AI transcript
0:00:04 I’m glad you guys invited me here, because you’re slumming it down with like the E_com millionaires again.
0:00:09 This is like a make-a-wish type of episode for us You. know?
0:00:46 There’s really two things that I need to talk to you about. There’s two reasons you’re here. Number one, I cannot believe that you sell hundreds of millions of dollars of this stupid little wallet. This is unbelievable to me. It’s been blowing my mind ever since I found that out. And now uh uh you’re here finally to give us some answers. And two, um I think you’re very opinionated when it comes to E_com. You don’t hold back, you don’t pull punches. And so we like that. We like spicy guests. And I think you’re you’re gonna be able to have both of those things for us. [SPEAKER_TURN]
0:00:51 I think you sh you should smack Sean right now for calling it stupid little wallet. Did you hear that? [SPEAKER_TURN]
0:00:57 Stupid little wal I’m just trying to get ’em fired up. I told you he gets fi he gets fiery, he gets feisty. So I wanted to l you know, stir the pot a little bit. [SPEAKER_TURN]
0:01:03 You better play nice. I’ll dock your your E_commerce brand. Like uh you know he’s got he’s got some uh [SPEAKER_TURN]
0:01:14 I’ve been a Ridge wallet owner since two thousand and sixteen or seventeen. You know Ridge uh sponsored the hustle. [SPEAKER_TURN]
0:01:31 Well dude thank, you for the support. And you guys were super early for newsletter sponsorships. Like we probably run like a pretty big sponsorship like ecosystem now. We sponsor like a ton of newsletters like you know YouTubers obviously. You guys were like one of the first people selling that ad space. So [SPEAKER_TURN]
0:02:00 Yeah and you know what I learned about your guys’ industry? Well just any marketer who’s savvy is people like you and Sean. You guys know how to find early interesting stuff and you take all of the risks and you and you just you understand the arbitrage like the under-priced opportunity. And so we had a lot of smart people who would buy these ads with us and I’m like I can’t believe they’re doing this. It’s so unproven. And then I realise that that that’s like the theme of a smart marketer which is throw dollars at a variety of things and then exhaust it once once everyone else comes and finds it. [SPEAKER_TURN]
0:02:27 Yeah it’s ad arbitrage right, Like. everything’s attention. So if I’m giving Facebook at this point fifteen dollars per thousand views and if I can get a better price off of newsletters or influencer or YouTube like, it’s all just an attention economy. And it’s so funny to watch that like pendulum swing back. Linear T_V_, like the T_V_ your parents probably watch, is so cheap to run ads on because nobody’s buying it. So like you know uh I’ll probably spend [SPEAKER_TURN]
0:02:29 What’s like the C_P_M_ of linear T_V_? [SPEAKER_TURN]
0:02:49 a dollar, like. It’s like ’cause there’s all these channels right, there’s been like you know thousands of channels that have come out that like have eight hundred people who watch them. So like you just buy like big blocks of random ad space that are just very male male targeted. Um and like yeah literally like a dollar to reach a thousand people. [SPEAKER_TURN]
0:02:52 Sam do, you know what our best performing ad channel is, our marketing channel for my brand? [SPEAKER_TURN]
0:02:54 Postcards. [SPEAKER_TURN]
0:03:06 But you would not believe it Postcards. It’s not super scalable like you can’t just like spend to infinity on it. But you know you put a dollar in you’ll get eight or nine dollars out of revenue. It’s amazing uh, co [SPEAKER_TURN]
0:03:37 a a simple product. It wasn’t like some some Mark Zuckerberg you know innovation or anything like that. And you’ve scaled it up, you built it brick by brick. But you said you started in the serv didn’t like a side of c sort of a sweaty services business. You didn’t start the company and you didn’t start off in the product game. So can we just do your story for a little bit and then I wanna brainstorm other D_C_D_C_ ideas with you afterwards. But first let’s do let’s do your story. [SPEAKER_TURN]
0:04:07 Sure. Um yeah, you got that right. Uh the show’s my first million. So I made my first million dollars off of an ad agency. So you know, Facebook ads came out in twenty twelve. That was like when it was probably like an open beta, anybody could join. And I learned how to do Facebook ads. I worked at an a agency with my C_M_O_ Connor. And the agency sucked. Like you know, it was two hundred two hundred people working there, probably five hundred clients. Nobody would let me see. Yeah yeah, I was just an employee. And then I
0:04:35 like oh, I should do this. I could do a better job of this. The ad agency I worked at, the average client was around for four months. So imagine that sales cycle. Like it takes sixty days to on-board ’em. They’re they get thirty days’ worth of work and they’re like this sucks, and then thirty days to off-board. The average client was four months, right. And I’m like imagine if I just did this, but I kept ’em for a year. I’m like I’ll make so much money, right. So I start an ad agency, I have ten clients, um [SPEAKER_TURN]
0:04:40 So you’re you’re you’re saying this like it’s simple. So you you’re working at a ad agency. How old are you roughly at this time? [SPEAKER_TURN]
0:04:42 I was twenty eighty two. [SPEAKER_TURN]
0:04:49 You’re twenty two years old. You’re not like a marketing expert yet, right. You’re like, you know, you’re learning on the job, I would s assume. [SPEAKER_TURN]
0:04:52 Yeah yeah, but like it was
0:05:09 it’s kinda like TikTok shops is today. Like nobody’s an expert, right. Like it’s it’s a brand new thing that came out. Like I was we’re probably two and a half years into Facebook ads. People still thought Instagram followers were the most important metric. And they’re like wanting to run campaigns to get followers, right. [SPEAKER_TURN]
0:05:20 And was your agency super bullish on Facebook as a channel? Or it was kind of like this new thing that you know you got really interested in ’cause it was new. But th w was the whole agency like hey this is gonna be a really big deal? [SPEAKER_TURN]
0:05:50 Yeah, it was like a cookie-cutter D_ to C_ agency like in the heyday. This is probably like twenty fifteen, right. So uh Facebook what Facebook and email was the services we were providing. Like there was no other services. Maybe there was one guy doing Google ads, right. But it was really all in on Facebook as like this brand new channel. And if I could go back in time, I would have been even deeper into Facebook. Like the biggest challenge with Ridge uh then we we’re skipping up a couple of years in the future. But like we try to diversify too fast. Like I was
0:06:01 a newsletter sponsorship, and like they worked, I should have put all of my dollars into Facebook back then up until like twenty twenty Um. I would have just been better off putting as much money into that as possible, but [SPEAKER_TURN]
0:06:05 And Ridge was one of your clients. Were they an early client? [SPEAKER_TURN]
0:06:36 Yeah so I had ten cl so I’m at an agency, it sucks, I think I can do a better job. Me and my C_M_O_ uh Connor, we ended up starting an agency together, we take ha ten clients with us um, eight of them you have never heard of okay, like they’ve just you know gone extinct uh, one of them was Ridge and then one of them was actually Mudwater which has actually gone on to crush it like, we did their Google ads or at some point like in twenty sixteen or whatever but yeah so we end up taking Ridge over
0:07:06 their son best friend, they start this business, they get to like five million dollars a year in sales and they are you know like the dad was a special ed teacher, like you know Daniel was gonna go to go be an accountant and this thing just kinda caught fire and he really didn’t wanna be an accountant. So like their expectations for the brand when they got to five million dollars a year they’re like this is the best thing that’s ever happened, right. And me and Connor being hella young and I’m like I think we can get to fifteen million dollars a year. I think we can get this thing to thirty million dollars a year. I remember uh telling
0:07:36 Connor, I’m like, I think we can do a hundred million dollars a year selling this wallet. And he looks me down the face and he’s like, there is no fucking way in hell we’re gonna do that, right. This was like twenty seventeen. But they didn’t really wanna run it all that much anymore, right. Like they didn’t wanna manage people. So I’m like cool, we’ll do everything else. So my agency kinda is gets built around running Ridge Wallet. Uh we do their customer service, we do their product importation, we do all of their marketing, we do their web dev, uh and then I’m charging ’em like two hundred thousand dollars a month. Like all of the money
0:08:04 coming from Ridge Wallet. They ended up being like sixty percent of all agency billables for my for my tiny agency. And at a certain point they’re like hey we should just merge, right. Um so me and Connor take an equity stake. Everyone in my agency just goes in-house to Ridge. I ended up selling off the agency to one of the people who was running it and that was probably twenty eighteen and since then Ridge has gone from you know thirty million dollars a year to over two hundred. [SPEAKER_TURN]
0:08:34 That’s. amazing What. I what I love about that story is that it sounds like when you’re running the agency like almost like nobody would in in a business school would recommend hey you’re running this marketing agency and then for one client you’re gonna start doing customer service you know logistic support all all these other things. It sounds like wrong to do that. It’s like how one customer is gonna make up sixty percent of your billables. From a business school perspective that would be like a bad move. But Dharmesh said something once on the podcast he goes
0:09:01 with my first business ju he goes I I got I got mixed up later. He goes just ’cause I was ignorant doesn’t mean I was wrong. Meaning I didn’t know the right way to do it, but my instincts actually were leading me in the right direction. It just wasn’t uh uh uh you know I didn’t have like some sophisticated game plan and maybe it wasn’t typical, but it was my instincts were correct. And it sounds like your instincts were correct that you should just keep leaning into the ridge thing even though it was like maybe you’d not want a normal agen m normal marketing agency ever would have done. [SPEAKER_TURN]
0:09:31 Most clients suck. Like if you guys have ever done client work, like most clients fight with you, they don’t pay you, like they’re always trying to fire you, right. And Ridge as a business was ran by really cool guys who didn’t want to take any like rains away from us. They were very happy with the five million dollar a year business and they’re like we could always go back to shipping the orders ourselves, right. Like I mean the the guys are are like you know Buddhists, like raised raised Buddhists their whole lives, I think that’s part of it. But they were very much like hey this is a good
0:10:01 these guys are growing this business, let’s give them more responsibility. And you know, you can’t really exit agency businesses for all that much, right. One reason why we went all in on Ridge and did the merger is like an agency’s probably worth maybe one X_ client contracts. And they maybe at the peak it was two X_ client contracts, right. So like if your client’s you know if you have a guaranteed million dollars in revenue you might be able to sell it for a million or two. Where Ridge at the time were like fucking ten billion dollar a bi year business right here, we’re gonna be
0:10:06 grow this thing to the fucking moon Uh. so it just made sense to put all our chips in that basket. [SPEAKER_TURN]
0:10:19 What was the metric that you saw that gave you the aha moment where you were like alright, they’re doing five million now, but this could be thirty, this could be a hundred. Was there one or two metrics or was it just a guess? What what was that research process like? [SPEAKER_TURN]
0:10:50 It just it just seemed like they could always put another dollar into Facebook and it could work, right. Like the limiting factor wasn’t like uh marketing or awareness, it was like uh the operations of the business, right. We ended up like we had a year where we didn’t have any wallets ’cause we couldn’t keep ’em in stock. So like we went from fifteen million to eighteen million one year and that was just because we couldn’t make enough of the fucking product and I’m like you know so often demand is the thing that stops these brands, like you can only get to so big of it as ham and that wasn’t the case here. Uh you know we we did like a [SPEAKER_TURN]
0:11:09 wearable and it was so hard to get people to buy the wearable. Like the cack on Facebook was four hundred dollars. Back then okay, it was like so fucking hard to get people to buy these wearables where the wallet it was like a six dollar cack. Like we could just put up a new ad and they were just static images and they were just selling. So that was the metric man. [SPEAKER_TURN]
0:11:27 That’s like an interesting um process because a lot of people, myself included, will say focus focus focus, get it right, make it great, it’s gonna take a decade plus, but your story is more so like I tried this, I tried this, I tried this, none of it worked, this thing was clearly the winner, I should go all in on this. Is that what your recommendation is? [SPEAKER_TURN]
0:11:58 Well, my recommendation as a person trying to make it is you should make the best decision at the time. So whatever the facts are, when the facts change make, a different decision, right. Uh strong beliefs held held loosely. So like I’m like I’m at an agency, I could have just like did that grind and be like I’m gonna be a V_P_ at this agency when I’m twenty six, I’ll make like two hundred grand a year. But I was like no, these people suck, I think the best decision for me is to just do what they’re doing better, right. And then from the agency to Ridge, I’m like
0:12:18 an agency business, I’m like running an agency sucks, the rich thing seems to be going better, so I should just do that instead. I should find a way to to to encrench myself inside of this business. And then at Ridge it was just like I mean for so long we did not launch any other products, for eight years it was just selling more of the wallet, because that’s what was working. As soon as it started to get a little hard, then we pivoted to everything else. [SPEAKER_TURN]
0:12:45 Which is funny, because I would have thought early on I would have the uh uh a paralysis of analysis when I’ve been like well there’s not that many wallet like you’re like if you told me two hundred million dollars a year in revenue, I would say well you’ve you’ve sold every man in America a wallet, like there are no more wallet buyers. You know what I mean, that’s like one of my uneducated self-limiting belief a little bit would have been on that. If you said two hundred million a year, I’m gonna be like well there are no wal there are norm no more people who need a wallet. [SPEAKER_TURN]
0:13:15 it did it’s a weirdly big TAM like the reason why like we in you know in retrospect I could tell you all the reasons why Ridge Wallet worked it’s, a ten billion dollar a year TAM okay, and like most of that is luxury brands, L_V_M_H_ sells like four billion dollars a year in men’s wallets like curing they own Gucci they sell a ton of men’s wallets but, then tapestry which owns coach coaches a billion dollar a year in men’s sales. So that’s men’s accessories no, men are buying those products they’re, all gifts that are given to ’em and
0:13:17 nobody’s ever excited about getting those products.
0:13:47 So the reason why like I I’m very public that I think rich can get to a billion dollars in revenue is because tapestry has a men’s business doing a billion dollars a year in revenue with nobody loyal or passionate about that. So I’m just gonna make whatever they make uh in all of our cool colours and our cool materials and you know uh I think it’s been so sexy to be talking about tech and A_I_ these past ten years right, or you know tech for ten years A_I_ for ten months. But I was at like the all-in summit and I’m looking at those
0:14:17 guys and like the the products they’re talking about exist inside their phones, right. Like they exist inside some server somewhere. But they’re all wearing fucking cool suits and watches and leather belts and I’m like okay I’ll just sell ’em all that shit, right. Like I’m just gonna sell like all the like the most practical thing ever. Because also smart people don’t enter the space, right. The reason why Ridgewall was able to be so successful is because we’re the only people running Facebook ads for wallets. Like n then there’s been a bunch of other like people who’ve started up the like
0:14:31 and have tried, they’ve all ended up going out of business because it’s really difficult to get right, right. Like there is no repeat business. You can’t like believe that the L_T_V_ will come save you later. It’s very much like can you tactically acquire customers profitably every single day. [SPEAKER_TURN]
0:14:54 Hey uh hey p Brown-Shawn White. Shawn’s got that immigrant emi energy that I love. He’s got you know what I mean like, I call it I call it a a Korean s a Korean convenience store owner energy. You know it’s just like there’s not like too too much thi overthinking it. It was like well you guys are all wearing this, I’ll just sell that. You know what I mean Like. [SPEAKER_TURN]
0:15:26 So you you know uh Munger has these great quotes where he’s like his his main thing is like instead of trying to be brilliant just, avoid stupidity or he’ll be like you know the best thing in the world is stupid competition and we just have not much and stupid competition. It sounds like that’s part of what in retrospect made Ridge work was you were you were like hey look we took this simple idea and um there’s not a lot of other really smart you know D_C_C_ marketers that were doing this and so we were able to to make hay. [SPEAKER_TURN]
0:15:56 Yeah, totally, man. I mean and and to this day, the best D_C_C_ marketers are working on stuff like you know A_G_ one, right. Like they’re selling supplements. And it’s because it’s a better business. Like undoubtedly, if there’s an L_T_B_ tied to your business, like it’s going to be better, it’s gonna be more valuable, it’s gonna trade at a higher multiple. But the other thing is like the, best marketers have have more or less left the industry, right. Like in twenty twenty one, running an e-com brand was incredibly cool. It has gotten less cool every single year. So
0:16:24 There’s less people doing it. There’s less voices. There’s less people talking about it. And it’s ’cause it’s fucking hard. Like I I’m n unjokingly called like the the blue-collar work. It’s like, you know, everyone wants to be shipping cool A_A_A_ products, or everybody wants to be shipping, you know, something that isn’t physical boxes to people’s doors of products you actually have to like make. Everyone wants to build, you know, the services of whatever. So anyway, yeah, over the past four years it’s gotten really uncool to do what I do. [SPEAKER_TURN]
0:16:42 Do do do you guys on on two hundred million in revenue, are you able to make uh good cash flow and profit or, you know, I know so many friends who have these companies and their numbers are huge, but they cash is always an issue. Are you able to manage this well and uh or at that scale do you still struggle? [SPEAKER_TURN]
0:17:10 I think the reason why you guys asked me to be here is to talk about the fact that you can in fact make a profit running e-commerce brands. So uh Ridge has never raised any money. We have no debt. So every dollar in this business every, dollar in my balance sheet is profit that has been reinvested. Uh I’ve been able to make millions of dollars a year for the past couple of years running this business. So yeah, it can definitely be done, man. Like I I I bought a house in L_A_ directly because of selling wallets on the internet. [SPEAKER_TURN]
0:17:26 Give us a sense of the timeline. So you said kind of like, I dunno, it was twenty sixteen ish right, when you when you guys merge or you took over the brand. But can you just give us kind of like a year one five mi uh five million when you when you started working with them, then it went to f ten, then it went to twenty two, then it w you know, give us a timeline. [SPEAKER_TURN]
0:17:57 Yeah. And I’m fucking horrible at timelines. So I I’ll I’ll give it my best. It’s basically been it’s like a fifty percent keger since I started working with the business. So I think they did a kick-starter in twenty thirteen. The first year they do like a million in re in revenue. In twenty fifteen they probably do two or three. When I meet them twenty sixteen they do like five million bucks. So I think it went from five to ten to fifteen to eighteen. And that’s like the hardest year of the business. When it went from fifteen to eighteen,
0:18:12 was like we had no inventory with this massive fucking tax bill, that sucked That. was probably twenty eighteen or nineteen when that happened. Twenty twenty we do fifty million dollars. So I might I m that must have been twenty eighteen. It must must have been thirty. So eighteen to thirty to fifty.
0:18:19 And then we then the fifty this the Covid year. So it went from fifty to a hundred. And then it’s been like
0:18:26 Yeah. I mean l last year was a I’ll just say a multi-hundred million dollar a year. So [SPEAKER_TURN]
0:18:41 let me let me re let me let me recap that for the listener. So you started in fifteen I didn’t hear what you said, but in two thousand sixteen five million and then each year for that was five million ten fifteen eighteen thirty fifty a hundred with last year being multi-hundred. That’s incredible growth. [SPEAKER_TURN]
0:19:12 Yeah. Uh something like that. Uh so it’s been super fun man. Um th you know and Sam you brought up have I sold uh every wallet in America? That was like one of your concerns right, Uh so like I said it’s a massive tam right, and I always say that we’re a great uncle gift. Like you guys are gonna go to Christmas or you guys are gonna go to fucking a birthday or whatever and you have to buy some guy in your life a present and you don’t know his size right, The Ridge wallet’s a perfect price
0:19:42 point, you can get one on sale today for like seventy six bucks and it is size-less and like every guy in your life you’d be like hey look it has your favourite sports team on it or it has carbon fibre whatever, else right, so it’s a perfect uncle gift and most of our products are probably sold as gifts right, some woman in their life buying it for some guy in their life and the wallets are about half of revenue right now, the other half of revenue is all the other stuff we’ve launched so, the biggest unlock we’ve ever had was in twenty twenty two we started selling men’s wedding bands and
0:20:00 once again this is a category where people thought I was so fucking dumb to sell men’s wedding bands, they’re like it is a commodity good, like who the hell is buying this, the first year we do eight figures, it is the highest margin, fastest growing part of my company is selling men’s wedding bands on the internet. [SPEAKER_TURN]
0:20:12 So l let’s let’s talk about this ’cause we’re in this group chat that you you have which is like a bunch of bunch of D_V_C_ brands, I don’t I don’t know what the cut-off is, I think I’m like below whatever the cut-off was supposed to be but, you let me in which, was nice of you and [SPEAKER_TURN]
0:20:13 uh like the charisma higher. [SPEAKER_TURN]
0:20:44 Yeah, exactly. I’m the personality hire. So so I um uh you you talked about like going into new categories and like the wedding band was obviously a smash success. You’ve said the wearable thing maybe wasn’t as big of a success. And you had this kind of interesting way of looking at it ’cause I just thought Ridge Wallets, that kind of like the the sort of carbon fibre metal wallet company and you were talking about like Mont Blanc and you were talking about these other almost like luxury accessory brands and that was the vision you had for the company. When did that vision kick in? Um so like
0:21:03 when did you reframe what the company is? ‘Cause I think entrepreneurs we hear stories where somebody already has the vision and they already have the right frame and it sounds beautiful and big and and really appealing. Um but at the beginning they don’t always have that, you know. Mark Zuckerberg there’s a video of him on a couch somewhere and somebody’s like are you gonna expand past colleges? He’s like nah that wouldn’t be cool.
0:21:17 And now he’s like got satellites above India giving people internet so they can use Facebook. Like you know your vision expands as you grow. Um when did your the vision kind of change or when did you reframe it? And secondly how do you think about going into new categories? [SPEAKER_TURN]
0:21:47 Yeah, well, I’m a very paranoid person. So like in twenty eighteen I’m like this is gonna end. We have to fucking find some other shit to sell. So we got into backpacks and phone cases and all this stuff pretty early in twenty eighteen. Um and we the first year we did like four million dollars in backpack sales or maybe it was three million. It was like a big chunk of revenue and we cancelled that program ’cause I was too stupid to know that was like actually a good amount of backpacks. I was like I’m like the wall is doing twenty million dollars, how come we can’t do twenty million dollars in backpacks? In retrospect we’ve sent
0:22:17 launched backpacks, so I was just too stupid, right. So we were always looking for new products to sell, mostly because I was worried that I was gonna sell every wallet to every man in America. But as you learn more about the industry, like the very common thing is very large hold-cos holding lots of accessory brands. Like L_V_M_H_ is just an accessory brand. Like everything inside their portfolio just sells accessories mostly, to women, but there are occasionally pop-ups of like very strong men’s accessory brands. Mont Blanc is owned by Rich Mont, they own Cartier, like that is the strongest men’s
0:22:47 S_ three brand, and they do five hundred million dollars a year, you think it’s gonna be pens, pens were like eighteen percent of revenue. It’s mostly just like small leather goods, right. And it’s across the world, people buy each other gifts, like wallets and backpacks and belts and everything else. Um so it’s there’s a playbook here, it’s like you have to find a group of customers who like you, you have to like continue to make products that they like and sell it into them, and I am more ruthless with product expansion than I think a lot of brands are, and I think more people
0:23:14 should just try. They’re really worried about hurting brand, and I’m like your customers never fucking think about you. Like you’re lucky if somebody is mad you launched something. Like you know, I always go to uh like BIC is one of my favourite brands, like they make lighters and they make pens and they make razors, right. And we buy all of those products independently, and they’re best in class for both of them. I d I didn’t even think of the I didn’t even think of those three uh yeah. But you say that, I’m like oh, it’s same. [SPEAKER_TURN]
0:23:45 Yeah, yeah, and they’re the best in class in all three of those. If you want a disposable razor or a cheap pen or a lighter, they p that’s the only one. They they own those markets. Um and it’s just because the guy had a plastic factory and he’s like he’s it’s it’s a French company and they they actually they they got ’em to tattoo removal now, right. Like they’re making like they just bought a bunch of tattoo companies ’cause they’re like yeah, whatever takes plastic, we’re just gonna do those things, right. And it doesn’t violate anything in your brain ’cause you just bu like that’s just the way it’s always been. So I think it’s more
0:24:00 than a like than a lot of people want to admit. And y brands die by being too rigid by that. Like all birds should have got into fucking bedding or in like all these different type of things, but they didn’t. So now they’re just a fucking dead shoe company, right? Like you should just be so ruthless with that product expansion. [SPEAKER_TURN]
0:24:13 You’re a very charismatic guy. You you’re you you have a lot of uh interesting parts of your personality that I enjoy. What attributes would you say y are most responsible for the rigid success you think? [SPEAKER_TURN]
0:24:43 Uh one, it’s a very trust-forward organisation, it’s a very transparent organisation. When I say trust-forward, six of us own it, you know, three of them are father, son, best friend, like literally would die for each other, and then me and my C_M_O_ Connor, I I lived with them for fucking five years. So like the guy we I was talking last night, there was a time when we were running the agency where we did not have a thousand dollars. Like we would have to take he his dad gave him a car and it was like a nineteen ninety seven Honda Civic that
0:25:13 smelled and like paint was peeling, windows didn’t work. We would take it to meetings, we would have to park it behind buildings so people didn’t see us get out of this fucking junky car. And you know tying it to that it’s like not being it not being scared to go back to zero, right. Like I’m from like a very poor bad area where p kids died of fentanyl overdoses and like I lived in a flophouse with like fuck it like there was like fourteen guys living in uh bunk beds when I moved to L_A_ and so I’m like dude uh not scared to go back there so just more more willing to
0:25:31 risk, things are never that bad, also being willing to eat shit. I’m like bro, uh if I have to fucking be a waiter, I’ve we’ll figure it out, right. Um yeah, so I yeah, that that fortitude, like not being like so ego tied to whatever the fuck you’re doing. If I if I have to pack boxes, I’m gonna pack boxes, right. [SPEAKER_TURN]
0:26:01 What are the ways people get uh EECOM wrong? So we’ve you talked about all birds, right. It was a a product that was hot, and now the stock is you know dead. There’s you know a bunch of other kind of famous examples of that. And then there’s companies like yours which is keep scaling profitably, you know never, took a dollar a debt, never took a dollar of investment and made it work. Um what are the kind of give us like your your version of the do’s and don’ts. And I maybe just start with the don’ts like the dumb shit that people do, the bad decisions that people make or the
0:26:14 the common traps you see people fall into. ‘Cause I’m sure you you know you’re that’s your network as EECOM. So you see the full spectrum, people who totally flop, people who grind away for years and get nothing out of it, and people who excel and succeed. [SPEAKER_TURN]
0:26:45 Yeah. So you can’t you can’t out-muscle a TAM. So like understand what you’re selling and how boot the market actually is. I see amazing operators waste time with horrible opportunities, right. Like like the TAM is what the TAM is. And if you’re like the number one fucking garlic press seller, like that’s kind of a meme in the community. Like dude, I’m like in your executing ruthlessly to be the number one gar garlic press seller, that is worse than being the twelfth best creatine gummy, right. Because that market is
0:27:15 exponentially growing, there’s L_T_V_ tied to it. Like so many people just waste energy and time on these horrible fucking product categories. So you can’t you can’t beat a tam. You’re not better than the trend. So bone broth. There was companies that exploded, got to eighty million dollars in revenue. It was like dude which th this is the new way people are gonna consume calories. Bone broth. That is now at a thirty Euro low. Because that’s not the cool thing anymore, right? People have moved Yeah. Exactly. So there’s a guy
0:27:45 from uh I_Q_ bar, his name’s Will, he’s incredibly smart. He talks about his l uh trend surface area. So it’s like look, people start with their luck surface area. He’s like I make products to have as much trend surface area as possible. So if keto’s hot, I’ll be keto. If gluten-free’s hot, I’ll be gluten-free. If it’s sugar, that’s cool, or non-sugar, like whatever, I’ll b I’ll make those products to just hit whatever the trend is. And I’ll just change my packaging so I’m always top of trend. And you’re not better than the trend, right. So like that’s the point I’m trying to make is
0:27:59 you can write it up, but it as soon as it crashes, you’ll crash with it. And then my my third one, the most controversial one is that L_T_V_ isn’t real. Like lifetime value only works if you’re alive. So most brands die waiting for L_T_V_, right? [SPEAKER_TURN]
0:28:22 And what you mean by that is you gotta be profitable early on on that customer you acquired. If you acquire the customer for two hundred dollars and he only made you know twenty dollars and you’re saying oh the I the the L_T_V_ it’ll all pay off, that’s kind of what you’re talking about right, versus the way you guys do it is you’re trying to be f profitable either first purchase or are you guys profitable first purchase or is it like you know a month or two later, wh where are you guys at? [SPEAKER_TURN]
0:28:46 Dude, I have to be profitable in the first purchase. You think people are coming back to buy a second wallet in a month? It’s like I’m like dude, the the L_T_V_ from wallet customers is like maybe in ninety days I get ten percent. So like it’s very much I have to be I have to turn not not not a contribution margin per like actual true paying for all my fixed costs every time I sell a wallet to somebody. [SPEAKER_TURN]
0:29:16 Can we play a game called uh change my opinion? And this is for both of you guys. I have a bone to pick with your industry. I I think Sean’s heard me with this spiel before. What what frustrates me sometimes uh not exactly you guys, but I’m gonna use you as an example, but uh people who they all they worry about is like the CAC and the L_T_V_ and the the TAM of these industries uh or uh and they don’t spend any time actually thinking is this product awesome? Is this the
0:29:40 you know like, im is this truly solving a problem and um it bothers me sometimes that it’s more of an arbitrage not, exactly thinking about can I create a widget that makes a customer’s life better and is of high quality. I wish that more people in this industry sort of talked about that a bit more. Do you think that’s a fair criticism or wh where am I wrong on this? [SPEAKER_TURN]
0:29:42 Do you know I mean
0:30:13 I think it’s a fair criticism. My industry’s been washed out though. So like the people you’re talking about ha probably have all laughed. It’s that there’s so few people left in EECOM. Like like Sean brought up like the group chat. Maybe two people respond every single day and one of ’em’s me too. Like it’s it’s like we’re at we’re at like a a multi a multi-year low of interest in the industry. So like yeah, al all those people have left. The people who are still here and shipping. Dude, I bring up Hexclad. You guys wanna talk about like amazing um yeah, so like I’m [SPEAKER_TURN]
0:30:13 Yeah.
0:30:19 You you’d tweet about ’em all the time and like they inspired me. ‘Cause you said they like worked for three years finding the perfect pan. [SPEAKER_TURN]
0:30:50 Okay, so when I met Danny, it was twenty twenty, they d they didn’t have a web site. He says they did, but like you couldn’t check out on the fucking web site, okay. They they were fucking selling pans at trade shows and like county fairs cooking up eggs themselves right, In. Costco road show, so not even in Costco, they had a pay to show up at Costco and fucking cook up these eggs and they from twenty twenty they’ll do I mean it’s documented at this point over a half a billion
0:31:11 dollars a year. Like they they got to hundreds and hundreds of millions of dollars in annual turnover with a hundred million plus in profit. Danny will fucking shoot me for saying all this stuff, but like I think it’s all pretty pretty rare public, you know Gordon, Gordon joined the brand, they have Fox as an investor now, but pre all that they were doing nine figures in a year, okay. [SPEAKER_TURN]
0:31:21 didn’t Gordon Ramsey like write a huge cheque, he didn’t just like sort of join the brand, he like invested a b a pretty sizable amount or w was he part of a round or was it him personally investing in it? [SPEAKER_TURN]
0:31:36 That’s all public, there’s like uh there’s like a thing uh he came in with Fox on some s on something and like you know because, Fox it’s like a three way deal, Fox wants to give him money to make shows and he wants to get more equity and Hexclad so it’s like a big three way deal. But uh [SPEAKER_TURN]
0:31:51 Hexclad pans in my kitchen right now. They’re great. Uh you know I don’t know if they’re the best pans ’cause I’ve tried a hundred pans, but they’re way better than the pans I had before and to the point where I bought a second set of them ’cause I was like these are great I’d. I’m happy with these pans. [SPEAKER_TURN]
0:32:21 Yeah, and they put years into the product development. Like they actually spe like they care about their customers. What it comes down to is respecting our customers. If you’re just like that’s why I don’t like info products. Like if you don’t respect your customers, if you’re just like trying to arb them or like, you know, we have a customer name uh, so our customer’s everyday dad, we call him Ed. And I’m like almost every meeting I’m like, are we respecting Ed? Are we delivering value to Ed, right? Everyone has an Ed in their life. Think about like your guys’ brothers or your dads. He’s just like a guy who likes widgets,
0:32:51 like he loves phishing and like he loves N_F_L_ like, that’s fucking Ed. And I’m like look, Ed has Ed has paid for everything in my entire life. We need to take care of Ed. We wanna make sure Ed gets like the best cool as shit possible that, we give him great value and great deals. And that’s what Harscladd did. And like and we talked about like I think this industry it’s a bad rap because so many people have entered it and so few people have left with any amount of money. Or like it’s people who did leave with money like it was like a greater fool theory. They were just tricking somebody to give them money and then they bailed out. But
0:33:09 then there’s companies like Hackscladd where there’ll be a fifty year brand. There’ll be a generational brand and they’re fucking crushing it. So it’s possible. They’re buying Super Bowl ads. Like I mean this is you know a b they were boot-strapped up until like two years ago like a boot-strap brand getting that done. It’s fucking amazing. [SPEAKER_TURN]
0:33:40 Yeah I. I think Sam b uh what you said is true that marketing skill is the core competency for most of the winners in this space. Most. There’s a cu there’s a couple who just really nailed product or community right, and then they just they they built slowly brick by brick over over the d over a decade. But for the most part the people you’ll hear about and the people you’ll meet, they’re great because they are great at doing Facebook ads and Google ads or now TikTok uh content. And so that’s true, but at the same time you’re like oh I
0:34:10 that it’s this CAC to L_T_V_ thing, well it’s like guess what, when you sit down with your team, you’re like how do we raise L_T_V_, right? Like there’s some natural gravity, like Sean’s saying, like you buy a wallet every seven years, you’re not really gonna change that. But like for my product you do buy it m way more often, you know. In the first six months we double our double the amount that they’ve i they paid us on the first order, right. So it’s really it’s a it’s uh uh it’s r it’s a movable number, right. We can actually affect that. And then you’re like alright well, how do we increase L_T_V_ It’s? like yeah, you could spam ’em with emails, you could spam ’em with text
0:34:40 messages. But guess what, the better way to do it is to make an amazing product that they’re gonna want to buy again and like lower the return rate. How do you lower the return rate to get more profit, right? It’s like make a better p quality product. And so I think that when you that for anybody who’s actually gonna try to win, you will have to b make an amazing product. Otherwise you won’t be able to do the the ad arbitrage you’re trying to do because um how else could you increase the L_T_V_ if everyone hates your product or it’s not doing anything for them. And so you know, I think the the people who stick around and actually win in the
0:34:42 run or the ones who who do what you c [SPEAKER_TURN]
0:35:12 Yeah, I think those are good answers to the to the question. I think that um like you know wh I uh when I see someone making like a boost your testosterone like thing or I’m like dude, I don’t know if any of this works or if they’re just really good at making a label that’s appealing. And so I like start to lose confidence in the industry as a whole. What actually and that’s actually I’m actually curious if you guys have any of these like D_C_D_C_ brands where you’re like this product is amazing. And so it’s actually really good to hear that hex
0:35:15 is one of ’em Uh. do you guys have any other favourites? [SPEAKER_TURN]
0:35:45 Well, going back to the supplement side, um a lot of it is like I mean a lot of this work is being done for like the the co-manufacturers right, Like. there’s co-packers that actually do all the formulation. So a lot of times people are just showing up and buying stuff off the shelf. So if you’re getting any sort of supplement, like it’s probably the same supplement white-labelled a hundred times, and that’s just like the way the industry works. So you know, I would put hard goods in a special category and like we talk about D_C_C_ brands. I mean
0:36:16 all of my favourite fashion brands are small and independently owned, right. Like does that count? Like uh this is Buck Mason, these pants are James Purse, right. Like I just got a suit from Billy Reed. Like these are all small independently owned companies, right, that are that are running. They have Shopify websites. Does that count as D_S_C_, right. It’s it’s very much like there’s there’s a a black box of bad rap products and I think a lot of it c supplements that come from commands, right, or anything to do in the health and wellness space. Like that is like typically where there’s a bunch of
0:36:25 But if you buy a Ridge Wallet, you’re g you’re gonna get what is on the package, you know what I mean Like? or one of our phone cases or whatever. It’s like a fucking phone case, man. Like it’s pretty good. [SPEAKER_TURN]
0:36:37 Um who who else is crushing it? So what are some D_C_D_ brands that we wouldn’t know or we wouldn’t really r realise how how well they’re doing um just because we’re not in the space, we’re not paying attention. [SPEAKER_TURN]
0:36:44 Yeah, the other reason you guys called me here, to talk about the Wubbles, okay. The Wubbles is fucking crushing it Uh. and [SPEAKER_TURN]
0:36:46 Wubbles, okay. So what are what are the Wubbles? [SPEAKER_TURN]
0:37:16 So we are we are f we are three young adult men. We’re not the core customer, right. It is a uh crocheting product. So it is like you make little characters and they have licensing and like there’s little education. It’s like basically like either it’s you know young people doing it to have less screen time or it’s you’re doing with your kids so they have less screen time. And that problem Yeah. Dude thi when I met them they might be they might have been doing ten million dollars a year.
0:37:46 Like they in two years they’ve gone from ten to probably a hundred and fifty million dollars in revenue. Like no no capital raised, they are still and I really th I like ’em and I respect ’em, they will not fucking launch subscription boxes. They’re like yeah we don’t we don’t think it’s that important. I’m like Jesus fucking Christ. Like if I can shoot these people I would because they won’t do subscription. It’s like the perfect product. Like it is just educational, it’s fun, it’s connecting with your family,
0:38:09 Like it’s this movement against screen time, which is like a big trend that they can take advantage of. There’s every month they could have new characters, they could just show up in your door, you do ’em, there’s a little community aspect. It’s the single best brand and execution that I’ve ever seen. Like this will be a billion dollar exit, because they’re still fucking good at it. There never is any goddamn money. Just like it’s two people just putting it together in North Carolina. [SPEAKER_TURN]
0:38:16 How did they even think of this? Like whoa wha wha wha how did this get on the were there were there big crocheters? Wha wha what is the sto origin story of this? [SPEAKER_TURN]
0:38:46 Yeah. So I think it’s a it’s a husband or wife team. I think she was just crochet. And she’s like yeah, I would love to have little guides. And there was like an Etsy community of people like selling crochet guides and she’s like she would buy ’em and then she’d be like okay, I’m gonna make my own. And then she would, you know, release ’em and then it’s like oh, maybe I should just sell the my my little crochet kits. And bam, fucking explodes dude. So like if you’re listening to this and you’re thinking like okay, I want I’m I’m not washed out. I wanna try e-commerce. I highly recommend
0:39:13 into services first, okay? Like you should learn how to make money on the internet via services. And if the show’s called My First Million, you’ll m you’ll make your first million dollars delivering good value to people like me or like whoobles, whoever else. Then find a trend that’s very fast emerging, right? Like I think no screen time. I think creatine, those are the two biggest ones of the next two or three years. Like if you can do a no screen time creatine crochet kit, something, fucking, you’ll figure it out, right? [SPEAKER_TURN]
0:39:21 Dude, I’ve uh spent so much money on Legos lately for that no screen time uh trend. What are other no screen time products? [SPEAKER_TURN]
0:39:24 I feel like um I feel like the micro-plastics is another another trend, right Like? [SPEAKER_TURN]
0:39:26 And air quality. [SPEAKER_TURN]
0:39:57 Yeah. Dude yeah, so like uh just glass everything. Glass bottles, glass containers, what uh just r like imagine if you could just buy a backpack and they’re like we guarantee there’s no plastic in it. Fucking awesome. Just wrap it in paper shipped to people. The that’s another trend I think it’s gonna be fast emerging. Um yeah, no screen time. Just more physical tactical toys, right. Like bringing back the fidget spinner but as like a focus tool, right. Like I think there’s a bunch of shit you could do in there. Um but anyway, those are fast emerging trends right now.
0:40:19 protein was a trend that’s basically probably dead, right? Pre-protein was collagen. There’s always these just like pockets of success you’ll find. And that’s the beauty of the space. It’s like um what’s the what’s the early boob milk? Uh col what’s that called, colostrum? Yeah. Oh my god, I’m getting so many ads for colostrum. [SPEAKER_TURN]
0:40:29 Like r I think raw honey. I it had like a small moment. I’m sure it’s gonna come back, right. There’s like a bunch of New Zealand honey companies. [SPEAKER_TURN]
0:40:45 And if you if you were a founder, where would you kinda look for these? Do you are you th are you a proponent of look in your own life? Wh what are you doing or what is your w wife doing that seems unusual, but actually there’s a passionate community? Are you like I scour Etsy and Reddit? Is that where you would look? How would you do this if you didn’t know which trend to start with? [SPEAKER_TURN]
0:40:48 Right. So you should look in your own life because
0:41:20 you probably don’t have the skills to actually go out there and like f like you know or it in i I’m assuming you have no resources to actually pick a trend and double down and actually deliver on those promises, right. So you should find something in your own life that you actually know and are passionate about. If you’re a more seasoned professional, I think you can find those things right, and really what it would be is I think Reddit’s dead, I think Etsy’s dead, like that’s A_I_ slop basically at this point. The instantification of the internet has happened to those two websites. Uh I
0:41:50 look at literally what’s happening inside of Erwan like, I would just move to L_A_ and go to Erwan every single day, because they w those are the best people at catching trends. Like they were anti-backs in fucking nineteen ninety seven, right? Like that’s like what they are very very early on those things. Um and if you’re if you’re not gonna do that, then it’s like you just you have to follow the girlies on TikTok, right? Like th the other one I bring up is Pilates. Like Pilates was a thing in two thousand, it’s having a
0:41:58 massive resurgence right now. And like once again we’re three young men how, are we gonna fucking make a Pilates brand? But Pilates for guys probably could be another trend. [SPEAKER_TURN]
0:42:00 Just needs a new name. [SPEAKER_TURN]
0:42:25 Yeah, totally Well. Laplas I think is what the actual name is. Uh oh no La. something like that. My my my earth knows. Uh but yoga yoga is a very much a downward trend, right. And like this yoga was just a synod like a a synonym for health and wellness. And like you, know, non just Jack dude’s waitlist thing. I think that’s actually changing and it’ll be something else like Pilates or or something else. [SPEAKER_TURN]
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0:43:45 What are some other uh going up and going down Give? me like a a topic or a trend and tell me is this a uh buy or sell moment? [SPEAKER_TURN]
0:43:52 Well uh look this, is not a hot take. This is not Scott Galloway fucking, but all
0:44:23 all big box department stores, like it’s very very much like we just saw Joanne’s fabric go down, we just saw container store go down, we just saw Party City, like that’s gonna accelerate, like there’s we are over commercial real estate, there’s too many big box stores, like even Target is having a really fucking hard time, and my biggest wholesaler is Best Buy, I crush it in Best Buy, um but all of that shit is probably
0:44:53 the the FUD isn’t real enough, it should be even more real, like Nordstrom’s Macy’s, like I think small independent uh brick and mortar shops really do work, like if you’re in L_A_ you go to Century City, like but the f I was walking around Bloomingdale’s and you know th th like ten years ago it was or even twenty years ago probably, it was like the like the the number one place to buy women’s fashion, like women contemporary fashion, it was the coolest thing ever, I’m walking around they got blouses that are eight hundred dollars and it’s
0:45:23 on a Saturday. Like nobody’s fucking shopping there at the d at the best mall in L_A_. So I th I think the FUD isn’t even you should we should we should be even more scared that there’s gonna be more collapses and any any sort of commercial real estate that’s like ten thousand square feet plus, that is like selling physical goods. Um the other one is probably better for you, candy, like uh there’s like V_C_s have really backed this like better for you artificial, sugar, like you go to a fucking target, like there’s all of these like weird
0:45:39 sugar brands, I think it it’s gonna come out that that causes cancer and R_F_K_ is gonna be pretty against it. So anyway, I’m probably not launching anything in there, probably probably launching a real sugar and that’s a very hot tape that could add f age really bad that like real sugar is gonna make a massive resurgence. [SPEAKER_TURN]
0:46:01 Uh what do you think about like you know these uh uh like other people who would do the same model you did, services to product. So for example I think the guys behind Brez, which is that uh I think it’s a I don’t know what it is, it’s like a mushroom drink or it’s like a adaptogenic drink. S basically it’s like al it gives you a high but it’s not alcohol, it’s like mushrooms or wheat or something? [SPEAKER_TURN]
0:46:11 It says Brez is micro-dosed cannabis and mushrooms in a can. It’s a wheat drink. It’s a wheat drink. Those guys were agency people, right? [SPEAKER_TURN]
0:46:52 to have controlled substances be advertised. So like he that’s like his specialty. Like if you had a cannabis company, you had to go through him uh in in his agency called We Are Lucid to actually do the cannabis advertising on meta, right. He found a compliant way to do it. Um so he’s incredibly smart, nixed an amazing operator, ran a great agency. That’s the best model. The other person is Zach uh uh from Homestead. He has a company called Hollow Socks.
0:47:23 Like uh I don’t know how much time we have, but to unpack the history of e-commerce, e-commerce one point O_ selling random shit on the internet, okay. Like whatever, pets dot com, e-commerce two point O_ is marketplaces, it was E_ Bay versus Amazon versus everything else, e-commerce three point O_ is what we consider D_T_C_ one point O_, which was like the first brands coming online, the Allbirds whatever, else. Then you get D_T_C_ two point O_, which was the COVID hotness, the peak, everyb everything exploding, right. We are now in
0:47:25 to see three point O_ which, is small
0:47:57 serviced providers pivoting to brands with very lean teams, and Create Gummies, Hollow Socks, Brez, the three best examples Create. Gummies has a team of eight people. I think they’ll do forty million dollars this year, right? Hollow Socks is a team of five people. They’ll do thirty million dollars this year selling, socks. Most definitely met ads, right? And then Brez, they’re public with their numbers. Follow Aaron on LinkedIn, and I think they did five million dollars last month in revenue, okay. W uh
0:48:27 in beverage, in a controlled substance, that’s fucking insane. Like that company’s worth three hundred million dollars today, right. And I think their team’s incredibly small, maybe maybe twenty people at this point. So um yeah, that is that is the best bull case for e-commerce right now. Service operators who’ve seen like the rise and fall of all these different brands have learned from them, have spent their money to get good at ads, right. Launching targeted, hyper-specific brands and the
0:48:28 three I named are the best. [SPEAKER_TURN]
0:48:34 Sean, you should go go to drinkbrez.com Do. you see their website? That’s the prettiest website I’ve ever seen in my life. [SPEAKER_TURN]
0:48:39 Yeah, that’s usually not a good thing. The prettiest websites are not usually the ones that that work the best, but [SPEAKER_TURN]
0:48:44 I hear you and I am on board with that. This is one of the exceptions. Look at this. [SPEAKER_TURN]
0:49:14 I you know I think uh what what happens is you see the front the front of the house is not always where the traffic is going. So you know the front of the house is the it’s kind of a hero, it’s the brand, it’s the aspirational, but you run your ads and maybe you’re running straight to a P_D_P_ or to a TikTok shop or to different things like that. I think they’re very heavy into TikTok right, like the their model is the the TikTok blueprint which we just did a episode with with Rob from uh Rob the bank about like the the TikTok blueprint that a bunch of the brands are using right now and I think Brez is doing that where it’s organic co it’s it’s kind of the Tik
0:49:44 affiliate slash organic model where you’re getting really cheap C_P_M_s because TikTok videos can just pop off and you you know y you’re you’re putting out thousands of pieces of content a month but uh and it’s driving sales uh un unlike the way w you know I’ve been doing it or you’ve been doing it Sean which is like a lot of um you know Facebook, Google ads, you know you put a dollar in, it’s attributed exactly how much that uh that ad generated in revenue and you just sort of optimise from there. The TikTok game is a little bit different, it’s a bit of a spray
0:49:46 and play a game for the most part. [SPEAKER_TURN]
0:50:11 Yeah so I just sent you guys this is from Aaron from, Brez. They did four point six million in revenue in month twenty one, January. This is their Lincoln post. So this is all public information that they share. Uh TikTok shop was thirty seven grand. Amazon revenue was three hundred and forty two Uh. I’m not gonna read this for the audience. Maybe we’ll just show it, but um dude they’re fucking killing it. Brez is awesome. [SPEAKER_TURN]
0:50:14 Mm-hmm.
0:50:26 Uh not it’s not an actual P_N_L_, but like you know sort of a b a marketing P_N_L_ on uh on Twitter and LinkedIn. It’s great. Let’s uh we could read this. So total net revenue, four point five million Uh. let’s see that’s, in you said month twenty one now? [SPEAKER_TURN]
0:50:29 Yeah yeah, dude. It’s like t it’s literally [SPEAKER_TURN]
0:50:52 Then they’re ads. They spent a million dollars on Facebook, uh four hundred thousand on Google. On uh TikTok ads they spent zero, but I know that they must be spending on on the affiliate part of TikTok because I if I’m on TikTok I see Brez stuff all the time and it’s always an affiliate link wh uh you know s swipe up and you can sort of buy it from there. Um app love and four hundred seventy two thousand. [SPEAKER_TURN]
0:51:09 It really seems like the one of the keys to this business like and this is not always the case, but it’s picking the right idea. The right idea and the right angle r i it it seems like there’s no other way to explain how something can get to four million dollars in monthly revenue in twenty one months. [SPEAKER_TURN]
0:51:28 Yeah. I mean and and the reason they were able to be right is because they’re both agency operators, right. Like they ha the right people to launch a product like this. And also it’s so hard. The reason why they’re willingly sharing their P_ and L_ is they have nothing to hide and they they don’t think you can beat them, right. And I think anybody listening to this can’t beat them, because they can’t beat them. [SPEAKER_TURN]
0:51:33 Are they shutting down their agency or they’re just gonna keep trying to do both? Like why would you run your agency once this happens? [SPEAKER_TURN]
0:51:54 Yeah, I mean you end up just like you know selling it off or hiring operators. I mean I mean Nick uh Shackelford, which was the partner in Brez. I mean he had you know uh an events business, he had an agency business, he had an email business. I think you just you find partners to take that over and you just put more time into this. But I mean early on I was like willing to bet on these fucking guys, because they’re the best. [SPEAKER_TURN]
0:52:02 Sam, I want you to Google Nick Shackelford tattoo and um tell me if you wanna compete with this guy. [SPEAKER_TURN]
0:52:06 Oh my God. His whole body is covered. [SPEAKER_TURN]
0:52:11 Yeah from the neck down to his toe every, inch of his body is covered in a tattoo. [SPEAKER_TURN]
0:52:20 He looks like a like a jap like a yeah he looks like a Japanese murderer. Like you know how they do like the yakuza they, do like the whole that’s insane. [SPEAKER_TURN]
0:52:24 Included is Nick. I mean he actually got it done man. He said it was so painful. [SPEAKER_TURN]
0:52:29 Oh my God. It looks horrible. I mean it looks great, but I don’t wanna do it. [SPEAKER_TURN]
0:52:31 Looks painful. [SPEAKER_TURN]
0:52:34 Yeah, that’s what I mean. Uh that’s insane. Uh what do you think Ridge is worth right now? [SPEAKER_TURN]
0:52:43 Oh man, I mean the m the the market for a brand like us is at an all time low And. like the w like look at the same thing. [SPEAKER_TURN]
0:53:14 Uh we’d probably a market clearing price is probably three hundred million. Like I could probably clear that at at the market with our growth and everything. It’s really hard to sell my business right now. And like I’m not trying to sell my business right now, right. Like I think we have like by the end of the decade we’ll be doing like five or six hundred million dollars a year in annual revenue. Really driven by this big tech rollout. So like we’re really big in Best Buy already, we’re gonna be in Apple, we’re gonna be in Verizon, selling power banks, phone cases, cables, we already sell our wallets in a
0:53:44 lot of those places. Um so that’s like the next evolution of the brand is just more product expansion. But it’s hard for me to sell my brand when Solo Stove is in a public company and I think they’re worth maybe a hundred million on the public market, right. Like there’s it they peaked at two point one billion dollars and now they’re probably the market cap today is a hundred million. Um and they have like four hundred plus million in revenue, they own chubbies, like uh it’s very hard for my brand to go to market when if you squint we kinda look like them.
0:53:54 they are they they just need to be taken private. There’s a lot of take private things to happen, and interest rates are still too high to take a lot of stuff private. So we’re just waiting. Waiting for all that to happen. [SPEAKER_TURN]
0:54:02 What would you wanna sell if you weren’t doing Ridge? If you had uh sell Ridge today, what would you what other pro I mean you’re not a guy who would stop. What other product would you wanna sell? [SPEAKER_TURN]
0:54:33 Yeah, my goal for Ridge, eventually I’m not the long-term shepherd of this brand. Like if it if it’s gonna go public or whatever, or m most likely get bought by one of the roll-ups, like in our industry, that’s that’s the exit path. There’s ten strategics that end up buying brands like ours. Um I would like to g net a hundred million dollars, and then I would like to start a portfolio of brands and services basically. Like, you know, everyone wants to have a their own little P_E_, their own little family office type thing. So I would launch a bunch of we’re
0:54:40 little e-commerce brands that I think are gonna be trend-relevant and higher service providers to to run that as businesses. [SPEAKER_TURN]
0:54:42 I love that you know what you want.
0:54:49 You know, you’ve mapped this out of like what your ideal setup is. I love that. I love people who call their shot. [SPEAKER_TURN]
0:55:20 do you you talk about trends like but but you know bone bone broth it’s hot then it’s not keto it’s hot then it’s not and so like why go after a trend if it’s gonna ultimately you know do what trends do most trends don’t last forever. So is that like building your sand castle you know uh building your castle on on on quicksand or something like that like why why go after a trend when trends have this like shelf life are you trying to time and exit or are you trying to you’re gonna pop
0:55:22 What what’s the plan if you’re gonna build on top of a trend? [SPEAKER_TURN]
0:55:51 Yeah dude, going back to Will from I_Q_ bar, trend surface area. Like you create a product and a trend because that’s the w the best way to grow is in a growing market. You can be average in a growing market and grow very very fast right, I was an average operator when Facebook ads were growing and that’s why I my business grew. Now I can be a good operator ’cause I have to be right, but when a market’s growing very fast, you could just be average. And then once once you get some sort of success, it’s it’s pivoting.
0:55:54 So like if I was in the bone broth business,
0:56:25 I would have told them like hey, we have to do fucking protein-focused bone broths or bone bars. Like I I I’m that guy coming in here trying to like disrupt whatever fucking business I’m in. I’m like we did it yeah, if I was at bone broth, I’d be like look, that’s fine, we should do that. We’re gonna do bone bars and we’re gonna get whatever, some jack guy talking about how they’re great. Then I’d be in the bars business and then it’d be like we gotta do bone supplements. We gotta be the only guys doing bone whatever m marrow pills. Like that’s the type of shit I’d be pitching to ’em. So uh [SPEAKER_TURN]
0:56:55 love that that’s your answer ’cause it’s like that’s the attitude you have to have to win in that game. My takeaway is man, what a horrible game to play Uh. like y y you know I I was just doing a podcast yesterday with a guy and he goes uh you don’t wanna be in the fresh produce business. He’s like um you know uh y you know he’s like you wanna be YouTube not a YouTuber right, just as a simple example. He’s like y you take the best YouTuber and they’re in the fresh produce business. They have to keep s running as fast as they can on that treadmill and if the treadmill gets faster and faster
0:57:15 every year, and if they stop they, fall behind and there’s a thousand other people on that treadmill. And so same thing, like if you’re on a trend and a trend y, you know, almost by definition is gonna sort of peter out and then the new trends will emerge, that just seems like a really hard way to win in business when there’s other styles of businesses that don’t have that problem, right? But it’s a like [SPEAKER_TURN]
0:57:33 but but Sean, I think you’re both could be right. I think the right answer though is to which whichever path you take should fit your skill set and interest and you should commit to it and be that. You know we had Moyes on uh Moyes Ali from Native Beaudre and we said like why don’t you do something easier He. goes ’cause I’m a merchant, this is what I do. And I think that’s [SPEAKER_TURN]
0:57:46 it’s that silly. I actually disagree. I think committing to a path is significantly better than not. And if Sean Frank is committing to this trend thing, then he yeah, it’s exhausting for you because that’s at your interest. [SPEAKER_TURN]
0:58:24 Yeah, I I’m not saying what he’s doing is bad. I’m saying he’s the he’s a outlier winner. And even he’s like, yeah, there’s a company that’s like us that does four hundred million a year is probably w and is worth a hundred million on the public markets, right. Or you know, we have to continually hop, you know, from one category to the next. And i he’s in a better one, it’s more enduring, but let’s say you’re on uh the bone broth type of type of thing where it’s a wellness trend. And the wellness trends or the diet trends, they change very f very very rapidly, right. It’s like it that’s a hard game to play compared to like th you know, uh
0:58:37 look at the other look at the um possible set of businesses you could go into, that’s that’s definitely on the hard side, dude. Like uh E_com_ is definitely on the hard side and E_com_ on top of a trend is i is the hard version of the hard version. [SPEAKER_TURN]
0:59:07 Oh dude, look, I I understand completely. But the reason why I’m in it is because it’s permissionless. When I was twenty two, nobody would let me build fucking Nvidia servers or whatever. Like, you know, a m a more robust infrastructure led business, right? Like if I was gonna provide, I don’t know, fucking routing cable services, some random shit like that. Like maybe now I, you know, I c I could get rid of that. But e-commerce is permissionless and that’s why I like it. Agencies are permissionless. It’s like the reason why we sold on Shopify is
0:59:14 because nobody would give us a uh Nordstrom’s P_O_ right, Like. there’s there’s a a level of gauging or s [SPEAKER_TURN]
0:59:44 SaaS is permissionless, communities are permissionless, there’s a lot of things that are permission newsletters are permissionless whatever, there’s a lot of things that are permissionless. The agency one is actually more permissionless than EECOM because you know for EECOM you have to buy inventory right, there’s a there is a capital requirement, the agency one is is different right, that’s just I’m gonna hustle my skills and I’ll get cash flow then what you did was use that cash flow to then you know invest and continue to grow the brand right, but b for most people they they get I know a lot of people that got excited about EECOM and didn’t realise like
0:59:48 how scaling works with EECOM, where [SPEAKER_TURN]
1:00:09 Yeah, it’s the it like it people squint and think it’s SaaS and it’s not. It’s like it’s like your bi your problems get harder the bigger you get, right. Like it’s bigger P_O_s, it’s more management, it’s everything else where, you know, if you’re SaaS it’s like, you know, if it’s if it’s if it’s ten zeros or a thousand zeros being processed through your thing, who the fuck cares. Um but you have to [SPEAKER_TURN]
1:00:34 you you’ve gotten more you’re you’re a great follower on Twitter because you’re hilarious, but you’re this perfect combination of being hilarious, but also I think you’re right, like because you’ve been there, done that. But has being as opinionated as you have been and willingness to call people out and this willingness to like say what you think, has that ever held you back and do you regret doing that or do you think that like going all in on being a strong personality has benefited you? [SPEAKER_TURN]
1:00:57 I mean the only tangible negatives of being a public personality on the internet is w is if and when you get sued because you will be sued, right. Everyone gets sued and it it’s it’s the cost of doing business. They will read your tweets in depositions. So just like that is the reality, right. I think a lot of people like don’t want to like offend people. That’s embarrassing or what? [SPEAKER_TURN]
1:01:03 What did you mean by saying you want to shoot the wobble family? [SPEAKER_TURN]
1:01:26 Like I mean I was I got to pose why I told someone I was gonna drop a nuclear bomb on them and they read that. Well I don’t I don’t explain like I don’t have access to nuclear weapons and stuff. Um but like I mean you should you should be yourself and authentic and uh my Twitter has sold like $300,000 worth of wallets. So definitely it’s a it’s a net positive, but [SPEAKER_TURN]
1:01:44 your podcast, right. So your personality and being public about what you guys how well you guys are doing with Ridge and being funny and opinionated led to you guys doing this EECOM podcast. And the EECOM podcast pays you a bunch of money, right. Like you guys are doing really really well off that. So that’s paid off in in a different way, right. You wanna talk about that? [SPEAKER_TURN]
1:01:51 Yeah yeah, So I only have like four minutes I gotta go to a call and do my real job. Uh m maybe something you guys don’t know anything about but, uh [SPEAKER_TURN]
1:01:58 Huh? I take naps after this. [SPEAKER_TURN]
1:02:28 the reason why I got public on the internet is because in twenty twenty two all of my friends moved across the whole world because of COVID and I didn’t hang out with anybody. And it sucked for everybody. Twenty twenty one twenty twenty two like I used to have a community of people who talk about e-commerce and then they’ve all moved so I was just by myself and I’m like let me just get on Twitter and start talking about e-commerce um and through that I made a bunch of great friends uh because it’s a very lonely thing running a big business. Like you know my my best friends from high school um one of
1:02:58 them, goes to like crime scenes and cleans up like when somebody kills themselves or whatever. And the other one does garage doors. So like imagine trying to tell them being like yeah man like you know I spent eight million dollars on meta but I probably should have spi like they they they had somebody shut the fuck up. So you want you wanna find friends who uh you know can s can you know have some sort of sympathy for what you’re building. So got on Twitter found, those people um they’re all like you know Jason from Hexcloud’s on there Mike, Beckham from uh
1:03:28 simple model. He has like two hundred million dollars selling fucking water bottles. Matt from PELAcase. We started a podcast Yeah. dude uh it’s called Operators. So it’s a it’s a niche e-commerce podcast. We have spin-offs. We have marketing operators Dude. I, think it’ll bill at least two million dollars to sponsors, but it might bill like four million dollars to sponsors. And it’s just us talking about e-commerce Uh. probably one tenth the listenership. I mean way less. Maybe one one hundredth the listenership you guys get. But because it’s so niche, it’s like way more of an actual
1:03:58 a community, right. And you know I think people wanna be you guys because you guys are like an entertainment show, right. You guys are like a big show, you know massive, reach, entertaining people. But if you’re listening to this and you’re an expert at something, do an incredibly niche YouTube channel because like the the sponsor integrations are just so much deeper. Like our sponsor is fulfil the E_R_P_, right. And like you guys don’t know what that is, but if you’re an e-commerce merchant you need an E_R_P_ and the annual contracts are a hundred and fifty thousand dollars a year and we’ve probably sold
1:04:09 hundred of them, right. So it’s like they’ll give us six hundred thousand dollars a year because we’re the only marketing channel for them, right Um. anyway, but yeah, so we do a podcast. [SPEAKER_TURN]
1:04:31 right now, in this moment of time. Never stop selling guys. [SPEAKER_TURN]
1:04:34 We appreciate you man. Thanks for doing this. Alright, that’s the pod. [SPEAKER_TURN]
1:04:45 I feel like I could rule the world I. know I could be what I want to Uh. put my all in it like no days off On. the road, let’s travel, never looking back. [SPEAKER_TURN]
1:05:19 hey Sean here a quick break to tell you an Ev Williams story. So he started Twitter and before that he sold a company to Google for a hundred million dollars and somebody asked him they said Ev what’s the secret man how do you create these huge businesses, billion dollar businesses and he says well I think the answer is that you take a human desire preferably one that’s been around for thousands of years and then you just use modern technology to take out steps. Just remove the friction that exists between people getting what they want and that is what my partner Mercury does. They took one of the most basic needs any entrepreneur has managing, your money
1:05:49 and being able to do your financial operations. And they’ve removed all the friction that has existed for decades. No more clunky interfaces, no more ten tabs to get something done, no more having to drive to a bank, get out of your car just to send a wire transfer. They made it fast, they made it easy, you can actually just get back to running your business, you don’t have to worry about the rest of it. I use it for not one, not two, but six of my companies right now, and it’s used by also two hundred thousand other ambitious founders. So if you wanna be like me, head to Mercury dot com, open up an account in minutes, and remember Mercury is a financial technology
1:05:56 not a bank, banking services provided by Choice Financial Group and Evolve Bank and Trust members F_D_I_C_. Alright, back to the episode.
1:05:56 (music)
0:00:09 This is like a make-a-wish type of episode for us You. know?
0:00:46 There’s really two things that I need to talk to you about. There’s two reasons you’re here. Number one, I cannot believe that you sell hundreds of millions of dollars of this stupid little wallet. This is unbelievable to me. It’s been blowing my mind ever since I found that out. And now uh uh you’re here finally to give us some answers. And two, um I think you’re very opinionated when it comes to E_com. You don’t hold back, you don’t pull punches. And so we like that. We like spicy guests. And I think you’re you’re gonna be able to have both of those things for us. [SPEAKER_TURN]
0:00:51 I think you sh you should smack Sean right now for calling it stupid little wallet. Did you hear that? [SPEAKER_TURN]
0:00:57 Stupid little wal I’m just trying to get ’em fired up. I told you he gets fi he gets fiery, he gets feisty. So I wanted to l you know, stir the pot a little bit. [SPEAKER_TURN]
0:01:03 You better play nice. I’ll dock your your E_commerce brand. Like uh you know he’s got he’s got some uh [SPEAKER_TURN]
0:01:14 I’ve been a Ridge wallet owner since two thousand and sixteen or seventeen. You know Ridge uh sponsored the hustle. [SPEAKER_TURN]
0:01:31 Well dude thank, you for the support. And you guys were super early for newsletter sponsorships. Like we probably run like a pretty big sponsorship like ecosystem now. We sponsor like a ton of newsletters like you know YouTubers obviously. You guys were like one of the first people selling that ad space. So [SPEAKER_TURN]
0:02:00 Yeah and you know what I learned about your guys’ industry? Well just any marketer who’s savvy is people like you and Sean. You guys know how to find early interesting stuff and you take all of the risks and you and you just you understand the arbitrage like the under-priced opportunity. And so we had a lot of smart people who would buy these ads with us and I’m like I can’t believe they’re doing this. It’s so unproven. And then I realise that that that’s like the theme of a smart marketer which is throw dollars at a variety of things and then exhaust it once once everyone else comes and finds it. [SPEAKER_TURN]
0:02:27 Yeah it’s ad arbitrage right, Like. everything’s attention. So if I’m giving Facebook at this point fifteen dollars per thousand views and if I can get a better price off of newsletters or influencer or YouTube like, it’s all just an attention economy. And it’s so funny to watch that like pendulum swing back. Linear T_V_, like the T_V_ your parents probably watch, is so cheap to run ads on because nobody’s buying it. So like you know uh I’ll probably spend [SPEAKER_TURN]
0:02:29 What’s like the C_P_M_ of linear T_V_? [SPEAKER_TURN]
0:02:49 a dollar, like. It’s like ’cause there’s all these channels right, there’s been like you know thousands of channels that have come out that like have eight hundred people who watch them. So like you just buy like big blocks of random ad space that are just very male male targeted. Um and like yeah literally like a dollar to reach a thousand people. [SPEAKER_TURN]
0:02:52 Sam do, you know what our best performing ad channel is, our marketing channel for my brand? [SPEAKER_TURN]
0:02:54 Postcards. [SPEAKER_TURN]
0:03:06 But you would not believe it Postcards. It’s not super scalable like you can’t just like spend to infinity on it. But you know you put a dollar in you’ll get eight or nine dollars out of revenue. It’s amazing uh, co [SPEAKER_TURN]
0:03:37 a a simple product. It wasn’t like some some Mark Zuckerberg you know innovation or anything like that. And you’ve scaled it up, you built it brick by brick. But you said you started in the serv didn’t like a side of c sort of a sweaty services business. You didn’t start the company and you didn’t start off in the product game. So can we just do your story for a little bit and then I wanna brainstorm other D_C_D_C_ ideas with you afterwards. But first let’s do let’s do your story. [SPEAKER_TURN]
0:04:07 Sure. Um yeah, you got that right. Uh the show’s my first million. So I made my first million dollars off of an ad agency. So you know, Facebook ads came out in twenty twelve. That was like when it was probably like an open beta, anybody could join. And I learned how to do Facebook ads. I worked at an a agency with my C_M_O_ Connor. And the agency sucked. Like you know, it was two hundred two hundred people working there, probably five hundred clients. Nobody would let me see. Yeah yeah, I was just an employee. And then I
0:04:35 like oh, I should do this. I could do a better job of this. The ad agency I worked at, the average client was around for four months. So imagine that sales cycle. Like it takes sixty days to on-board ’em. They’re they get thirty days’ worth of work and they’re like this sucks, and then thirty days to off-board. The average client was four months, right. And I’m like imagine if I just did this, but I kept ’em for a year. I’m like I’ll make so much money, right. So I start an ad agency, I have ten clients, um [SPEAKER_TURN]
0:04:40 So you’re you’re you’re saying this like it’s simple. So you you’re working at a ad agency. How old are you roughly at this time? [SPEAKER_TURN]
0:04:42 I was twenty eighty two. [SPEAKER_TURN]
0:04:49 You’re twenty two years old. You’re not like a marketing expert yet, right. You’re like, you know, you’re learning on the job, I would s assume. [SPEAKER_TURN]
0:04:52 Yeah yeah, but like it was
0:05:09 it’s kinda like TikTok shops is today. Like nobody’s an expert, right. Like it’s it’s a brand new thing that came out. Like I was we’re probably two and a half years into Facebook ads. People still thought Instagram followers were the most important metric. And they’re like wanting to run campaigns to get followers, right. [SPEAKER_TURN]
0:05:20 And was your agency super bullish on Facebook as a channel? Or it was kind of like this new thing that you know you got really interested in ’cause it was new. But th w was the whole agency like hey this is gonna be a really big deal? [SPEAKER_TURN]
0:05:50 Yeah, it was like a cookie-cutter D_ to C_ agency like in the heyday. This is probably like twenty fifteen, right. So uh Facebook what Facebook and email was the services we were providing. Like there was no other services. Maybe there was one guy doing Google ads, right. But it was really all in on Facebook as like this brand new channel. And if I could go back in time, I would have been even deeper into Facebook. Like the biggest challenge with Ridge uh then we we’re skipping up a couple of years in the future. But like we try to diversify too fast. Like I was
0:06:01 a newsletter sponsorship, and like they worked, I should have put all of my dollars into Facebook back then up until like twenty twenty Um. I would have just been better off putting as much money into that as possible, but [SPEAKER_TURN]
0:06:05 And Ridge was one of your clients. Were they an early client? [SPEAKER_TURN]
0:06:36 Yeah so I had ten cl so I’m at an agency, it sucks, I think I can do a better job. Me and my C_M_O_ uh Connor, we ended up starting an agency together, we take ha ten clients with us um, eight of them you have never heard of okay, like they’ve just you know gone extinct uh, one of them was Ridge and then one of them was actually Mudwater which has actually gone on to crush it like, we did their Google ads or at some point like in twenty sixteen or whatever but yeah so we end up taking Ridge over
0:07:06 their son best friend, they start this business, they get to like five million dollars a year in sales and they are you know like the dad was a special ed teacher, like you know Daniel was gonna go to go be an accountant and this thing just kinda caught fire and he really didn’t wanna be an accountant. So like their expectations for the brand when they got to five million dollars a year they’re like this is the best thing that’s ever happened, right. And me and Connor being hella young and I’m like I think we can get to fifteen million dollars a year. I think we can get this thing to thirty million dollars a year. I remember uh telling
0:07:36 Connor, I’m like, I think we can do a hundred million dollars a year selling this wallet. And he looks me down the face and he’s like, there is no fucking way in hell we’re gonna do that, right. This was like twenty seventeen. But they didn’t really wanna run it all that much anymore, right. Like they didn’t wanna manage people. So I’m like cool, we’ll do everything else. So my agency kinda is gets built around running Ridge Wallet. Uh we do their customer service, we do their product importation, we do all of their marketing, we do their web dev, uh and then I’m charging ’em like two hundred thousand dollars a month. Like all of the money
0:08:04 coming from Ridge Wallet. They ended up being like sixty percent of all agency billables for my for my tiny agency. And at a certain point they’re like hey we should just merge, right. Um so me and Connor take an equity stake. Everyone in my agency just goes in-house to Ridge. I ended up selling off the agency to one of the people who was running it and that was probably twenty eighteen and since then Ridge has gone from you know thirty million dollars a year to over two hundred. [SPEAKER_TURN]
0:08:34 That’s. amazing What. I what I love about that story is that it sounds like when you’re running the agency like almost like nobody would in in a business school would recommend hey you’re running this marketing agency and then for one client you’re gonna start doing customer service you know logistic support all all these other things. It sounds like wrong to do that. It’s like how one customer is gonna make up sixty percent of your billables. From a business school perspective that would be like a bad move. But Dharmesh said something once on the podcast he goes
0:09:01 with my first business ju he goes I I got I got mixed up later. He goes just ’cause I was ignorant doesn’t mean I was wrong. Meaning I didn’t know the right way to do it, but my instincts actually were leading me in the right direction. It just wasn’t uh uh uh you know I didn’t have like some sophisticated game plan and maybe it wasn’t typical, but it was my instincts were correct. And it sounds like your instincts were correct that you should just keep leaning into the ridge thing even though it was like maybe you’d not want a normal agen m normal marketing agency ever would have done. [SPEAKER_TURN]
0:09:31 Most clients suck. Like if you guys have ever done client work, like most clients fight with you, they don’t pay you, like they’re always trying to fire you, right. And Ridge as a business was ran by really cool guys who didn’t want to take any like rains away from us. They were very happy with the five million dollar a year business and they’re like we could always go back to shipping the orders ourselves, right. Like I mean the the guys are are like you know Buddhists, like raised raised Buddhists their whole lives, I think that’s part of it. But they were very much like hey this is a good
0:10:01 these guys are growing this business, let’s give them more responsibility. And you know, you can’t really exit agency businesses for all that much, right. One reason why we went all in on Ridge and did the merger is like an agency’s probably worth maybe one X_ client contracts. And they maybe at the peak it was two X_ client contracts, right. So like if your client’s you know if you have a guaranteed million dollars in revenue you might be able to sell it for a million or two. Where Ridge at the time were like fucking ten billion dollar a bi year business right here, we’re gonna be
0:10:06 grow this thing to the fucking moon Uh. so it just made sense to put all our chips in that basket. [SPEAKER_TURN]
0:10:19 What was the metric that you saw that gave you the aha moment where you were like alright, they’re doing five million now, but this could be thirty, this could be a hundred. Was there one or two metrics or was it just a guess? What what was that research process like? [SPEAKER_TURN]
0:10:50 It just it just seemed like they could always put another dollar into Facebook and it could work, right. Like the limiting factor wasn’t like uh marketing or awareness, it was like uh the operations of the business, right. We ended up like we had a year where we didn’t have any wallets ’cause we couldn’t keep ’em in stock. So like we went from fifteen million to eighteen million one year and that was just because we couldn’t make enough of the fucking product and I’m like you know so often demand is the thing that stops these brands, like you can only get to so big of it as ham and that wasn’t the case here. Uh you know we we did like a [SPEAKER_TURN]
0:11:09 wearable and it was so hard to get people to buy the wearable. Like the cack on Facebook was four hundred dollars. Back then okay, it was like so fucking hard to get people to buy these wearables where the wallet it was like a six dollar cack. Like we could just put up a new ad and they were just static images and they were just selling. So that was the metric man. [SPEAKER_TURN]
0:11:27 That’s like an interesting um process because a lot of people, myself included, will say focus focus focus, get it right, make it great, it’s gonna take a decade plus, but your story is more so like I tried this, I tried this, I tried this, none of it worked, this thing was clearly the winner, I should go all in on this. Is that what your recommendation is? [SPEAKER_TURN]
0:11:58 Well, my recommendation as a person trying to make it is you should make the best decision at the time. So whatever the facts are, when the facts change make, a different decision, right. Uh strong beliefs held held loosely. So like I’m like I’m at an agency, I could have just like did that grind and be like I’m gonna be a V_P_ at this agency when I’m twenty six, I’ll make like two hundred grand a year. But I was like no, these people suck, I think the best decision for me is to just do what they’re doing better, right. And then from the agency to Ridge, I’m like
0:12:18 an agency business, I’m like running an agency sucks, the rich thing seems to be going better, so I should just do that instead. I should find a way to to to encrench myself inside of this business. And then at Ridge it was just like I mean for so long we did not launch any other products, for eight years it was just selling more of the wallet, because that’s what was working. As soon as it started to get a little hard, then we pivoted to everything else. [SPEAKER_TURN]
0:12:45 Which is funny, because I would have thought early on I would have the uh uh a paralysis of analysis when I’ve been like well there’s not that many wallet like you’re like if you told me two hundred million dollars a year in revenue, I would say well you’ve you’ve sold every man in America a wallet, like there are no more wallet buyers. You know what I mean, that’s like one of my uneducated self-limiting belief a little bit would have been on that. If you said two hundred million a year, I’m gonna be like well there are no wal there are norm no more people who need a wallet. [SPEAKER_TURN]
0:13:15 it did it’s a weirdly big TAM like the reason why like we in you know in retrospect I could tell you all the reasons why Ridge Wallet worked it’s, a ten billion dollar a year TAM okay, and like most of that is luxury brands, L_V_M_H_ sells like four billion dollars a year in men’s wallets like curing they own Gucci they sell a ton of men’s wallets but, then tapestry which owns coach coaches a billion dollar a year in men’s sales. So that’s men’s accessories no, men are buying those products they’re, all gifts that are given to ’em and
0:13:17 nobody’s ever excited about getting those products.
0:13:47 So the reason why like I I’m very public that I think rich can get to a billion dollars in revenue is because tapestry has a men’s business doing a billion dollars a year in revenue with nobody loyal or passionate about that. So I’m just gonna make whatever they make uh in all of our cool colours and our cool materials and you know uh I think it’s been so sexy to be talking about tech and A_I_ these past ten years right, or you know tech for ten years A_I_ for ten months. But I was at like the all-in summit and I’m looking at those
0:14:17 guys and like the the products they’re talking about exist inside their phones, right. Like they exist inside some server somewhere. But they’re all wearing fucking cool suits and watches and leather belts and I’m like okay I’ll just sell ’em all that shit, right. Like I’m just gonna sell like all the like the most practical thing ever. Because also smart people don’t enter the space, right. The reason why Ridgewall was able to be so successful is because we’re the only people running Facebook ads for wallets. Like n then there’s been a bunch of other like people who’ve started up the like
0:14:31 and have tried, they’ve all ended up going out of business because it’s really difficult to get right, right. Like there is no repeat business. You can’t like believe that the L_T_V_ will come save you later. It’s very much like can you tactically acquire customers profitably every single day. [SPEAKER_TURN]
0:14:54 Hey uh hey p Brown-Shawn White. Shawn’s got that immigrant emi energy that I love. He’s got you know what I mean like, I call it I call it a a Korean s a Korean convenience store owner energy. You know it’s just like there’s not like too too much thi overthinking it. It was like well you guys are all wearing this, I’ll just sell that. You know what I mean Like. [SPEAKER_TURN]
0:15:26 So you you know uh Munger has these great quotes where he’s like his his main thing is like instead of trying to be brilliant just, avoid stupidity or he’ll be like you know the best thing in the world is stupid competition and we just have not much and stupid competition. It sounds like that’s part of what in retrospect made Ridge work was you were you were like hey look we took this simple idea and um there’s not a lot of other really smart you know D_C_C_ marketers that were doing this and so we were able to to make hay. [SPEAKER_TURN]
0:15:56 Yeah, totally, man. I mean and and to this day, the best D_C_C_ marketers are working on stuff like you know A_G_ one, right. Like they’re selling supplements. And it’s because it’s a better business. Like undoubtedly, if there’s an L_T_B_ tied to your business, like it’s going to be better, it’s gonna be more valuable, it’s gonna trade at a higher multiple. But the other thing is like the, best marketers have have more or less left the industry, right. Like in twenty twenty one, running an e-com brand was incredibly cool. It has gotten less cool every single year. So
0:16:24 There’s less people doing it. There’s less voices. There’s less people talking about it. And it’s ’cause it’s fucking hard. Like I I’m n unjokingly called like the the blue-collar work. It’s like, you know, everyone wants to be shipping cool A_A_A_ products, or everybody wants to be shipping, you know, something that isn’t physical boxes to people’s doors of products you actually have to like make. Everyone wants to build, you know, the services of whatever. So anyway, yeah, over the past four years it’s gotten really uncool to do what I do. [SPEAKER_TURN]
0:16:42 Do do do you guys on on two hundred million in revenue, are you able to make uh good cash flow and profit or, you know, I know so many friends who have these companies and their numbers are huge, but they cash is always an issue. Are you able to manage this well and uh or at that scale do you still struggle? [SPEAKER_TURN]
0:17:10 I think the reason why you guys asked me to be here is to talk about the fact that you can in fact make a profit running e-commerce brands. So uh Ridge has never raised any money. We have no debt. So every dollar in this business every, dollar in my balance sheet is profit that has been reinvested. Uh I’ve been able to make millions of dollars a year for the past couple of years running this business. So yeah, it can definitely be done, man. Like I I I bought a house in L_A_ directly because of selling wallets on the internet. [SPEAKER_TURN]
0:17:26 Give us a sense of the timeline. So you said kind of like, I dunno, it was twenty sixteen ish right, when you when you guys merge or you took over the brand. But can you just give us kind of like a year one five mi uh five million when you when you started working with them, then it went to f ten, then it went to twenty two, then it w you know, give us a timeline. [SPEAKER_TURN]
0:17:57 Yeah. And I’m fucking horrible at timelines. So I I’ll I’ll give it my best. It’s basically been it’s like a fifty percent keger since I started working with the business. So I think they did a kick-starter in twenty thirteen. The first year they do like a million in re in revenue. In twenty fifteen they probably do two or three. When I meet them twenty sixteen they do like five million bucks. So I think it went from five to ten to fifteen to eighteen. And that’s like the hardest year of the business. When it went from fifteen to eighteen,
0:18:12 was like we had no inventory with this massive fucking tax bill, that sucked That. was probably twenty eighteen or nineteen when that happened. Twenty twenty we do fifty million dollars. So I might I m that must have been twenty eighteen. It must must have been thirty. So eighteen to thirty to fifty.
0:18:19 And then we then the fifty this the Covid year. So it went from fifty to a hundred. And then it’s been like
0:18:26 Yeah. I mean l last year was a I’ll just say a multi-hundred million dollar a year. So [SPEAKER_TURN]
0:18:41 let me let me re let me let me recap that for the listener. So you started in fifteen I didn’t hear what you said, but in two thousand sixteen five million and then each year for that was five million ten fifteen eighteen thirty fifty a hundred with last year being multi-hundred. That’s incredible growth. [SPEAKER_TURN]
0:19:12 Yeah. Uh something like that. Uh so it’s been super fun man. Um th you know and Sam you brought up have I sold uh every wallet in America? That was like one of your concerns right, Uh so like I said it’s a massive tam right, and I always say that we’re a great uncle gift. Like you guys are gonna go to Christmas or you guys are gonna go to fucking a birthday or whatever and you have to buy some guy in your life a present and you don’t know his size right, The Ridge wallet’s a perfect price
0:19:42 point, you can get one on sale today for like seventy six bucks and it is size-less and like every guy in your life you’d be like hey look it has your favourite sports team on it or it has carbon fibre whatever, else right, so it’s a perfect uncle gift and most of our products are probably sold as gifts right, some woman in their life buying it for some guy in their life and the wallets are about half of revenue right now, the other half of revenue is all the other stuff we’ve launched so, the biggest unlock we’ve ever had was in twenty twenty two we started selling men’s wedding bands and
0:20:00 once again this is a category where people thought I was so fucking dumb to sell men’s wedding bands, they’re like it is a commodity good, like who the hell is buying this, the first year we do eight figures, it is the highest margin, fastest growing part of my company is selling men’s wedding bands on the internet. [SPEAKER_TURN]
0:20:12 So l let’s let’s talk about this ’cause we’re in this group chat that you you have which is like a bunch of bunch of D_V_C_ brands, I don’t I don’t know what the cut-off is, I think I’m like below whatever the cut-off was supposed to be but, you let me in which, was nice of you and [SPEAKER_TURN]
0:20:13 uh like the charisma higher. [SPEAKER_TURN]
0:20:44 Yeah, exactly. I’m the personality hire. So so I um uh you you talked about like going into new categories and like the wedding band was obviously a smash success. You’ve said the wearable thing maybe wasn’t as big of a success. And you had this kind of interesting way of looking at it ’cause I just thought Ridge Wallets, that kind of like the the sort of carbon fibre metal wallet company and you were talking about like Mont Blanc and you were talking about these other almost like luxury accessory brands and that was the vision you had for the company. When did that vision kick in? Um so like
0:21:03 when did you reframe what the company is? ‘Cause I think entrepreneurs we hear stories where somebody already has the vision and they already have the right frame and it sounds beautiful and big and and really appealing. Um but at the beginning they don’t always have that, you know. Mark Zuckerberg there’s a video of him on a couch somewhere and somebody’s like are you gonna expand past colleges? He’s like nah that wouldn’t be cool.
0:21:17 And now he’s like got satellites above India giving people internet so they can use Facebook. Like you know your vision expands as you grow. Um when did your the vision kind of change or when did you reframe it? And secondly how do you think about going into new categories? [SPEAKER_TURN]
0:21:47 Yeah, well, I’m a very paranoid person. So like in twenty eighteen I’m like this is gonna end. We have to fucking find some other shit to sell. So we got into backpacks and phone cases and all this stuff pretty early in twenty eighteen. Um and we the first year we did like four million dollars in backpack sales or maybe it was three million. It was like a big chunk of revenue and we cancelled that program ’cause I was too stupid to know that was like actually a good amount of backpacks. I was like I’m like the wall is doing twenty million dollars, how come we can’t do twenty million dollars in backpacks? In retrospect we’ve sent
0:22:17 launched backpacks, so I was just too stupid, right. So we were always looking for new products to sell, mostly because I was worried that I was gonna sell every wallet to every man in America. But as you learn more about the industry, like the very common thing is very large hold-cos holding lots of accessory brands. Like L_V_M_H_ is just an accessory brand. Like everything inside their portfolio just sells accessories mostly, to women, but there are occasionally pop-ups of like very strong men’s accessory brands. Mont Blanc is owned by Rich Mont, they own Cartier, like that is the strongest men’s
0:22:47 S_ three brand, and they do five hundred million dollars a year, you think it’s gonna be pens, pens were like eighteen percent of revenue. It’s mostly just like small leather goods, right. And it’s across the world, people buy each other gifts, like wallets and backpacks and belts and everything else. Um so it’s there’s a playbook here, it’s like you have to find a group of customers who like you, you have to like continue to make products that they like and sell it into them, and I am more ruthless with product expansion than I think a lot of brands are, and I think more people
0:23:14 should just try. They’re really worried about hurting brand, and I’m like your customers never fucking think about you. Like you’re lucky if somebody is mad you launched something. Like you know, I always go to uh like BIC is one of my favourite brands, like they make lighters and they make pens and they make razors, right. And we buy all of those products independently, and they’re best in class for both of them. I d I didn’t even think of the I didn’t even think of those three uh yeah. But you say that, I’m like oh, it’s same. [SPEAKER_TURN]
0:23:45 Yeah, yeah, and they’re the best in class in all three of those. If you want a disposable razor or a cheap pen or a lighter, they p that’s the only one. They they own those markets. Um and it’s just because the guy had a plastic factory and he’s like he’s it’s it’s a French company and they they actually they they got ’em to tattoo removal now, right. Like they’re making like they just bought a bunch of tattoo companies ’cause they’re like yeah, whatever takes plastic, we’re just gonna do those things, right. And it doesn’t violate anything in your brain ’cause you just bu like that’s just the way it’s always been. So I think it’s more
0:24:00 than a like than a lot of people want to admit. And y brands die by being too rigid by that. Like all birds should have got into fucking bedding or in like all these different type of things, but they didn’t. So now they’re just a fucking dead shoe company, right? Like you should just be so ruthless with that product expansion. [SPEAKER_TURN]
0:24:13 You’re a very charismatic guy. You you’re you you have a lot of uh interesting parts of your personality that I enjoy. What attributes would you say y are most responsible for the rigid success you think? [SPEAKER_TURN]
0:24:43 Uh one, it’s a very trust-forward organisation, it’s a very transparent organisation. When I say trust-forward, six of us own it, you know, three of them are father, son, best friend, like literally would die for each other, and then me and my C_M_O_ Connor, I I lived with them for fucking five years. So like the guy we I was talking last night, there was a time when we were running the agency where we did not have a thousand dollars. Like we would have to take he his dad gave him a car and it was like a nineteen ninety seven Honda Civic that
0:25:13 smelled and like paint was peeling, windows didn’t work. We would take it to meetings, we would have to park it behind buildings so people didn’t see us get out of this fucking junky car. And you know tying it to that it’s like not being it not being scared to go back to zero, right. Like I’m from like a very poor bad area where p kids died of fentanyl overdoses and like I lived in a flophouse with like fuck it like there was like fourteen guys living in uh bunk beds when I moved to L_A_ and so I’m like dude uh not scared to go back there so just more more willing to
0:25:31 risk, things are never that bad, also being willing to eat shit. I’m like bro, uh if I have to fucking be a waiter, I’ve we’ll figure it out, right. Um yeah, so I yeah, that that fortitude, like not being like so ego tied to whatever the fuck you’re doing. If I if I have to pack boxes, I’m gonna pack boxes, right. [SPEAKER_TURN]
0:26:01 What are the ways people get uh EECOM wrong? So we’ve you talked about all birds, right. It was a a product that was hot, and now the stock is you know dead. There’s you know a bunch of other kind of famous examples of that. And then there’s companies like yours which is keep scaling profitably, you know never, took a dollar a debt, never took a dollar of investment and made it work. Um what are the kind of give us like your your version of the do’s and don’ts. And I maybe just start with the don’ts like the dumb shit that people do, the bad decisions that people make or the
0:26:14 the common traps you see people fall into. ‘Cause I’m sure you you know you’re that’s your network as EECOM. So you see the full spectrum, people who totally flop, people who grind away for years and get nothing out of it, and people who excel and succeed. [SPEAKER_TURN]
0:26:45 Yeah. So you can’t you can’t out-muscle a TAM. So like understand what you’re selling and how boot the market actually is. I see amazing operators waste time with horrible opportunities, right. Like like the TAM is what the TAM is. And if you’re like the number one fucking garlic press seller, like that’s kind of a meme in the community. Like dude, I’m like in your executing ruthlessly to be the number one gar garlic press seller, that is worse than being the twelfth best creatine gummy, right. Because that market is
0:27:15 exponentially growing, there’s L_T_V_ tied to it. Like so many people just waste energy and time on these horrible fucking product categories. So you can’t you can’t beat a tam. You’re not better than the trend. So bone broth. There was companies that exploded, got to eighty million dollars in revenue. It was like dude which th this is the new way people are gonna consume calories. Bone broth. That is now at a thirty Euro low. Because that’s not the cool thing anymore, right? People have moved Yeah. Exactly. So there’s a guy
0:27:45 from uh I_Q_ bar, his name’s Will, he’s incredibly smart. He talks about his l uh trend surface area. So it’s like look, people start with their luck surface area. He’s like I make products to have as much trend surface area as possible. So if keto’s hot, I’ll be keto. If gluten-free’s hot, I’ll be gluten-free. If it’s sugar, that’s cool, or non-sugar, like whatever, I’ll b I’ll make those products to just hit whatever the trend is. And I’ll just change my packaging so I’m always top of trend. And you’re not better than the trend, right. So like that’s the point I’m trying to make is
0:27:59 you can write it up, but it as soon as it crashes, you’ll crash with it. And then my my third one, the most controversial one is that L_T_V_ isn’t real. Like lifetime value only works if you’re alive. So most brands die waiting for L_T_V_, right? [SPEAKER_TURN]
0:28:22 And what you mean by that is you gotta be profitable early on on that customer you acquired. If you acquire the customer for two hundred dollars and he only made you know twenty dollars and you’re saying oh the I the the L_T_V_ it’ll all pay off, that’s kind of what you’re talking about right, versus the way you guys do it is you’re trying to be f profitable either first purchase or are you guys profitable first purchase or is it like you know a month or two later, wh where are you guys at? [SPEAKER_TURN]
0:28:46 Dude, I have to be profitable in the first purchase. You think people are coming back to buy a second wallet in a month? It’s like I’m like dude, the the L_T_V_ from wallet customers is like maybe in ninety days I get ten percent. So like it’s very much I have to be I have to turn not not not a contribution margin per like actual true paying for all my fixed costs every time I sell a wallet to somebody. [SPEAKER_TURN]
0:29:16 Can we play a game called uh change my opinion? And this is for both of you guys. I have a bone to pick with your industry. I I think Sean’s heard me with this spiel before. What what frustrates me sometimes uh not exactly you guys, but I’m gonna use you as an example, but uh people who they all they worry about is like the CAC and the L_T_V_ and the the TAM of these industries uh or uh and they don’t spend any time actually thinking is this product awesome? Is this the
0:29:40 you know like, im is this truly solving a problem and um it bothers me sometimes that it’s more of an arbitrage not, exactly thinking about can I create a widget that makes a customer’s life better and is of high quality. I wish that more people in this industry sort of talked about that a bit more. Do you think that’s a fair criticism or wh where am I wrong on this? [SPEAKER_TURN]
0:29:42 Do you know I mean
0:30:13 I think it’s a fair criticism. My industry’s been washed out though. So like the people you’re talking about ha probably have all laughed. It’s that there’s so few people left in EECOM. Like like Sean brought up like the group chat. Maybe two people respond every single day and one of ’em’s me too. Like it’s it’s like we’re at we’re at like a a multi a multi-year low of interest in the industry. So like yeah, al all those people have left. The people who are still here and shipping. Dude, I bring up Hexclad. You guys wanna talk about like amazing um yeah, so like I’m [SPEAKER_TURN]
0:30:13 Yeah.
0:30:19 You you’d tweet about ’em all the time and like they inspired me. ‘Cause you said they like worked for three years finding the perfect pan. [SPEAKER_TURN]
0:30:50 Okay, so when I met Danny, it was twenty twenty, they d they didn’t have a web site. He says they did, but like you couldn’t check out on the fucking web site, okay. They they were fucking selling pans at trade shows and like county fairs cooking up eggs themselves right, In. Costco road show, so not even in Costco, they had a pay to show up at Costco and fucking cook up these eggs and they from twenty twenty they’ll do I mean it’s documented at this point over a half a billion
0:31:11 dollars a year. Like they they got to hundreds and hundreds of millions of dollars in annual turnover with a hundred million plus in profit. Danny will fucking shoot me for saying all this stuff, but like I think it’s all pretty pretty rare public, you know Gordon, Gordon joined the brand, they have Fox as an investor now, but pre all that they were doing nine figures in a year, okay. [SPEAKER_TURN]
0:31:21 didn’t Gordon Ramsey like write a huge cheque, he didn’t just like sort of join the brand, he like invested a b a pretty sizable amount or w was he part of a round or was it him personally investing in it? [SPEAKER_TURN]
0:31:36 That’s all public, there’s like uh there’s like a thing uh he came in with Fox on some s on something and like you know because, Fox it’s like a three way deal, Fox wants to give him money to make shows and he wants to get more equity and Hexclad so it’s like a big three way deal. But uh [SPEAKER_TURN]
0:31:51 Hexclad pans in my kitchen right now. They’re great. Uh you know I don’t know if they’re the best pans ’cause I’ve tried a hundred pans, but they’re way better than the pans I had before and to the point where I bought a second set of them ’cause I was like these are great I’d. I’m happy with these pans. [SPEAKER_TURN]
0:32:21 Yeah, and they put years into the product development. Like they actually spe like they care about their customers. What it comes down to is respecting our customers. If you’re just like that’s why I don’t like info products. Like if you don’t respect your customers, if you’re just like trying to arb them or like, you know, we have a customer name uh, so our customer’s everyday dad, we call him Ed. And I’m like almost every meeting I’m like, are we respecting Ed? Are we delivering value to Ed, right? Everyone has an Ed in their life. Think about like your guys’ brothers or your dads. He’s just like a guy who likes widgets,
0:32:51 like he loves phishing and like he loves N_F_L_ like, that’s fucking Ed. And I’m like look, Ed has Ed has paid for everything in my entire life. We need to take care of Ed. We wanna make sure Ed gets like the best cool as shit possible that, we give him great value and great deals. And that’s what Harscladd did. And like and we talked about like I think this industry it’s a bad rap because so many people have entered it and so few people have left with any amount of money. Or like it’s people who did leave with money like it was like a greater fool theory. They were just tricking somebody to give them money and then they bailed out. But
0:33:09 then there’s companies like Hackscladd where there’ll be a fifty year brand. There’ll be a generational brand and they’re fucking crushing it. So it’s possible. They’re buying Super Bowl ads. Like I mean this is you know a b they were boot-strapped up until like two years ago like a boot-strap brand getting that done. It’s fucking amazing. [SPEAKER_TURN]
0:33:40 Yeah I. I think Sam b uh what you said is true that marketing skill is the core competency for most of the winners in this space. Most. There’s a cu there’s a couple who just really nailed product or community right, and then they just they they built slowly brick by brick over over the d over a decade. But for the most part the people you’ll hear about and the people you’ll meet, they’re great because they are great at doing Facebook ads and Google ads or now TikTok uh content. And so that’s true, but at the same time you’re like oh I
0:34:10 that it’s this CAC to L_T_V_ thing, well it’s like guess what, when you sit down with your team, you’re like how do we raise L_T_V_, right? Like there’s some natural gravity, like Sean’s saying, like you buy a wallet every seven years, you’re not really gonna change that. But like for my product you do buy it m way more often, you know. In the first six months we double our double the amount that they’ve i they paid us on the first order, right. So it’s really it’s a it’s uh uh it’s r it’s a movable number, right. We can actually affect that. And then you’re like alright well, how do we increase L_T_V_ It’s? like yeah, you could spam ’em with emails, you could spam ’em with text
0:34:40 messages. But guess what, the better way to do it is to make an amazing product that they’re gonna want to buy again and like lower the return rate. How do you lower the return rate to get more profit, right? It’s like make a better p quality product. And so I think that when you that for anybody who’s actually gonna try to win, you will have to b make an amazing product. Otherwise you won’t be able to do the the ad arbitrage you’re trying to do because um how else could you increase the L_T_V_ if everyone hates your product or it’s not doing anything for them. And so you know, I think the the people who stick around and actually win in the
0:34:42 run or the ones who who do what you c [SPEAKER_TURN]
0:35:12 Yeah, I think those are good answers to the to the question. I think that um like you know wh I uh when I see someone making like a boost your testosterone like thing or I’m like dude, I don’t know if any of this works or if they’re just really good at making a label that’s appealing. And so I like start to lose confidence in the industry as a whole. What actually and that’s actually I’m actually curious if you guys have any of these like D_C_D_C_ brands where you’re like this product is amazing. And so it’s actually really good to hear that hex
0:35:15 is one of ’em Uh. do you guys have any other favourites? [SPEAKER_TURN]
0:35:45 Well, going back to the supplement side, um a lot of it is like I mean a lot of this work is being done for like the the co-manufacturers right, Like. there’s co-packers that actually do all the formulation. So a lot of times people are just showing up and buying stuff off the shelf. So if you’re getting any sort of supplement, like it’s probably the same supplement white-labelled a hundred times, and that’s just like the way the industry works. So you know, I would put hard goods in a special category and like we talk about D_C_C_ brands. I mean
0:36:16 all of my favourite fashion brands are small and independently owned, right. Like does that count? Like uh this is Buck Mason, these pants are James Purse, right. Like I just got a suit from Billy Reed. Like these are all small independently owned companies, right, that are that are running. They have Shopify websites. Does that count as D_S_C_, right. It’s it’s very much like there’s there’s a a black box of bad rap products and I think a lot of it c supplements that come from commands, right, or anything to do in the health and wellness space. Like that is like typically where there’s a bunch of
0:36:25 But if you buy a Ridge Wallet, you’re g you’re gonna get what is on the package, you know what I mean Like? or one of our phone cases or whatever. It’s like a fucking phone case, man. Like it’s pretty good. [SPEAKER_TURN]
0:36:37 Um who who else is crushing it? So what are some D_C_D_ brands that we wouldn’t know or we wouldn’t really r realise how how well they’re doing um just because we’re not in the space, we’re not paying attention. [SPEAKER_TURN]
0:36:44 Yeah, the other reason you guys called me here, to talk about the Wubbles, okay. The Wubbles is fucking crushing it Uh. and [SPEAKER_TURN]
0:36:46 Wubbles, okay. So what are what are the Wubbles? [SPEAKER_TURN]
0:37:16 So we are we are f we are three young adult men. We’re not the core customer, right. It is a uh crocheting product. So it is like you make little characters and they have licensing and like there’s little education. It’s like basically like either it’s you know young people doing it to have less screen time or it’s you’re doing with your kids so they have less screen time. And that problem Yeah. Dude thi when I met them they might be they might have been doing ten million dollars a year.
0:37:46 Like they in two years they’ve gone from ten to probably a hundred and fifty million dollars in revenue. Like no no capital raised, they are still and I really th I like ’em and I respect ’em, they will not fucking launch subscription boxes. They’re like yeah we don’t we don’t think it’s that important. I’m like Jesus fucking Christ. Like if I can shoot these people I would because they won’t do subscription. It’s like the perfect product. Like it is just educational, it’s fun, it’s connecting with your family,
0:38:09 Like it’s this movement against screen time, which is like a big trend that they can take advantage of. There’s every month they could have new characters, they could just show up in your door, you do ’em, there’s a little community aspect. It’s the single best brand and execution that I’ve ever seen. Like this will be a billion dollar exit, because they’re still fucking good at it. There never is any goddamn money. Just like it’s two people just putting it together in North Carolina. [SPEAKER_TURN]
0:38:16 How did they even think of this? Like whoa wha wha wha how did this get on the were there were there big crocheters? Wha wha what is the sto origin story of this? [SPEAKER_TURN]
0:38:46 Yeah. So I think it’s a it’s a husband or wife team. I think she was just crochet. And she’s like yeah, I would love to have little guides. And there was like an Etsy community of people like selling crochet guides and she’s like she would buy ’em and then she’d be like okay, I’m gonna make my own. And then she would, you know, release ’em and then it’s like oh, maybe I should just sell the my my little crochet kits. And bam, fucking explodes dude. So like if you’re listening to this and you’re thinking like okay, I want I’m I’m not washed out. I wanna try e-commerce. I highly recommend
0:39:13 into services first, okay? Like you should learn how to make money on the internet via services. And if the show’s called My First Million, you’ll m you’ll make your first million dollars delivering good value to people like me or like whoobles, whoever else. Then find a trend that’s very fast emerging, right? Like I think no screen time. I think creatine, those are the two biggest ones of the next two or three years. Like if you can do a no screen time creatine crochet kit, something, fucking, you’ll figure it out, right? [SPEAKER_TURN]
0:39:21 Dude, I’ve uh spent so much money on Legos lately for that no screen time uh trend. What are other no screen time products? [SPEAKER_TURN]
0:39:24 I feel like um I feel like the micro-plastics is another another trend, right Like? [SPEAKER_TURN]
0:39:26 And air quality. [SPEAKER_TURN]
0:39:57 Yeah. Dude yeah, so like uh just glass everything. Glass bottles, glass containers, what uh just r like imagine if you could just buy a backpack and they’re like we guarantee there’s no plastic in it. Fucking awesome. Just wrap it in paper shipped to people. The that’s another trend I think it’s gonna be fast emerging. Um yeah, no screen time. Just more physical tactical toys, right. Like bringing back the fidget spinner but as like a focus tool, right. Like I think there’s a bunch of shit you could do in there. Um but anyway, those are fast emerging trends right now.
0:40:19 protein was a trend that’s basically probably dead, right? Pre-protein was collagen. There’s always these just like pockets of success you’ll find. And that’s the beauty of the space. It’s like um what’s the what’s the early boob milk? Uh col what’s that called, colostrum? Yeah. Oh my god, I’m getting so many ads for colostrum. [SPEAKER_TURN]
0:40:29 Like r I think raw honey. I it had like a small moment. I’m sure it’s gonna come back, right. There’s like a bunch of New Zealand honey companies. [SPEAKER_TURN]
0:40:45 And if you if you were a founder, where would you kinda look for these? Do you are you th are you a proponent of look in your own life? Wh what are you doing or what is your w wife doing that seems unusual, but actually there’s a passionate community? Are you like I scour Etsy and Reddit? Is that where you would look? How would you do this if you didn’t know which trend to start with? [SPEAKER_TURN]
0:40:48 Right. So you should look in your own life because
0:41:20 you probably don’t have the skills to actually go out there and like f like you know or it in i I’m assuming you have no resources to actually pick a trend and double down and actually deliver on those promises, right. So you should find something in your own life that you actually know and are passionate about. If you’re a more seasoned professional, I think you can find those things right, and really what it would be is I think Reddit’s dead, I think Etsy’s dead, like that’s A_I_ slop basically at this point. The instantification of the internet has happened to those two websites. Uh I
0:41:50 look at literally what’s happening inside of Erwan like, I would just move to L_A_ and go to Erwan every single day, because they w those are the best people at catching trends. Like they were anti-backs in fucking nineteen ninety seven, right? Like that’s like what they are very very early on those things. Um and if you’re if you’re not gonna do that, then it’s like you just you have to follow the girlies on TikTok, right? Like th the other one I bring up is Pilates. Like Pilates was a thing in two thousand, it’s having a
0:41:58 massive resurgence right now. And like once again we’re three young men how, are we gonna fucking make a Pilates brand? But Pilates for guys probably could be another trend. [SPEAKER_TURN]
0:42:00 Just needs a new name. [SPEAKER_TURN]
0:42:25 Yeah, totally Well. Laplas I think is what the actual name is. Uh oh no La. something like that. My my my earth knows. Uh but yoga yoga is a very much a downward trend, right. And like this yoga was just a synod like a a synonym for health and wellness. And like you, know, non just Jack dude’s waitlist thing. I think that’s actually changing and it’ll be something else like Pilates or or something else. [SPEAKER_TURN]
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0:43:35 you go to Vanta dot com slash million again, that’s Vanta V_A_N_T_A_ dot com slash million. Alright back, to this episode.
0:43:45 What are some other uh going up and going down Give? me like a a topic or a trend and tell me is this a uh buy or sell moment? [SPEAKER_TURN]
0:43:52 Well uh look this, is not a hot take. This is not Scott Galloway fucking, but all
0:44:23 all big box department stores, like it’s very very much like we just saw Joanne’s fabric go down, we just saw container store go down, we just saw Party City, like that’s gonna accelerate, like there’s we are over commercial real estate, there’s too many big box stores, like even Target is having a really fucking hard time, and my biggest wholesaler is Best Buy, I crush it in Best Buy, um but all of that shit is probably
0:44:53 the the FUD isn’t real enough, it should be even more real, like Nordstrom’s Macy’s, like I think small independent uh brick and mortar shops really do work, like if you’re in L_A_ you go to Century City, like but the f I was walking around Bloomingdale’s and you know th th like ten years ago it was or even twenty years ago probably, it was like the like the the number one place to buy women’s fashion, like women contemporary fashion, it was the coolest thing ever, I’m walking around they got blouses that are eight hundred dollars and it’s
0:45:23 on a Saturday. Like nobody’s fucking shopping there at the d at the best mall in L_A_. So I th I think the FUD isn’t even you should we should we should be even more scared that there’s gonna be more collapses and any any sort of commercial real estate that’s like ten thousand square feet plus, that is like selling physical goods. Um the other one is probably better for you, candy, like uh there’s like V_C_s have really backed this like better for you artificial, sugar, like you go to a fucking target, like there’s all of these like weird
0:45:39 sugar brands, I think it it’s gonna come out that that causes cancer and R_F_K_ is gonna be pretty against it. So anyway, I’m probably not launching anything in there, probably probably launching a real sugar and that’s a very hot tape that could add f age really bad that like real sugar is gonna make a massive resurgence. [SPEAKER_TURN]
0:46:01 Uh what do you think about like you know these uh uh like other people who would do the same model you did, services to product. So for example I think the guys behind Brez, which is that uh I think it’s a I don’t know what it is, it’s like a mushroom drink or it’s like a adaptogenic drink. S basically it’s like al it gives you a high but it’s not alcohol, it’s like mushrooms or wheat or something? [SPEAKER_TURN]
0:46:11 It says Brez is micro-dosed cannabis and mushrooms in a can. It’s a wheat drink. It’s a wheat drink. Those guys were agency people, right? [SPEAKER_TURN]
0:46:52 to have controlled substances be advertised. So like he that’s like his specialty. Like if you had a cannabis company, you had to go through him uh in in his agency called We Are Lucid to actually do the cannabis advertising on meta, right. He found a compliant way to do it. Um so he’s incredibly smart, nixed an amazing operator, ran a great agency. That’s the best model. The other person is Zach uh uh from Homestead. He has a company called Hollow Socks.
0:47:23 Like uh I don’t know how much time we have, but to unpack the history of e-commerce, e-commerce one point O_ selling random shit on the internet, okay. Like whatever, pets dot com, e-commerce two point O_ is marketplaces, it was E_ Bay versus Amazon versus everything else, e-commerce three point O_ is what we consider D_T_C_ one point O_, which was like the first brands coming online, the Allbirds whatever, else. Then you get D_T_C_ two point O_, which was the COVID hotness, the peak, everyb everything exploding, right. We are now in
0:47:25 to see three point O_ which, is small
0:47:57 serviced providers pivoting to brands with very lean teams, and Create Gummies, Hollow Socks, Brez, the three best examples Create. Gummies has a team of eight people. I think they’ll do forty million dollars this year, right? Hollow Socks is a team of five people. They’ll do thirty million dollars this year selling, socks. Most definitely met ads, right? And then Brez, they’re public with their numbers. Follow Aaron on LinkedIn, and I think they did five million dollars last month in revenue, okay. W uh
0:48:27 in beverage, in a controlled substance, that’s fucking insane. Like that company’s worth three hundred million dollars today, right. And I think their team’s incredibly small, maybe maybe twenty people at this point. So um yeah, that is that is the best bull case for e-commerce right now. Service operators who’ve seen like the rise and fall of all these different brands have learned from them, have spent their money to get good at ads, right. Launching targeted, hyper-specific brands and the
0:48:28 three I named are the best. [SPEAKER_TURN]
0:48:34 Sean, you should go go to drinkbrez.com Do. you see their website? That’s the prettiest website I’ve ever seen in my life. [SPEAKER_TURN]
0:48:39 Yeah, that’s usually not a good thing. The prettiest websites are not usually the ones that that work the best, but [SPEAKER_TURN]
0:48:44 I hear you and I am on board with that. This is one of the exceptions. Look at this. [SPEAKER_TURN]
0:49:14 I you know I think uh what what happens is you see the front the front of the house is not always where the traffic is going. So you know the front of the house is the it’s kind of a hero, it’s the brand, it’s the aspirational, but you run your ads and maybe you’re running straight to a P_D_P_ or to a TikTok shop or to different things like that. I think they’re very heavy into TikTok right, like the their model is the the TikTok blueprint which we just did a episode with with Rob from uh Rob the bank about like the the TikTok blueprint that a bunch of the brands are using right now and I think Brez is doing that where it’s organic co it’s it’s kind of the Tik
0:49:44 affiliate slash organic model where you’re getting really cheap C_P_M_s because TikTok videos can just pop off and you you know y you’re you’re putting out thousands of pieces of content a month but uh and it’s driving sales uh un unlike the way w you know I’ve been doing it or you’ve been doing it Sean which is like a lot of um you know Facebook, Google ads, you know you put a dollar in, it’s attributed exactly how much that uh that ad generated in revenue and you just sort of optimise from there. The TikTok game is a little bit different, it’s a bit of a spray
0:49:46 and play a game for the most part. [SPEAKER_TURN]
0:50:11 Yeah so I just sent you guys this is from Aaron from, Brez. They did four point six million in revenue in month twenty one, January. This is their Lincoln post. So this is all public information that they share. Uh TikTok shop was thirty seven grand. Amazon revenue was three hundred and forty two Uh. I’m not gonna read this for the audience. Maybe we’ll just show it, but um dude they’re fucking killing it. Brez is awesome. [SPEAKER_TURN]
0:50:14 Mm-hmm.
0:50:26 Uh not it’s not an actual P_N_L_, but like you know sort of a b a marketing P_N_L_ on uh on Twitter and LinkedIn. It’s great. Let’s uh we could read this. So total net revenue, four point five million Uh. let’s see that’s, in you said month twenty one now? [SPEAKER_TURN]
0:50:29 Yeah yeah, dude. It’s like t it’s literally [SPEAKER_TURN]
0:50:52 Then they’re ads. They spent a million dollars on Facebook, uh four hundred thousand on Google. On uh TikTok ads they spent zero, but I know that they must be spending on on the affiliate part of TikTok because I if I’m on TikTok I see Brez stuff all the time and it’s always an affiliate link wh uh you know s swipe up and you can sort of buy it from there. Um app love and four hundred seventy two thousand. [SPEAKER_TURN]
0:51:09 It really seems like the one of the keys to this business like and this is not always the case, but it’s picking the right idea. The right idea and the right angle r i it it seems like there’s no other way to explain how something can get to four million dollars in monthly revenue in twenty one months. [SPEAKER_TURN]
0:51:28 Yeah. I mean and and the reason they were able to be right is because they’re both agency operators, right. Like they ha the right people to launch a product like this. And also it’s so hard. The reason why they’re willingly sharing their P_ and L_ is they have nothing to hide and they they don’t think you can beat them, right. And I think anybody listening to this can’t beat them, because they can’t beat them. [SPEAKER_TURN]
0:51:33 Are they shutting down their agency or they’re just gonna keep trying to do both? Like why would you run your agency once this happens? [SPEAKER_TURN]
0:51:54 Yeah, I mean you end up just like you know selling it off or hiring operators. I mean I mean Nick uh Shackelford, which was the partner in Brez. I mean he had you know uh an events business, he had an agency business, he had an email business. I think you just you find partners to take that over and you just put more time into this. But I mean early on I was like willing to bet on these fucking guys, because they’re the best. [SPEAKER_TURN]
0:52:02 Sam, I want you to Google Nick Shackelford tattoo and um tell me if you wanna compete with this guy. [SPEAKER_TURN]
0:52:06 Oh my God. His whole body is covered. [SPEAKER_TURN]
0:52:11 Yeah from the neck down to his toe every, inch of his body is covered in a tattoo. [SPEAKER_TURN]
0:52:20 He looks like a like a jap like a yeah he looks like a Japanese murderer. Like you know how they do like the yakuza they, do like the whole that’s insane. [SPEAKER_TURN]
0:52:24 Included is Nick. I mean he actually got it done man. He said it was so painful. [SPEAKER_TURN]
0:52:29 Oh my God. It looks horrible. I mean it looks great, but I don’t wanna do it. [SPEAKER_TURN]
0:52:31 Looks painful. [SPEAKER_TURN]
0:52:34 Yeah, that’s what I mean. Uh that’s insane. Uh what do you think Ridge is worth right now? [SPEAKER_TURN]
0:52:43 Oh man, I mean the m the the market for a brand like us is at an all time low And. like the w like look at the same thing. [SPEAKER_TURN]
0:53:14 Uh we’d probably a market clearing price is probably three hundred million. Like I could probably clear that at at the market with our growth and everything. It’s really hard to sell my business right now. And like I’m not trying to sell my business right now, right. Like I think we have like by the end of the decade we’ll be doing like five or six hundred million dollars a year in annual revenue. Really driven by this big tech rollout. So like we’re really big in Best Buy already, we’re gonna be in Apple, we’re gonna be in Verizon, selling power banks, phone cases, cables, we already sell our wallets in a
0:53:44 lot of those places. Um so that’s like the next evolution of the brand is just more product expansion. But it’s hard for me to sell my brand when Solo Stove is in a public company and I think they’re worth maybe a hundred million on the public market, right. Like there’s it they peaked at two point one billion dollars and now they’re probably the market cap today is a hundred million. Um and they have like four hundred plus million in revenue, they own chubbies, like uh it’s very hard for my brand to go to market when if you squint we kinda look like them.
0:53:54 they are they they just need to be taken private. There’s a lot of take private things to happen, and interest rates are still too high to take a lot of stuff private. So we’re just waiting. Waiting for all that to happen. [SPEAKER_TURN]
0:54:02 What would you wanna sell if you weren’t doing Ridge? If you had uh sell Ridge today, what would you what other pro I mean you’re not a guy who would stop. What other product would you wanna sell? [SPEAKER_TURN]
0:54:33 Yeah, my goal for Ridge, eventually I’m not the long-term shepherd of this brand. Like if it if it’s gonna go public or whatever, or m most likely get bought by one of the roll-ups, like in our industry, that’s that’s the exit path. There’s ten strategics that end up buying brands like ours. Um I would like to g net a hundred million dollars, and then I would like to start a portfolio of brands and services basically. Like, you know, everyone wants to have a their own little P_E_, their own little family office type thing. So I would launch a bunch of we’re
0:54:40 little e-commerce brands that I think are gonna be trend-relevant and higher service providers to to run that as businesses. [SPEAKER_TURN]
0:54:42 I love that you know what you want.
0:54:49 You know, you’ve mapped this out of like what your ideal setup is. I love that. I love people who call their shot. [SPEAKER_TURN]
0:55:20 do you you talk about trends like but but you know bone bone broth it’s hot then it’s not keto it’s hot then it’s not and so like why go after a trend if it’s gonna ultimately you know do what trends do most trends don’t last forever. So is that like building your sand castle you know uh building your castle on on on quicksand or something like that like why why go after a trend when trends have this like shelf life are you trying to time and exit or are you trying to you’re gonna pop
0:55:22 What what’s the plan if you’re gonna build on top of a trend? [SPEAKER_TURN]
0:55:51 Yeah dude, going back to Will from I_Q_ bar, trend surface area. Like you create a product and a trend because that’s the w the best way to grow is in a growing market. You can be average in a growing market and grow very very fast right, I was an average operator when Facebook ads were growing and that’s why I my business grew. Now I can be a good operator ’cause I have to be right, but when a market’s growing very fast, you could just be average. And then once once you get some sort of success, it’s it’s pivoting.
0:55:54 So like if I was in the bone broth business,
0:56:25 I would have told them like hey, we have to do fucking protein-focused bone broths or bone bars. Like I I I’m that guy coming in here trying to like disrupt whatever fucking business I’m in. I’m like we did it yeah, if I was at bone broth, I’d be like look, that’s fine, we should do that. We’re gonna do bone bars and we’re gonna get whatever, some jack guy talking about how they’re great. Then I’d be in the bars business and then it’d be like we gotta do bone supplements. We gotta be the only guys doing bone whatever m marrow pills. Like that’s the type of shit I’d be pitching to ’em. So uh [SPEAKER_TURN]
0:56:55 love that that’s your answer ’cause it’s like that’s the attitude you have to have to win in that game. My takeaway is man, what a horrible game to play Uh. like y y you know I I was just doing a podcast yesterday with a guy and he goes uh you don’t wanna be in the fresh produce business. He’s like um you know uh y you know he’s like you wanna be YouTube not a YouTuber right, just as a simple example. He’s like y you take the best YouTuber and they’re in the fresh produce business. They have to keep s running as fast as they can on that treadmill and if the treadmill gets faster and faster
0:57:15 every year, and if they stop they, fall behind and there’s a thousand other people on that treadmill. And so same thing, like if you’re on a trend and a trend y, you know, almost by definition is gonna sort of peter out and then the new trends will emerge, that just seems like a really hard way to win in business when there’s other styles of businesses that don’t have that problem, right? But it’s a like [SPEAKER_TURN]
0:57:33 but but Sean, I think you’re both could be right. I think the right answer though is to which whichever path you take should fit your skill set and interest and you should commit to it and be that. You know we had Moyes on uh Moyes Ali from Native Beaudre and we said like why don’t you do something easier He. goes ’cause I’m a merchant, this is what I do. And I think that’s [SPEAKER_TURN]
0:57:46 it’s that silly. I actually disagree. I think committing to a path is significantly better than not. And if Sean Frank is committing to this trend thing, then he yeah, it’s exhausting for you because that’s at your interest. [SPEAKER_TURN]
0:58:24 Yeah, I I’m not saying what he’s doing is bad. I’m saying he’s the he’s a outlier winner. And even he’s like, yeah, there’s a company that’s like us that does four hundred million a year is probably w and is worth a hundred million on the public markets, right. Or you know, we have to continually hop, you know, from one category to the next. And i he’s in a better one, it’s more enduring, but let’s say you’re on uh the bone broth type of type of thing where it’s a wellness trend. And the wellness trends or the diet trends, they change very f very very rapidly, right. It’s like it that’s a hard game to play compared to like th you know, uh
0:58:37 look at the other look at the um possible set of businesses you could go into, that’s that’s definitely on the hard side, dude. Like uh E_com_ is definitely on the hard side and E_com_ on top of a trend is i is the hard version of the hard version. [SPEAKER_TURN]
0:59:07 Oh dude, look, I I understand completely. But the reason why I’m in it is because it’s permissionless. When I was twenty two, nobody would let me build fucking Nvidia servers or whatever. Like, you know, a m a more robust infrastructure led business, right? Like if I was gonna provide, I don’t know, fucking routing cable services, some random shit like that. Like maybe now I, you know, I c I could get rid of that. But e-commerce is permissionless and that’s why I like it. Agencies are permissionless. It’s like the reason why we sold on Shopify is
0:59:14 because nobody would give us a uh Nordstrom’s P_O_ right, Like. there’s there’s a a level of gauging or s [SPEAKER_TURN]
0:59:44 SaaS is permissionless, communities are permissionless, there’s a lot of things that are permission newsletters are permissionless whatever, there’s a lot of things that are permissionless. The agency one is actually more permissionless than EECOM because you know for EECOM you have to buy inventory right, there’s a there is a capital requirement, the agency one is is different right, that’s just I’m gonna hustle my skills and I’ll get cash flow then what you did was use that cash flow to then you know invest and continue to grow the brand right, but b for most people they they get I know a lot of people that got excited about EECOM and didn’t realise like
0:59:48 how scaling works with EECOM, where [SPEAKER_TURN]
1:00:09 Yeah, it’s the it like it people squint and think it’s SaaS and it’s not. It’s like it’s like your bi your problems get harder the bigger you get, right. Like it’s bigger P_O_s, it’s more management, it’s everything else where, you know, if you’re SaaS it’s like, you know, if it’s if it’s if it’s ten zeros or a thousand zeros being processed through your thing, who the fuck cares. Um but you have to [SPEAKER_TURN]
1:00:34 you you’ve gotten more you’re you’re a great follower on Twitter because you’re hilarious, but you’re this perfect combination of being hilarious, but also I think you’re right, like because you’ve been there, done that. But has being as opinionated as you have been and willingness to call people out and this willingness to like say what you think, has that ever held you back and do you regret doing that or do you think that like going all in on being a strong personality has benefited you? [SPEAKER_TURN]
1:00:57 I mean the only tangible negatives of being a public personality on the internet is w is if and when you get sued because you will be sued, right. Everyone gets sued and it it’s it’s the cost of doing business. They will read your tweets in depositions. So just like that is the reality, right. I think a lot of people like don’t want to like offend people. That’s embarrassing or what? [SPEAKER_TURN]
1:01:03 What did you mean by saying you want to shoot the wobble family? [SPEAKER_TURN]
1:01:26 Like I mean I was I got to pose why I told someone I was gonna drop a nuclear bomb on them and they read that. Well I don’t I don’t explain like I don’t have access to nuclear weapons and stuff. Um but like I mean you should you should be yourself and authentic and uh my Twitter has sold like $300,000 worth of wallets. So definitely it’s a it’s a net positive, but [SPEAKER_TURN]
1:01:44 your podcast, right. So your personality and being public about what you guys how well you guys are doing with Ridge and being funny and opinionated led to you guys doing this EECOM podcast. And the EECOM podcast pays you a bunch of money, right. Like you guys are doing really really well off that. So that’s paid off in in a different way, right. You wanna talk about that? [SPEAKER_TURN]
1:01:51 Yeah yeah, So I only have like four minutes I gotta go to a call and do my real job. Uh m maybe something you guys don’t know anything about but, uh [SPEAKER_TURN]
1:01:58 Huh? I take naps after this. [SPEAKER_TURN]
1:02:28 the reason why I got public on the internet is because in twenty twenty two all of my friends moved across the whole world because of COVID and I didn’t hang out with anybody. And it sucked for everybody. Twenty twenty one twenty twenty two like I used to have a community of people who talk about e-commerce and then they’ve all moved so I was just by myself and I’m like let me just get on Twitter and start talking about e-commerce um and through that I made a bunch of great friends uh because it’s a very lonely thing running a big business. Like you know my my best friends from high school um one of
1:02:58 them, goes to like crime scenes and cleans up like when somebody kills themselves or whatever. And the other one does garage doors. So like imagine trying to tell them being like yeah man like you know I spent eight million dollars on meta but I probably should have spi like they they they had somebody shut the fuck up. So you want you wanna find friends who uh you know can s can you know have some sort of sympathy for what you’re building. So got on Twitter found, those people um they’re all like you know Jason from Hexcloud’s on there Mike, Beckham from uh
1:03:28 simple model. He has like two hundred million dollars selling fucking water bottles. Matt from PELAcase. We started a podcast Yeah. dude uh it’s called Operators. So it’s a it’s a niche e-commerce podcast. We have spin-offs. We have marketing operators Dude. I, think it’ll bill at least two million dollars to sponsors, but it might bill like four million dollars to sponsors. And it’s just us talking about e-commerce Uh. probably one tenth the listenership. I mean way less. Maybe one one hundredth the listenership you guys get. But because it’s so niche, it’s like way more of an actual
1:03:58 a community, right. And you know I think people wanna be you guys because you guys are like an entertainment show, right. You guys are like a big show, you know massive, reach, entertaining people. But if you’re listening to this and you’re an expert at something, do an incredibly niche YouTube channel because like the the sponsor integrations are just so much deeper. Like our sponsor is fulfil the E_R_P_, right. And like you guys don’t know what that is, but if you’re an e-commerce merchant you need an E_R_P_ and the annual contracts are a hundred and fifty thousand dollars a year and we’ve probably sold
1:04:09 hundred of them, right. So it’s like they’ll give us six hundred thousand dollars a year because we’re the only marketing channel for them, right Um. anyway, but yeah, so we do a podcast. [SPEAKER_TURN]
1:04:31 right now, in this moment of time. Never stop selling guys. [SPEAKER_TURN]
1:04:34 We appreciate you man. Thanks for doing this. Alright, that’s the pod. [SPEAKER_TURN]
1:04:45 I feel like I could rule the world I. know I could be what I want to Uh. put my all in it like no days off On. the road, let’s travel, never looking back. [SPEAKER_TURN]
1:05:19 hey Sean here a quick break to tell you an Ev Williams story. So he started Twitter and before that he sold a company to Google for a hundred million dollars and somebody asked him they said Ev what’s the secret man how do you create these huge businesses, billion dollar businesses and he says well I think the answer is that you take a human desire preferably one that’s been around for thousands of years and then you just use modern technology to take out steps. Just remove the friction that exists between people getting what they want and that is what my partner Mercury does. They took one of the most basic needs any entrepreneur has managing, your money
1:05:49 and being able to do your financial operations. And they’ve removed all the friction that has existed for decades. No more clunky interfaces, no more ten tabs to get something done, no more having to drive to a bank, get out of your car just to send a wire transfer. They made it fast, they made it easy, you can actually just get back to running your business, you don’t have to worry about the rest of it. I use it for not one, not two, but six of my companies right now, and it’s used by also two hundred thousand other ambitious founders. So if you wanna be like me, head to Mercury dot com, open up an account in minutes, and remember Mercury is a financial technology
1:05:56 not a bank, banking services provided by Choice Financial Group and Evolve Bank and Trust members F_D_I_C_. Alright, back to the episode.
1:05:56 (music)
Episode 684: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to Sean Frank ( https://x.com/SeanEcom ) about his $200M ecom playbook.
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Show Notes:
(0:00) Sean’s first million
(8:35) $5M – $200M in 6 years
(25:57) What people get wrong in ecom
(30:33) Case study: HexClad
(36:52) Fast-emerging trends
(40:57) How to spot trends
(44:54) Services-to-product playbook
(51:47) Sean calls his shot
(54:01) Winning at the trends game
(59:01) Being outspoken on the internet
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Links:
• Operators Podcast – https://www.youtube.com/@Operators9
• Ridge – https://ridge.com/
• PostPilot – https://www.postpilot.com/
• LVMH – https://www.lvmh.com/en
• Tapestry – https://www.tapestry.com/
• HexClad – https://hexclad.com/
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Check Out Shaan’s Stuff:
Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd
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Check Out Sam’s Stuff:
• Hampton – https://www.joinhampton.com/
• Ideation Bootcamp – https://www.ideationbootcamp.co/
• Copy That – https://copythat.com
• Hampton Wealth Survey – https://joinhampton.com/wealth
• Sam’s List – http://samslist.co/
My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano