)

Yeah, so both of those situations and many before are learning experiences. Because I would say 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 the jury stood out on The Fascination because it was a largely equity based deal, but, hopefully, everyone will be happy with it in the long run, and certainly, in Lisa, I'm disappointed that I wasn't able to satisfy everyone in the process. That was a matter of timing, really, because, timing is so important in an exit. I mean, building a company for exit.



37:17 --> 38:09 (David Wolfe)

You can do all the things. You can put all the right things in place, but, ultimately, headwinds happen. 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. 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, when I work with young founders today, I talk about, I don't really like the term bootstrapping, but when you choose your investors and when you raise capital, you have to be sure you understand what you're doing, and I think a lot of people raise money at valuations that are gonna be hard to please everybody.



38:10 --> 38:44 (David Wolfe)

Because as you know, if you raise money at a very high valuation, there's something that's gonna come with that, and I don't wanna 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, and what looks like a home run isn't necessarily a home run for everyone. So what have I learned? I've learned a lot of things that I think I pass on to people, which is, 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. They get better terms than the early investors.



38:45 --> 39:34 (David Wolfe)

Get your timing right. Don't be greedy. If you want an exit, exit. But if you don't, build a business forever, and you know, what 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, 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 I've experienced the same thing. I mean, building a business is so hard. You always think tomorrow could be the last day. You always do.



39:35 --> 39:40 (Lucas DiPietrantonio)

What keeps you motivated to jump right back into it? Have you ever taken time off?



39:41 --> 40:14 (David Wolfe)

Yeah, many years ago when I sold my first business, It's called the Vacation Store. I had forced time off because they kept me on as president, but it took me about 3 months to realize they didn't really want me around, and I wasn't really able to work. 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. I thought I was gonna take time off, when we sold, when I was coming off the end of the earnout with The fascination, and then you know, I stepped into right into Abel. 



40:15 --> 41:05 (David Wolfe)

So 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've done all the things. I said when I turned 60, and I'm over 60, when I turned 60, I wrote to my kids who have grown successfully in their careers and said the one thing I will say to you is say yes to everything. Because I look around my friends today, and I see them with their bucket lists and things that they want to do, and most of the things on their bucket list are things that I've already done, my wife and I have already done, and so, I think that work life balance is a bit of a myth, but it's also everything. If you love what you do and you love your work, you just gotta live life around it.



41:05 --> 41:07 (Lucas DiPietrantonio)

You engineer your own balance out of it.



41:07 --> 41:49 (David Wolfe)

Yeah, you absolutely do. So, I'm as enthusiastic today. I believe I'm as enthusiastic today as I was when I started out on this crazy journey all those years ago, 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 one Abel, I'm working with an extraordinary team. I'm having a huge amount of fun, and they're an amazing group of people I'm enjoying working with. So, that's how it has to be for you to get up in the morning, do what you do. 



41:50 --> 41:57 (Lucas DiPietrantonio)

You obviously have a lot of exposure on the consumer side. What consumer verticals are you looking at these days and are excited about? 



41:57 --> 42:04 (David Wolfe)

Like many people, I've moved to the platform businesses now. You know? I think that, commerce enabling businesses are critical.



42:05 --> 42:13 (Lucas DiPietrantonio)

Even yeah. 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.



42:15 --> 43:02 (David Wolfe)

If you saw my inbox as an operator or 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 gonna call out the one that I picked because it would be unfair to everybody else, and I don't have any experience yet. But, you know, 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 as an investor I've picked a few. Again, and I went back to what I said at the beginning, the people, the idea, the inspiration, how smart the people are, whether they understand they gotta work with a team.



43:03 --> 43:43 (Lucas DiPietrantonio)

It's interesting when you draw similarities and parallels between consumer products and then commerce technology businesses, B2B, Saas. In a consumer business, 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. It's different in the software space, especially when you're seeing monetization of software, and people can come up and build the exact same thing and offer it cheaper. It changes the equation of, like, what software has always been product led. It's like, we need to build the best product. That's how we're gonna create the most loyalty. That's tough to do in, like, a Shopify ecosystem.



43:44 --> 44:00 (David Wolfe)

Yeah. I honestly don't know the answer to that. I mean, I've been incredibly lucky. To name one, I don't know if you're aware. It's not a direct competitor of yours by any means, but the creator agency Whalar. 




44:01 --> 44:03 (Lucas DiPietrantonio)

You told me about that. I haven't seen their stuff, though.



44:03 --> 44:20 (David Wolfe)

So they're huge now, 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. 



44:20 --> 44:24 (Lucas DiPietrantonio)

Wait that’s a consulting business that does create a production.



44:25 --> 45:28 (David Wolfe)

No, they manage talent. They do everything in the creator economy. From managing talent to big brand campaigns, and now they've even built something that you mentioned earlier. They built a measurement tool with Nielsen actually to actually measure in accurately the impact of Creators. I mean, I don't know how you pick from one to the other, but you've gotta love commerce enabling businesses. How you pick the winners, I'm not sure, and then in terms of categories, I'll always say this. I always think there's room for one more lifestyle brand. So if you can find a niche 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 niche for yourself, then you know, we are always gonna be astounded by where did this brand come from.



45:29 --> 45:46 (David Wolfe)

That's gonna always happen, and it's gonna be brilliant people, visionary people with great ideas and going back to those seven steps, understanding the need or desire that they're fulfilling and then doing everything just right, and the quality of the product, It's always gonna be critical. 



45:47 --> 46:01 (Lucas DiPietrantonio)

So last couple questions here. Let's say you're starting a consumer brand from scratch again today. Where are you acquiring customers? Where are you going out? You built a great product. Where are you marketing it? What's your playbook?



46:02 --> 46:49 (David Wolfe)

Yeah. So the playbook is you know, I remember when I started, Lisa, my business partner, who came from a more traditional background at the time, he used to say to me, how are you gonna build this business? I said, we're gonna start with influencers, and he'd say, well, what's an influencer? Because it was back in that day when no one really were 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 we could call them, I mean, even  performance PR, the kind of affiliate influencer space, people with audience, you've gotta start with how are you gonna attract audience because people are on their phones every day.



46:49 --> 47:39 (David Wolfe)

They're reading certain things. They're following people. That's gonna be critical. So that piece of the jigsaw is critical, and then how you amplify that and the assets that you create is critical too. 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 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. 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.  



47:39 --> 47:41 (Lucas DiPietrantonio)

How can I create the best creative to resonate with you?



47:42 --> 47:52 (David Wolfe)

You gotta go where they are, and you gotta create creative, and then ultimately, it's all the same stuff again, gotta have a great product. You gotta have everything else right.



47:53 --> 48:37 (Lucas DiPietrantonio)

Yeah. I agree with that. I think you need to understand how you're gonna create, there's more content today. You need to just be exercising that muscle daily and understanding what people wanna consume, and It needs to be less organic. I mean, more organic these days. The other thing I would say is, brands need to be building a business that's more enduring, and they need to understand that consumers, they have so many more options today, especially digitally than they did when you lost Lisa. So you need to be playing to win the long game, win the marathon. That happens through, you know, hand to hand combat, through content over, you know, a more prolonged period of time. It's not just a lot about, you know, launching prospecting ads. 



48:38 --> 49:17 (David Wolfe)

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 off 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, 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 it anymore. We Just gotta find that audience.



49:17 --> 49:39 (David Wolfe)

We gotta partner in different ways. We gotta 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.



49:40 --> 49:51 (Lucas DiPietrantonio)

Yeah. I like that. That's a good place for us to cap off the conversation. One thing I'll say is just tell us about the book. I know it's not out yet, but what are you writing? When can we expect it?



49:52 --> 50:58 (David Wolfe)

So I'm writing a book called, Unboxing, and the book is about, I mentioned it earlier, the relationship between anticipation and experience. So, it's this idea that in life and in marketing, everything that we do is whether you've got plans to get one. One of my good friends is getting married this weekend, 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 exceeds it, 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, it's not gonna 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 I hope it'll make you smile and laugh. 



50:58 -->:51:10 (Lucas DiPietrantonio)

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. 



51:10 -->:51:11 (David Wolfe)

Thank you. Thanks for having me.

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