Podcasts about dollar shave

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Michael Jones of Science Ventures joins Nick to discuss Lessons from Liquid Death and Dollar Shave, Why X's Super-App Strategy is Flawed, Building Through Influence, and The Power of Observation. In this episode we cover: Disrupting the Razor and Beverage Industries Influencer Marketing and E-Commerce Trends Early Stage Investing, AI, and Startup Landscape Identifying Successful Founders Guest Links: Twitter LinkedIn Science The hosts of The Full Ratchet are Nick Moran and Nate Pierotti of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area. Want to keep up to date with The Full Ratchet? Follow us on social. You can learn more about New Stack Ventures by visiting our LinkedIn and Twitter. Are you a founder looking for your next investor? Visit our free tool VC-Rank and we'll send a list of potential investors right to your inbox!

A 23 ans, elle a explosé tous les compteurs grâce à une vidéo LinkedIn face caméra. 3 millions de vues, 200 000 précommandes sur sa campagne de crowdfunding. La marque Respire est lancée sur les chapeaux de roues. Justine Hutteau et Thomas Meheut visent gros. Amoureux des défis, ils se lancent dans un pari fou: concevoir une marque de soin et d'hygiène, éthique, bio, responsable et Made In France. Objectif ? Devenir mainstream et sensibiliser aux alternatives respectueuses de l'environnement. Ça, c'était il y a 3 ans. Depuis, la marque s'est imposée dans les rayons des grandes enseignes, mais pas seulement. Justine et Respire s'attaquent aux réseaux sociaux pour raconter leur histoire commune. Une conversation passionnante, pétillante et amusante, à l'image de Justine, sans faire l'impasse sur le revers de la forte exposition médiatique dont elle a fait l'objet. On y découvre son cheminement à la fois professionnel et personnel: Comment elle fait face à la critique en se concentrant sur le constructif, Sa volonté de développer des produits toujours plus efficaces, agréables et désirables, La place qu'elle a fait à la course à pied dans sa vie, Comment elle appréhende sa représentation sur les réseaux sociaux, entre partage et préservation. Un échange instructif qui remettra en question tous les produits qui composent votre trousse de toilette. N'hésitez pas à partager cet épisode débordant de bonne humeur à vos proches. Ils vous en remercieront ! BONUS: Je vous ai négocié en direct, un code promo de -10% sur l'ensemble du site internet Respire, avec le code DOIT ! TIMELINE : 00:02:30 - Présentation 00:14:00 - La vidéo 00:27:14 - R&D de déo 00:40:00 - Greenwashing 01:07:45 - Brevets et concurrence 01:27:55 - Acquisition et influenceurs 01:42:30 - Retail et distribution 02:01:50 - Critiques et mental 02:32:07 - Le sport On a cité avec Justine plusieurs anciens épisodes de GDIY : #4 Bruno Levêque - Prestashop #213 Adrien Roose - Cowboy #224 Timothée Rambaud - Legalstart #230 Arthur Auboeuf - Time for the Planet #263 Jean-Marc Jancovici - Carbone 4 #265 Maud Caillaux - Green Got #272 Mike Horn - Aventurier & explorateur #276 Mathilde Thomas - Caudalie #295 Arnaud Jerald - Apnéiste #300 Mathieu Blanchard - Ultratrail Avec Justine, on a parlé de : Michael Dubin & Dollar Shave club sur le podcast How I built this Association HOPE Justine vous recommande de lire : “Le monde sans fin, miracle énergétique et dérive climatique” de Jean-Marc Jancovici On embrasse Vincent et Valérie Clerc, des partenaires de course en or ! La musique du générique vous plaît ? C'est à Morgan Prudhomme que je la dois ! Contactez-le sur : https://studio-module.com. Vous souhaitez sponsoriser Génération Do It Yourself ou nous proposer un partenariat ? Contactez mon label Orso Media via ce formulaire. Vous pouvez suivre Justine sur Instagram et LinkedIn.

SkarxFace (Edgar) and Jon sit down and chat with Jaegon who is working hard to get a pro card. Kaitlynn also joins us who is Jaegons fiance. We get a perspective on how much discipline it takes to get a pro card and also how they make it work within their relationship. So much valuable information in this episode. Sign up for Dollar Shave club here Protect yourself with Zenith Security. Get ahold of them at 1866-722-3666 or 208-529-0129 today to get started! Follow our socials and buy merch here --- Support this podcast: https://anchor.fm/mezclaofmoguls/support

This week's Misfit Entrepreneur is Aryeh Sheinbein. Aryeh is the founder of Results Driven Advisory, a firm that has 2 primary focuses. The first is to help business owners value their business, then improve the value of the business. Second, to help business owners grow their own wealth while focusing on the business. Aryeh has and still works with Alvarez & Marsal as a Managing Director. The company is one of the premier advisory companies to the world's biggest hedge funds and private equity firms on business valuation. He's maintained this while building multiple successful companies such as Results Driven Advisory helping clients throughout the world. ​ And I wanted to have him on to discuss a few topics, of course how to make sure you get the full value out of your business and maximize your wealth, but also how to successfully build companies while still working in a professional you love under a company. www.Solutionadvisory.com Instagram: @AryehTheBusinessMan Aryeh went to college and got a degree in finance and wanted to be on Wall Street as an investment banker. After two years, he moved to a small private equity/VC firm that was more of a family office. They invested in early stage companies and small businesses that they grew and sold or took public. He did that for 4 years and it helped to shape his path. He was the only junior person on the team and worked with private companies. He then went back to Wall Street and spent time in hedge funds and equity firms, then ended up where he is today helping those firms in valuing businesses. He always had the drive to do other things on his own and built his own businesses or invested in them along the way. What should business owners know about how to truly value their business? What do they get wrong? For most business owners, the majority of their net worth is tied up in the business, the asset. And most don't think about maximizing that for themselves. The starting point is the value today and the ending point is what you take home when selling. You have run the business to get to the destination in the right way. Business value differently. Manufacturing is different than SAAS, etc. Buyers are interested in the future cash flow. What does the business throw off in the form of cash? If you are not generating free cash flow, you have to show how the growth with get there and how it will pay off. If you are, you need to maximize the cash flow as much as possible. Essentially, EBITA. Recurring revenue in addition to good EBITA is important for value. It is valued higher than one off revenues. If possible, you should work to have a recurring component to your revenues to help your with your value. What should an entrepreneur do to start increasing their value? And how does recurring revenue affect the multiple on a business? You need to layer in a recurring or subscription stream of revenue and automate it as much as possible. Look for complimentary products or services to your core product to add a recurring component with. Increase net revenues (EBITA) by either strategically lowering the cost to deliver your solution or look at ways to increase your pricing – do both if possible. Look for economies of scale in where you can add more clients without adding cost. ​ How do you achieve a liquidity event without selling it? You can do this with debt as a cheap cost of capital. It must be debt as vehicle that the business can handle. In a similar way you can do a “cash out refinance” on a home, you can do the same with a business loan. At the 20 min mark, Aryeh goes through an example of this. Thoughts on exiting a business? There are many different factors, but the first to understand is that there are two types of buyers: Financial and Strategic. A Financial buyer is buying with the intent of a future financial gain or return on the invest in buying the business. They will pay a fair market value in the middle range. A Strategic buyer is a competitor or a complimentary business and views your business as a good “add on” to their business and plug it into to their offerings. Strategics get more economies of scale and thus typically pay a premium value for a business as the sole purpose is not just a financial return, but there are other businesses or capabilities that the target brings. Think of Dollar Shave club being bought because they created a niche and it was easier for Unilever to buy them and the niche than to compete. Most business owners work on and in their business but have little time to focus on their own wealth. How can an entrepreneur maximize their personal wealth while short on time? Increasing the net worth of the business increases their net worth, so maximizing that is a start. If the business is generating good cash for the business owner, most business owners hire a financial planner or advisor. This industry is driven by limitations in that they sell financial products and/or are paid a percentage of assets, but these fees really eat away at the growth potential of your capital. Additionally, you are not able to see all the investment vehicles available to you. The #1 thing, if you want to be educated, is that whoever you are going to deal, you have to know, like, and trust, and they need to show they have a broad knowledge base. Look for true investors that are Fiduciaries if you are going to work with an advisor. Thoughts on 401ks and other investment vehicles? If you are an employee, take full advantage of 401ks and the match. There are limitations in that you cannot invest in things like real estate, etc. in a 401k. 401ks stick mostly to mutual funds and ETF's which over 90% do not beat the S&P 500 over time. Fees are also important to track and make sure you are on top of as it is surprising at how impactful they are to the growth of your 401k in a negative way. Keep fees as low as possible and limit them in every way you can. ​ How do you manage it all and do what you do? ​ You need to have systems for things. Things need to be able to scale. Standard operating procedures that are documented and can be followed by team members is critical. Your goal is not to be needed in the day to day but be needed strategically. What is the trade of time? You have to see what it takes and is capable of doing before you can know if it is something you want to continue. You must personally develop and get to know your true strengths to find complementary strengths in others and fill your weaknesses. Staying healthy is very important as well.   Best Quote: For most business owners, the majority of their net worth is tied up in the business, the asset. And most don't think about maximizing that for themselves.   Aryeh's Misfit 3: People are super important in business and life, and it is a 2-way street. Your development in people skills and communication is critical to success. Focus on things you enjoy doing and to do this, you need systems to help you do so. Use systems to help manage and do the things you don't enjoy. Always be learning. It really compounds your growth over time.   Show Sponsors: BKA Content (1 FREE Month!) www.BKAcontent.com/Misfit 5 Minute Journal:  www.MisfitEntrepreneur.com/Journal

In this episode, Aaron Chase and George Ferido sit with vagabond Frankie Hoy.  With Aaron and Frankie leaving this year, they talk about their projected career paths and plans for the future while George sits and twiddles his thumbs.  This episode is brought to you by Dollar Shave.....Just kidding. Thank you for listening! www.thebuddysystem.co

Former Dollar Shave Club VP and executive creative, Matt Knapp, is the latest guest on Mumbrella's new weekly standalone interview series, and joins Damian Francis this week for an extended chat.In it, Knapp chats about pulling the pin on his US adventure when COVID hit hard in April 2020, and how he came to the decision to move back to Australia a year earlier than planned.He speaks about a desire to do new things beyond “worrying about how to sell razors”, and how that drove him to spread his wings beyond Dollar Shave Club, though he continues to freelance for the company and says he still has a lot of love for the brand.

It doesn’t matter how great your product is if no one knows it exists. That’s why marketing matters. But not every company has the resources to go all out on a big-name CMO or to commit a large yearly budget to specific marketing efforts — especially when the digital world is changing so quickly. So what’s an ecommerce brand to do in order to get its message across to the right people?Erik Huberman founded Hawke Media to answer that question, and for more than seven years he and his team have been making marketing more accessible to businesses of all shapes, sizes and stages. On the episode of Up Next in Commerce, Erik explains how companies should be planning their marketing budgets and what the revenue threshold is that companies need to aim for before they can even think about scaling. Plus, he digs into his entrepreneurial and investor roots to give some advice to those out there who are just getting started, including the hard truth about what it means to be an entrepreneur, and some tips on new and emerging platforms where you can grow your personal and professional brands. (And yes, we are talking about Clubhouse!)Main Takeaways:Same Problems, Different Speeds: Even the biggest brands in the world face the same key struggles as the new start-up making waves: access to talent. The difference is the speed at which the companies at both ends of the spectrum can move. With more decision-makers involved and more stakeholders to answer to, bigger companies have to be more methodical and intentional about who they bring in to help, whereas smaller companies can make decisions fast, but there is more volatility with every choice. Join The Club: New platforms like Clubhouse are on the rise, and finding a way to capitalize on them is the biggest challenge currently facing businesses competing for market share. Listen in to hear Erik and Stephanie dive into the Clubhouse wormhole and the opportunities that await.I Get So Emotional: Marketing is about eliciting emotion from the person you’re selling to, whether it is B2B or B2C. By establishing an emotional connection and presenting a value proposition that a buyer can clearly see as a solution to a problem, a level of trust is created that will lead to a long-lasting relationship.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, Co-Founder at Mission.org. Today, on the show, we have Erik Huberman, the Founder and CEO at Hawke Media. Erik, welcome to the show.Erik:Thanks for having me.Stephanie:I am excited to have you on. I was just chatting up a bit before telling you how we are actually a client of Hawke Media, full disclosure to anyone listening. It's been amazing. But I would love it if you could go through what is Hawke Media for anyone who doesn't know?Erik:Yeah, sure. We're an outsourced CMO and marketing team to companies. So, what that means is we basically go into companies, identify what the holes are in their marketing, organization, or strategy. And then we can spin up different experts on an ala carte month-to-month basis, whether it's a Facebook marketer, an email marketer, a fractional CMO, et cetera. We've got about almost 200 full time people. We manage marketing for about 500 different companies from small startups to Fortune 100.Erik:Our mission, for lack of a better word, is to create accessibility to great marketing. So, the idea is we really saw that it was really hard to, for most companies, get access to great marketers. We wanted to make a place where we had amazing marketers, amazing talent, people that were top of their game, but it was super easy to work with them. That was a challenge we saw on the market that didn't exist, a solution didn't exist. That's how we got started.Stephanie:That's awesome. Yeah, it's been really fun. We did the CMO thing first. It was cool, because you do get access to people who have been CMOs at big companies before and they have all this expertise. But we had them for three months. And then they transitioned us on to the next stage of implementation of social and other things. It was just really fun to be able to have access to talent like that without actually having to hire them as an FTE or something.Erik:Yeah, that's exactly the model. I came from building and selling a couple ecommerce companies and just wish this existed. My last ecommerce company, we were heavily funded. So, I had a 10-person marketing team of talented people, but they all worked or they could have all worked half time or less and gotten what I needed to be done. So, we had toyed with the idea of, "Could we hire these guys out to other companies? Because they're a great team, but we don't need them all full time. But we need all their expertise." So, that's part of where it came from, the idea was born.Stephanie:Okay, cool. What ecommerce companies did you have before this?Erik:I had a company called Fame Wizard first, which was online music business coaching for musicians. Then a company called Swag of the Month. It was a T-shirt subscription company, long before Dollar Shave and all that. And then an activewear brand called Ellie that's still around, the E-L-L-I-E.Stephanie:That's awesome. So, what things did you learn at those companies that maybe you brought either to Hawke Media or to how you're maybe advising brands today?Erik:Yeah, really quick bullet points. Fame Wizard have a customer that has money. Having independent artists as your customer is really hard to build a business off of. Swag of the Month, the need for working capital and financing, which funny enough, we just launched our financing and working capital arm of Hawke Media a couple months ago. And then the third one, Ellie, don't overcomplicate it. If it's working, double down on it. Also, that I don't like having other people make decisions for me, because that's when I was working with a committee and I was not the main decision maker. They screwed up a lot.Stephanie:I like that you have bullet points. You're like, "I already got it covered. I already know."Erik:Yeah. I've definitely walked away with very specific, "Don't do that again."Stephanie:Yup. Yeah, that's great. So, are you able to share some brands that you work with? So, we can get the scope of who-Erik:Yeah.Stephanie:... that you guys are learning from and working with right now and teaching.Erik:Yeah, I mean, it's the full scale in terms of small startups, most people haven't heard of, and hopefully, we change that. Tamara Mellon, we started with it when they were a tiny business and skyrocketed them for a couple years. GREATS, the sneaker company, we built for three years with them and they sold to private equity. Incase, the phone case, until they sold to Incipio. It's ironic. We get a lot of companies to scale and then we get fired, but it's par for the course.Erik:And then we also work with big brands, Nike, Unilever, Estee Lauder, Red Bull, et cetera, as well. And then a lot of small brands that don't necessarily want to be the next big VC-backed company that are $3-, $4-, $5-, $10-million companies while we're working with them. That's what they want to be. They slowly grow and run a lifestyle business that pays them a couple million bucks a year and do great.Stephanie:Yup. Do you see the big brands having the same type of struggles as the smaller ones, or is it very separate where you have to put very different skill sets depending on the company size?Erik:No, the expertise are similar and the struggle is similar in the sense of access to talent is really one of the biggest... True knowledgeable, experienced talent is what everyone's struggling with. The way we have to operate is different, because when you're dealing with a small business, a lot of times you're dealing with the owner, CEO. They can do whatever they want. There's no one they're reporting to, even if they have investors who usually have control. When you're dealing with bigger companies, you're dealing with publicly traded companies, a lot more processes, a lot more checkboxes, a lot longer time to make decisions. So, it's a lot slower. So, that's why I look at our client base like a distributed portfolio.Erik:The startups are super fun, because you can do whatever you want, you can get going quickly, et cetera. But they're also super volatile on the other end, where they'll fire you overnight for one small thing. Whereas big companies, they take forever to sign, take forever to make changes, but they also stick with you forever. So, we've worked with a lot of these bigger companies for years and years and years, because they're used to signing three-, four-, five-year contracts, even if we are month to month.Stephanie:That's good. So, what are some challenges you're hearing right now around either marketing challenges or business challenges that you guys are tackling that's maybe different than what you were hearing in 2020 or 2019?Erik:Yeah, I mean, 2020 was all COVID, but the silver lining was the market share of spending online almost over doubled. So, our clients on average doubled their revenue on what we were operating for them. So, that was really good. What we saw what changed towards the later end of the year and now into this year, so, now that market share hasn't diminished that much. Instead of 13% of consumer spending, being online pre-COVID, it went up to 30. Now, I think it's at 27%. So, it's still massive increase.Erik:So, we are seeing that now, all the big CPG companies and all these bigger companies that back to the point can't make quick decisions, unless the world's falling apart, cut everything. They usually do that and then they slowly roll back. They're all really coming back strong into digital, because they're seeing so much more market share there. So, what happened was the cost to advertise on Facebook and Google during Q2 and part of Q3 dropped about 30%, because there was less competition on it. Q4, October and November were insane, October because of the election and then November, holidays hit. December, they carry over a little bit, but they do lessen.Erik:And then I think now, I am anticipating advertising continuing to get more costly, because now, again, 13% of these big companies marketing online is now 27, they're going to spend more to capture that market, which means you're going to compete with them. So, if you're a small or medium business competing, there's a good chance that cost to advertise online increases significantly. So, not necessary what companies are looking for but what they should be is ways to increase their ownership of their customers, because if it costs you more to get a customer, the way to combat that is to increase your lifetime value to a customer. It's a math equation. It's that simple.Erik:So, how do you do that? You find ways to increase your lifetime through merchandising, through retention, through customer experience. When I say merchandising, having other products and services you can sell to the same customer. There's just a lot of things you can do, and then just continuing the communication like email marketing, SMS, chatbots, ongoing content, just all the ways you can create a walled garden around your existing customer base for them to buy more from you. The companies are going to win, which is why you see Amazon just skyrocketing. They were a book company at one point. Now, they sell you anything.Stephanie:Yeah, I love The Everything Store talking about how he and his wife are going and dropping off books to try and ship them out. That was a good book for anyone who hasn't read it yet. So, I mean, I'm thinking about myself as a smaller company right now. We're talking about ad costs are going up. It's going to be harder to compete against bigger brands. If you haven't acquired those customers yet and you don't have anyone to talk to, it seems like there's definitely an opportunity to be more strategic of finding new channels, whether it's the TikToks of the world or the Clubhouse.Stephanie:Shout out to Hillary, you just got me onto Clubhouse. But it feels like there's a bunch of new channels popping up that could help democratize community building a bit more or yeah, finding your audience in different channels that bigger brands maybe won't hop on as quickly.Erik:That's funny. I just got accused of being addicted to Clubhouse. So, my wife has actually had to say, "When we're eating, put that thing away." It's just the past week, but that platform is taking off. Yeah, it's always about working for diversifying. The problem is Facebook and Google still perform so much better than these other platforms that they need to catch up. TikTok will absolutely compete as they build out their ad platform.Erik:I think it's a no brainer in the way that the platform's built, but they need to do a better job of their targeting and everything, which when I say that, no one's spamming. It's just too early. Snapchat seems to be getting their legs under on Twitter. Hopefully, we'll figure it out. Stephanie:Yup, yup. I agree. Are there any new places that maybe are lesser known, where you're like, "We're trying out this one little thing in the back alley here that no one else knows about"?Erik:I mean, your know about Clubhouse. Clubhouse doesn't plan on monetizing through advertising, but as a community builder, it's crazy. I've been on it one week. I've 11,000 followers. I'm not an influencer. Twitter, I have a bunch of followers, but that's unusual for me.Stephanie:What are you doing on Clubhouse then? Because I get on there, and I'm like, "Hi." For anyone who can't see this, my awkward waving in Zoom. I don't know what I'm doing on there.Erik:Yeah, I've been fortunate enough to spend the past decade building a pretty solid network. So, when I got on there, a bunch of my friends were the people on stage that people want to hear from. So, guys like Daymond John and Lewis Howes and [inaudible] were all pulling me up to talk with them. And then other guys, like Grant Cardone, who I never knew before this now, start pulling me around with them. So, it's been a week, but all of a sudden, I've connected with a bunch of these heavy hitters that I've never knew before, that now we're also jumping on calls offline and connecting. So, for me, basically, I was on two flights a week almost in 2019. So, I spent most of my time traveling to shows and conferences and meeting people. This is scratching that itch.Erik:So, for the people that really want to network and build that network and learn from other people, this is the perfect platform for someone like me. It's not for everyone. So, I've gotten on stage. I've talked a lot. I mean, there's millions of people on it. Thankfully, I've been very lucky to build what I've built. A lot of them are looking for advice on how to build their businesses. So, now at this point, this is my fifth business I built. We've bootstrapped it. I've invested in, I think, 30 other companies. I've had a few exits, had some successes there. So, a lot of times, I can give some quick guidance to someone on there. So, I've done a lot of that, which has been fun.Stephanie:Yeah. So, since no one else has talked about this, this is why I'm diving even deeper into this. So, someone that can listen and be like, "Okay, I'm going to try that out too," are you speaking on there when you're saying you're on stage? Are you getting invited from someone? Are you just creating a room yourself? Tell me a bit about how that's working.Erik:Yeah. So, I mean, just to recap the platform, basically, it's super simple. All you see is a person's headshot, their little icon. It's all voice. So, you just talk. So, there's the stage and then there's the audience. Whoever's on stage can talk and you can mute your mic and talk. You got as many people on stage as you want, like a panel, and then anyone can come in and listen. So, as mentioned before we started this, I like to talk. So, me sitting in a room and talking and I've been in rooms with 20 people on stage, 30 people on stage, where I chime in once every 30 minutes.Erik:A lot of the habits that are starting to come on there are just people rotating on the stage asking questions of the panelists and just doing Q&A for hours, but it's people asking about, "How do I build my business? I'm struggling with this. What do I do here?" And then what I've seen is a lot of altruism, which has been fun. I've opened up my direct messages on Instagram through that. So, it's like, "If anyone needs help, just hit me up." So, making connections to VCs, to funding, to whoever could be a good distributor or a partner, give them advice, trying to help people.Erik:What I've seen also is a lot of people that aren't in L.A., New York, Austin, or Silicon Valley, that don't have access to these networks are all of a sudden... There was a whole world of amazing entrepreneurs I didn't even know until I got on this thing. It's a lot of the BIPOC community is getting on there and really helping each other. Not that I am one of them, I tried to help and very passionate about diversity and inclusion. So, we do a lot of charity work around bridging the opportunity gap. So, I've seen this as an amazing tool for that, because there's so many people that don't have access to... I've grown up around entrepreneurs. My dad's successful frankly. I grew up around people that have started businesses. I had a pretty easy path of role models.Erik:Most of these people don't or a lot of these people don't and that are coming from inner cities, et cetera. They are now on this. I do get pinged maybe 100 times a day actually on that thing, asking to be their mentor. I'm like, "You don't have to make anything official here. What can I help with? Let me answer your questions," that kind of stuff. So, that's been super rewarding, but I do see this as we're all stuck at home right now, where you are means nothing.Erik:So, this is a way for everyone to be connecting. But without having to be on video, it also makes a lot more people comfortable having a conversation. With voice, people are not as rude, demeaning. Social media has a problem on the tech side. We all know it, where it's like when you can just text whatever you want... We deal with it all the time with clients. If we have an angry client and we're on email, we'll get hate mail. Then I pick up the phone and call them and they're like, "Hey, how are you?" It's like, "What?" Same thing, I really think there's something there.Erik:The curiosity I have is as a social media platform... I'm sorry, this is all going to Clubhouse. But just as a social media platform, on Facebook, you might spend 3 minutes, 5 minutes, 10 minutes at a time scrolling through Facebook. Clubhouse, I'm watching people spend 12 straight hours in a day. I've never seen a social platform that people just zoom in and go. So, I'm really curious what that turns into. I think they'll end up monetizing by adding tips to panels, so you can actually tip the panelists or paid speakers, I think that's what we're going to see. Because they said they want to make money for their content creators, and they don't plan on adding ads.Erik:So, I think that's going to be interesting. But for brands to answer your question, I think for personal brands, it's massive. You're a CEO or whoever you are, building your brand on there and starting to talk. I mean, we had a channel the other day, where it was a bunch of beauty entrepreneurs from the south, bunch of women that had built beauty brands bringing up young beauty brands to talk to them. There were women coming on stage to talk about their brand and then going, "I've made $300 in the past two months on my website. The audience just bought $7,000 worth of items."Stephanie:Wow.Erik:That's happening. It's an eight-month old platform, but really got popularity two weeks ago. So, it's interesting to see where that can go.Stephanie:Yeah, I mean, that makes sense, especially around the theme too of, I mean, bigger brands too leaning into becoming their own media companies and getting on there and leading not just from their brand perspective but being thought leaders. Their brand is behind the scenes. If you offer value, someone won't mind if it's coming from someone at a large company that's like, "Well, sounds so smart. So, I'm sure they work at whatever big company that is," but they're the one on there offering the best tips.Erik:Yup. That's the other thing is there's no BS-ing it. When you talk enough, people are going to know whether you know what you're talking about or not. I've seen it. The rest of the two people on the stage are like, "Wait, what?" People call each other out, because I think people feel responsible, including myself. The audience is taking this advice. I jumped into a panel yesterday that was talking about Bitcoin. Some guys said, "There's absolutely no risk in investing in Bitcoin. You just put as much money as you can." I was like, "Hold on for a fucking second. Excuse me." Yeah, so there's that too.Erik:And then I do think there's a whole community and personal aspects that were like 21 Savage is one of the biggest followed people on. He does DJ sets every night with Sir Mix-a-Lot and all sorts of other people. It's not just business. There is a lot of other fun conversations. Overheard LA did a whole thing where they were saying, "What's the weirdest story you've had in COVID around dating?" There's comedy shows. There's all sorts of fun stuff.Stephanie:Yeah, that's awesome. So, when you're on there giving tips to businesses and people who are trying to learn, what are the top questions that you're asked or what things do you talk about that resonate most with business owners?Erik:So everybody wants funding. These are all early, early businesses. Everybody goes, "How do I get funding? How do I get a grant or a loan or funding?" If you need money to get started, that's a bad sign. Don't get me wrong. There's high tech companies and certain companies that you can't get around it. But most of the initial funding for businesses comes from friends and family if you need it. If you need a heavy amount of funding and it's not something high tech, you have to be real if you're the right person to start that business. That's one. There's a lot of people that pitch for that while starting with the hardships story, something that's like, "This is what I'm struggling with." I've noticed that it doesn't get the reaction you'd hoped for.Erik:Compassion is a big thing. I think for help, people do, but if you lead with that to try to get someone to be part of you in business, it shows the wrong focus. It's not to diminish what people are going through. A lot of people have had a really hard time recently and in general, but I do notice that when you lead with that versus excitement and optimism, you're going to attract a lot more people with optimism.Stephanie:That's a good one. Yeah, I've definitely seen a lot of people who come with the story where you're like, "I should feel bad, but also as a businessperson who maybe is either going to invest or partner with you, we'd be in this together. I need to know that you have another reason to want to push this forward. It's not just this." So, that's a good point. All right, give me more.Erik:The COVID excuse, I'm not very nice about this one, but I have too many friends that have done well in spite of COVID. Not because they got lucky. Someone came on the other night as like, "I've launched my ecommerce company last a year ago, but because of COVID, we've had a really hard time." It was like, "Take a beat. Because of COVID, your ecommerce company has had a tough time." We just went over the stats of ecommerce. I was like, "Explain that." It wasn't ecommerce. It was the person couldn't get out of their way. So, that's generally the advice I end up giving to, because again, there's a lot of people trying to get started. It's just go.Erik:My biggest learning in entrepreneurship in general is no one's that smart. It's just people that went for it and got lucky. I really believe that, including myself. I don't think that I'm not impressive. I think I went for it. I timed it right, meaning I got lucky. Meaning, because of the way the world worked, I knew about ecommerce right when the world wanted to build all the ecommerce and I was one of the only free agents in LA with a reputation of being successful. So, that's a big one.Erik:So, with COVID, I have a friend that owns 20 gyms across Canada that got shut down overnight, done. He's been doing it for 20 years. He three days later decided to launch a virtual training platform and has done millions in revenue in 2020 as a gym owner and was able to keep his entire staff, pivot, not lose money, and now have a whole new revenue stream that when things do reopen, he's got both.Erik:So, I have a friend that owns a chain of restaurants in L.A. He's not thriving, but his businesses are all still open. He's making money. He's made a living. There's ways to operate that you can actually get through this. I watch some of our clients, ecommerce brands. They're like, "Cut everything." I'm like, "What do you mean cut everything? The numbers are good. I get that the news is scary, but you're doing well. Do not cut." The companies that cut, I don't know if any of them recovered, the companies that I know that cut with us. And then we had a whole bunch of other companies that stuck with us, our average client in Q2 doubled their revenue.Erik:So, interesting if you think about what happened in Q2 of 2020. So, yeah, getting back to it, the biggest one is like don't give yourself excuses, go for it. That's a lot of what we're talking about. And then we get into sometimes deeper marketing conversations like, "What do I do to get started in marketing? If I don't have a budget yet, where should I spend my money? Should I run Facebook ads right away?", those kind of questions.Stephanie:Yeah, I love that. It reminds me too of doing things in haste, there's a good quote. That was around investing, but it's like the person who's scrambling to themselves when the news sounds bad or something, they're never the ones who do well or find a good ROI. I thought I'd be the person sitting and waiting most times and play the long game, instead of reacting to the news or quickly stopping or starting something really quickly. It's probably never that necessary to jump on something.Erik:Correct. You have to give yourself that luxury, so to speak. So, what I learned myself out of this was I'm keeping more money in the bank going forward, so that I can take a beat. Even if I see my business losing money, I can go, "Deep breath. What's the right long term plan here?" Not just react because I got to stay in business tomorrow. That's where a lot of businesses got stuck is we're in such a great economy. People are just spending all their money on growth. All of a sudden, it cut off. So, you have no money in the bank, that can be a bad situation.Stephanie:Yeah, I agree. So, you're talking about many of them don't have budgets and they're trying to start marketing or launched an ecommerce shop or something. How would you go about that? Because I used to read quite a few books that talked about scrappy ways to do it, whether it was just putting up a landing page and then maybe linking to products, reselling them. There's so many things that we've been taught when it comes to being scrappy and starting something without having to invest money, but how would you do it now in 2021?Erik:Yeah. Everybody loves to throw around the MVP model, minimum viable product. The problem with it is people go to minimal and not viable. Meaning, you make a product that gets out there, but it's not really viable. It's not really what somebody's going to buy from. It's a landing page that sends you to a site that says you can check out but you can't or whatever it is. People think that just getting up and running is good. You got to commit.Erik:If you're just getting started, keep the day job, make money along the way. If you can't work a day job, then you get started on midnights and weekends, you're not going to be a good entrepreneur, because welcome to entrepreneurial life. So, that's actually a good way to get used to it in my opinion.Erik:Also, it never happens as fast as you want it to or almost never. So, it buys you time. You're not under some ultimatum that if this doesn't work in six months, I can go back to work. It's like well, just give yourself as much time as you need. Switch over when it can support your lifestyle. So, to get started, I mean, there's a few ways. If you're trying to launch a new product, you might need to put in 10, 20, 30, 50 grand to get started. That's actually a thing. That's where the friends and family come in if you're launching a new shoe line or something, but start small. Sell out. It's okay. Meaning, sell your product, not sell out as a jab or anything. It's okay to have a small run in the beginning.Erik:And then in terms of marketing, I've really honed in on this focus, actually, through a lot of answering these questions on Clubhouse is where we invest our investment threshold and where we like to look at companies is 20 grand a month in revenue. Because honestly, that's when you've been able to get over the scrappy period and you started to build a sustainable business. Still small, but there's something there. That's traction to us. To me, it's like get to that point without spending too much money.Erik:Partnerships, get someone that has your audience that you're trying to reach and find a way to make them talk about you to their audience. That could be press. That could be influencers. That could be other brands that collaborate with you. That could be many different ways. But start there, start building that organic reach groups. If you're selling shoes, not in COVID, but in general, sell them out of your trunk. Don't make it so it just has to be through your website either.Erik:My view is focus on one thing, and don't narrow yourself in other ways. The idea of being direct consumer and not opening up every other distribution channel for your brand is crazy to me. Go omni-channel, open up retail, open up everything else, and build a model that makes sense for all of those, and then see where the least path of resistance is. Maybe Nordstrom decides you got the coolest sneaker ever and you get a $5-million order. You're able to ask the right people, so you can protect yourself, because a lot of those big box will return the entire order when they don't put it on the shelves.Stephanie:Oh, wow.Erik:So, there's ways of that-Stephanie:[inaudible 00:25:50].Erik:That's why retail is hard. Walmart, they charge you for the products that don't sell and send it back to you. So, you got to be careful on those agreements and what you take on, but listen, it can also set you up for the rest of your life getting a deal like that. So, open it up to do all those things and be scrappy about it. Instead of throwing other people's money and trying to grow and hoping it works, find ways to make money right away. As someone that has bootstrapped a business and owns it with my partner, but the two of us, it's awesome. We tell our team all the time, "Anything you want to do, we can do it. Just ask." We're not reporting to anyone. We don't have people on our board or investors that we have to report to that are going, "I don't agree. I'm worried about the risk of my money." Not all investors do that, but some do. So, yeah, if you can keep ownership, it's a lot of fun. It's stressful at times too, because there's no one else backing me up. It all falls on you. But once you get through those hardships and get used to that challenge, because it never ends, it actually becomes pretty fun.Stephanie:Yeah, yeah, that's definitely my viewpoint on investors too. Unless they're very strategic, they're going to open up a network for you. They're going to give you something that you can't get otherwise. If you're just going after money, you probably needed to look elsewhere. I mean, my friends and family, not so much. I would have never been able to raise any money from them properly. But, thinking about it more strategically, instead of just, "Here's some dollars," because we had a guest on the show, who I forget who they were.Stephanie:Maybe Hillary can remind me in our prep doc here, but they're talking about how they built their company based off a Kickstarter Indiegogo type of thing, because they had this whole quote that was, "Don't rely on friends and family." Because if that's how you think you're going to fund your product, you're already going to fail. Account for them to maybe only be 3% of what you need or something like that. Only 3% of your product will be bought from them. The rest, you need to go out and form those email newsletters. Find your audience elsewhere, or else, there's no point in you trying if that's your only goal.Erik:Yeah, I would say that with smart money, which I agree with, if you're going to take money, take smart money that knows what they're doing and can help you. But a lot of times you can get that help without even taking their money. That's the other part. There's an anecdote about call someone for advice and they'll give you money. Call someone for money and they'll give you advice. So, if you want connections, most people that have been successful, most not all, but most are really willing to pay it forward, I've noticed. They want to help. They can't help everyone, but when you catch them at the right time... And then for anybody, it's a game of numbers. If you're looking for help, reach out to as many people as possible. Someone's going to say yes.Stephanie:Yup, I agree. So, the one area that we sometimes neglect on this show is B2B commerce, because of course, everyone's focused on B2C. But I saw that you put out a list of tips for B2B ecommerce companies. I was hoping you could walk through, what are you guys seeing for B2B companies? Do you work with B2B companies? How are you advising and marketing for them right now?Erik:Yeah, I mean, in the nutshell, B2B marketing is actually very similar to B2C, except for the end goal with B2C is a transaction. B2B generally is to drive a qualified lead, but you're still marketing to an individual. That's the part that I think people really forget. When I'm marketing to B2B, I'm not marketing to a business. I'm marketing to the decision maker at that business. So, it's still a person. So, instead of marketing to someone that likes dogs and biking, I'm marketing to someone that has this title at this type of company, who's a marketing manager at a Fortune 500, whatever it is. So, it's just a different targeting methodology.Erik:And then the way you position the company is still value proposition. You still want to get an emotional reaction. That doesn't mean like go crazy with it. So, don't take that too verbatim, but people justify emotion with logic. So, if you can hit the emotional reptilian side of the brain and get with any type of marketing and get them to feel like you're going to do something for them, that's the best way to get someone. So, Hawke Media is all B2B obviously. We don't use it that much now, but we're about to ramp it back up. Have you seen our commercial with the lemonade stand?Stephanie:No.Erik:Super fun. We filmed this less than a year into business, I think. I sat with my business partner. Again, we're marketing to business owners. That was our main target. They were like, "What do people like?" I'm like, "Puppies and kids." It was just when GoDaddy got banned from the Super Bowl for putting a puppy mill as a joke commercial. I was like, "No, let's not do that. So, let's go with kids." So, we basically created the commercial about a bunch of kids in a really corporate office.Erik:But when I say kids, eight, nine year old's running around, skateboarding, throwing paper airplanes, freaking out. The owner, this little blonde girl going like, "I can't take this. Who's handling our Facebook ads? Who's doing this?", and just freaking out. And then we come in and we got you. I was in the commercial too. We explained that. It shows them at the end, a bunch of kids making it rain with cash and dancing and having fun.Stephanie:That's cute.Erik:It was fun. It got people's attention, but the whole point was, "We got you. I know you're freaking out, but we're not and we got you." That's how it came off. That emotional connection, even though we're talking about B2B, which you'd think is super logical. How much do you cost? How much money you're going to make me? No. Why people hire us, the logic reason is bandwidth's our expertise. The emotional reason is, "Please someone just handle this. I don't know what's going on here. I just want to grow and I need someone to take it off my plate," or "I don't know what I'm doing." We need someone to just come in calmly and help us.Erik:Understanding that in B2B is super important, because then everything you do with positioning yourself is like, "We're here. We got you. We know what we're doing." You can sleep easy at night is our positioning. Now, you change that. And then how you execute on that, same channels, Facebook, search, email marketing, press, all the things we use for our clients, creating your own content is the stuff we use for ourselves.Erik:I'd say any marketing is aspirational. Not meaning I aspire to be like something great, but more like, "I'm currently at this state, and I want to be here." It's as simple as my socks have holes in them. I want comfortable socks and you go buy socks. This aspiration doesn't have to be something groundbreaking. So, understanding that you need to position yourself as that aspiration, the solution to getting the person from where they are to where they want to be, no matter what you're selling, B2C, B2B, is the most important part.Stephanie:That's really good. Yeah, I mean, I think about the ads to B2B and they're so lame. A lot of times, they make things so corporate. It's like, "I'm pretty sure any corporate citizen will not want to watch another corporate style ad." They want something new and different and love to just connect with the person. Even if it's a title that you're connecting with, there's someone behind that title. If you wouldn't like it, they probably won't either.Erik:Yes, exactly. That's been the awesome thing about Hawke and its marketing specifically is I'm the customer, literally, who would be buying from us. That's why I created it. So, I get to make things that I didn't want to see. You just nailed it. I hate the boring, stodgy, men and women in suits. We've been trusted for 25 years. Who cares? That's not why I'm hiring you.Stephanie:It's like the stock photography, where you go on there. It's like all these people in offices and business suits. I'm like, "Who's buying this stock photography? This is horrible."Erik:My favorite, I used it again recently. So, that's why it reminded me. Remember that photo shoot they did with the baboon doing stock photos in an office. I just found it. My brother-in-law asked me what I was up to this weekend, I sent him the baboon banging on the keyboard. I'm like, "Just working." That was a great shoot. That was so perfect. Yet so many people did not get the point of that, which is this is ridiculous. Why are we taking office stock photos?Stephanie:Yeah, yeah, that's funny, but I mean, a lot of people use them for a while. I guess it worked for probably a solid week, and then everyone realized it's not working anymore.Erik:No, no, a lot of people still use the office photos. Listen, that's not going to be the only driver of your business. You don't have to be perfect in marketing. If you have a good product or service, marketing helps, but it's not critical. So, a lot of people get away with really bad marketing and still have a really good business.Stephanie:Yeah, the one theme that I've heard from quite a few people on the show is that the organic videos and natural things are all performing way better than stock photography or anything that seems like it was built out of the box. Are you seeing that as well?Erik:It depends. It depends on what type of product it is. If it's a product that needs a lot of trust, you need production value. Meaning, a supplement or something that people are looking to solve a problem. They don't want to see that you threw something together. If it's like fashion or lifestyle products that people aren't really worried, you can get away with that a lot more.Stephanie:Yeah, I like that. So, one other thing, I don't know how much do you guys experiment with TV, because I was listening to a good episode. I forgot what podcast it was, but I think it was Gary Vaynerchuk, where he was essentially saying, "All TV is dead except for Super Bowl ads." That's the only ads that actually work. Every other TV commercial, they don't work anymore. They're dead.Erik:Gary's a friend and I think he has nailed what he's doing. He's a super bright guy, but I think a lot of times, he speaks in hyperbola. Nobody ever gets held to these big grandiose claims. I called a friend out for claiming that Bitcoin will be at 50 grand by Sunday. And then Sunday came around, I screenshot it and I sent it back. I'm like, "What the hell, man?" He's like, "Whatever, it'll happen in the next month." It's a habit that a lot of people got into, making these giant claims. I'll be real, TV does work. You got to buy it, right? Yeah, we do some TV, some radio. It's not a big part of our business. I'm not trying to hype it up.Erik:But once you have an amazing funnel and you really know who your customer is and you're really good at nurturing leads... Meaning, not just letting them come to your site and hopefully, they buy, but capturing email, capturing their phone number to text them and follow up and really nursing them. Again, you know your audience and you know your messaging. So, you know how to attract your audience and get them to buy. TV is still one of the cheapest places to get a 30-second impression from a massive audience. So, both TV and radio are still very viable options as you scale, but you can do a lot of digital before you have to go there.Stephanie:Yeah, yeah. Yeah, I agree. We had one of our podcasts aired on radio. They took it and turned into a one-hour special for Veterans Day. It's called The Story. Some people were like, "Radio is dead. Why would you want radio?" I'm like, "Do you know how many people still listen to radio?" Actually, it's still very legit if you can get on radio. I mean, it's huge.Erik:Most people are sitting in their car. They're not going anywhere. They're not changing the station either, because, frankly, there's not that many options. You can get a lot of people that are doing nothing. The hard part is to get them to remember things, but it works. We've had a lot of luck, especially event sales. When we're doing big events like TED and stuff like that and trying to sell tickets, DutyCon was a good one, radio works really well.Stephanie:Yup. Yeah, like you said, getting that CTA, where it's not something that's distracting or they crash, but seriously, going by what I just talked about.Erik:Yeah, exactly.Stephanie:All right, only couple minutes left. Let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Erik:I'm ready.Stephanie:All right. What's up next on your podcast list?Erik:Who is or what?Stephanie:Either, who or what? What are you listening to?Erik:Oh, well, we have our own. So, who would be Rachel Zoe.Stephanie:You have her coming up?Erik:Yeah, we've worked with her for years. She's awesome. Yeah, so that's the next one. And then after that is Rob Dyrdek, I think. I want to get more into How I Built This. He's awesome. I just think that that's always an interesting story. My podcast is more about their life story. His is really about how they built their company. So, I like the life story too. My podcast was I wish someone did this. So, I'm just going to do it and hit up cool people and find out how they got where they are. Yeah, so my podcast is Hawke Talk.Stephanie:Awesome. Yeah, I will be checking it out. What's up next on your reading list?Erik:Whatever my business partner assigns me. I am not a voracious reader, and my partner is. So, he's decided-Stephanie:He assigns it to you?Erik:He's decided as of last month that he's going to give the executive team including me a book a month that he wants us to read and be on the same page on. I'm all about it, because I don't have any motivation on my own to really do it. I'll pick up a book now and then probably a couple a year. Most of the time, I end up listening to it on Audible. I'll buy the book. I buy all my friends' books. My wife rolls her eyes every time. I got to support, but I don't read any of them. Sorry, guys. We're coming out with our own book towards the end of the year called The Hawke Method. It's how we grow companies, basically.Stephanie:That's awesome. I love that. What one thing do you not understand today that you wish you did?Erik:I wish I understood the public markets more. I've put money in it now and started to try to learn it, but I've surface level things I understand. But when we started getting into derivatives and the complicated side of finance, I'm still not completely clear. I've also shied away in some ways, but I think when you overcomplicate it, it's too complicated for everyone. That's when we get into the housing crisis and things like that, but I also would love to understand it so that I can call bullshit on it sometimes, because I realized in my entire career, no one's that smart. If it's complicated, it's probably a problem.Stephanie:Yup, that's a good one. What favorite piece of tech are you enjoying right now? It can be new or something you've used for a long time. It can be an app or anything.Erik:Yeah, I will say the one that surprised me the most is the Oculus, because I've been a naysayer of VR. I'm like, "VR is too isolating. It's stupid, blah, blah, blah." But once I got one and I ended up helping an organization called YPO do an event with Oculus and got one, and I'm like, "Oh, wow, no, this is interesting." There's actually something to VR and the experience you can have. Most people can only use it for 45 minutes at a time, but I think it's really cool. I think there's something coming down the pike with that that I think will be really cool.Stephanie:Yup, yeah, we wrote a 2021 Trends Report. That was something I'm keeping an eye on is how to use that when it comes to not only following influencers, but shopping from feeds and watching live events, but also being able to get it while watching it and stuff. I think there's a little work to be done, like you said. I know a lot of people especially myself still get dizzy and not feeling very good after, for me, 10 minutes, but it seems like once that gets a bit better, there's a lot of opportunity, especially for ecommerce companies if they can figure out how to make it an event and something fun that people want to attend.Stephanie:Plus, also, it's like The Container Store in Netflix series. You want to buy with the Netflix series ad, even though they don't really slap you over the head with Container Store stuff, but you're like, "But I need that specific box to put my scarves in."Erik:Yes, exactly. No, I think that's exactly it is. The business model needs to be fixed around the content for VR, because it's just not good enough yet to track enough content and things to do. But once that turns into a much more prolific platform, I think that you'll see it hockey stick quick.Stephanie:Yup. All right, last one, what is the nicest thing someone has ever done for you?Erik:Oh, I have to think of a nice thing, because I feel like if I'm going to say the nicest, it's going to be...Stephanie:Or you can say the meanest too. You're like, "Oh, this person was really mean to me."Erik:I had a business partner that really screwed me up, but I don't need to give it any credence. Not my term.Stephanie:Nicest then.Erik:I'm trying to think of nicest. I mean, the fortunate thing is many, many people have done a lot of nice things for me. A lot of people taking bets on me before I had any reason to deserve them. My parents were always great to me. My wife's great to me. I'm surrounded by people that do nice things for me. So, I will say a nice thing that stands out that I never give enough credence to is when I graduated college, I went into real estate a week before the whole banking industry collapsed. I made $350 that year.Erik:Six months in, a friend of mine's dad called me. I was a guitarist growing up. My drummer in my band's dad called me and said, "Hey, I've been watching you. You seem to be like a young, aspiring entrepreneur. I like your grind and your spirit here. I want to help people like my son, who is still pursuing music, figure out how to do the business side of things. So, they can actually at least make a living being a musician. I think there's a thing we could do here." I spent a couple months putting a business plan together, showed it to him. He not quite disappeared but went MIA for three months.Erik:Called me July of 2009 and said, "Hey, I'm putting in a quarter million dollars. I think I can raise this another $750,000. You're going to run it. Let's go." That became my first online company. So, that guy put in his own quarter million dollars, got his friends to put in $750,000 million invested in an online music company in 2009. And then put me in charge of it, gave me 5% of the company and paid me minimum wage, which I was grinding.Erik:It was a bet. Don't be wrong. It could have really worked out for him, but I also think of that as that guy set me up as an entrepreneur in a lot of ways too. I don't know what I would have been doing without that opportunity. I'd probably still have grinded through real estate unless something else popped up for something. That put me into digital. That did a lot of things for me. I'm still in touch with them, but that was a big one.Stephanie:That's a good story. I'm glad I asked. Yeah, that's really good. Cool. Well, Erik, this has been a very fun interview. I want to bring you back for another round in the future to hear how 2021 is going. Where can people find out more about you and Hawke Media?Erik:Definitely, Clubhouse.Stephanie:I'll see you there.Erik:Yeah, [erikhuberman on any social platform's fine. And then Hawke Media, if you ever want to reach out, is just hawkemedia.com. We do free consultations. Always happy to help.Stephanie:Cool. All right. Thanks so much for joining us.Erik:Yeah. Thanks for having me.

In this episode, Ross and John speak with Dan Murray, President and Board Member at Creator IQ the leader in Enterprise Influencer Marketing. Dan has an impressive career as former CFO at Dollar Shave club as well as holding senior positions at Yahoo and Fantdango. Dan shares with his insight into the startup space. In this episode we cover: Building the bedrock in education and learning from good leaders- Phase 1, 2 and 3. Why ‘International' experience was the most important phase of his career Why a ‘Doer' makes for a better leader How to deploy capital effectively. What Metrics and Why. Why closing the marketing loop is key and when to allow experiments How to decide when to ‘Internationalise' Why Influencer marketing grabs market share Why not to hire people to motivate them! Metrics to demonstrate a solid return for VC's When do decide to go profitable or raise further money Usage = Churn at the CFO level! COVID and how we overcame it with our customers Advice to his 18-year-old self. What does it mean to be a leader, style and cultural traits --- Send in a voice message: https://anchor.fm/gloabl-tech-leaders/message

How can marketers use MRI data and neurolinguistics to develop strategies and campaigns that get better marketing results? This week on The Inbound Success Podcast, Hackstone founder and CEO Dan Hack talks about the process his team uses to incorporate lessons learned from FMRI scans in crafting impactful stories that really resonate with audiences. Dan breaks down what he calls the "three brain framework" and shares a formula for using it to create messaging, campaigns, stories and videos that help viewers convince themselves to make a purchase. Highlights from my conversation with Dan include: Hackstone is a video production company that acts as an outsourced creative team for agencies. Dan and the team at Hackstone use neuroscience research from FMRI scans to determine what taps into peoples' emotions, and they use that to develop marketing campaigns. Dan says most marketers make the mistake of leading with facts, when in reality, buyers are driven by emotion, and then look for the facts to back up their emotional decision. The three brain framework can be used to apply these principles. It segments the brain into three parts - the emotional brain, the logical brain, and the survival brain. The survival brain decides what information the brain will actually take in based on what is needed for survival. The emotional brain is where connections and associations are made, and where memories are stored and relationships are developed. It is what triggers the desire to purchase something. The logical brain is all about facts, and is used to justify the purchases that the emotional brain wants. FMRI data is used to determine what really resonates with people, and what they really want - as opposed to what they say they might want. The most important thing in developing marketing messages and campaigns is to determine what your customers want, but unfortunately most marketers start by identifying what they want to tell customers. Dan calls this selfish marketing. Resources from this episode: Visit the Hackstone website Follow Hackstone on Instagram Check out some of the sources Dan relies on for neuroscience data: CXL NMSBA Journal of Consumer Research Journal of Advertising Research Listen to the podcast to learn how to incorporate neuroscience into the development of your marketing strategies. Transcript Kathleen Booth (Host): Welcome back to the Inbound Success Podcast. I'm your host Kathleen Booth. And today my guest is Dan Hack who is the founder and creative director of Hackstone. Welcome Dan. Dan Hack (Guest): Thanks. Dan and Kathleen hamming it up while recording this episode. Kathleen: I'm happy to have you here and I am excited to talk about some of the things that you're working on which are really, really kind of cool and scientific. About Dan and Hackstone Kathleen: Before we get into that, for those who are listening and might not be familiar with you or Hackstone, can you talk a little bit about your story and who you are and what you do and also what Hackstone is? Dan: Yeah, sure. So Hackstone started out as a video production company. I started Hackstone like 12 years ago I think now. We've kind of developed into sort of an arm of an agency and it's been a lot of fun because we get to do the creative things we get to, we get to do different... our clients are all over the place, big and small. And we get to do a lot of kind of the creative part and work with agencies to come up with the creative, to recommend the creative to their clients and also to our clients. And then we do a lot of testing. We do a lot of like, is this going to work, you know, testing storyboards and the creative and then also doing the, you know, we call them postmortems, you know, we're afterwards you go and see why something worked and why why it didn't work. Right? So we're kind of a production company on steroids we've been called. So it's a lot of fun. We really like what we do. What does MRI data have to do with marketing? Kathleen: That's awesome. One of the things that drew me to talking with you and having this conversation is that I learned that you guys are using actually MRI data and neurolinguistics to figure out more effective ways of tapping into emotions and developing narratives. I will be the first to say, I'm a huge marketing nerd. And I think while many people think of marketing as this creative discipline, I'm always naturally drawn to the side of it that's a little bit more scientific, which is why I was like, Oh, I totally want to talk about this. So tell me, what does MRI data have to do with marketing? Dan: So nothing and everything all at the same time. So basically what we're doing, and it's funny because you develop instincts, right? About what's going to work and not work. And there's always the chase of how do we know this is going to work and why did something work and why did something not work, right? Like way back when, the reason I got into this whole thing was because I was young, I was creative. I had two projects that fell into my lap. They were really successful and creative people have a huge ego. And I had a ginormous ego, right? I became so arrogant when I first started this. I wanted to be a director, I wanted to affect the world with my product, right? And then, you get to projects that don't work at all, right? That are just flops. And the thing about a big ego is that they're incredibly fragile as well. Right? And then you become crushed and everything you thought you believed about yourself is wrong essentially. So that's when I really got into the world of like, I wanted to find out why were these two projects after I've had this success, why did these projects not work? Right? Because clients give you their money when they give you their money, they give you their trust as well. They're like, Hey, we trust that you're going to make something that's going to blow the lid off of our KPI. You know? And, and that's a lot of responsibility and that's a lot of pressure as well. So I was exposed to the world of testing pretty early on in my in my career and, and it just started with just asking people like, do you like this? Do you, how did we do? Like, do you think this is something you would buy? Is this a good product? Like, how did you resonate with it? What annoyed you? But there are a lot of problems with that and you find that, that people respond and oftentimes tell you they're really nice. People inherently are good, right? And they tell you what they think you want to hear. So the information you get back from them is not entirely accurate all the time. So you go deeper, right? You go into like, okay, well we're going to use eye tracking technology, right, to figure out like where they're looking. And then you go even deeper. You were going to use EEG to see how their brain is firing, which is, which are the like the probes you put on the head. Then you measure sweat glands and you measure pulse. And basically stop asking them questions. It's like, Hey, we're not going to ask you any more. We're just going to see how you respond to whatever stimuli we put in front of you. Kathleen: It's like a lie detector. Dan: Kind of, exactly. Only less pressure for them. You don't go to jail afterwards hopefully. But so then you get into all the way up to FMRI data, which is essentially putting somebody into an FMRI machine. And FMRI stands for functional magnetic resonance imaging. And what that does is it looks at your brain and tells you real time, with a few second delay, how your brain is firing or responding or what parts of your brain are using the most blood right? The most fuel based on what you're showing somebody. And it's like a light bulb. It's super cool. Like you can show somebody a commercial and you can tell right away based on what parts of their brains are firing, whether they like it or not. Right? Apple develops their products in FMRI machines where they show the different cases of the different screens of the different iPhones. And they can tell right away like, okay, well this part of the brain is firing and that means they like it or they don't like it or they're responding negatively or positively or whatever. And really we've taken that, so trying to kind of sum it up here, they've taken that, we've taken that and sort of put that into a framework that we call the three brain framework. That tells you certain things like we know from FMRI data that people don't respond to facts, right? But people don't buy cars because of the safety features, they don't buy cars because they have the radar you know, the radar cruise control on the highway or the leather seats or whatever. It's all about emotion, right? And that's why we always go back to how should it make you feel? Right? That's how we start every single project. We have two steps. Number one, how should it make you feel? Number two, support that with facts, right? A lot of people get that backwards. And that's what we know from FMRI data is that when you're selling facts, you're selling to a part of the brain whose only job it is to support the emotional decision that you've already made. Kathleen: Right. It's to reverse justify what we like. First we figure out what we want and then we figure out how to justify it. Dan: Right? Exactly. Exactly. But here's the thing, like we don't even know we're doing it right? Like there's, one of my favorite studies is a smoking study back from the nineties. I think it was early nineties. The biggest FMRI study ever done where it was when the surgeon general started putting the warning on the packs of cigarettes, right? And researchers wanted to find out like, well, people are still smoking, but people are saying, right, we're doing these focus groups. And people are saying like, yeah it's making me not smoke. Right? And they were like, okay, we need to put these people into FMRI machines and figure out what's going on. So first they asked them, they said, do you think the Surgeon General's warning on the pack of, you know, any tobacco product makes you less likely to smoke or makes you smoke less? And they were like, yeah, I think so. And then they put them in FMRI machines and they watched their brains as these people, number one smoked, and number two, were exposed to the Surgeon General's warning, right? And what they found is super cool. They found that when people smoke, their brains have the same reaction as, it's the reward center lights up, it just explodes, as when they see the Surgeon General's warning. It's the power of associations, right? So because when people smoke, what they usually do is they stop working, they walk down the hallway, they link up with coworkers, they have a conversation. And the last thing they see before they light a cigarette before this release of dopamine is they see the Surgeon General's warning, right? Kathleen: Pavlov's dog, right? Dan: And so they create that association, right? It really is. Yeah, exactly. So in neuromarketing, what you're doing is you're trying to figure out how the brain works and you're trying to, you don't always have the budget to test every single project, but you're trying to figure out, you're trying to make an educated guess on how people are going to respond to certain things, right? Kathleen: Sorry to interrupt you, but it's so interesting listening to you talk about this because I'm actually fascinated by the neuroscience behind all the anti-smoking campaigns. And I had done some research on this as well. And a corollary, kind of additional story to the one you just told, which I think is so interesting is you know, for many years, depending upon how old you are, if you're listening, you may or may not remember for many years, the government used these campaigns that were these very scary images of like black lungs. And, it's interesting, they're starting to do this again now. What they found, the primary focus of a lot of the antismoking campaigns was on teenagers because that's like, if you can prevent somebody from starting to smoke in the first place, it's a much better approach than trying to get somebody who's already smoking to stop. Dan: Right? Kathleen: And so they used to use those scare tactics and like, you know, just like the eggs and this is your brain on drugs kind of thing. And those did not work well. It wasn't until they had something called the Truth Campaign where they started to see some success. What the Truth Campaign did, which you may recall seeing, is it scrapped all of those fear tactics. What they did was they figured out, they really thought about like, why do people smoke? Right? Why do teenagers start to smoke in the first place? Is it because they don't understand it's bad for them? No, it's because they are rebelling against their parents. And that is a form of rebellion. And so what the Truth Campaign did was it looked at, well, if we want to tap into that feeling of rebellion, how can we leverage rebellion to get them to not smoke in the first place? So the messaging and the Truth Campaign was all around big tobacco wants to control you and has you in their pocket. So it was like rebel against big tobacco and don't fall for it essentially. And that got a much, much better outcome than all the fear tactics. And I feel like that's kind of like the same thing that you're talking about. All of these campaigns, you can pour a ton of money into them. But if you don't really understand at the very core what is that emotion that somebody is driven by, then you're not going to be successful. Dan: Right. Kathleen: So that was a long tangent, but I'm fascinated by this and there's so much interesting work being done in behavioral health that I think can inform marketing. Dan: Yeah, that's exactly right. And you know, and the problem I think is that it's still kind of expensive, right? Like there are research groups and there are subscription services and we subscribe to those where when researchers do this research to find out what campaign was the most successful in this last super bowl, right? And they do the FMRI studies and they're funded. You can subscribe to that data and get that data and then use that data to kind of inform what you do. In a perfect world, yeah, we would have, you know, when we do a car campaign, you know, put people in an FMRI machine to see like, Hey, are they most stimulated by the color? Are they, is that a red car? Is it a white car? Is that a black car? So, those are all the nitty gritty things that you get into. But I think at the heart of it is exactly like what you said. You need to figure out who your audience is. You need to figure out what they want, and then give it to them. It sounds really simple and it kind of is, right? And then all these tools, this neuromarketing is essentially, we use that to try to figure out what it is, what exactly is it that your audience wants and how do you give it to them? Because a lot of clients come to us and they say here's what we want to say. Or, when you ask them questions like what causes a campaign to not perform well? And usually it goes back to selfish marketing, right? You approach that campaign with what is it that we want to say, right? We want to tell our story. Like, the word story, I'm an oppositionist. I get that. But, the word story drives me up the wall. It drives me insane because it's become this catchall, right? And it's all like, tell your story has become this romantic replacement to messaging, right? Or information or get your message out there. What does that mean? Right? So this is really a sort of a way to figure out what is the right story. There are a million stories. Like, nobody cares who started the company, right? Nobody cares why even necessarily you started the company, right? People care about other things. And this is really trying to find out what those things are and then giving them those things essentially. Kathleen: So I have so many questions for you. Dan: I'll just go and go. What is the Three Brain Framework? Kathleen: No, no, no. I warned you, I'm a huge nerd. And so like you've already seen through the smoking stuff, you and I could go for hours on this topic. But I want to break it down a little bit. So first of all, you mentioned you have this Three brain approach. Can you define for me exactly what that, like what are the three brains? Dan: Sure. So obviously, there are more than three parts of the brain, but for our purposes, for this marketing purpose we divide the brain into three parts. We have the survival brain, you have the emotional brain, and then you have the logical brain, right? And we look at it as kind of a funnel. All three parts of those brains has its own purpose. So you look at the survival brain, sort of like a club bouncer, right? He stands in the front with his arms crossed and he decides what gets in and what gets out, right? The brain is cognitive miser, right? So the brain tries to save calories. He's the guy who decides number one, is this important to my survival? Do I need to know this information? Is this going to save my life? And then he also decides, is this new information? Do I already know this information or can we just radically summarize that? So to put it on the shelf, and a good example of that is like your lawn, right? Nobody knows how many blades of grass they have in their front yard right now. It's not looking good for my yard. I have room for a lot. I've only had four like blades of grass or nursing them and, but everybody knows that you have that you have a lawn, right? You see a lawn. That's an example of something being radically summarized and then you know, and then put on a shelf. So you have that. Then if you do get through that, you have the emotional brain, right? And the emotional brain is the, we call it the mother, right? It's the mammal brain, if you will. You know, some people call it that. And basically that's where you create associations, right? Like, Hey, last time when I touched that, it burned me and that hurt. And that's important to my survival. And it does other things like memory. That's where your relationships are built, right? Like where do you fit in, in your tribe? And how do you advance, you know, in your tribe and, and you know, again, important for your survival. And also you have some really cool things that happen in here, like synesthesia for example, which is like, which is where... Kathleen: Is that where you see colors as emotions? Dan: Yeah. Kind of. But it's like when you're watching a commercial. We use this in food commercials, right? When you're watching a commercial and you do a really good job in filming that and getting that across, the viewer will actually taste what they're seeing, right? It's essentially you have these neuro pathways for like vision and for taste and for smell and whatever. And sometimes when they're really powerful, when you have a train, there's a train outside. So that made me think of it. When you have a train like hurling down this neuro pathway, sometimes it'll jump the track onto another pathway. Right? Kathleen: I feel like I totally know what you're talking about because when I go to the movies, my chain of cinemas locally, in the intro kind of footage that leads up to every movie, they always have the sound of the can of Coke popping open. And then the pouring into the glass with the ice and the fizzy sound combined with the ice clinking and the Coke filling. And I'm like sitting there going, Oh my God, I need a Coke. And I can taste it right now. Dan: I want that. Yeah, exactly. That's exactly what it is. So that's the part of the brain where those kinds of things happen, right? And those are the kinds of things we want to do. And that's why you make food. Like your goal is to make the viewer taste the food, right? Pizza. Really close shots of the cheese pulls and those kinds of things. Right? Super important. So anyway, the emotional brain is where we do most of our decision making, right? Then you have the logical brain and the logical brain is sort of like, it's like, it reminds me of my dad, right? He's the accountant and he's the guy who basically, he's like the legal department, right? He's the guy who who ruins the fun essentially, you know, like, like you say... Kathleen: We call that "the fun sponge". Dan: Yeah, exactly. It's the higher processing. Dan: And this part of the brain either supports what your emotional brain has already decided when it comes to purchasing or it overrides that decision, right? So you can go and sit in a Ferrari and you smell that new smell of the Ferrari and you really want it and you feel that emotional connection to the car in that red and that tan leather, you know, or whatever. And then the logical brain comes in and says like, Hey, 2,500 bucks a month. Like that's more than your mortgage. There's no way. We're not doing that. And really, that's the way it works. So the emotional brain is where you should be selling, right? When you create something, you should create it for the emotional brain and then create facts to support the logical brain in helping support the emotional brain in making that decision. So that's why facts should come second. Yet most of our marketing aims directly for that logical brain, yet that's not where we make decisions. Kathleen: Yeah, that makes total sense. Cause I totally know that myself, how I buy. It's like I see something I like and I'm like, I really want that. How can I justify it? It's the old saying buy the dress and then find the party. Where to find neuroscience data Kathleen: So for somebody who's listening, I think if they understand this conceptually, you know, if it were me, my next question would be like, great, now how do I find this data to help me figure out what emotions to tap into? And you were mentioning there's ways you can subscribe to information about FMRI data. So can you get into a little bit if somebody wants to learn more about this, get tapped into to that kind of data, where can they find it? Dan: Sure. So I can send you some links afterwards if you want to put those in the show notes there on some of the places where you can subscribe to that. Publications, you can subscribe to even industry standard or industry specific data, you know, that apply directly to your industry. But a lot of this stuff is really, it's not new information, right? You have to beat it into your brain to kind of remember that. So, for example, the principle of the three brains, right? The fact that our minds look for contrast. There's this framework. Your mind looks for contrast, right? It's got to get into your mind first without being filtered out. And then you have certain principles that are kind of spread out. They're all over. And I think you have to make a decision. So that's why you have neuro marketing firms who put that together for you if you don't want to think about it. But I think it's important to become familiar with that. And then to put everything you do marketing wise, messaging wise through a framework like that. Does that make sense? How to apply neuroscience to B2B marketing Kathleen: Yeah, it does. And, in my head I'm thinking I can see so clearly how you would use this. You used the example of a Ferrari. If you're selling a Ferrari or you're selling a food product or you know, clothing or some things that are more consumer facing, maybe more optional products if you will. But my question is when it comes to, for example, like what somebody might consider to be a boring B2B purchase, like accounting software or you know, like I'm in cybersecurity. Walk me through how you think about developing an emotional tug for something that most people look at as a pretty boring thing. Dan: Yeah, absolutely. So the first thing before we even get to that emotional tug, we have to remember, get through the bouncer, right? So one of the things, and I had this super cool example, hold on, I might have it written down here, that that I pulled. Now maybe I don't. You get these emails where people use industry jargon a lot, right? You first have to think about how do you get through the bouncer. So you have to make it easy to understand. You have to, you have to understand that you're super close to your industry. The person you're talking to might not be super close to your industry. So understand that your brain immediately asks, do we even let this information in? Whether it's an email, whether it's a marketing video, whether it's a commercial, like whatever it is, whether it's a billboard even. Should we let this information in? And you have to then go to the emotional connection of how do you make that emotional connection. So when we say emotional connection, you have to emote. What we mean is you have to think about how should this messaging make you feel. So some questions to ask are, should this make the person feel like I'm an authority? Should this person feel afraid that you know, that somebody is going to hack their system or steal ransomware, viruses, those kinds of things. Should they feel funny? Or should your messaging feel funny? Should they be amused? So you go back to that. How should it make you feel? And then you take that information and that information should support that. Does that make sense at all? Examples of marketing campaigns that have been developed using MRI data Kathleen: Yeah, it does. It totally does. So let's get into some examples because you guys have done work with some really interesting companies and I feel like this is especially one of those topics where you can talk about it conceptually and still not understand it. But when you dive into actual examples, it starts to become much more clear. So can you maybe talk about how you've used these principles with some of the companies you've worked with to get really great results? Dan: Sure. Exactly. So car ads. So I'll take a local first. So we work with a local brand. It was a Ford dealership and they had done celebrity commercials in the past where they had an athlete say like, Hey, here's where I'm shopping. And when we look at data, FMRI data, even with the, with the latest COVID, there's a lot of data coming out from COVID PSAs where they're saying a lot of these pieces are falling flat, right? A lot of this messaging from COVID 19 is falling flat, even with celebrities in it. Why is that? Right? And then you get into like, it's not just a matter of getting celebrity, you have to put that celebrity in a, in a situation where it's authentic. And what's authenticity? That depends on your brand. So, a while back, we put an athlete into a set of Ford commercials. And the problem was that athletes can't act. Not only can't they act, athletes don't want to act right. And it was almost like, you know, having this athlete is working. It's okay, but we're doing it because we've done it in years past and it's sort of like people expect that from our brands. How do we ramp that up? So what we did was we came in and we said okay, the athlete can't act, he doesn't want to act. He shouldn't act if he doesn't want to, so you don't have to. What does the audience want? So we created this campaign where we took this athlete, made fun of the fact that he's in a commercial where he's being asked to act and he doesn't want to act. And it was phenomenal, right? It went all the way up the chain to like, what are you guys doing? This is awesome. This is like the best campaign ever. The athlete had a lot more fun doing the commercial. The client had a much better response from that. And that trickles down to now you have fundraisers with the athlete where now you have a better response to that. You sell more cars. People are talking about your brand more and most importantly, people remember your brand more. Because ultimately it's about attention and it's about keeping the attention. And then, how were you remembered by the people who maybe aren't ready to buy now but are ready to buy in 90 days? Wherever they are in their cycle and their buying cycle. And how do you stay top of mind for that? Pizza, same thing. You know, in the celebrity line, we work with a pizza brand every year where they have an athlete who works with them to not only sell pizzas but also to raise money for a charity. A certain amount of your sales goes to whatever the charity is. And they had typically had this green screen and put the celebrity up. The celebrity image, let that just do the work. And people didn't respond to that. So we went back and said, okay, who is the audience here? Who are we really trying to attract? And it's fans of this athlete, right? So you look at the basic framework. You don't have to FMRI study this to kind of get that framework. We look at that information and we say okay, they want to be entertained. And the best way to entertain them, and we know this from FMRI data, it's the associations, right? So if you were to put a puppy on the screen, and then put the brand at the end, if that's the emotion you want to be linked to, you are already 75% of the way there, right? When it comes to commercials then you put in your messaging and you make it even better. And we found in the past that when you take a product and you integrate it into a piece of entertainment, you maintain that audience attention. It's the sense parts of an advertisement. So when I say ad, I mean like a video, even a video on Facebook for example. And you're trying to get a lead or you're trying to sell mattresses or whatever it is you're trying to sell, it's about keeping the attention, and especially how long a viewer stays in a video matters because that's how you retarget, right? That's how you recognize how interested they are. We have a three minute video. They made it all the way to the end, they're super interested, right? So it becomes like this capturing the attention and then maintaining the attention. So what we did with the pizza brand is we created a short film and we put this character, the athlete, which was Alex Ovechkin, into this pizza commercial where he was in these absurd scenarios. Like he initially moved here from Russia where pizza was the reason he moved, not hockey. He stumbled upon hockey when he was delivering pizzas, right? And it was this absurd storyline that was just fun and entertaining. And you saw this athlete in a situation he's not normally in. When you're selling, you're always asking people for their attention. When they're seeking you out, that's when it's okay to just give them the information, like on an iPhone, right? But when you're asking them, when you're interrupting their lives and you're asking them for their attention, you're saying like, Hey, we want you to buy our pizza. Because when you buy our pizza, a portion of your proceeds go to whatever the charity is, you have to make it worth their while. And we saw a a phenomenal capture rate. Not only that, but the average, I'm trying to think of like what it is now. So the average completion rates for any video for a long form video is about 15%. We were hitting 86, 87% completion rates because when somebody starts the video, they watch all the way to the very end to the logo and to the offer. Which is phenomenal. And those are the kinds of things, more than just views, you can say Oh yeah, this got 2 million impressions, you know, which is great. You can buy impressions. Impressions don't really mean a lot. Are they meaningful impressions? Ultimately that's what you're trying to get to with FMRI, or with any neuro marketing, you're trying to get to the bottom of, is this meaningful to our audience? You're getting their attention. You're hopefully keeping their attention by creating a meaningful experience that is worth their time, which is ultimately the most valuable thing I think we have. How to get started with neurolinguistics and MRI data Kathleen: That's so interesting. Throughout this conversation, you've sprinkled in things that are a good guide for somebody if they're thinking okay, I want to do this. Can you kind of summarize, if you were meeting with somebody for the first time and you needed to tell them, here's how you're going to go ahead and use this concept for your own marketing, what are the steps they should go through? Where do they get started? Dan: Sure. So we've got a framework, I can pull it up here real quick just just as a reference. We've got a campaign worksheet that we use for these when we go in that's based on our three brains. So for example, we always ask, what's the purpose of your video? What's the primary goal of your campaign? And that's just the background information. So you say who's your customer? And then how are you going to measure success? I think it's super important to figure out how are we even going to gauge if this thing is working or if it's successful or not? You'd be amazed how many people don't know. A lot of times, especially with video, we find that a lot of people come to us and say like, Hey, the CEO wants a video. We don't really know what the purpose is, but can you just get it off my plate? We call those box checker videos and then we're like that nerdy kid in class who's like, but we still want an A, right? So we'll get the A for you. So again, we start out with contrast. So we say like, who are your competitors? And you take inventory of what your competitors are doing. And again, through this neuro research, we know that it is better to be different than it is to be better. It's very difficult to quantify better. Like, what is better to some people, right? So, for example, banks might say, and this is a common thing, when a customer comes into our bank, we know their name. We know them, we have that personal relationship. To me that's not better. I love being anonymous. When I walk into a branch and they say, good morning, Mr. Hack, I'm like, Oh cool, I need to find a new bank. They know my name. That's not good. I don't like that. So that's something that doesn't work for everybody. So then you say how many competitors, what are your competitors doing? How do you not do what your competitors are doing? Because we know through the tests we do repeatedly that when you put a series of car commercials that all say the same thing, when you watch the Today Show in the morning and you see the lawyer commercials one right after the other that say, we're fighting for you, we're here for you, we're the tough guys. You know, people don't remember that. People will watch that. We watch people watch those. It's commercials where we'll put like five or six of those in a row. We'll watch people watch them. We'll see them interact with them. Yet at the end of that run of commercials, they don't remember anything. They don't remember any of the brands. Because again, the bouncer, right? The survival brain has decided like, Hey, you don't need to know this information. Even if you're in the market for that, you don't need to know this information. It's going to use too many calories to process it. I'm going to put it all together for you, put it in a basket and put it on the shelf. You don't need to worry about it. People don't remember what they saw. They don't remember brands. They don't even remember the storylines at the end of that. So the first thing we do is try to figure out, okay, what do we do that's different? We put that into our framework. The next thing is simplicity. And this again is the survival brain. So for a long form video, you might decide what are the three points we want to make really well? Where for a commercial you may decide what's the one point we know, through testing? When you try to make three points in a 32 second commercial, people remember generally nothing. It's like 0.5 when you average it out, right? When you put one point in a commercial, when you try to make one point, people tend to remember mostly that one point that you're making. So you have to ask yourself, okay, like we want to get these 15 things across in our messaging or in our video. Is this the place for that? Where are you in the buying cycle? And right now when you're top of funnel, is this the place where you want to try to educate customers on your product? Usually, no. So because it's just too much to remember at that point, what do you need to prove to your customer to convince them to buy? So that's how you appeal to the logic part, because the logic part is going to ultimately support the emotional part. How should you deliver that information? And then we look at the reward. The final thing is the reward. Why should your viewer keep watching? And when we test a long form piece, like with the Ovechkin piece for example, it looks fun and it looks interesting and it looks entertaining, but it's very thought out. We went through and figured that in a piece like this, you have somebody's attention for maybe seven, eight seconds before their mind starts wandering. What can we put in there at the seven, eight second mark that is going to recapture their attention, draw them in? So you have to do that throughout your video. And when you watch I don't know, like the Purple Mattress for example, is a really good campaign. That was done to repeatedly bring you back in those really good long form, like Dollar Shave. Kathleen: I was just going to say that first Dollar Shave Club video that made them go viral, you couldn't stop watching because the pace was so perfect and you knew there was something more fantastic that was coming. Dan: Yeah. So, and you have to remember that what's interesting to you is likely not interesting to your customer. And that's what we talk about as selfish marketing. What do they want to hear versus what do I want to say? Yup. Kathleen: I love it. Well, okay, so any chance that I could share a link to that campaign framework in the show notes because that sounds like a super valuable document for people to have. Dan: And then it's got other things too, which is super cool. What does your customer want? What's their internal problem? Then you get into internal versus external problems and those kinds of things. What's keeping them from having what they want and how do you solve that problem? But ultimately, people remember how they felt when they watched your stuff or when they're exposed to your brand much more. And again, FMRI data or not FMRI data, it comes down to the fact that people remember how they felt. They don't remember what you said. Kathleen's two questions Kathleen: This is so interesting and it's been so much fun to talk about. I want to ask you two questions and then I want to get into how somebody can follow up and learn more. So my two questions that I always ask everybody, the first one is, this podcast is all about inbound marketing. I'm curious, is there a particular company or individual that you think is really setting the standard for doing inbound marketing right now? Dan: Yeah, I do. I think there's so many of them. Most of the national long form ads that you're seeing on Facebook now are really well done. For example, Purple Mattresses, really well done. They have the bears, right? I think Geico, the Martin agency, Geico does a phenomenal job. And I also think that Dollar Shave Club really was the kind of the groundbreaking long format that changed how long form ads work. Even though you had that data, there's a disconnect between people know what the right thing to do is versus them actually doing those things. Kathleen: I love those examples. And then the other thing, most marketers I talk to say they suffer from this problem of what I call drinking through a fire hose. Digital marketing changes so quickly. It's really hard to keep up with best practices and new technology and all that. So how do you personally keep yourself educated? Dan: So you know, there's certain people, certain things I follow. Some people follow Gary V - Gary Vaynerchuk. So people like that. You take those sources. I have a ton of those sources that I use. And then in the morning I sit down and go through them to see what's happening. And then you decide what you remember and what you don't remember. I can send you some of those links. Kathleen: Who are your top three sources? How about that? Dan: Top three sources? I'd have to say, so I use a lot of the curated stuff like IAB, the newsletters. I use a lot of those. We use CXL. We use a lot of Harvard Business Review. And then just staying in touch with people. I've got a lot of colleagues in the industry where we talk about what's happening, who's doing what? What worked for your clients, what didn't work, what did you find out? Did you hear about a new study that just came out? You know, those kinds of things. How to connect with Dan Kathleen: Awesome. Well, if somebody is listening to this and they want to learn more about what we talked about or they just want to learn more about you or Hackstone, what's the best way for them to connect with you online? Dan: Hackstone.com. That's our website. We're on social as well. We try to make our social a little more entertaining than the website. The team is a lot less ADD and a lot less all over the place than I am. So they typically will do the talking. So if you're lucky, you won't have to actually talk to me. You know what to do next... Kathleen: Alright, well I think talking to you is fascinating. So if you are listening to this podcast and you liked what you heard or you learned something new, I mean, I know I did this time for sure. This was so interesting. Head to Apple Podcasts and please consider leaving the podcast a five star review because that is how we get found by new listeners. And if you know somebody else who's doing amazing inbound marketing work, tweet me @workmommywork, and I would love to have them as my next guest. That is it for this week. Thank you so much, Dan. This was a really fun conversation. Thanks.  

On this episode we talk to the 10th employee at Dollar Shave club, Cassie Lawrence. She discusses how she joined DSC, when she knew it was going to be successful, advice to other startup employees and much more! Cassie Lawrence 1:00 - Were you there for the video? 2:45 - The CEO of Dollar Shave clubs advice to Cassie about her career. 4:42 - What was her first day at Dollar Shave Club like? 5:55 - 3 Pieces of advice to somebody joining a fast growing company? 9:22 - When did she know Dollar Shave clubs was going to be huge 12:50 - Did Dollar Shave give equity to early stage companies? 13:15 - Why Cassie decided to go to a small agency instead of a fast growing company 17:02 - How is PR doing during COVID-19 18:30 - Cassies advice to graduating college students

On this special episode with Russell’s first ever guest interview, we hear from Joe Marfoglio about the best things to do to grow your YouTube channel. Here are some of the informative things you’ll hear in this episode: Find out why thumbnails are so important to how many people watch your videos. Hear why Russell’s long intro on Funnel Hacker TV cost him views. And find out what tool you can use to not only track your own videos, but also the videos of your competitors. So listen here to find out Joe Marfoglio’s best tips to grow viewership on your YouTube channel. ---Transcript--- What’s up everybody? This is Russell Brunson, welcome back to the Marketing Secrets show. I hope you guys are excited for today. We have a special guest, and I’ve rarely, if ever, brought on a special guest to the show. But as we are getting closer and closer to the Traffic Secrets launch, I thought it would be fun to bring on Joe Marfoglio, who is the guy on our team who does all of our YouTube stuff. So we’re calling these tails of a funnel hacker, and Joe’s episode is going to be walking you guys through some of the stuff that we’re doing to grow our YouTube channel, and are following some things that didn’t make sense to me, like cutting out our amazingly designed intros and making thumbnails that look goofy because they increase viewership and a whole bunch of other stuff. He literally took one of our videos that had less than 1000 views, edited a couple of things and boosted it to over 100,000 views with no ads spent. So these are the kind of things he’ll be talking about on today’s episode. So I’m going to queue up the theme song, and when we come back you guys will have a chance to meet my friend Joe Marfoglio. Joe Marfoglio, Joe how are you doing, man? Joe: What’s happening man? Hey, glad to be here. Thank you for that awesome intro. Russell: Hey man, this is the first time we’ve done a live interview on this show before, which is really exciting. Very exciting. And I love you have your Funnel Hackers shirt on, and all your Two Comma Club awards in the back. Joe: That’s it man. I’m just waiting for the Two Comma Club X to come in the mail to kind of even out the set, it’s going to be awesome. Russell: Joe just won one last week, you guys, at Funnel Hacking Live he got one, which is pretty cool. Alright, so obviously we don’t have a ton of time, but I’ve got a lot of questions for you. So inside of the Traffic Secrets book, there’s a whole chapter on YouTube traffic. And most of it I pulled from you, because you are the guy who on our team is doing all of our YouTube, doing all this stuff, and you’ve done such an amazing job. So most of the things are there from you. So this is kind of to tease people a little bit about what’s happening inside the book, but also to just get them to know you and understand some more about YouTube. So why is YouTube, do you think, different than all the other platforms that are out there? You know, we’ve got Instagram, Facebook, Twitter, TikTok, all this stuff, why YouTube, why are you so passionate about YouTube? Joe: You know, so yeah you have Facebook, Instagram, and I see a lot of people, it’s very easy, it’s sometimes easier for them to build a big following on Facebook or Instagram, they kind of go to YouTube and they struggle a little bit. And it’s because YouTube isn’t just a social media platform, it is a social media platform, but it’s also a search engine where people are searching for a certain, you know, certain topics. Maybe they’re searching how to do something. You know, so what you have to do with YouTube is not only put up content that’s engaging that people want to watch that has value, but you also have to add kind of a story element to it. And the one thing that you don’t want to do, and I see people do this, is kind of repurpose your content. Like say you have content you put on Facebook, and then Instagram or a podcast and you like, you know, and you distribute to all these different channels. If you put it on YouTube, a lot of times you find that it’s not going to get that much traction. And think about YouTube like this, when you watch YouTube yourself, if you guys are out there and you’re watching YouTube, why do you subscribe to a certain channel? If you’re going to subscribe, maybe they’re showing you how to make money online, or how to grow your instagram, but there’s a ton of videos on there that talk about how to grow your instagram channel, but it’s like, what makes you subscribe and want to watch somebody? It’s going to be their personality, it’s going to be the way they engage with you. And it’s going to be the way the content comes across. So what I would say for YouTube, the difference is, is treat YouTube like it’s it’s own thing. Make videos just for YouTube and try to approach it not as a marketer, but as a creator. Not that you’re going to sell anything but that you’re going to build your audience and your following. Russell: Yeah, one of my favorite things about YouTube too, and I talk about this in the book a little bit, every social platform, like let’s say you do a Facebook live, like we’re doing right now, it’s happening and then it’ll drop, it’ll be  here for the next couple of days, then it will drop down the newsfeed, and then eventually just disappears and nobody will ever see it again. Whereas YouTube is the only platform where you create something and then it grows over time, because it’s not just social, it’s social and a search. And that’s why it’s so, it’s different because you create something and if you create it the right way, then it sits there and it grows throughout time, as opposed to everything else, which seems to diminish over time. So it gives, at least someone for me, who’s creating stuff, it gives me more incentive to create stuff that’s nice because it’ll last beyond the moment. Whereas Facebook live is there for a moment, and then it’s gone. Whereas YouTube it can last for forever. I mean, like we talked about earlier, the Overcome Pornography videos, overcoming pornography addiction, they still get hundreds and hundreds of views every single month, and we don’t even sell the product anymore, which is probably sad because you were an affiliate making money when it was there. Joe: No, yeah that video, I think I sent you a screen shot when you were doing the book, and it has hundreds of clicks on there, and what it does is the content builds on each other. So you put a video out three years ago, and if you keep putting content out, you’re going to keep getting leads, you’re going to keep getting people subscribing and watching your stuff, and yeah, it doesn’t disappear, it just builds on top of each other. Russell: Okay, I want to ask another question, this is off the questions that you sent me as pre-questions, because I’m excited about this one, I hope that’s okay. I’m going to put you on the spot a little bit. I think a lot of times people think YouTube strategies like, ‘Okay, I gotta make the most perfect video in the world.” And you look at companies like Dollar Shave club for example, where they made this video, and it goes crazy viral and then builds this huge company up, and he sells to whoever he sold for, for like a billion dollars. So we’re like, ‘Okay, I’ve got to make the perfect YouTube video.” And people stress about it and because of that, they never actually make something at all. Versus like, you told me, in the book we share the example, but you talked about the strategy of like Gillette or other things like that. Will you talk about that? Because I feel like that’s a strategy that more people like me could actually do. Not I gotta make the perfect video, instead looking at it a little differently. Will you talk about how Gillette did their strategy and how we can use that as well? Joe: Yeah, so here’s the thing. When you guys are starting your YouTube channel, think of it like in, the first thing you want to do is really go deep in your niche, whatever you’re doing. So for example, Gillette, what they did was they didn’t go out there and say, well, they did. They tried to make a viral video like Dollar Shave Club, and it flopped. So what they did was, they said, “Listen, we want to dominate for the keyword how to shave.” Because the people that watch how to shave videos buy our product. So they did how to shave your head, how to shave your back, how to shave your legs. They did all these videos that got hundreds of thousands and millions of views, and they were very targeted to their subscribers. So the thing I would tell people is, figure out what your niche is, figure out what you’re going to go after and go deep in that niche. Kind of like the way you explain the whole blue ocean strategy in Expert Secrets. Because, the one thing you don’t want to do is go and look at someone who has a million subscribers and follow what they do. So say you’re doing, because they’ve already been established, they already have a huge audience. So say you’re doing Amazon, what you want to do is go through Amazon and say, okay, make videos on Amazon, on Amazon FBA, on Amazon Drop Shipping, on Amazon Affiliate. And then go through and hit, every time, anything that someone is searching for Amazon, you want to make a video on. And it doesn’t have to be a perfect video, like you said. It just has to be engaging enough to get retention, but it doesn’t have to be this high production video. But what you don’t want to do, is you don’t want to make a video on Amazon, then make a video on how to make money online, then make a video on procrastination, then make a video on the Corona Virus. If you want it to, if you’re just starting, you want to create this traffic lane that like YouTube knows, “Okay, when Joe puts a video out, it’s going to be on Amazon.” And then they’ll start showing your video to more and more people that search like Amazon stuff, and then you can expand out from there. Russell: Very cool. Yeah, actually go look at Gillette’s. It’s funny, after you told me that story I went and looked in there and you see all the, there’s stuff that I never would have dreamt people are looking to shave. So, alright, there you go. There’s a video for that now too, which is awesome. It’s very cool. Okay, my next question for you is when someone creates, let’s say they’re creating videos and posting them on YouTube and they’re not getting any traction, they’re not getting a lot of views, what would be the best way for someone to look at that, and be like, “Okay, here’s how I tweak it or optimize it to get people to actually start watching my videos.” Joe: That’s a great question because I see this all the time. I see people posting their videos up there and they’re getting no views and they just keep posting the same videos. So here’s the thing, think of it like this, think of your YouTube channel, say you have a store, a brick and mortar store, think of your YouTube channel as, that’s your storefront. The videos that you create are your product, and the people that view it and subscribe are your customers, right, they’re raising their hand and saying, “I want that product.” If you’re putting videos out, and no one is watching them or subscribes, or very little people are watching or subscribing, you change up the way you make your videos, there’s something wrong with the way you’re making your videos. Don’t batch out your videos and just throw them out there. You have to see what videos are engaging. So what I would say is, the first thing I would start out is like I said, find your set of keywords, your content bucket. Start putting those videos out, see which videos start getting some traction, and then double down on those keywords. The other thing you want to do is constantly be testing your thumbnails. The two most important thing about your video is going to be your thumbnail and your attention. You get the best video in the world, but if your thumbnail stinks and your title doesn’t have a hook, people aren’t going to click on it. So the thumbnail is, that’s like the visual hook, that’s going to stop people from scrolling and saying, “What’s happening here?” So big faces, little bit of text, your title has your keyword in it, but it also has your hook. And then the video, the first 30 seconds to the minute is the most important part to your video. Because that’s where you want to hook people, and that’s where you want to keep at least 80% retention, and you want at least 50% retention all the way to the end. If you’re not getting that, the best thing to do is after you shoot your video, putting call outs, put in some b-roll, kind of do some pattern interrupts, to keep people visually engaged with your video. Because unlike say a podcast, when people are watching on YouTube, if you’re not visually engaging them, they’re going to look somewhere else. Russell: There’s like a hundred different options for them to click on around the video of like, uh, distraction. Joe: Right. A good example of this is on your channel, you had a video up on sales funnels and you know, you posted it a few years ago, it got a couple of thousand views, we took that same video, just added call outs and b-roll, I think that new video has 150,000 views. Russell: Wow. Joe: And the simple thing is, is even though it’s amazing information, it doesn’t matter who it is, if people aren’t visually stimulated, they’re going to go off. Russell: Yeah, interesting. A couple of things that I learned from you that were crazy is like the thumbnail one, like you said. We used to make these beautifully designed thumbnails, and then the click through rate wasn’t very high and then you made these, no offense, but these ones I’m like, “Ah!” and then it’s like 5x more click throughs. I’m like, ‘Oh, crap.” And it was interesting at Funnel Hacking Live, Prince Ea talked about that, he said when you do a shoot most people do the video and then they try to find a still to make the thing. He’s like, no, you bring professional photographers. That’s the most important part, the thumbnail. He says they’ll spend more time trying to get the thumbnail sometimes, than the entire video as a whole. So I think that’s one big thing. The second thing that I learned from you that was interesting, and we did 100+ episodes of our Funnel Hacker TV show, and I loved it, they were so much fun, but we never got tons of views. I was like, “Why are people not loving this?” and when you started looking at our stats, you’re like, “Well, the reason why is people watch the first little bit, then you have a 30 second cool intro that was amazing. It was the most amazing intro of all time. Any creator would be so proud of this amazing intro. And then it got into the content.” And you showed me like, “Here they are hooked and then the intro starts and then people at the end that make it through that stay gone.” And you went from like, “Take a 30 second intro and make a one and a half second intro.” I was like, “But it’s like, it’s so, on a tv show they have a huge intro and it’s amazing.” And you’re like, “They’re not watching TV, they’re sitting here with YouTube with a thousand things around them, distracting them. You’ve got to be focused and get to the point quick and engage them and keep them hooked.” So yeah, things like that, that I think creators like me are like, ‘Oh, look at my intro, it is so long.” And that’s not the right move. Joe: Yeah, exactly like, the best kind of format is like a 15 second hook, 4 to 5 second branded intro, 10-15 seconds who you are, your content and then a call to action at the end. Russell: So cool. Oh man. Well Joe, I appreciate you coming on man, this was fun, being my first live interview. I’m not the best interviewer, but you were a great guest and shared some super actionable, and important things. And I think what I would recommend, you know we’re funnel hackers here, so we’re good at looking and modeling what people are doing. So go look at our channel, and look at the videos that get a lot of views and ones that don’t get very many. And Joe’s in it always optimizing stuff and figuring things out, but half of this whole game is looking at what’s working and then be like, why is that working? That’s what I’m doing, that’s what you’re doing, we’re always doing that in all aspects. Why is that working, what was the reason? And then trying and testing and making little tweaks and changes. I would love if you shared one last thing, just because I remember the first time there was a plugin in Chrome, I think it was Chrome, that you told me to download, and I downloaded this 3 or 4 years ago, and now every time I go to YouTube I see all the stats and it’s so much fun to see all that stuff, and I think most people don’t even know that there’s stuff, tools like this available, to give you all the analytics and all the detail on the video. I want to talk about any of the tools like that, that you use right now that people can use as well. Joe: Um, yeah. So one of the ones is VidIQ, it’s the one I told you about, which is I love it because I do SEO. So the data in there is amazing. Everyone should get it. They have, the best part about it, you can put your competitors in there, you can see what they’re doing, you can see what videos are trending for them. So that’s a great video. Another one I think is Two Buddy, which is, you know, it’s okay. But My preference is definitely VidIQ, just because it has all that data. Especially if you’re constantly testing and looking at stuff. Russell: It’s great that it’ll show you your competitors videos. Like this video got added x amount of people to subscribe to their channel because of this video. And this is how many views it got. How many it’s getting per day, and all the… You’re just like, “How are they telling me all this stuff? This is amazing.” It shows you all the stuff that, and then you can reverse engineer it from there. As a funnel hacker that’s what we’re looking, how do we reverse engineer things? And this gives you like, it’s basically like, “Here’s what happening with the video.” And from there you can reverse engineer like, “Cool, now I know what I need to do. What do I need to create? How do I make something better? How do I make something that’s going to beat that one out so I get all those views coming to mine instead?” and stuff like that. Joe: Yeah. Russell: Awesome man. Well, thanks Joe. I appreciate you coming and being on the show. Everyone, if you had a good time with Joe, comment down below and say, “Thank you, Joe. We love you.” He’s been such a huge you know, support for me for the last, almost ten years. It’s been almost ten years, hasn’t it? Since we first met? Joe: Yeah, I think so. 2012, I think. Russell: That’s crazy. So a long time, and a huge help for us inside of Clickfunnels, growing our YouTube Channel and helping us get the message out to more people. So grateful for you man, thanks for being on the show. And everyone, please comment down below and tell Joe thank you for spending time with us today. Joe: Alright, thanks guys. Russell: Thanks man. Joe: Thanks Russell. We’ll talk to you later. Russell: Alright, see you man.

This is PART 2Join Alison, Karen & Brian as we look at an article from Mel Magazine (Dollar Shave Club's brand magazine) "In the Honey Badger Brigade, Female Men's Rights Activists Fight For Their Version Of Equality."

This is PART 3Join Alison, Karen & Brian as we look at an article from Mel Magazine (Dollar Shave Club's brand magazine) "In the Honey Badger Brigade, Female Men's Rights Activists Fight For Their Version Of Equality."

Hey guys? Remember when Gillette pooped the bed and lost all that money by ticking off its consumer base? Many of you moved over to Dollar Shave Club. But it's looking like they saw Gillette lose money and they want a piece of that bankruptcy action for themselves!Join Alison, Karen & Brian as we look at an article from Mel Magazine (Dollar Shave Club's brand magazine) "In the Honey Badger Brigade, Female Men's Rights Activists Fight For Their Version Of Equality."

O Dentro do Ringue é um podcast da Vindi (vindi.com.br). Sobre cultura, startups e tecnologia. Um ensaio de como as empresas de tecnologia conseguem escalar negócios com a mentalidade de crescimento agressivo e porquê não incentivamos a contratação de um growth hacker e sim, uma pessoa que possa criar a cultura hacker em todos departamentos. Episódio #2 - Sua empresa não precisa de um growth hacker Host: Rodrigo Dantas, CEO da Vindi LinkedIn; Instagram; Twitter. Co-Host: Lidiane Oliveira, copywriter da Vindi LinkedIn; Instagram; Gabriel Costa - Referência no assunto. Primeiro growth hacker da Resultados Digitais, e atual CMO e sócio da Singu. LinkedIn; Instagram; Tiago Barra - Cientista de dados na Cappra Institute, foi head de growth e dados da Rappi,  99, Empiricus e ClickBus. LinkedIn; Instagram; Growth hacker de lâminas Michael Dubin é um morador de Los Angeles, mais especificamente Venice Beach, uma das praias badaladas dos Estados Unidos. Ator e comediante de profissão, Michael participava em 2010 de um grupo de comédia e fazia bicos em programas de televisão... mas o sonho dele era entrar no Saturday Night Live, o berço da comédia americana. O sonho de ser uma grande estrela foi interrompido no Natal de 2010, quando ele conheceu um amigo do seu pai, que tinha perdido um contrato de importação e estava com contâiners de lâminas de barbear da Ásia, parados num porão. Eram 250 mil lâminas!!! (Pausa).  Em Janeiro de 2011 (logo depois do Natal), nascia o Dollar Shave Club, um e-commerce de assinaturas que vendia lâminas de barbear de 1 dólar. A ideia era simples, mas parecia absurda do ponto de vista de mercado: vender lâminas baratas e pela internet. E dar fim naquelas 250 mil lâminas que o amigo do pai do Michael tinha em casa, paradas.   Quem confiaria em uma lâmina desconhecida e que valia tão pouco?  Michael começou do seu apartamento, um dos maiores cases de growth hacking da história. Growth hacking é um termo inventado por profissionais de marketing e tecnologia, para ilustrar testes e experimentação para acelerar o crescimento de empresas. Mas o primeiro ano, não foi maravilhoso para esse e-commerce de lâminas que acabava de nascer. Antes de ser “o case” de assinaturas de produtos da história, o DSC patinou até a brilhante ideia do empreendedor fazer um vídeo sátira, para tentar vender o clube com muito humor. Com um investimento de U$4500 dólares (cerca de R$17 mil reais nos dias de hoje), o vídeo intitulado de "Nossa lâminas são do caralho” foi colocado no ar no dia 06 de março de 2012 e explodiu em poucas horas. Nos dois dias seguintes do upload no Youtube, o site tinha atingido 12.000 novos assinantes e aí o que a gente sabe é... história.  Michael e o time do Dollar Shave não se contentaram a usar técnicas de growth como member get member, vídeos e etc. Três anos depois de explodirem no mercado americano, começaram a usar a estratégia de amostras, nos principais hotéis das principais capitais americanas. A ideia era simples: dar aos hóspedes dos melhores hotéis americanos, um kit com uma lâmina de qualidade para os usuários provarem e se sentirem “tentados” a ir no site e fazer a assinatura. Em Julho de 2016, o Dollar Shave Club atingiu 3 milhões de assinantes de lâminas e foi vendido por U$1 bilhão para a Unilever. Quem conhece o case do DSC sabe bem que eles executaram em pouco tempo, uma jornada de crescimento do zero aos 3 milhões de assinantes, com a mentalidade de crescimento desde o dia ZERO.  LINKS IMPORTANTES: Curso de Growth Hacking da Alura; Vídeo do Dollar Shave Club.

This episode features the brains behind one of the most successful subscription services in America, known as Dollar Shave Club. Dollar Shave club was founded by Michael Dubin in January 2011. The brand debuted in a hilarious viral YouTube video that has reached approximately 26 million views to date. Listen as Jeff and Michael discuss how that video ignited Dubin’s career and how the brand has made it easy for consumers to look, feel and smell their best.  Learn more about your ad-choices at https://news.iheart.com/podcast-advertisers

Dollar Shave Club celebrates 'Dad Bods.' Ikea turns your living room into the set of your favorite sitcom. How to become a bolder brand. Top on-page SEO factors. And enter: The Bancake List, targeting iHob haters, plus more. From June 4. Dollar Shave Club's Dad Bods, Ikea's Sitcom Living Rooms,...

EP168 - Bombas founder David Heath     David Heath is the CEO and Co-Founder of Bombas (@bombas), a fast growing, energetic e-commerce apparel company, focused on making the most comfortable socks in the history of feet, while helping those in need. Founded because socks are the number one most requested clothing item at homeless shelters, for every pair they sell, they donate a pair to someone in need. In this interview, we cover a wide range of topics including the Bombas founding story, their SharkTank experience, the DTC business model and growth challenges, social marketing, innovation, the brick and mortar. If you’re inspired by the Bombas story, they are hiring!  FREE SOCKS included. https://boards.greenhouse.io/bombas Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 168 of the Jason & Scot show was recorded on Friday, February 22, 2019 from the eTail West tradeshow in Palm Desert, CA. http://jasonandscot.com Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript Jason: [0:24] Welcome to the Jason and Scott show this episode is being recorded on Friday February 22nd 2019 live from the etail West trade show, here in semi Sunny Palm Desert I’m your host Jason retailgeek Goldberg and unfortunately Scott is trapped on a plane so we’re going to talk about him and assign him a bunch of action items. One of the top trends we always cover on the show is direct to Consumer Brands and so we’re excited to have on the show one of the top DTC companies in the apparel industry, so joining us from bombas we have the CEO and co-founder Dave he. David: [1:01] Thank you. Jason: [1:02] Hey Dave thanks very much for being on the show a long time listeners will know we always like to get things started by getting a little bit of the background about how you came to your current role can you tell us a little bit about your bio. David: [1:13] Yasso born and raised in New York and I don’t think we need to go back that far, but I so actually my dad’s not to renew are so very early on it I knew that entrepreneurship was something that I wanted to do was very inspired by him and watching him build a business from, the basement of our house to you know something that I think we’re all very proud of I need to go to school for entrepreneurship at Babson College and then upon graduation. I always found that every job I had I can end up working for a smaller and smaller and smaller and smaller company ultimately landed at a media company where I was the seventh employee Rana clean up where I ended up meeting one of my co-founders Randy Goldberg, it’s been 6 years there we developed our relationship and kind of always shared his mutual passion for wanting to start a business together one day. We developed business plans for numerous ideas ranging from services to pack the product, ultimately it was kind of one of these moments of Fate that I think let us to where we are today I have Andre scrolling on Facebook back in 2011 I came across a quote that said that socks with the number one most requested clothing item at homeless shelters in. I immediately wasn’t like oh my God there’s some business to be had here I just kind of stopped me in my tracks and I was like what you said something that. [2:38] I’ve never spent more than a second of my life or day thinking about is perceived as a luxury item for somebody else, so I remember walking over to Randy’s desk and I remember sharing the quote with him and then over the next couple weeks we both found that we just couldn’t shake this idea, obviously followed entrepreneurship and the other Trends were happening in the startup World in, Tom’s was in there 50 or business and growing incredibly fast where we park her just announced that they had launched about six months prior and kind of bug and reinvigorated the conversation around the one for one business model cuz when more be first launched. They were one for one I wear that was kind of their remains take they’ve more position to be a fashion brand these days babe. That’s some kind of the light bulb went off and we were like, what if we created a company where we donated a pair of socks for every pair of socks that we sold to help him solve this problem in homelessness. Remember like okay well what type of socket we integrate how are we going to create, no carve out our place in the in the market and so we spend the next two years looking at your doing research and development trying every pair of sock on in the market and ultimately landed on was. [3:55] I’m much more comfortable and Innovative kind of everyday casual athletic sock so at the time Brands like happy socks and Paul Smith we’re coming out with these brightly colored dress socks and your funky dress socks for men wear a trend Randy and Iraq start of guys we were jeans and sneakers to work everyday. Jason: [4:14] And you are tube socks up till then right. David: [4:16] Oh yeah totally totally you know Walmart all packed everything, and so what we ended up realizing was that there was this large gap in the athletic Market where you guys are. 12 pack from Walmart or you buy these individual premium price products that were really aimed towards the runners and cyclists and basketball players and hikers that were costing 15 1820 $38 a pair and so I was like what did Linnaeus a $38 pair of socks from a $2 pair of socks. So all of this technology and Innovation seamless toe arch support comfort footbed you know high-quality fabric new articulation in the heel. Amounted actually a lot more Comfort just an everyday wear but I was realizing that all of these sock companies are marketing all of these Innovations just towards the enthusiast. [5:04] I’m kind of waiting our light bulb moment our our our our our moment way so what if we took all those Innovations and marketed towards the mass Market consumer and, pitched in a while seamless toe is better for standing on your feet every day as a nurse or a firefighter or a baker or you know, mom chasing after her kids or a school teacher. And that’s bombas was born and we launched the company back in August of 2013 and here we are five and a half years later we’ve just donated I believe our 15 million pair of socks. Team has grown significantly we continue to double your over here and sales yeah it’s been a wild ride. Jason: [5:47] That’s awesome I put your key like there’s some pesky details that might have stopped some people from pursuing that like expertise in like design or Manufacturing, Jane or a bunch of stuff I didn’t hear you mention having a having a rich background in. David: [6:04] Did not did not at all. Jason: [6:06] Yes I’m sort of curious was bombas able to happen because, those things are now easier to Outsource in your able to leverage that or did you guys just jump in and learn how to do stuff and make some mistakes and kind of grow the expertise organically. David: [6:20] Yeah I think it was I think it was a mix of luck and the fact that we didn’t have any expertise that allowed us to create a product that was I think far superior than anything that we had, ever experienced it say the lock portion of it was so when I sat down. [6:36] Early early days of the idea I sat down with my dad and I was like I got this idea for a sock company, yeah expecting him to be like that’s one of the worst ideas you’ve ever had but do you think I’m leaving your godfather was in the sock business for 40 years and I know that you did really well by himself can’t go talk to him, so I called him up and it turns out that in the late eighties and early nineties use presidency of Gold Toe, I’ve been left Gold Toe to start a private label stock manufacturing company which ended up being one of the largest private label stock manufacturing companies in the world so. Falling into kind of expertise and somebody who literally knows every single supplier of socks in the world and knows how to manufacture any type of sock in the world, was a massive advantage and something that I totally totally a tribute to lock, the component that wasn’t luck that I think once we started the R&D and design phase, with the fact that we had no bias and no snow we weren’t skewed by any preconceived notions in manufacturing and I remember. Very vividly talking with one of our manufacturing Partners I said to them I said I want to put a seamless toe on this athletic sock. They’re like why would you want to do that like that’s wildly expensive you only find seamless toes, ano Italian made dress socks because they’re so thin you can actually feel the same they’re like on athletic socks you can’t feel the same cuz they’re cushiony was like I can feel the same like I want to go to see what’s the weather like. [8:06] Do you know how expensive that is on a per pair of socks be so it’s like I don’t know you know how much and they’re like $0.10 a pair and I was like. [8:13] 10 senses like I can makeup 10 said that my godmother was like no I used to make socks for less than a penny a pair whose like this is why they’re pushing back on this but I think the fact that we were. Truly designing this coming at it from a consumer’s perspective, and not coming out of her manufacturing or you know resellers perspective of oh well we need to create a product that has this much margins that weekend we didn’t think about it we were just like let’s create the best product possible, and see if people like it and so that’s how we came to me. Jason: [8:42] That’s awesome and I feel like in some ways that’s not an uncommon story that the disruptors one of their their core advantages as they don’t have the bias of all these preconceived notion of the the people that did them before in some ways II, I feel like I’ve heard similar iterations of that story from like the Tommy John guys or you know a bunch of other even Dollar Shave Club like where, if you would come from Joe at it probably would have been harder to imagine Reinventing the. Product like that exactly so early on the model was that we’re going to put the socks on a website and sell them direct-to-consumer and was that, the the idea why did you guys ever kick around being a wholesale supplier of socks or. David: [9:30] I mean so rainy and I came out of the online media business so the online space was I think what we knew and I think we were the most comfortable I believe we also thought that you know early days we, United States early days when 2013 doesn’t exactly feel like early days of the internet when you think about it it’s only e-commerce is only been around for you 20 + years or so yo it’s still relatively early days I think we thought that you know. For building a brand around another wise commoditized product like a pair of socks we we need the, the unlimited landscape and palette by which the internet affords to tell deep and enriching stories and produce really great content which is ultimately what builds great brands are at least we believe build brick builds great brands, and similar let you know it’s like the Dollar Shave comes over all that you know I think having. The ability to use things like video and deeply Rich photographic content and copy in a way to talk about a really small product that on a store shelf, would only got you know what to in of packaging space to tell a really how do you tell a deep story like that and so I think. [10:48] Are whole thesis early on was, let’s see let’s put our content in a brand that’s why we launched an Indiegogo we created a 3-minute video about the socks I only like I don’t know if you’re going to sit through a 3-minute video about Sox ultimately they did and I think the product in and our brand resonated, with the customer base and I think that’s kind of sad our path and I think we always talked about. [11:14] Wholesale at some point we just launched a small wholesale Partnerships last year with Nordstrom’s Dick’s and QVC. But I think it wasn’t I think we felt like there was so much room and still believe they’re still so much room to grow, online where you kind of really got to have that one-on-one relationship with the customer around and otherwise. Forgotten or not thought about product like a pair of socks. Jason: [11:41] Yeah and Sumter is one of the things a lot of DTC companies talk about as one of them obviously, is your name higher margins when you’re selling direct to Consumer but a big thing is customer intimacy and you get like the immediate feedback what what’s tough customers like what they didn’t like you hear directly from the voice of customer inside there’s always this hypothesis we can iterate our product faster we can make our product better because we’re directly connected to the customer as opposed to just turn feedback from the Walmart by or something curious if that’s marketing speaker that’s true why are your sock the same as they were the day they want or have you have they evolved in integrated based on customer feedback. David: [12:21] I mean I think for us I mean it’s it’s not marketing-speak I think a lot of the. The ways that the company is involved and you know I wouldn’t say that we we changed our core product in a whole lot of ways. I mean without without any sort of you guys think we’ve nailed it I think we got it pretty right but things like. Jason: [12:44] He’s doing a little dance while he’s saying that just so you know. David: [12:46] I remember one one very distinct moment through customer service we kept getting a lot of Outreach from people saying why don’t you make socks that are size 13 to 15. Or like extra large that’s got to be a small market for us you know who’s really going to buy them. And we were like now is put it on hold us but I’ll hold it like customer service to be like we keep getting request for extra large socks when I okay fine will produce a small number of extra large socks, in kind of summer are course I also, and it ended up representing 10% of our overall business I mean in the in the industry on a whole I think it represents someone like three to 4%. But I didn’t because we were there listening to the market and then serving that market where owning a much larger share of that because we’re producing a product. Foreign otherwise probably over over seen part of the demographic it’s that was one instance and then another one in the incense is wise we, earlier cuz I’m sure you hear from a lot of other d2c brands or Scrappy so like all of our photo shoots for basically like. Me and my other co-founders we happen to be for white males and we got a lot of feedback from from customers of color being like. Yeah why don’t you give him. Jason: [14:07] Why can we get a good looking feet in that yeah yeah. David: [14:09] Baphomet why don’t you representing African-American feed or or or more people of color and we were like you’re absolutely right we should you know it wasn’t something that. We had really thought about but we took that feedback and then immediately our next photo shoot we have wide range of diversity and and now it still continues to be one of the pillars of all of our photo shoots and content going for is it we we always learned from an eye of inclusive inclusive and diversity which I don’t leave our socks around ass or shelf I don’t know if we would ever, if we ever would have gotten that feedback all the way back to us but listen to our customers and having that relationship with them we can react and say like yeah. We talked up on that one we oversaw it like shame on us will fix it but we can’t we have the ability to fix it pretty rapidly going forward, and the response we get back from those customers is like, the extra large like I can’t believe you listen to me you were going to buy a ton and then you know the people who are proactive on the photo shoot stuff, they wrote back at me and be like wow thanks for listening to me and and implementing change. Jason: [15:13] Yeah you know it that’s interesting cuz again I feel like I’ve heard that similar story for my Andy Dunn bonobos and it’s like the exciting take away from that for me is. The because we never had the relationship with that brand that was sitting on the shelf to even care. And said they tasted like that a better connection with you give you feedback might have started off as a negative that it turned into this this positive opportunity to get closer to the customer. So first place I can buy this oxygen to go go I’m guessing you’re going to tell me you were oversubscribed and that was a wildly successful launch. And so the back in 2013 you got all right now I got to stand up a website to sell these things and in 2013 it might not have been totally obvious what the best way to do that was so I’m just I know you’re not the CTO but I’m just curious. Did you guys decide to build your own site from scratch did you find Shopify back then and you remember what you did. David: [16:09] Yeah so I actually had the fortunate nature of two of my co-founders were former creative agency guys so. Jason: [16:17] Hold that against him as a creative agency guy. David: [16:20] It’s been a it’s been a massive massive advantage that have them on our team so they both built design number of websites for clients in the past so it wasn’t. It wasn’t that foreign to us and I think that having worked at this Media company we put a lot of microsites and kind of manage that aspect for four different clients as well, so at the time we were like well we want to be an Enterprise company one day so you know obviously going to go with Magento because Magento runs out of the enterprise software and they had Magento community in Shopify was, not I mean they didn’t have + when we started and it’s amazing to see how how much they’ve grown over the years but. Probably one of the worst mistakes we made was not launching on Shopify to begin with you have a Gen 2 ended up being a bear super resource-intensive you know, from all of this press bike so we got on Today Show Good Morning America Shark Tank every time our website would crash and it wasn’t until we got on Shopify eventually, that we’ve never experienced any of that pain going forwards I’m a big big big Choppa by fan. [17:33] But yeah I mean it wasn’t signed up we would put up with magenta community site within about 30 days post our Indiegogo campaign we really wanted to capitalize on queue for sales that year and yeah I was Bruce. Relatively easy against again again borrowing against some of the. [17:54] Bumps along the way I think managing managing the site was not something that was super foreign to us. Jason: [18:00] Sure sure and don’t beat yourself up I feel like the path forward was very much not clear in 2013 if you like them I feel like the options of four for the incubation stage of clear. David: [18:12] I couldn’t afford demandware and so. Jason: [18:14] Fast forward your next problem what you should be on when you’re selling a billion dollars a year and socks like the answer is unclear at the moment to buy, but that’ll be a first world problem I think to solve so then remind me how far along you were when you went on Shark Tank. David: [18:30] I so we were fourteen months at 11:13 months old so we launched in August of 13 and R episode. Aired September of 2014, they did reach out to us in April that it’s our Indiegogo campaign I think one of the things most people don’t know is that there is an actually there is actually an active casting department at Shark Tank which is. After being on it an hour and I watch the show pretty regularly I now see you there like yeah we had a successful Kickstarter I’m like they found them. Jason: [19:09] Fishing they weren’t that what they didn’t stumble upon. David: [19:10] So so what are the tips of your they want to get on Shark Tank have a really successful Indiegogo and Kickstarter campaign cuz that’s where they look to reach out to us an April kind of thought of it as like a laugh to begin with her like really like we want to do that like, like I guess what’s the harm and went to the went to the interviewing process and you created the videos and flew out there and film and then you fill him in there like. [19:36] Cool with you may or may never hear from you may or may not ever hear from us again if you do will let you know like a week or two before your episode airs, don’t plan on anything basically in the meantime run your business is normal and so we were in the middle of fundraising at that time and so, no I was like man if we are going to be on Shark Tank like, I want to be able to like use this as leverage to like raise a better valuation but ultimately we closed the round about four weeks before the episode aired we got the call and then I cure episodes good are in 2 weeks not a whole lot you can do at that point we staffed up significantly on customer service cuz we just did it now luckily I talked to my friend over Nick over at plated who been on and he was like Overstock customer service he’s like that’s the one thing like that you can actually do before you, go on air everything else is he can’t buy more inventory can’t fix the website you know just going to kind of cross your fingers and hope it all goes well, so yeah we hired I think 30 customer service people and ended up I think’s going up to like 50 that weekend cuz it was just so overwhelming. Jason: [20:51] It’s in his crazy that you get so little notice there’s an earlier iteration of that phenomenon like Oprah’s West Wendover used to be on and literally by the the end of Oprah’s run she had a full-time team that just helped those aren’t for entrepreneurs like Harden their business to get ready for the show airing because. She put them out of business. David: [21:13] Yeah yeah you can actually crush a business. Jason: [21:15] Intermountain my senses shark tank is a lot more there now then it sounds like like I do like that you get more notice than 2 weeks now is that not true or okay. David: [21:23] I think so I mean at least not from what I what I hear look at the end of the day ABC is trying to reduce the television show. I think they obviously have interest set you know they want to see their their entrepreneurs succeed but at the end of the day they have to protect. They’re their IP and make sure that nothing leaks in advance and yeah they really want to control you know. What businesses are going to be on in and in the messaging around then I think, there’s probably too much liability on there and 4 if they tell you too far in advance is probably going to lie that you’re going to tell somebody and then it’s going to end up in the Press somehow like I think the Press would really give a shit about, like cool your man with long with nine other brands but. You know I hope you know I hope no like ill will against them and neither our interests are two different things but we’re trying to run a business and they’re going to reduce television show. Is partner’s past Shark Tank ABCs been incredible I mean you really do become part of the ABC Family when you when you close a deal with a shark in, you know you got on Good Morning America you get on The View and they put products in you know the Bachelor and dancing with the stars and they do a lot of cross-promotion across their platforms. [22:43] So they’ve been they’ve been really fantastic since them but in the early days they’re just like you got to run your business. Cuz I also think they don’t want it cuz I’ve also advised the number of other. Jason: [22:54] Oh yeah don’t ramp up like you’re going to die. David: [22:57] And I have to say that like I’ll say you have to prepare for the best-case but expect the worst. Because I’ve seen people who bought hundreds of thousands of dollars worth of inventory and then they do like $10,000 and say us. It’s no telling what it’s not like Oprah where I think it’s a little bit more Oprah endorses it it’s probably going to go through the roof if you go on Shark Tank with. Alarm clock that fries bacon how many of those are really going to sell. Jason: [23:26] One right here but I take your point. David: [23:27] I volunteer. Jason: [23:31] Yeah I tell you I tell you get it I know you’re in the ABC family so feel free not to, but like I feel like early on there were some entrepreneurs they were smart enough to say hey this is a great customer acquisition opportunity and I don’t really care if I get a deal and I feel like one of the the secret things that that ABC is done to combat that is they now like they charge a piece of equity just to be on the. David: [23:53] They don’t actually anymore now so they did that for the first five seasons but actually, Mark I think threatened to walk off the show because he felt like it was to turn good businesses from coming on the show right cuz if you got a, 10 or 20 million dollar business you’re not going to walk on this phone and give up Equity car blondes without knowing really what the outcome is going to be in so. Look I think the way that they try to combat that. [24:22] I think anybody will realize and admit I mean I could M you even being on it yeah it’s a great obviously exposure opportunity but what I will tell you in the research that I did going on to the show. From the like six or seven brands that I talk to. The people who ended up getting deals ended up having higher success rates from immediately you know airing the episode than those that don’t I think there is a little bit of that Oprah effect where the customer validates. The product or the business if a shark actually invest in it versus if they down is a truss a month, I’m sure there’s probably a number of cases where people have seen Monumental success Following the show just from the exposure from our standpoint we were really like we want to create it we want to do a deal because we know that all kind of guarantee higher degree of success once we are and then also say following that being a part of the ABC family and then kind of the value that we’ve gotten since then and obviously having a shark in our corner, yeah I certainly certainly paid for itself. Jason: [25:29] That’s awesome and I just wanted something which I truly appreciate so remind us you were funded and who who was your. Daymond John who sort of in the space so that was, probably an aspirational shark to get I always chuckle in this particularly I feel like comes to play with like Robert and Mark is. I have a sentence that like in general the sharks are looking for good deals right like inside other very often is an argument that that you should give away more Equity than you might to. Traditional funding source and part of their argument is always we’re going to bring all this support and expertise and technical help and and Mars always oh and I’ll take care of all your website and all that stuff and as we now know from falling a bunch of these usually what that means is on the throw you on shopping and I’m like. That could be good advice I’m not sure how much Equity I would want to give away for that advice alone so I’m always curious to hear from sharks that they feel like they’re the they got more value than just the cash from there, there shark. David: [26:35] I mean in our case it’s really been a level of mentorship you know I think Damon will be the first to admit and he always says he gives us a ton of accolades he’s like let these guys understand e-commerce way better than I do you know he understands the wholesale and brand-building side of the world but, there were moments where you’re we were talking about going in the new product categories are going into wholesale and having him as a sounding board. And I think that that’s why each of the relationships are super unique thing in our relationship it’s been. Mutually beneficial because it we were two business guys that come from startup world would come from the online background can we knew how to build a brand. We need to kind of build and scale online we had to do digital marketing so we weren’t there calling him every step of the way being like how do we do this how do we do this how do we do this how to do and in some instances you know I think there are. More inventors are than entrepreneurs or like I came up with this really cool idea and think of my garage. Are the first thing about starting a business and for them the advice of go on top of eyes like they wouldn’t even know which I was I was so it’s hard to. Argue you know somebody doesn’t know something and they got to a path of there with the path of least resistance. Yeah what is the value. Jason: [28:01] It’s a view from an expensive mistake like absolutely, and I think it’s so a I sit there with a box of popcorn and risking no personal Capital heckling that show all the time and one of the things I feel like is really involved is all of their perspectives about, the value of various channels right now if you like early on it was like oh you might do direct-to-consumer until you could get a wholesale but whole sales only way to get scale and I feel like more recently and I’m like damn John in particular he’s reference did he learn from you guys and I feel like like I said there was at least one show where he mentioned like as a result of my experience with people like you, I’m now a lot more weary about that wholesale model and a lot less excited about it and I think it even says he’s liked it at his own business, based on some of this morning so that’s it like you should be getting some Equity back I think that’s when he calls I’ll tell him. [28:55] Yeah so so that is totally awesome. One of the things that we see with a lot of direct-to-consumer companies is based on your value proposition there’s a certain Market out there that’s really easy to acquire right in. That’s says the market could while they vary between different kinds of businesses. Whatever it is you launch you grow really fast you get to that point like we’re in the old world if you’re opening Gap stores it might have taken you 5 or 10 years to acquire all the customers that were predisposed to love you today you get all those customers in the first 6 months and so you get this nice first Spike but then most companies, hit this Plateau where the new customers stop being quite so easy to acquire and so I’m always curious for for folks like yourself of kind of, in my perspective gone by that first raunch like like did you go through that and then what what if you had to do and how do you think about things differently about acquiring customers today than you did back in your Indiegogo Shark Tank like. David: [29:59] Yeah so how how much time do I have okay. Jason: [30:03] The recorder will be out for 12 hours. David: [30:05] It’s a great question I think I think it’s obviously something that any d2c brand is constantly thinking about right when is this is when is this going to run out I think for us you know. There are there are number of levers that we continue to Paul that allow us to continue to acquire customers profitably on first purchase and that’s always been our kind of marketing. Principal and guidelines from day one is a we were never going to chase LTV you saw what it did other companies you know you saw that over paying on customers early on that you thought we’re going to repeat didn’t repeat yo ended up tanking the company sue you are always thinking okay as long as we can focus on some of the core metrics that will define success in the business which are. [30:52] Produce a high margin products as long as you got high margin then you can you’ve got a lot of dollars to work with then contribution margin on on aov so if we start to reach a plateau in terms of being able to acquire that customer how can we raise a OVI you know one of the key things that we did for the beginning we used to be a singles only company that we moved the packs the day that we moved to pack sorry you if you went from $36 to $60 since then we’ve introduced higher-priced product so we’ve got Merino wool and you know ski socks and bar product mixes as is grown from a merchandising perspective than our aov is like $86 so we’re constantly finding ways to combat, yo the inevitable growth of cost-per-acquisition on a customer base is so this year when we introduce a new product categories that all have a much higher price point hopefully will raise its over the $100 mark, simultaneously we’re always looking to optimize channels and I think one of the things that people are people under value, or they don’t think about and it’s one of the things I constantly advised some of the early-stage startups that I either investing or mentor. [32:03] Is the power of creative. Really really really good creative can actually lower CPAs sum when we introduced to our our million pair video campaign original you’re like okay this is just me a thank you to our customer base will produce this video not really expected to go anywhere and then our CMO is like, I want to test this in marketing or like okay fine potestas in marketing but it’s always like a 2 minute long video or like no way this thing is going to work online, it’s scaled so rapidly we were getting like CPAs in like the $9 for a few months were getting like low team CPS, are the time when we are averaging a thing you are average CP is probably 40 or 50 bucks the time significantly drop that campaign ran. Over a year until it started to see fatigue I think that videos to date is over a hundred and fifty million views probably attributable to close to, 10 to 15 million dollars of Revenue off of that one single piece of creative and so. [33:10] That was that was a real eye-opener for us we’re like how we need to constantly be reinvesting in in creative and sweet built out this. Full basically internal agency model which is nice cuz two co-founders from Regency people you have a lot of that skill-set internally but we develop. So much creative more constantly pumping it into the marketing field you know and 90% of it. [33:35] This garbage you know it doesn’t work but the 10% that does well you kind of start to distill down and distilled down into still down to the power I think of e-commerce is that, are being able to see when you put money behind an ad be able to see what performing and why it’s performing in on what audience base is it performing well then you can try to replicate that across similar audiences and then tweaked it, and as long as that engine and you start to build you know that engine up and start a leopard the data you can start to become really really smart about the way. We also have to be willing to take risks is one piece of creative that we came up with last year our laundry back guarantee we’re basically said. Never lose it one of a pair of bombas in the laundry will replace it for free did horribly on Facebook. And our CMO is like well I think this is such a great campaign I got such great press coverage like let’s put it on TV. And I was like why are we spending any more money on this piece of creative it did terribly on Facebook why do you think it’s going to do well on TV, and miraculous agents really really well on TV so you know I think the ability to kind of create content tested iterated but also be able to take risks on where you’re publishing that content, with an eye again towards those metrics. [34:52] Is for us would what is allowed us to continue and also diversifying channels I think that was the other thing I think realizing. Early on it take 90% of all of our spend was on Facebook, our budget continues to double every year on Facebook by Facebook I think represents 40% of our overall spend today. [35:13] TV represents a large power podcast audio direct mail I mean every single of these channels add up. Yeah direct Mills great CPAs hard to scale it you know it doesn’t scale like TV in Facebook, but it gives us a really really competitive CPA is so having the overall mix bring the overall cost for a cost for a position. Facebook is higher these days but as a blended mix that’s all we really care about while we also in one of the other advantages of our businesses, kasaks a replenishment item, naturally and we have a very very high repeat Ray and repeat is what ultimately drives the profitability of the of the company, Zack gives us the ability to reinvest into new channels and. Yeah I got not every businesses as fortunate or set up the way that you know our margin structure is or some of the repeat rates but. What’s a lot of Cisco. Jason: [36:09] That’s why you would spend some time picking the right product categories suicide note that that seems like one path to success has to be really smart about your Performance Marketing and and do great executions and really agonized unlock trade even try lots of different things and learned that’s one way to go is to just spend like a drunken sailor and then I hope to get a choir to go public before anyone notices so I’m just saying for listeners to pads you choose. David: [36:39] I would recommend against the ladder pass. Jason: [36:41] I would too but like more. David: [36:42] Super super stressful yeah I think those are fewer and farther between I think if you look at the Acquisitions that Walmart made by mod fast forward 70 million dollars and they raised 75, I don’t know I don’t think anybody really did well on that deal. Jason: [37:00] I think the only one that wasn’t a value acquisition was yet for sure. David: [37:04] Yeah I mean I owe dark bonobos was was in there somewhere. Jason: [37:07] I think it was close to like One X Revenue. Which it like I would argue I’d like to get a lot more but that’s where you may not be closed yet what we shall see. Once I take you didn’t mention but I feel like I have not been in a in a car in the last year and not have you remind me about the seam in my socks is it is radio or really affected part of the. David: [37:33] Killer yeah yeah podcast Radio audio serious all the way across the board that continues to be one of our largest growing, are fastest growing channels by spend I think we tripled, tripled spending audio over the last two years represent probably 15% of our overall spend now. Yeah we can meet at 8 it’s a little bit more hit or miss I think it’s like TV and then you’ve got to find the channels that resonate for you and there’s not, unless we will find a podcast that does really well for us and then I think we saturated over time and then it stops performing so it’s kind of move on audio two kind of mining for gold tonight might find you know one that does really well you dig really deep and then the other one the other mine dries up and you got to find something else but across-the-board audio does pretty well but it’s time-consuming for sure cuz you got him that it you know it’s you got to create the spots. Jason: [38:35] Podcast in particular one thing that podcast from notorious for his like the attribution model is kind of tough. You Tennessee products that are like really fast direct sell direct all the action and it’s usually you’re cracking attribution based on like a URL or promo code is that how you guys look at podcast or do you feel like you have some sense for. Building in that kind of thing. David: [39:00] Like if anybody I think I think if there was anybody who figures out how to do multi Channel or multi-touch attribution in e-commerce well I think they would. Yeah I think they would be the next multibillion-dollar company honestly we were lying on a pretty easy. [39:18] Way we do we do how’d you hear about us surveys and yeah we cross metric that against the data coming through the coupon codes for the sights but, what you’re fine and yeah I think the big maybe it’s not a big secret but I think, what most companies do is the same offer that you’ll get by Just landing on their website is the same offer that the promote within a podcaster on a radio show. So what we end up getting is a lot of people just type in bombas. Com and see the promo offer 20% off your first order and then they just go through that. What we find is we got probably, a four times after bution on the how did you hear about a survey when we overlay that data so if it was $100 CPA office specific podcast will come down about 25 bucks. Once we kind of overlay that how did here but you know we’re in so many channels now it starts to become really challenging like did they first learn about us some podcast was that the last one touch point of entry into how many times today you know see us on Facebook or television or you know Direct Mail which was the channel that ultimately got them over the hump this is why were I think. [40:32] Monitor Channel by Channel acne or cost-per-acquisition to look at efficiency I think the thing at the end of the day that we really really care about it’s just overall cost per acquisition across all channels that’s that’s truly the one metric that allows us to know whether we’re on the right path or not. Jason: [40:48] Got it so that ends up being your sort of next best dollar calculus is is customer acquisition cost with that makes perfect sense that’s a perfect to my next question you mentioned earlier in the show that you’re just starting to pile at some some wholesale partners and I’m curious. Are you thinking of that is a separate channel in separate piano and just evaluating the ROI from that channel on its own or are you thinking about, that exposure in those those high-traffic retailers as a customer acquisition marketing tactic as well. David: [41:20] Yeah I think it’s I think it’s a mix of both I think that when I. You know when I eat when I look at the future of the company and we have plans to be a billion dollar company in the next 10 years. I don’t think that the rate at which e-commerce is growing, will we be able to necessarily do be able to do a billion dollars of Revenue just online and look if you like fashion over or proving that you know you can do seven hundred million dollars of Revenue online cuz I got things up first for a, branded only retailer Nan Marketplace retailer to be doing those kind of numbers I think I think more and more brands of get there but. When I look at our strategy and kind of diversifying where we’re going to get growth probably need to be a little bit more strategic about it and not going to put all my eggs in one basket and so I still see you, a large opportunity and also assume there’s a lot of other brands that are in our space I look at Stan’s you know. [42:21] Over a hundred million dollar your company predominantly at wholesale so when I look at that I’m like okay well apart of the market share you know can I take you know how big can bombas be not necessarily competing against ants and when we interview our customers the majority of our customers are coming from Brands like Hanes for the loom your jockey there they’re buying up rather than buying over. And so when I look at how big of a market share those brands have at retail, Mike well if we’re doing this online we surely should be able to carve out a nice little business for us at wholesale that will just add to the revenue stack over all but. [43:00] Interesting lie enough when we launched at Nordstrom’s dicks at Nordstrom’s and Dick’s specifically, we were over indexing pretty significantly against every other sock in the category, and remember I was like I can’t believe you know I knew that we were confident that we were going to be successful at at retail or wholesale but, I didn’t think that we would be two to three times the sell through rate of of the next best-selling sock in the category and I remember sitting out with our private Equity partner and they’re like. Will you realize there’s not another sock brand on the Shelf spending $40 a year on marketing and I was like, all right so I think that we’re benefiting at wholesale from a lot of the radio ads and TV and stuff that we’re thinking is all direct response what is actually having a lift at wholesale as well because there’s brand recognition if you’ll rocking through the store is there yeah maybe they’re listening to us in the car and then they get into a Nordstrom’s like alright that’s the brand I just heard about I’m going to buy a pair of those I don’t think we ever kind of really thought about the the overlap effect. Are online or online marketing I just did Eric Woods would have in the offline world. Jason: [44:14] I’ll put their clothes in the show notes so people can see him, you know you talked about hitting that like billion dollar threshold and you say like how many direct-to-consumer like native brands have gotten a billion dollars and it’s it’s pretty small right, and then you go all right well what about the traditional House of brands that dominate the retail shelf the VF Corp sayings like how many billion dollar brands of a built in the last 10 years smaller so you know where all the new 10 billion billion dollar run rate brands are coming from the retox. It’s cat and Jack its lights to Target to lunch 5 billion dollar brands in the last 2 years Kroger has billion dollar brain is crazy. David: [45:03] Gary Wright coming out of Aeropostale. Jason: [45:06] Yeah so there is this to me there’s something to like. And I don’t like using private label cuz I actually think these new brands are our evolution of private label it’s not just a cheaper version of the national brand on the show. David: [45:20] They put like brand thinking and jolly. Jason: [45:23] Microcytes they do all these things but you think about it what the common denominator of those Brands is. That retailer has the same customer intimacy that our direct-to-consumer brand has they know the customer to have a direct relationship and then they have us the scale visibility and low customer acquisition cost. Retail some you know if or do I give all that infrastructure has already been amortize somewhere else and so it is like I do and I say you like man, part of the equation for digitally native Brands to get to billions of dollars probably means some you know some blend of that that brick-and-mortar presence is. So this is all been great I do just in case I was stupid enough not to ask any of the right question is there anything that you feel like you’ve learned in this run that would surprise new entrepreneurs are new direct to Consumer brands that, that you’d care to share with us. David: [46:21] Yeah I think I think one of the biggest piece of advice that I got really really early on for one of my friends who worked at Tom’s was the. The ability to focus our main focus on a relatively small product set. When I remember when we had done like $500,000 in sales those like we’re killing it Riley sales in her first six months we need to be producing shirts and underwear and sweatpants and sweatshirts and he sat down and he was like. [46:52] We at times is that we sold the first we sold one silhouette in five colors for the first I think like four years I am built like a multi hundred billion dollar company off of that he’s like don’t underestimate. [47:05] How small you are or don’t overestimate how small you are. Compared to like the larger population and we’re over a hundred million dollar brand today and I still and now I’m not surprised by you no bite as much when I meet people in there like oh I don’t know I’ve never heard of bombas before I cuz I was it just like more humbling at this point where I’m I have to assume that nobody else has heard of us despite our size and even though I think that puts it in respect that you can be a brand over a hundred million dollars, go to the middle of the country and ask people at Warby Parker is our guarantee most of them are like I never heard of Warby Parker I think I remember of somewhere and I was like oh Casper mattresses, what’s a Casper mattress and I like right you live outside your like New York in LA and you know some of the bubbles that we live in and yeah these Brands don’t penetrate quite as deeply as you as you may think there are that’s what brands are thing like Target or able to you know it’s been up brands in a much easier it cuz they owned those customer bases across every single Geographic and demographic, Physicians I would say don’t like don’t overestimate. [48:18] Your size and stay focused on the one thing that you do really really really really well and frost I was producing socks and selling them online that’s why we didn’t get distracted by going to wholesale we didn’t get distracted by producing other products here we are five and a half years later we still just sell socks, and I still think that we’ve got hundreds of millions of dollars more Justin our core product category just online. Jason: [48:42] That that is awesome and don’t forget to get out of the New York l a bubble sometimes figure out what the customer in Muskogee wants Muskogee is in Oklahoma, people Walmart frequently talked about like that’s the prototypical Walmart customer at Muscogee random facts on the Jason and Scott show so we’re running out of time I want to get one last question in when you and I are back at the show five years from now you have any sense for how the the market in the world might be different if you have a view for the future of, of Brands and like do we have the same assortment of direct-to-consumer and wholesalers and things that we have today. David: [49:25] I think there will be a might have been anything there’s going to be some consolidation I think I think it would be great if, I think there’s so much efficiency to be had by rolling up some of these e-commerce Brands together by centralizing marketing centralizing back office operations, I think Andy at Walmart that was kind of their you know what he was charged with I’d love to see him pull it off. If not him I think there’s I think somebody should should come into the space and and kind of wrap up a bunch of these big Brands to make them even bigger. [50:02] So that’s what I’m kind of hoping for over the next five years and, I bet you will also start to see I’d like to hopefully see some more Acquisitions in the space that aren’t that better, not billion-dollar Acquisitions right I think you know a hundred million two hundred million dollar Acquisitions for the small the native deodorant company right I think those are, in the end the next round of entrepreneurs that I’m meeting interesting Lee enough are all in the product categories that they’re all developing. Are not sitting down being like I’ve got the next billion-dollar idea I think they’re saying that I mean like, I see an opportunity to carve out a 40 million dollar you know Market in this direct-to-consumer space and hopefully somebody will hire us for a hundred hundred twenty million dollars and I think that’s the right mindset of this next round of entrepreneurs you don’t need to go out and raised 50 to 300 million dollars of capital to build this Behemoth or and that’s going to take oatmeal a world domination and be the next P&G, yeah I think I think we’ll start to see a little bit more of a fragmented space and smaller smaller fundraises and smaller a relatively smaller acquisitions. Jason: [51:13] Interesting in that lights up. I think we talked about the fact that I got our business can be a great business for a bunch of employees I can solve a consumer problem and the challenges, which businesses in that size is they don’t offer the return on investment for the traditional VC model and so if you build your company based on that VC model like that BC does not want you to see. David: [51:38] We could have a whole nother podcast about vcu’s and where I think their place is in building direct-to-consumer Firenze versatile. Jason: [51:45] So that’s that’s kind of what I was like in the short version of that like you talked about raising less when you say raising less do you think that’s raising last from the traditional funding sources or do you think that’s a newer funding sources. David: [51:59] I mean, you know I use us as an example we were we raised $2000000 to seed funding in 3 million in our and haven’t raised a single dollar ever since we raised four million dollars and total and built a hundred billion dollar company in 5 and 1/2 years at Super profitable. It can be done right you don’t need to go out and raise $50 hundred million dollars to build a hundred billion dollar company is like that that’s like to me is like asinine thing k, answer this next wave entrepreneurs I think they’re looking at margin or looking at cost-per-acquisition they’re looking at contribution, they’re looking at the financial is in a much more surgeries way and they’re also not just looking at online they’re looking at omni-channel they’re being a lot more strategic about how they’re bringing products to Market and you know how they’re acquiring customers and realizing that, there’s a subset of Angel Investors and there’s a new wave I think of you to see entrepreneurs like myself and Andy and you know Jeff reiter and all these other due to see CEOs that are now investing in this next wave of companies and saying you don’t need to go raise 20 million dollars from you no first-round or any of these other big you know no knock on them I just think that. [53:06] They serve a great purpose in writing in funding Technology based companies that require massive amounts of capital that don’t have 90% margin profiles that shouldn’t you know that that don’t generate cash in the first year but like if you’ve gotten retail brands have been being built for the last hundred years without. Massive amounts of VC funding because if your business is set up correctly. [53:31] As a consumer business you should generate profit on your product like it it sounds crazy to be like stating that as a fact today but like your. Fundamentally if you have the right model setup your business should generate cash and that cash at scale should be able to fund growth I don’t know. Jason: [53:50] That’s a wildly controversial position I’m sarcasm fully intended totally agree and I that’s a great place to leave it because we’ve done it again we blown through are a lot of time making some people stay at the gym a little extra long for this episode which I like. David: [54:05] Look at this excerpt Rhapsody. Jason: [54:06] Exactly I got nose I need them if folks have some comments or questions about the show feel free to jump on our Facebook page will continue the conversation there as always. If you really enjoy this episode we sure appreciate if you jump on iTunes and get us that five star review Dave if folks want to connect with bombas or follow some more of your thought leadership is there a place on the internet that it’s best to hang out are you a Twitter guy. David: [54:31] I’m not at it I’m actually not a social media user much to my communications Apartments Chagrin but. Jason: [54:38] I can put your mobile phone number in the show note so that would be better. David: [54:40] Founder it’s out there somewhere I get a lot of random phone calls from. Bender’s but no I mean by myself, we’ve got to buy me something on Instagram that’s what the kids are using these days but I’ll plug that we’ve got 55 open positions the company right now, incredible company culture so if you’re interested in a job in New York go on our career pages and definitely. Jason: [55:07] That is awesome and that that best Pat there is the Gear Page on bombas.com will put that in the show notes as well Dave really appreciate your time and really enjoyed our conversation until next time happy commercing.

Show Synopsis: In Season 02 Episode 08, we discuss software defined networking, dollar shave club kits, and routing without configuration. Working from home. What we are Drinking: Double Barley Double Bubbel Dollar shave club trial kits The new world of software defined networking Questions about routing. Can a router with no configuration route packets?   We have a twitter @BeerandBroad   Get 5$ at the Dollar Shave club or give a $50 gift card to someone special  Get 25 dollars in credit at Ting. This Episode of Beer and Broadband is licensed under the Creative Commons Attribution License   Creative Commons License

We all struggle to find niches when trying to get into the coaching game. But is it really that hard? Or have we been looking in the wrong places? This episode shows you how you can find dozens of niches, all of which have great power and are profitable now and for years to come. Click here to read online: Coaching Series 2/3: How Niches Can Easily Be Found in Recurring Client Problems ________________________________________ In 2010, Gillette blades dominated the market at 70 per cent. Six years later, they were down to 54% How can Gillette get back into the game? Phil Masiello is one of the reasons why Gillette is losing market share. Masiello founded 800razors.com and sales at his company were up to about $2 million annually before he sold it. However, Masiello is only one among many competitors. Harry's, Dollar Shave and other smaller razor and blade companies are all responsible for the drop in Gillette's market share. It's Phil Masiello, himself who has the best advice for Gillette. “Gillette makes a great shave,” Masiello said. “Nobody has ever complained about the great shave of Gillette and Schick. People only complained about the price. You take the price difference out, all of a sudden they are back in the game.” Notice what Masiello is pointing to? It's the “recurring problem”. If you've ever bought Gillette's blades, the only thought that crosses your mind with every purchase is: how can five pieces of plastic and some metal cost $40 per pack? In New Zealand, each blade is priced at the whopping price of $8. 15 zillion shaves later; you think of the same problem over and over again when buying new blades. The recurring problem exists in every industry, without exception Take for instance the role of a media planner in an advertising agency. What is her recurring problem? It's ROI or a return on investment. A media planner's job is to decide where to spend the client's money. Will it be on social media? On TV adverts? Or some place else? What she decides then trickles down to the copywriters and designers and everyone else in the agency. The teams will need to either need to make more TV commercials or instead, radio spots, depending on where the ROI is best. And the biggest problem with media planning isn't the spending of the budget, but the perception of the clients and the agency. If you were asked: On a scale of 1/10 how high would you rate newspapers with regards to ROI? What about TV? Or radio? Or would social media be a better choice? Perception isn't reality, and when a firm did painstaking research, they found something mind-boggling. See the figures below. What's the recurring problem? Yup, it's perception. And this kind of recurring problem shows up consistently when you're coaching clients. Usually, the same problems turn up again and again. Take, for instance, the Article Writing Course. All of our coaching is done online via a forum and through assignments. It's not what you'd call a traditional system of phone calls, Skype calls or in person. Even so, it's not the medium of coaching that is valid for this discussion. What's important is in identifying the recurring problem. And the recurring problem is that our clients, at least, are keen on getting new clients, and they realise that articles are one of the better ways to create authority and hence, get clients. But they struggle with speed. Writing an article takes so long that they get exhausted. And you know what happens when you get so tired, right? Your output isn't that great. The coaching system we have in place is therefore built around speed. By the end of the coaching program, the goal is to write magazine-quality articles in 90 minutes. If you're training a netball team the recurring problem might be different Nerves and pressure situations on the court is almost endemic among young players. As Leanne Hughes, once a netball player herself, says: “Playing in the circle is tough. You don’t want to miss that goal and lose the game by one point. How do you calm the nerves when you need to deliver that shot? The recurring problem is getting the shot even under extreme pressure. This precise idea is what enables a buyer to lock into whatever it is you're selling as a coach. And in turn, it prevents you from saying something silly like: “Oh, I'm a netball coach” when asked what you do for a living. One more example and then it's time to move on through the series. Joseph Ch'ng runs training in Neuro-Linguistic Programming (NLP) Clients learn to be NLP coaches just like him. But what's the recurring problem that shows up? Joseph has found that coaches aren't always in the right frame of mind to coach others. To get into that state of mind—a meta state—as he calls it, is essential. And that's a recurring problem that he sees with many coaches. As Joseph says: Meta State is a peak performance state. A state of being in-tuned, open, connected. Clients respond well to coaches who are in this state and as a coach you get far more impressive results. You need to learn how to move into, and stay in that meta state when working with clients, no matter how your day has been before that moment.” See those problems cropping up time and time again? Gillette has its price issues; a media planner tends to battle with the perception of clients. On the Article Writing Course, we have to deal with speed, while Leanne works on nerves. And finally, Joseph's client's recurring problem is the “burdens of the day” and “how to switch into meta state right away”. Find your client's recurring problem today. Ask them. They'll tell you. Just like I would tell you why I don't like paying $8 for a single Gillette blade. However, now that we have the recurring problem concept in play, how do we go about the important task of finding prospective clients? Next Step: Coaching Series 1/3: How to Start Up with a Great Niche

Today we discuss Ford acquiring Spin, Lime getting into electric cars, Dollar Shave club gets into fragrances, Disney+, Yelp shares crater, Trump White House press conference, Kylie Jenner Astroworld lip kit & more! Articles & Time Stamps in Episode Notes Learn more about your ad choices. Visit megaphone.fm/adchoices

Alexis Littlefoot joins, Emilio Sparks, in the WrassleRap Arena. They discuss the ever so dope, Wrasslebaes, and they also DIVE into not only Gender Diversity, but also Cultural Diversity within the Wrestling Taste Making Community. They also answer your Hot Takes.  This episode is sponsored by Dollar Shave Club. Join Dollar Shave Club today for just $5, with free shipping and get the 6-blade Executive razor plus trial sizes of Shave Butter, Body Cleanser and One Wipe Charlies. Then keep the blades coming for a few bucks more a month. Get yours at Dollar Shave club dot com slash WRASSLE. That’s Dollar Shave club dot com slash WRASSLE. Email the show: Thewrasslerappodcast@gmail.com  Support the show get the limited edition Wrasslerap T-shirt.   Follow us on social media! https://twitter.com/emiliosparks https://www.instagram.com/emiliosparks/ https://twitter.com/YungLittlefoot https://www.instagram.com/YungLittlefoot/  https://twitter.com/WrassleRap https://www.instagram.com/wrasslerap/

OG Johnny 5 joins Emilio Sparks in the Wrasslerap Arena to talk the billion dollar "B" show. Ronda Rousey, Seth Rollins and Charlotte are also topics of interest on todays show.  This episode is sponsored by Dollar Shave Club. Join Dollar Shave Club today for just $5, with free shipping and get the 6-blade Executive razor plus trial sizes of Shave Butter, Body Cleanser and One Wipe Charlies. Then keep the blades coming for a few bucks more a month. Get yours at Dollar Shave club dot com slash WRASSLE. That’s Dollar Shave club dot com slash WRASSLE. Follow us on social media! https://twitter.com/WrassleRap https://www.instagram.com/wrasslerap/ https://twitter.com/emiliosparks https://www.instagram.com/emiliosparks/ https://www.instagram.com/ogjohnny5/ https://twitter.com/ogjohnny5

Emilio's PCMC co-host Mike has never watched a single second of professional wrestling ever. For his first time Mike watched WrestleMania 34. Vin Forte kicks it and helps Emilio explain some wrestling things. They talk Ronda Rousey, "Kayfabe," Nia Jax and Mike's fascination with the Undertaker.  This episode is sponsored by Dollar Shave Club. Join Dollar Shave Club today for just $5, with free shipping and get the 6-blade Executive razor plus trial sizes of Shave Butter, Body Cleanser and One Wipe Charlies. Then keep the blades coming for a few bucks more a month. Get yours at Dollar Shave club dot com slash WRASSLE. That’s Dollar Shave club dot com slash WRASSLE. Follow us on social media! https://twitter.com/emiliosparks https://www.instagram.com/emiliosparks/ https://twitter.com/WrassleRap https://www.instagram.com/wrasslerap/

Happy Wrestlemania Eve! The Wrasslerap Arena is a busy place today with Stat Guy Greg, Torri Yates-Orr and Robbie Fingers stopping by to talk all things Wrestlemania. This episode is sponsored by Dollar Shave Club. Join today and for just $5, with free shipping you’ll get the 6-blade Executive razor plus trial sizes of Shave Butter, Body Cleanser and One Wipe Charlies. Then keep the blades coming for a few bucks more a month. Get yours at Dollar Shave club dot com slash WRASSLE. That’s Dollar Shave club dot com slash WRASSLE. Follow us on social media! https://twitter.com/emiliosparks https://www.instagram.com/emiliosparks/ https://twitter.com/RealLifeKaz https://www.instagram.com/reallifekaz/ https://twitter.com/WrassleRap https://www.instagram.com/wrasslerap/

EP0105 - Stitch Fix IPO Hot Take This episode is a hot take of the Stitch Fix IPO Filing: How IPO's Work / Jobs Act $1B Exits in E-Commerce Zappos - $850m 2009 Quidsi/diapers - $545m -2010 Kiva - $775b 2012 Trunk Club - $350m 2014 Jet.com - $4b  8/16 Dollar Shave club - $1b 7/16 Chewy.com - $3b 4/17 Zulily - went public with $2.7b Stitch Fix Background Offering History Financing History Stitch Fix financial performance Stitch Fix Customer Value / Churn Personalization and Machine Learning Company size and roles Conclusion Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 105 of the Jason & Scot show was recorded on Sunday, October 22nd 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Google Automated Transcription of the show: Transcript Jason:  [0:25] Welcome to the Jason and Scott show this is episode 105 being recorded on Sunday October 22nd 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo. Scot:  [0:40] Hey Jason and welcome back Jason Scott show Sanders, we started working on a little new show this week and as we got into it real realize that the big news that is dominating the retail and e-commerce world is one event. stitch fixes S14 their IPO so as we got into it. And started working on this week we realized that the stitch fix IPO is really a platform that we can use to talk about some of our favorite topics here on Jason Scott show, it's a little bit of everything Jason it's got, Ikea's venture capital and exit e-commerce subscription Commerce which we talked about one of your favorite topics personalization machine learning and AI. There's an Amazon undertone where you know this is one of the few companies that's made it out hopefully knock on wood and then Amazon dominated world how are they doing that, and for all our e-commerce retail us there's this really interesting KP eyes are key performance indicators here like the cost to acquire customers at lifetime value turn, and one of our other favorite topics is private label and digital native vertical Branch so stitch fix IPO covers everything. Jason:  [1:52] It's like our last hundred and four episodes all rolled into one it's amazing. Scot:  [1:56] Yes clearly Katrina over there with says must be a big lesson her because she's kind of wrapped it all into one company which we appreciate. [2:06] To a lot of the distance, interesting stories so we were at code Commerce now we reported this on the podcast for those either that follow this so in March there was shot talk and Jason Delray the Commerce and had the founder of stitch fix Katrina up there and, she kind of baited her and said that his sources are saying that there are over 500 million in Revenue side I think a lot of people in the street didn't really believe there are that large, and then she said I can't talk about it but we aren't a billion dollars yet so that was really interesting cuz she. Not only was a denial about 500 it actually kind of put a bracket on it that simply said. I'm not going to deny 500 I'm going to say we're less than a billion so then it gave us kind of the sliding scale of somewhere between 500 million and 2 billion is kind of where they were so speculation was running rampant with that and then they hired a. CFO of the Hennessey low change and y La here we go boom the you know they're actually. 977 Million Dollar business this year which is. Pretty darn impressive there you're just as runs August to August I believe which is why they can talk about 2017 it's not over yet. So you know I think it's really interesting that here is this. Pretty big company like I'm in the billion-dollar Revenue Club here and then another thing that's interesting as it's pretty Capital efficient so it's profitable which is good and then also they raise between 40 and $59 in venture capital in a lot of these other billion dollar companies have raised hundreds of millions of dollars of capital so. [3:41] Really interesting case study they also talked about at the code conference that, you know they're there watching and other categories so they've launched men in that business in six months is where it took three and a half years for women and they watch plus and it's already doing it more in its first month, students first year so we had a lot of nice kind of little data points from that conference and then, you know the the s-1 launching has been pretty exciting to read through that but Jason I've read through it with a fine-tooth comb and are. Job in this hot take / deep dive is to pick up that you see parts for you guys and walk you through it. Jason:  [4:22] For sure and we're super lucky as a regular listeners will know Scott is the financial markets Guru amongst the two of us, partly because I'm completely inapt and partly because of you you actually took your own company successfully public and presumably learned a few things along the way so I'm hoping you can get things started by giving us all a primer in the IPO process, and I'm going to start you off with a question and I may have misread this but I had had to pick up a couple places that they may have filed. Earlier in the year confidentially and then there's all this talk this month about this them doing the s-1 filing was that a red herring is this in a new filing or are we just seeing what they filed back in. In July or August. Scot:  [5:13] Yeah the. [5:16] So what happened is the way IPOs worked before 2012 was you filed your S1 and everyone could see it and the super annoying because. That's ones go through usually like 10 or 20 drafts so you submit it and then the SEC is the government body that regulates these things will come back to you and I'll say, Jason what did you mean by that sending you don't answer and then I'll be like okay it while you need to tell potential investors that so there's this like back and forth also. You may not you may not know it's really the kind of a. Nonlinear risk point where you decide to file this one because you've really hung yourself out there and maybe have a bad court maybe you're talking to the SEC for 6 months it usually takes and yeah the back corner in there or, markets turn South so to help companies go public in 2012 they passed the jobs act which. Which does Stanford jobs but it actually stands for Jumpstart our business startups and what that allows you to do is date they separate the the filing so. As a startup and they're certain definitions around this you can choose to have a confidential filing so. We did ours we were totally confidential but I think stitch fix action now it's just that they had filed confidentially was just a signal. The car says it was their choice you can you can do that or not there's probably some reason they decided to do it. [6:44] So in July they announced that they had filed confidentially so would that allowed them to do is to work with their Bankers work with SEC get a quarter kind of under their belts and, then you expand I also let you see how other IPOs so in that time frame they were able to see how Blue Apron did for example or United Snapchat had gone public by then but they, I could see kind of how it worked so that that kind of. It's really nice because it gives you the ability if you want to you can actually kind of yank the filing and not go public financing of the kind of put themselves out there but it does help with this whole process so that's what that was all about. [7:27] So So yes it so we went public at Channel visor in 2013 did this whole process we did the confidential filing work with SEC and, actually use the same Bankers in the same banking team that song stitches could just, sent them a note and they said yep we're working on stitch excite I know exactly the kind of hell what's going to happen there it's going public is a very very exciting kind of a thing that sucks with lots of stress kind of power concert. Pretty interesting times and excited for for this company to get out we we haven't had a lot of IPOs in the market and in quite a while. [8:03] So [8:05] You know this is just one of the most-watched IPOs in a long time because we really haven't had a lot of e-commerce IPOs and then I posed that we've had kind of a dud larger digital world, how can I put two out there Snapchat they went public at a $30 price point in its now 15 and a blue apron when, public at 10 and is now five those are not really successful IPOs so so it should have come. Bad Dana Point out there then we have this company that I'm surprised everyone with the scale that it's at and there's this kind of. Waiting group of e-commerce and digital companies that are not be watching this and really closely and if this IPO can go off not only price well but staying well for for a year or two I think it means good things for this does not cohort of companies that are. Are probably ready to go so in there are the ones that that I kind of think about our you have wish which is the marketplace with largely Chinese Goods box Pinterest house Flipkart stripe. Fanatics instacart Warby Parker in Casper and Kendra Scott Kendra Scott's like more old school but I thought I'd throw it in there because it's kind of interesting. Most of these are unicorns which means they have received a billion-dollar private company valuation and you know any kind of thinks through the scale that they have to be at to do that. [9:27] Your bus is companies can have Revenue that are are very much north of a hundred million if not kind of closing in on 500 million in a billion dollars so they're definitely in that kind of class of companies that have the scale the growth brand to be able to go public. Also it's it's interesting cuz we don't have a lot of data on public e-commerce, that's because a lot of the ones that get ready to go public get snapped up by Amazon that's actually you know not out of the question that maybe Citrix doesn't actually make it public there's there still this is kind of the. [9:58] The about halfway point of that six-month process imagine before the end of the year though price and go out. [10:04] But a lot of times he's S1 stimulate buyers to come out kind of say this is my one time I have to buy this before it becomes public. [10:13] Can I take a new bladder so so why keep an eye on that. The the public companies that are out there there's only three so you have CafePress and Overstock and those are kind of. Micro Capstar kind of sub billion dollars the most successful public e-commerce company so around is Wayfair it has a six billion dollar market cap that's about two times its revenues I think. If you were going to hold my feet to the fire on stitch fix at a billion dollar Revenue. Growing 30% I think it probably is what's a 325 x multiple so I think we're going to see a a market cap. You know it does three to five billion range so much better multiple because it is much more subscription kind of recurring Revenue than you Seattle airfare which kind of has to sell. Everything each time so she Furniture you know I don't think you know in your life when you need furniture and then then you can out of the furniture business for a while. [11:13] Yeah yeah they're definitely you know just a different model but yet a lot lot better gross margins and net margins. And another thing I look at when I see these s ones from IPS perspective is what is the banking Syndicate the the blues to Blue Chip Banks are Goldman Sachs and Morgan, and what you do is when you look at the page and it actually put a digital copy of it even in the PDF or on the s-1 over with sec. There's different positions they mean different things the lead Banker gets this position is a larger font. There's all this kind of History around this that we can't going to but it's pretty interesting and. The. You guys look at the left first and the largest upper left is called lead left is Goldman Sachs and this example so Goldman Sachs is the The Bluest of Blue Chips. Yeah you know Jim Cramer calls them golden sacks slacks and another good company is they rarely do things with with Morgan Stanley those two kind of go head-to-head it's kind of like. [12:13] Oh I don't know Canton gun LG your two sports teams that are bitter rival State they look they usually don't do well together. [12:23] There you go there you and then. So you don't have Morgan Stanley on this week if you have JP Morgan which is very good bank and then you have Barclays RBC Stiefel Piper Jeffrey and William Blair and what will you do here is your thinking short and long-term sign, simultaneously, to the bank's you pick you want a great firm that's going to help you sell your IPO so they have relationships with the buyers of IPOs which are institutional buyers which tend to be hedge funds and mutual funds and. All these banks have that and they will do a great job selling this company. But then the secondary consideration is longer-term what you're trying to do is get a great internet analyst that are are great analyst this is called a cell site analyst dick in. Advanced buy-side analyst that your company is awesome and in public about it and you're in the show we talked a lot about you know these analyst we've had several on the show talking about the things that they report on and. Goldman Sachs you have all these guys have really good analyst and, many of them may be familiar with socks on the show so it will be interesting to see so he's Terry is the big guy e-commerce guy over Goldman Sachs I imagine that's who will cover it and, all down the line there there's some really good unless she wants to go public there's this waiting. And you have the analyst cover it and and it's good as a company to have. People that really understand your business out there banging the drum so that that's kind of what you do when you do the banking process last couple little points on the public market. Thinks there's ticker symbol is going to be S fix and they're going to raise $100 this is really just a placeholder what you do is you put out this initial draft and then you start to get reaction from. [14:04] From buyers are early reaction and then, as you see how the markets going you raise more and then you come up with your pricing and that kind of thing they're using their guitars to public market so you go on the New York Stock Exchange that's what we did at Chow visor they have chosen to go with the NASDAQ it's kind of a, six to one half dozen the other I do like the another aspect of an IPO it's a raising money kind of a thing and then it's a pyramid. And I do like the pr aspect of the New York Stock Exchange you get on CNBC get to ring the bell you're right there New York NASDAQ you just go and press a button at the NASDAQ Market Center in Times Square if so that's exciting in in grandiose, New York Stock Exchange. 22 is what we're going to run to hear is called the prospectus and that's the s-1 which is to the technical number given to these documents by the SEC. And it's only one. People read these aren't familiar with them they get really bogged down at the top the first 50 pages of an s-1 are really cya it's a bunch of lawyer stuff to keep people from suing so. Pass that stuff and don't get wrinkled up and it feels like this kind of effort lawyers called a parade of Horrors it's like literally a list of all the things, the wrong it is a really weird way to collect unit tell people about your company but it's just kind of the way it's done so. You know it's like everything that could possibly go wrong with your company and then you're like an end here's here's why we're so excited, it's really strange strange way to do it but it's done to reduce risk of litigation so skip to that and go right to the management discussion and usually there's a letter from the CEO so. [15:39] Yeah we'll put a link to this over on the SEC in the show notes or or like to download the PDF and use your fine function and go right to management discussion. Jason:  [15:50] Awesome tip let the record show channel advisor got to wake or ticker symbol then then the stitch fix it. Scot:  [15:59] Xperia S fix SF 49959, another thing that is good about this is we haven't had a lot of Billy dollar exits and e-commerce so if if my math right you again this could be hopefully north of Two And in that 325 range depending on how it prices. [16:25] There hasn't been a lot of VC investment in the e-commerce industry because we haven't had a lot of exits ovc dollars chase the exits, and exits are commonly referred to as liquidity events at the two most popular are acquisition or m&a and an IPO so just, quick history here. If some of the bigger one so we had in 2009 we had Zappos at i850 million Quincy diapers.com it 545 million that's Mark Laurie 1.0, and then we had Keva at 775 I don't know if I can count that as e-commerce but but I know this guy saw us let's talk about it 2012 Trunk Club which is very relevant to this one was acquired by Nordstrom for 350 million in 2014, that's not in the billion-dollar kind of close to Club but I thought I'd include it because of the proximity to stitch fix, and then. Mark Lori 2.0 soljet to Walmart for 4 billion on August 16th that guy had like a five five billion and just suck the last 4 years. It's pretty good. Shave club was acquired by Unilever for a billion and then Chewy was recently acquired by PetSmart for 3 billion, Zulily was an interesting one that kind of got the the double whammy so they went public I had about a three billion dollar valuation and then work wired that IPO didn't do well over time that's fatigue with our customer base, hot and then it was acquired by QVC for 2 and 1/2 2.4 billion in August of 2015. Seems like a lot when I say it like that but but since 2009 we've really had like 9 kind of exits 6 or so that are over that billion dollars. [18:03] And three of them were in the last 18 months this is an industry we really need a lot more of these kind of exits to keep venture capitalist investing so this is really important for industry I think we all are all need to be great for this to do really well and in kind of. Bring people back to the e-commerce fold-in Amazon his cast of pretty dark shadow when you talk to people that I know that are trying to raise money, you know they say it's Amazon question that really stops am at you every BC wants to know how is your five or ten million dollar company to go to survive in an Amazon world than now if this does well people and say well so I'm sure we can. That's some of the implications at a macro level. Jason why don't you would kind of gone a pretty long way without actually saying what's just fixed us why don't you bring people to speed on that. Jason:  [18:53] Yeah for sure so stitch fix is. You can think of is an apparel retailer they were founded in 2011 and they had what. I believe it was a novel concept back in 2011. They would sure ate a box of items for a customer and initially this was targeted just at women and so you would do a subscription and you can in that subscription you would get a box. Of 5 items of apparel and accessories and you could. [19:25] Cheap all some or none of the items in that box so essentially you paid $20 up front. Which was that sort of a styling fee the first time you use the service you fill out a survey so that the The Stylist can get your preferences they stitch fix picks five items they think you'll like and want to keep, they send them to you if you like him you pay for him if you keep all five you get a 25% discount if you just want to keep some of them you pay for him and send back what you don't want, if you like none of them you can send the whole box back and you're just out the $20 styling fee and I should mention the styling fee is waived if you keep any of the items. [20:04] I'm so back in 2011 this is the founder of Katrina Lake like literally. Getting customers to pay her for a box she would go shopping at Nordstroms by things know what the return policy was at Nordstrom's. Send them to the customer and the customer and keep them she would return them to the the retailers that she bought them from so she's. She's managing all these sort of return she's almost like a personal concierge, for the Shoppers and she turn this into a very significant Automated Business so over time that that business model is sort of evolved. Initially it was subscription-only and you could kind of pic. The frequency of the subscription you can get a box every month every other month every six months you know I'm a different set of periods. They they. [20:54] Shifted to a model where you can still can have that subscription but you can also just order a fix on demand so you since you don't have the pressure of a box showing up when you don't need one and whenever you feel like you just need to refresh your wardrobe. I want something new to you you can go online hit the fix button then and I'll send you a new box. Originally they were all selling other people's products, and they they started to develop their own Brands what they they call it exclusive Brands and so now portion of the, the products in the Box are coming from stitch fix which will talk more about it later they also added men's much more recently in Ascot mentioned the men's products scaled-up much more rapidly they've also offered plus size boxes, and I think the newest offering is maternity boxes and so all of this from a CEO Katrina Lake who's now. 34 years old which is pretty impressive. You know we're talking about the rare of 1 billion dollar e-commerce exits in the the relatively small number of of e-commerce companies that successfully doing lipo when you talk about those companies that are led by a woman CEO. It's it's like even extremely more rare which is I think exciting and and pretty awesome so you. If you were to read her letter in the s-1 she kind of highlights. [22:26] The Three core principles of the business right the first one is that they're always customer-centric that they're always focusing first on the needs of their customer. Number two, personalization is the future we'll be talking a lot about that and number three they think they have this unique combinations of humans and data and they have made some very substantial investments in AI which will be talking about and they think that unique combination of humans and data are better together than either. Human stylist or artificial intelligence is by itself so that. In a nutshell is the business order effects get these byproducts keep what you want. Send back what you don't and I would argue that it spawned a large industry of similar competitors. In the same category as in an other categories like Children's Apparel for example before we go too much further, do you want to dive into how they they were funded by once they got beontra Tina's original Nordstrom's credit card. Scot:  [23:32] Yeah yeah and she used to work at Poly where I don't know if you ever met her back when she was there at the podium for founder is an ex eBay guy that I've met several times and so she was she was kind of early on in this this whole industry to start with c. Pretty pretty neat that sheep spun out of that and it's. Effectively lap them I think at this point so I share your enthusiasm for female Founders and see is I think it's great the only other guy was kind of what he said that the only one I could think of. Was Meg Whitman at eBay I can't think of another you know kind of a the CEO female CEO kind of in our industry. [24:10] Yeah the IPO level so they are capital efficient and you. The sky saying they only raise 45 million you know it is interesting because 45 million is no no that's not chump change but you know it takes a lot of capital to build a business like this and I think. How many billion dollar businesses have soaked up your I said it before but 100 200 300 million to build a good almost take. 500 million pop service is very impressive and so the funding history. In 2011 Lightspeed Ventures did a seed round. [24:52] 2013 two headed around from Baseline and then very quickly on top of that and and, so I was in February 13th and then in October 13th at a 12-9 Darby with Benchmark and then Benchmark is the company is one of the Blue Chip VC's in the Bay Area, girly a bill girly is on their board from their heat that that's one of the firms that did eBay and Yahoo in the early days, I also an outspoken Uber investor and then they did a series C. In the sea 24 in 14th 6, teen ceduna 14 and then dated a top off kind of in 2017 of 12 million and, I just called a mezzanine round so ABC and mezzanine for those who that haven't raised Venture Capital with the way it works is in an IPO the same way you. You issue new shares so each time that kind of value the company at a pretty money you added this Capital you get a post money and then you get diluted I mention this because I saw a lot of conversations on Twitter when you look at the ownership. You end up with Baseline at 28% Benchmark 25% light speed at 11% and then Katrina Lake the founder at 16%, there's obviously a case there that says that's not fair Katrina should own 80% of this as a founder of you, we are doing is kind of making this bet on your is Venture Capital you get you get more than just Capital but just kind of keep it to that conversation you're making this. [26:27] To you when I take this 45 million and give up you know 85% of the company there should be a bigger outcome then if I didn't do that and. You're clearly these kind of cases you take her 16% you multiply it by that that 3 billion you get like 450 million kind of evaluation of her ownership, I probably the right choice but you don't you never know the other side of the outcome you know maybe if she'd bootstrapped this and waited 5 more years it would actually she could own 80% of it and have just a bigot as an outcome in fast-moving markets where you have, companies like Amazon swimming around its speed that is definitely something that that takes is probably a good choice to raise capital for. And then sink that covers. Big pieces so we don't want to get too bogged down in the financial stuff but Jason do you want to hit some of their revenue highlights. Jason:  [27:23] Yeah so they've had an ice hockey stick which is I think one of the things that that has caught a lot of folks attention 2014, they they reported 73 million dollars in Revenue, 2015 the ramped up to three hundred forty-two million dollars in Revenue 2016 they they doubled at 2 730 million dollars in revenue and in their fiscal year 2017 which is over as you mentioned they were just under a billion dollars at 7977 million dollars which. Parenthetically has to has to kill them that they didn't quite get over that. That be so so it's been a pretty good ramp up and, several of those years were profitable it looks like they they ramped up some expenses in 2017 and maybe weren't as profitable. Scot:  [28:17] Yeah and then the growth rates to just look at the growth rate between 14 and 15 like almost 400% growth so crazy but that was exciting time to be there and then from 15 to 1613 per cent growth death definitely Torrid but not as crazy as 400%, and then between 16 and 1734 per cent and in this is where you know what I'm imagining happened is that kind of said. Yeah should we go raise a $59 in turn around or should we just slow the growth rate get profitable and prove the model. This is interesting decision because what most pundits would tell you is while she loves growth so if they could have. I have gone public at 100% growth rate that probably would have been a different outcome than 34% but you know I think in hindsight it may actually. [29:09] Better that they're growing a little bit slower and more profitable because with the. I mentioned it the the Snapchat problems and questions around their ability to get profitable and then Blue Apron kind of hitting the skids. I think this is this ends up being a nice balance between growth and profitability of so so it will have to kind of see how it prices and then you know. What I'm engine is if they. Delray's over north of $100 that gives you a quite a bit of jet fuel to get that that engine going back up so I bet very quickly they'll try to get back to triple-digit growth building unnoticed looking at some of the numbers they don't. [29:47] The NEP now they don't specifically breakout sales and marketing or art effectively, marketing but I do kind of wrap it up into a number that has gnats GM and that is actually growing a good bit faster than Revenue so, between in 2016 840 per cent versus Revenue at 1:13 and then in 2017 and grew 55% versus 34% in. What you will you see inside a subscription models is in the early days you know it's you can you find your early adopters and it's pretty inexpensive too. Get to them but then as you grow your having spend more and more and more on the acquisition of of customers are the metric commonly known as cat that cost to acquire customer. Did you see any other metrics around that Jason. Jason:  [30:35] Yeah it was like I was the one of the really interesting things is are they. Capturing repeat customers and what's the lifetime value of those those customers, so they they did share a couple of things to give us some insight into that they they reported what they called this repeat rate which is. The percentage of customers from the previous year that purchase in the subsequent year and so they're sitting in in. [31:05] 2016 that was 83% and in 2017 that was 86% which sound pretty good, they also did this kind of convoluted cohort analysis that I'm going to rely on you to try to decode if anyone is cuz I I frankly didn't follow it it didn't seem quite as an. [31:28] As straightforward as I might have expected on one hand but on the flip side I guess I was pleasantly surprised that they tried to get some disability to that at all. Scot:  [31:39] Yeah and what you're trying to do coordinate a Caesar are very confusing because, we're trying to do think of it like a graduating class so teach your graduating class let's say you had a bunch of seniors that graduated in 2017 from high school, and then you followed him through college and the rest your life and you kind of saw what happened to those people that's a cohort analysis secret you lock in time this group of customers acquired from a certain. And you see what happens to them. So The first thing to do in the cohort analysis is they they look at a 2014 cohort and they show the value from that Court was 639. [32:19] And then the value of its dollar so than the value of a 2015 cohort with 718 so I think it is a fault this 14 people. [32:28] From 14 15 16 17 and they said those guys generated 639 / user / that life. [32:36] And they followed him and they said that. That actually went up pretty nicely you know about I will see what is that 10% in so that's good that shows inside of that cohort what you have is a lot of factors you have to learn so it's people that say. I tried this I'm no longer going to use it. It's more complicated in these models that do you have the on-demand like when does someone turn maybe they're on an annual plan you have to wait a whole year to see if they've turned maybe they're there every two years they want to get a fix or no. If someone moves from a monthly to accordingly that's not really churn so you. It gets really hard to measure turn so inside of that 10% increase you have some customers they're leaving but then you also have some customers that are buying more. So what their kind of saying here is the customers that end up buying more. Hope you're over Road by about 10% economically. The factors of turnt that's what's the story they're trying to tell I'd it's interesting I bet you know we don't have privy to this but I bet if we looked at the initial as when they filed this wasn't here and this is a reaction to Blue Nile to Napoli now but Blue Apron. Yeah I just felt like my at yeah it felt very much like a oh crap we have to really kind of figure out explain to people what's going on here. Then if you take that data point then they kind of looks and looks like the 16 cohort came down a bit and then they start looking at some of the first half's and what you see there and they had a little blurb in their hair that said. [34:07] The call in first half of a year so it's kinda like the six months. [34:13] Piece of the second six months they show you some of that and it's really fun and loaded so what happens is people by a fair amount in the first six months and then it kind of declines there, Ina, they talk about it as an opportunity it's also kind of weakness but it's not fair to do for them to get better with the data science this mirrors personal my wife. That was a stitch fix user had it for about four or five months and you have by the end of their had had. [34:41] Acquired enough clothes in it was kind of burned out by the processor forgetting to return it and getting fees and all this kind of stuff so hopefully something a little bit of yellow flag something they need to work on when I do my mask. [34:54] They give you just enough kind of figure this out so this is the first half of 2016 is 3:35 but then the total was like an essay. 5061 FM 506 so that when you do the math in the second half is 154 if so. [35:10] Literally dropped by half over at the pier to be here so let's see what that be 2/3 would be in the front half and then a third on the back half so interesting kind of. Trend air it's not clear how much that Stern and I got two people saying I don't want to box it all or how much is you filled up their wardrobe in their closet they're good to go. Jason:  [35:31] Yep and I I guess I should have mentioned another potential way to think about this is we did not mention the growth interactive customer base but, the back in 2014 when they did 73 million and sales they had 261,000 active customers with their defining as. Someone that bought a box in the latter the received the box in the last 12 months and if you look at their growth of active customers. [35:56] At the end of 2017 they are like almost 2.2 million active customers so the the growth has been. Year-over-year it is always the same order of magnitude as their revenue growth but it it has been slower. Then the revenue growth so that the the fact that they're the revenue is growing faster than active customers. [36:21] The week like on the surface looks like a good thing because it that that implies that they're they're driving greater Revenue per customer as as they get a a bigger and more mature customer base. Scot:  [36:31] Yeah yeah yeah I agree in, I have a feeling that as they do their Roadshow so wanting to keep an eye out for if if this is topics interesting for you, when you do your road show you actually have to record it and it's part of the SEC rules that anyone can watch the road show so it's on Retail Road show if you go to Retail Road show.com you will find that, don't be a window of time in any sings expire pretty quickly so but Jason I will treat when it's up in what you have there probably is Katrina and probably the CF oh and maybe someone else maybe the cool actually walking you through the Roadshow and I. Bats that they have to peel out a little bit more information cuz I think investors are going to be very keenly tied into this and trying to understand really what I think. I think that's the one piece missing hearing and people don't want to know that so it's me an option to see if they have to disclose that. Jason:  [37:28] When are there fun tidbits when you were talking about this this sales and marketing spend they did mention in the ass one that they actually hired miller-brown to do this aided awareness study so essentially in like May of are in December 2016, they went out and interviewed a bunch of women that were in their target market which are women are making over $50,000 a year that live in us and said, are you familiar with stitch fix and 28% of the women that they surveyed said yes in, in December of 2016 so then in May of 2017 after they sort of double that adds fan that aided awareness went up to 41%. [38:11] Like I would take it away Ernest with a pretty large grain of salt. Cuz you're you're asking someone if they remember if they're from they were something in a lot of people will just frankly lie because they don't want to say, they're not friendly with something but if it's true that that 41% of their target market are now from there with them. Like that implies that the the next big tranche of growth is probably harder to achieve than the. The last one was cuz it's it's a heck of a lot easier to go from 20% to 41% then it is to go from 41% to 75%. Scot:  [38:50] Absolutely yeah yeah and then I Delray had an interesting article about talking about how you know it's really kind of a non Coastal audience I don't know, is data that really supported that but I think when you get too many people you have to kind of be spreading out to the Midwest and what not so interesting. Jason:  [39:06] Yeah and I think part of it is just that their price points are like these are not like, super premium price points and you know in general these are not Designer level Apparel in so it's, you know it's it's meant for sort of a more modest consumers and I think there was even I can't remember was in the interview or something that Katrina said recently but she talked about that they at one point had a pretty bad. Inventory glitch where they weigh over bought and the, the root cause of over buying the wrong inventory was it they were buying sort of on-trend stylish stuff and their customers were we're responding that they didn't keep any of the items because they were inappropriate to wear at the PTA meeting for example or that you know, the the the sort of everyday occasions that their customers were we're hoping to use the products for it so I think that that helped Define the. The Target in the use case for Katrina. Scot:  [40:08] Yeah that and that's a really good kind of transition to the AI machine learning in the personalization it's this is kind of a it's really interesting weed from that perspective I've never, you seen anything quite like it so and I know you spend some time on it so it should take us to that. Jason:  [40:23] Yeah yeah it so it's it's almost hard to talk about machine learning and personalization separately Katrina and her in her letter talked about those. Tubing Big premises personalization is super important and then machine learning plus humans you know being the secret sauce, and the reason it's hard to talk about separately is because largely what you're doing with machine learning is. [40:47] More personalizing the the offer in case the actual products to each customer. [40:55] So I do want to start by talking a little bit about this how they use AI overall, so you fill out a 60 question survey and then they want to pick the five items that you are most likely to keep and they said they don't have a standard starter box so it's not like they're sending the same box to everyone. Everyone's box is going to be different based on current trends. Seasons what they have in inventory right now and the the answers to the 60 Questions that they know about you and so one way to do that is have a stylus that. Read your 60 questions and then have him or her go pick the five items in another way to do it is to to use some sort of algorithm to pick those items in so initially, the the model at stitch fix was let's establish a computer algorithm to pick those items and then lets it let the stylist. [41:54] Override it so we know what will pull up a list of candidate items for The Stylist and maybe you know that has eight items in it and you let the stylus pick the final five or maybe that the algorithm shows the first. 5 in the stylus can say yay or nay but interesting Lee. Early on they hire this guy Eric Olsen to be their Chief algorithm officer and build this Audrey them to figure out what you you send in that first box based on the answers to your survey and. Eric is an interesting guy because he was literally the VP of data science at Netflix which we all use as one of the best examples of. AI driven businesses I think he was also a data scientist a Yahoo to a super credible guy that's been working at stitch fix on the this interesting answer to this question. How do I pick the five right things to send to this first customer so that sticky so that she buy some of them so that you're she's profitable but also said that she keeps using the service, cuz it does first five items are wrong your your odds of getting another chance or dramatically lower. So then they're also going to use a I once you. [43:06] Pick some of those first items and don't pick some of those first items they're going to use that data to refine the items they send you in subsequent boxes and that's where they start getting this really valuable contextual data that's both implicit and explicit like they, implicitly know you return something and they can make inferences about why you returned it but there's also an option for customers to tell. The Stylist why they didn't like something until they get this explicit information the him was too long it didn't fit me well. All all of these sorts of things and so very early on situation was a believer in leveraging deep learning. As the merchant instead of heading human sort of dictate what styles customers would get exposed to which Tamiya super interesting. But then in more recent times it actually taking it to the next level so we mentioned. That they started watching their own products and I'm not sure we said this but if it sounds like about 20% of all their sales are from what they call Exclusive Brands which are predominantly. Brands that they created and they're actually using AI to design the products they offer and so what they'll do is they'll say hey. We have a big segment of customers that don't like a neckline lower than. 8 cm and the majority of product we buy from third parties have this 10cm neckline and so we're going to design your own product and it's going to have a 7cm neckline and said they're actually using their they broke each. [44:45] Each piece of apparel into 60 different attributes and they're using a guy to define the attributes that their customers would want that might not exist in that Marketplace in so they're using that too to dictate what what new products. [44:59] The build which is super cool they had not that I have seen disclose any. Hard data about how successful that AI is or how successful that AI versus a human is but another in RF event there the interest x on it in San Diego this year and one of the speakers was this woman Megan Rose, and Megan is the founder of a a smaller company that in some ways is stitch fix for jewelry it's called Rockbox and. Very similar to stitch fix you get a box of five pieces of jewelry to keep what you want you buy it. You return what you don't want the others extra model where you can kind of rent The Jewelry by just keeping it for as long as you want until you want a new piece, but they also are leveraging aai's their stylist and what I found interesting is Megan shared some of the statistics that when they transitioned, from Human curators to machine learning the purchase rate on the first box increase by 300% so that that computer was. 3 times more likely to pick items that that customer would keep they were able to improve their inventory efficiency by 85% when they went to the the AI BAE Systems and they they still cheap stylist but they have the. The way I am. [46:20] Inform the stylist exactly like stitch fix is doing and that enabled them to reduce their stylist cost by 30% so. stitch fix is getting anything like those results that's super substantial. [46:34] Improvement via this machine learning and what's terrifying about it and cool at the same time is. [46:42] If you had a great stylist a great person picking all these products, and she kept doing it and should get better over time and the first time she reads a survey she gets it you know I'm kind of right but by the, thousand times she's read a survey she's much better at it right like this the person wouldn't learn over time and her hit rate would keep getting better but then when you hire the next person. [47:04] They would start at zero just like the first person did right and the magic thing about this that this machine learning algorithm is. [47:13] It has learned from all two point, two million customers of stitch fix and it keeps getting better and better and so it it's scales much better and we worms much faster than a human can come in so you don't potentially the more customers in the more time in service all these things get in the better of the algorithms get, the the the profitability metrics on this business potentially keep going up. Much faster because the conversion rate just gets better over time whereas a lot of other things we do tend to regress to this mean and you kind of keep the same. Same conversion rate over time so it's going to be super interesting to see you know if the actual performance of the company kind of bear out. Does hypothesis is but for sure a hypotheses I always say that wrong for sure. Ate a significant angle of stitch fix is. Personalizing the offer based on this machine learning I think they said they have over 75 data scientist on staff now. We used to joke because every time Katrina would speaking an event the number of data scientist she claimed, had that double then it it almost didn't sound credible but now that we see the the. Numbers behind the business it it turns out that we probably should have been joking cuz it seems like they're all sort of credible number isn't in line with the the revenue growth that they've they've been experiencing. Scot:  [48:44] Yeah one of those things I thought was interesting as they also have a section in there that talks about. Their usage of data science and the obvious one is you went through all this The Styling algorithm, and then they also talked about nustyle development and then what you covered another one is so they have something like how many was it was 3,400 Stylistics. [49:08] Yeah there's a human stylist so, actually have the kannada matchmaking algorithm and so this data science will actually kind of say you know maybe, maybe some The Stylist our new moms and I'll map you up with other new moms so I don't know what day they're looking at but that that's kind of cool and then these 3400 Silas, many of them are part-time so I don't know how the interface works I've seen Amazon. Do this with customer care, you do the thing where you can kind of check-in check-out and and then there's an online your face where you can kind of do whatever style posting things they do did they talk about an application in the s-1 about, I thought that was interesting kind of a matchmaking is how to use data science that use a lot of demand forecasting so you know. Understanding. [49:56] This is is interesting because they send all these products out right so the return rate is pretty important and it's not entirely clear to me what happens to all the stuff. The comes back out of it goes in other people's boxes or what happens but there's some demand forecasting that has to happen there, and then there's merchandising optimization which is. Understanding how to order what size color and style kind of information and even talked about they use a lot of data science in the filming centers in a used one example they have five fulfillment centers so there's a matching of, which people go to which data which fulfillment center and then also they optimize inside the Fulfillment center using the data science for pick path optimization so I thought it was interesting that they've, this YouTube Don't this engine and they're using it in like I bought this at like 7 or 8 different, parts of the business so there's really good scale from those 75 data scientist. Jason:  [50:53] Yep and we should mention I think they filed a number of patents as a result of all this right like they have something like eight eight pending patent application. Scot:  [51:01] Yeah I also thought it's interesting day they love data science but they also talk about there's a human kind of check elements I guess you know. I guess maybe something has arrived at these things sometimes like it want everyone thinks they need purple socks or something that don't have humans to catch them. Jason:  [51:19] Yeah I interpret that is twofold like that there is sort of the final check but I also think that they have decided that customers respond better. To a human interaction so I think, the reason that that one of those core principles is AI plus humans is you know there's a lot of businesses where they would just try to get the AI really right and have a very impersonal experience, and you know just have to let the customer know the computer is selecting these items for you I think the stitch fix model is. That they would like you to build a relationship with that stylist and rely on that stylist as a person, and if you're going to fight or stitch fix I think they want you to feel like you're firing your friend Susan who's your stylist not just fire firing some. [52:06] Some computer that's that using math to pick out that's for you and so I think the human element both has a practical element but I also think it has a strong marketing branding element for them as well. Scot:  [52:19] Yet they get this really interesting case study and then we can move on from machine learning they said one example or Delila embroidery neckline knit top is purchased 52% of the time, and then what's interesting is are algorithms, I can determine How likely a client is up to 80% to purchase the item if we include it in that's in her specific fix them so they can kind of show the power of the you know if you just blast it out to everyone you get 52% but if you can like use the machine learning. Machine engine you get like a order of magnitude higher conversion rate which is pretty neat to your point on the, what they're saying about the machine learning stuff is it used to be in that venture capitalist would look for your eyes looking for a company that has a bit of an unfair advantage and that unfair Advantage used to be Network effects, you like marketplaces are the kings of this like eBay or buyers Springs more sellers is this network effect LinkedIn the more people social. [53:19] That works out this too but now it's interesting is those that data on 2 million clients and think about all the. The transactional data there's there's probably I don't know zillions of Dana Point's there. Any company even an Amazon that has to compute these guys that they're going to have to climb that mountain so it makes it really really hard for a startup to catch up, you pretty quickly dwindle down the number of Cups companies that, eat here too but maybe three or four you can have maybe a Macy's and end their advantage would be they have more customers so they can get to that two million pretty quickly so. Pretty interesting application of machine learning and I think this will be the first machine learning IPO that I've I'm aware of so that'll be another kind of neat thing and that it's also in our space of e-commerce. Jason:  [54:06] Until I mean two things I would just highlight there that. [54:11] I think they're trying to generate you know a version of a virtuous cycle here or an Amazon flywheel that they. [54:19] Significantly invested in their own machine learning Tech and so that they have that capability that we just covered but they also have a business model that just gets them more. Valuable data right so if you think about it and most apparel manufacturers are totally disintermediated from the customer so they get. No data from their actual customers and even if you're a retailer or even if you're a vertically integrated retailer your the Gap and you make all this stuff and you sell it through your stores once it leaves your store for the most part it's gone and you don't you have a return rate you wanted to be as low as possible, but you really you know this this try-before-you-buy send them five things get back what they don't love. Get you a much more valuable data source so the fact that they both. Have this more valuable data and then they have proprietary technology to act on that that data is a potential flywheel for them. [55:19] Oh, I still think it's interesting and somewhat controversial the amount of investment they made in the the. [55:29] The core machine learning technology right like so I could imagine when they they say. Started this in 2011 and I assume that machine learning came in a couple years after that 2013 you could look at it the state of what was out in the market and say if I'm going to be good at this have to build it myself and if I wanted to be a core competency I need to. To build it myself and for sure you need your own experts but. [55:52] The last five years have seen such a huge Improvement and evolution of the off-the-shelf tools that it almost certainly has to be the case that. These guys have spent a bunch of money building their own machine learning tools that are frankly probably inferior to the the version of tensorflow the Google gives you for free today and so it. It is they may have been a little early in the curve having expertise about their data and about the the. Applying machine learning models to their data and having a unique data set seems like a huge competitive Advantage I imagine some smart people could debate about how valuable their their investment in their own. [56:40] Machine learning technology was versus leveraging some of the the amazing technology that's coming on the market now but but I'm not sure whatever know the real answer there. Scot:  [56:49] Yeah, tell if a competitor can get there with a lot less and catch up then it was worth it get a couple of anything else on machinery. [57:04] A couple other, miscellaneous little tidbits they talk a lot about being a good brand partner in this one so they they talk about they have over 700 brand partners and some of those brand selected to provide some exclusives in in the stitch fix this and then as Jason mentioned they do have their own private label and they call that exclusive brands, I am Jason Howard debating my reed was 20% of fish stitch fix his exclusive Brands were were privately, 20% of everything was their own private label but you kind of red it is 20% could be kind of including those non stitch fix brand Partners exclusive thanks. Jason:  [57:44] Yeah they did mention that that some third-party Brands give them exclusive products and so like I'm quite aware that 20% of stuff that stitch fix design or a combination of stuff that's only sold by stitch fix. Scot:  [57:56] Yeah and this reminds me of our Amazon private label discussion where where. Part of Amazon's private label strategy is there their data science is saying look we need a widget like this and no one's doing it you know we need batteries that come. 24 to a box and not in a packaging that you can open and quantity 8 so interesting to see that. Another little tidbit is so they talked about Outsourcing the manufacturing of that private label called exclusive brands, but in 2017 they actually acquired a pretty large thing as 20,000 square-foot facility that's actually an apparel making. The equipment and & Company in Pennsylvania somewhere so it it felt like they were going to go all the way over to clean the grading and start actually making their own things and United States which is pretty interesting. Jason:  [58:45] Yeah although I do think in the s-1 they they made it very clear that the right you should not expect them like to actually fabricate in the US that they wanted some capability in the US for experimenting purposes but the like. [58:59] You should not invest in them based on the premise that they were going to become a US manufacturer. Scot:  [59:04] Yeah and then people wise they have. Pretty impressive 5800 people total 86% identify as female so that it is, pretty amazing what you put 55% of the management team to have 5 helmet centers / 1.5 million-square-foot 1,500 employees in the Fulfillment centers, 3400 Silas 200 client experience Associates million customers that's like what does that 1 / 100 no a thousand. Yeah so that's good ratio there did you dream team is actually pretty small I was surprised 95 Engineers so that's. [59:44] Pretty lean mean for kind of scale they're at and Sadie I guess the 75 data scientist get it closer to effectively. 150 which is closer to what I would think it would be so that's how the people break out largest chunk is the stylist and then the Fulfillment center employees followed by. You know the client experience Associates and then a relatively small Engineering in data science team. Jason:  [1:00:09] Yep and this was not surprising I suspect to you or I but I still talk to a lot of people that aspired to be a billion dollar e-commerce business and they still imagine that they're doing that out of a single fulfillment center. Scot:  [1:00:24] Yeah no. Jason:  [1:00:26] And I at yeah I mean yeah. Not very possible and I'm like this is a perfect example of what you know again at their they're not at a billion dollars yet and there and they they have a customer-facing business where humans interacting with every customer and yet still the largest portion of their, their workforces you know that are close to the the second largest piece of those Workforce it as all those fulfillment employees. Scot:  [1:00:51] Yeah I wanted more information on, fulfillment centers just because again I imagine that that almost every box comes back with something so imagine the it's the reverse supply chain that I'll Eat You Alive on the stuff so. Jason:  [1:01:09] Reverse Logistics are much more, challenging than I mean things are very hard to reverse Logistics are in order of magnitude harder in your right like that's cooked into this model is there's always going to be a high level of reverse Logistics so that that would be an interesting area to have some unique competitive advantages and if they do they they haven't pitched them very hard. Scot:  [1:01:30] Yeah and the day of science didn't necessarily cover that and you know, Gillett Wisconsin to it so what cities send out of too many customers let's say every month they send out a million boxes will probably less a900. Thousand come back with at least one item coming back so I'm have all of them but you know that's hard someone needs to go through there and figure out all that out you kind of know but you have to match it up happens to it. I don't, do the brands allow them to kind of like put it back, or do you have to liquidate it and then does each of these fulfillment centers have an outbound peace and an inbound if they put it back on a shelf that's like a whole it's really super inefficient to like open a bunch of boxes and put all that stuff on shelves that doesn't seem logical that I have a lot of kind of questions around that I bet. probably the Harry part of this thing. Jason:  [1:02:21] And there is like so I think this is more rumor than real problems but so all of these industries are plagued with a little bit of the like. [1:02:30] Oh wait a minute is this close stuff that already got returned from some other retailer right and that. The fuel gets playing there several of these services and I think including stitchfix have at some point shipped products that arrived at a customer's location with another retailers price tag on it. [1:02:50] Right and that you know puts all kinds of questions in the in the mind of the consumer and you start wondering like waiter is this a TJ Max kind of play where they're getting the. The leftover stuff from some some retard where they couldn't sell and then their there they're selling it at at you know predominantly with price which is part of the reason I have such good margins. The. And and the explanation that that stitch fix gave and I think you know this is blown over several years ago now was no no no no we're not getting anything. Back from a retailer that were selling a customer but sometimes we buy something from a brand and we've had a brand make a mistake and send this inventory that was pre labeled. With another retailers labels on it before and so that you know then then created that whole set of conversation. Scot:  [1:03:38] Do you feel like the brands would let them return the stuff. Jason:  [1:03:41] I think you could I thought I do think Brands would let them take returns and resell it I doubt any brands are getting them stock balancing you know you like. [1:03:53] There's very little stock balancing in a pair of these days where you can actually just return stuff that doesn't sell you know they're there often can be some sort of negotiated terms where that the inventory doesn't turn gets. [1:04:06] Gets tossed reduced overtime and you get some price concessions and things that way but yet no I think. [1:04:15] That that stitch fix probably feels like a pretty traditional retailer in, having a match their supply to demand as well as they can and then having how to start a smart strategy for liquidating the inventory that they're not able to sell. So I thought you know I think the date they pay some of the same Challenges ever no spaces there I did there's one other. [1:04:41] I think that the s-1 reminded us up but we but we could have known before this stitch fix is running on an Amazon web services. Scot:  [1:04:49] Yeah yeah it sucks so does Netflix and always makes me wonder like do they sleep at night we're going to Amazon can you. [1:04:57] I don't think Amazon would ever do this but there's the potential for someone to Cana, take a little peek in there and see what's going on under the hood so that that would it's like one of those very very tricky situations there's not really a great Alternatives that I have found two but you know you're kind of your funding and your competitor and your competitor has potential access to your your secret sauce. Jason:  [1:05:20] Yeah and even if they had no access even if they're completely aboveboard and they would never look at the data you are you're still funding your competitor. Scot:  [1:05:30] Absolent yep so that's Amazon wins no matter what. Jason:  [1:05:36] I would prefer the record I would say like I mean AWS is a great service there's lots of reasons to use it it does to me feel like Microsoft with Azure in Google with Google Cloud platform like have some pretty competitive offerings these days. Scot:  [1:05:50] Yeah yeah once you kind of get married in the one who sings it's a little bit of a roach motel it's hard hard to check out. [1:05:56] Degree architecture at some level that you have to do so Jason was kind of. Land plane here with what do you think so we've gone through a lot of highlights and some impressive scale on Revenue growth slowed in a little bit, can't look like it's going up a little bit I'll TV hard to call with the cohort analysis looks like it's a little challenged on the back half of the first year, what's your conclusion Justice IPO mean that the subscription Commerce is the future or or or what do we look like your. Jason:  [1:06:26] Yeah well said to me that's a that's a funny question the. [1:06:32] Yeah we should have we should have mentioned earlier when you talked about it to some of these previous companies there there have. [1:06:38] In the past been these tranches where there was some trendy fatty thing in a bunch of companies had an exit based on that fad right and said the most most obvious recent one would be flash sales you know everyone got up. Advanced evaluation and a bunch of flash flash sale companies had. Had favorable exits in the beginning and less favorable exits at the end and you know today it's pretty clear that there's not a very exciting market for Standalone flash sales that you don't potentially that. A tactic that a retailer would have but it certainly isn't of itself a business model and so when I look at these guys if. [1:07:17] If you're evaluating them on the basis of subscription being the winning model. I think subscription is more likely to be a trend like flash sales I think it's a super valuable tactic. That retailers are smart to use but I don't think that the winning formula in e-commerce is just to go all in on subscriptions and part of the reason I think that is. Most of the companies we think of as subscription model businesses have. Why do they had to abandon their subscription model in order to be successful right and so you know stitch fix. Is a very Soft Cell on the subscription model like they started out subs

Join Rich Valdez, Dr. Michele Reed and Ted Hicks as they moderate the #LNPShow that discusses the latest trends and game changers in parenting, technology, education, sports & product reviews. Show topics Equifax - what happens next? Who's getting the James Bond franchise? Ted's misadventure w/Dollar Shave. Is Amazon getting too big? When sports intersects w/politics? News & Notes: Recap of the iPhone event - old technology becomes new - again? We didn't talk about the Emmys? iPhone 8 announcement on Sept 12th - Are you excited? #CaneloTripleG -- Why do I know the name - Adalaide Byrd?

Join Rich Valdez, Dr. Michele Reed and Ted Hicks as they moderate the #LNPShow that discusses the latest trends and game changers in parenting, technology, education, sports & product reviews. Show topics Equifax - what happens next? Who's getting the James Bond franchise? Ted's misadventure w/Dollar Shave. Is Amazon getting too big? When sports intersects w/politics? News & Notes: Recap of the iPhone event - old technology becomes new - again? We didn't talk about the Emmys? iPhone 8 announcement on Sept 12th - Are you excited? #CaneloTripleG -- Why do I know the name - Adalaide Byrd?

EP095- Listener Questions and Amazon Earnings http://jasonandscot.com Amazon Q2 2017 Earnings Summary (PDF from Amazon) Amazon reported a beat on revenue but a miss on earnings Revenue came in at $37.96 billion, beating street estimates of $37.18 billion. EPS was only 40 cents per share, missing street estimates of $1.42 per share. Listener Questions Kiri Masters: I'd love to hear Jason and Scot talk about their global e-commerce outlook. Amazon in particular seems keen to expand aggressively in international markets. Does the growth opportunities match the regulatory / operational complexity for brands? Interested to get your take. Josh Tarasoff: Hi Jason and Scot--What is your take on Amazon's strategy behind buying products at full retail price from marketplace sellers? Here is an article: http://www.cnbc.com/.../amazon-new-fba-program-buys.... Thank you. I love the show. Anup Gosavi Hey guys... love your show. Would love to see your take on when/ if brands will be active on messaging platforms like Messenger, Kik. etc. Is it actually a better channel than email? Is there a signal in all that noise? Opportunities/ risks etc. Thanks! Lauren Quaile Tonkin: I'd love your thoughts on autoreplenishment. Why have other retailers not adopted this tactic broadly (beyond Amazon and Target)? Do autoreplenishment models differ globally? What non-intuitive products/categories do you think can benefit from an autoreplenishment strategy? Thank you! Keep up the great work. Ben Kates: off-price retail offline and online Gareth Hanes (in uk): Hi Jason & Scott, enjoying your podcasts from "the other side of the pond" in the UK. I would be interested in your take on the recent (in the UK anyway) growth of products sold on Amazon by Chinese 3P merchants (presumably manufacturers) using FBA. I have noticed transformational changes in some product groups where new SKUs and brands have gained strong traction very quickly (propelled forward by a combination of agressive pricing, AMS & FBA). There's been a lot of talk on your podcasts about Amazon "own label", but this "manufacturer to consumer" model would appear to be a much more of a imminent threat to incumbent domestic brand owners. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 95 of the Jason & Scot show was recorded on Thursday July 27, 2017. Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Google Automated Transcription of the show Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 95 being recorded on Thursday July 27th. 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo. Scot: [0:40] Hey Jason and welcome back Jason and Scott show listeners Jason imma. I haven't been traveling a lot lately but I think you have been zipping around for you you've kind of been hanging around the coast update listeners on your many travels. Jason: [0:56] Yeah I have been bicoastal this week's. I spent most of the week in my ancestral hometown of San Diego California, I was there for interact Tech which is a great smaller event that the internet puts on every year so that's some. Originally designed for CTO that sort of expanded to include the CMO Council and the digital Council so we had a. A fun couple days of a networking and content there and I got to lead to Workshop which was fun. It was for me probably not for any of the attendees and then flew to New York today to do a workshop with a card tomorrow. Scot: [1:37] Awesome yet so just racking up the miles going to join the eight million Mile Club Pearson. Jason: [1:43] I'm happy to report I hope to never achieve 8 million miles but I do have quite a few and I did get to visit I got to check off another Amazon bookstore on my West cuz there's one in University Town Center in San Diego. Scot: [1:58] Cool so give us a quick update on that and then what was the buzz it in RF take anything that listener should know about. Jason: [2:05] Usher so the the Amazon bookstore like. [2:09] Is not very interesting it was the second one they opened and it's a smaller footprint so it's basically. [2:18] Today in equivalents at our offerings to the. [2:21] The Seattle won that bet in West base so you not if you've been to another Amazon bookstore you don't need to go out of your way to see this one is that mentioned before the. The one in my hometown in Chicago appears to be, the most advanced with the with the coffee shop and a broader assortment of products than any of the other which is sort of interesting. Scot: [2:42] Did you try to return a random Amazon product like you're like you're freaking leader. Jason: [2:47] Because I was traveling for 8 days in a two-day overnight bag I did not have room to bring any test returns with me. [2:56] Yeah that's my shoes and I'm sticking to it but the check was good there was a lot of interesting speakers. [3:06] I definitely would say the theme of the show was preparing for the future and particularly overcoming risk aversion and not being afraid to fail and failing faster with sort of the. A recurring theme throughout the day. Scot: [3:23] So, gelatin and how do some of these 5200 or organizations crank up the the speed. Jason: [3:30] Exactly and I you don't I I think sometimes explicitly stated and sometimes kind of just implied, but you know I'll just leave the boogeyman for most of these these folks as Amazon and and they're particularly good at moving fast and innovating despite the fact that there. A large twenty-year-old company in so you know I feel like the the realization is hit a lot of folks that they have to find ways to be more. More agile and more forward-leaning than than the the innovator's dilemma with typically dictate. Scot: [4:03] And then what was your talk on. Jason: [4:05] So I actually did a workshop on that theme so I am. Presented sort of seven trends that I felt were sort of exponential growth Trends in the industry that would likely affect all of the. The attendees businesses and then I gave them some brainstorming tools that we use to be more forward-looking and sort of divorce ourselves from some of the, the Legacy thinking so I introduced them to a structure that was designed by a guy named Eddie to Bono called six hat thinking and so we went through a six hat thinking brainstorming exercise where we fired everyone from their current companies and had them all work for a new grocery retailer trying to invent a new customer experience in the US, to compete with Amazon Whole Foods. Scot: [4:52] Cool we should do a deep dive on the so don't say too much let's leave listeners just kind of guessing my my big question is did you really wear 6 haven't set a time. Jason: [5:01] Note that when we talk on the thing what you want is you only get to wear one handed a time that's that's the beauty of the the system. Scot: [5:11] So we won't tell listeners why it's called six hats so leave that is as I'm sure they're on the edge of their seat right now. Jason: [5:18] Cliffhanger. Scot: [5:19] What we have a jam-packed show tonight so let's jump into it so the two big topics number one is earlier today Amazon release their earnings for the second quarter and hot take on that and then we have listened or questions it's been quite a while since we did listen to questions we put the call out, and I'm excited report we we have a lot of listen to questions I'm not sure we're going to be able to get to them so let's kick it off with Amazon news which is our hot take on earnings. [6:04] Yeah so today. [6:07] Amazon came out with their Q2 earnings they're usually one of the later companies to report in our world so we already heard from eBay already heard from Google and Facebook and Twitter just kind of summarize those guys eBay was Steady As She Goes. Google did did relatively well the stock was off a little bit. They paid clicks were up but they face somatization challenges that that people kind of scratching her head about a lot of people worried maybe they're just getting a lot of klicks from YouTube that aren't monetizing very well-off out loud concerns over mobile and then, let's see Facebook crushed earnings on every measurable kind of thing they hit some new all-time highs Twitter's results for kind of man you know they're really struggling to add new users so that's kind of the setup is kind of you know. Mixed bad coming into Amazon so let's go through that so. The Top Line got to looking at Revenue that I came in at 38 billion and that topped Wall Street expectations pretty handily and represents 26% year-over-year growth and just remind listeners e-commerce is growing at 15%, and here you have Amazon just kind of pretty easily doubling that. [7:19] Nothing that I was have to remind myself with this quarter is it does not include Prime Dave so Prime day will actually fall into the Q3 results so. So this is this is pretty nice that represents a bit of an acceleration kind of from last quarter so you know Amazon would what amazes me is. [7:38] They seem to defy the rule of large numbers and what kind of talk what about Wyatt a minute that you have to be 38 billion and still posting these kinds of growth numbers is is. Pretty impressive. As you peel the onion on the revenue side North America Revenue was the cause of the reacceleration in that grew 27%. [7:59] There were some concerns about the cloud computing which is AWS because Microsoft had reported a strong quarter there a dubious has been lowering their prices as they kind of compete out in the world with with kind of the commodity storage and things, and AWS topped expectations so people are excited about that International had some currency headwinds but when you take those out it also had a nice showing. Things I watch closely are some of the non-gaap measures so third-party seller Services which is its own Revenue line item now. Groove 40%. [8:33] I should say little footnote for those of you that have followed my Amazon analysis for a while that used to break out media egm and other and they stop doing that unfortunately so. I can no longer kind of see how that egm pieces doing that's always going to want things I really enjoyed I do think this third-party seller service metric now is probably a proxy for that because most third-party sellers are in a GM. So that grew 40% so again you know almost three times the pace of e-commerce which is pretty amazing, third-party as a percentage of units hit a new high water mark of 51% that's the highest that's ever been so the third party Marketplace I know we have a lot of listeners that are either brands that do hybrid or are there are third-party sellers, retailers very healthy growth there. [9:22] The another new segment that Amazon introduced this year in the first quarter that we're now starting to see some Trends on is called retail subscription services, and that's essentially revenue from Prime and Dad grew 53% which the Wall Street notes will come out tomorrow I think we're going to see. People against before Prime day which I think had you know they said record signups I think we're going to see people touch up their number of prime subscribers based on this I think I think. [9:49] Egg while she may have underestimated how many prime subscribers kind of added in the quarter so so that'll be interesting to watch and will report on that, another area I look at is paid unit growth so this is just took kind of a, measure of volume that was up 27% year-over-year and that's its highest level since Q3 of 16 so it's really interesting reacceleration at Amazon going on and that's you know I think if you kind of. [10:16] You think about how Wall Street thinks about that was all super positive the one thing that kind of freak Wall Street out a little bit and this happens. Every cycle with Amazon is they start to show some profit and they reinvest and then a certain set of investors freak out about that. So that's on the bottom line on the expense side so while she was looking for just over billion dollar in in gap profit, and it actually came out to be 600 million so kind of half of what folks are looking for earnings per share that translates into earnings per share of $0.40 while she was expecting like a buck 40 so you'll see this headline to know that. Amazon misses bottom line by you know 77% that kind of thing that's certainly true. But you know when you when you beat revenue and Miss on earnings usually kind of implies some level investment inside of their and. [11:10] We'll see that we'll talk about that in a second and then the thing we. You know yo big public is very much of what have you done for me lately kind of thing it's really, maybe 20% about the quarterly reporting 80% about the next quarter what they're talking about so at Amazon updated their guidance for Q3 and the projected revenues between 39 and about 42 billion which implies, a bracket of 20 to 28% year-over-year growth 24% at the midpoint Amazon has a pretty good history at kind of beating that just like they did this quarter or coming in right at the top of that guy that's so that. That was as kind of that exceeded wall Street's kind of previous thinking about Q3 but where they did not exceed are they contact. Missed where while she was thinking is when they projected the bottom line into next quarter Wall Street was thinking about 950 million and Amazon said no it's me arrange of - 400 million - 300. [12:09] So this is going to raise those questions you and I hear a lot about in Amazon's not profitable it's not fair we just have to kind of wait for them to wash it to wake up. [12:19] And you again. Stock after hours was down 30 or $40 which feels like a lot but you have to remember Amazon is an $1,000 stock Club so that's only a couple points. And I think what we'll see tomorrow it'll be interesting you know it's hard to guess how lost react but I think we'll actually see. [12:40] The set of investors that care about growth and market-share what kind of overcome the industrious that are focused on profitability. [12:48] Last point on profitability Amazon really does not optimized for any of those things I just talked about they optimized for Revenue growth in market share and then. Cash flow and what happens is always accounting rules kind of. Bend that as you report this thing's so just kind of give you some numbers for the quarter Amazon had 17.8 billion dollars of operating cash flow and then 8.2 billion of that goes property equipment in R&D, so that's kind of what's Happening Here is the way I think about it is. [13:22] Amazon where to stop investing for the future and so let's just come. Play that off they wouldn't be making these kinds of Investments and you would have seen no a big chunk of the 17 billion flow to the bottom line. What they're doing is they're investing in R&D they're building fulfillment centers in her building data centers does does your kind of the three biggest legs of investment so for example another four billion went to pay for Lisa's so that's fulfillment centers and then invested another four billion in, new releases in equipment so so you know. [13:58] The losses that you see the way I would argue it and I think a retailer should think about this Wall Street it's kind of Ena. Don't think Howard I think these losses actually are not from the current business is kind of his F you know they're they're making. [14:14] Good investment for an Indies levels you think about the levels I just talked about that's the level of their investing in so so pretty crazy levels investment. Jason: [14:23] Yeah absolutely and you know I tend to think of it pretty simply if they if their profits were going down because their cost of goods were going up or some, some operating expense that was directly related to their sales this quarter were dramatically going up like shipping went way up as a percentage of sales or something like that like then. That would be indicative of a problem in their business model but when they're their profit isn't High because they're investing in, things that are likely to have a much higher future value like capacity or subscribers. [14:59] Like that that's that that's a whole different equation in my mind. Scot: [15:04] Yeah absolutely into that point I didn't talk about it but gross margins were real. About that been relatively the same for the last year or so you know the cost of goods are pretty are very stable and then, this is kind of like in the weed so I'll just kind of leave it as something if listeners are interested Amazon does report kind of segments in then that gives you a little bit better view of how profitable is each business unit if you strip some of this investment out they call it, CSI which I think stands for I know it's segment operating income I forget what the C is for, but they kind of report on retail AWS and that customer segment operating income I think it is that's a really interesting metric if you if you're if you want to get super geeky on this stuff and you have to really dig into their SEC documents their q and in her case can I get that, but it is a Consolidated segment operating income at the kiddos said look for CSI and I think. [16:05] I always find that is a really interesting few that strips out a lot of the things like you know RS use and non-cash pieces and a lot of the accounting stuff that kind of gives you a hard makes it hard to see what's going on inside of their. Jason: [16:19] Yeah I'm I still run into it all the time that you know I hear from some particular from retailers but you know others that oh man Amazon has good at growing Revenue but they but they're not profitable and of course. That just factually untrue and. It was even on Truth escort or even though it was a somewhat down quarter versus Wall Street expectations and then the one of here even more commonly is. [16:44] Only AWS is profitable so were you to take out AWS they they wouldn't be a viable business. Scot: [16:50] Yeah and the CSO actually proves that wrong so it does show AWS is profitable but it also talks about, not combines retail and 3p and it I believe it does a, domestic non-domestic in both of those domestics profitable Internationals losing a little bit on but you can see it's on a path to get there and it's kind of been chewing away at it over time so yeah you know that that's those are just kind of factually wrong Sue. Yeah I guess and NF. Amazon secretly loves it when people think that because they did you know that is not true and they they love misinformation kind of things like that that people are not watching the right. Part of them the ball here to to keep up with it when one thing is happened and we called it here on the Jason Scott show, as the stock has kind of held over $1,000 is kind of in the, thousand $10,020 range so things have happened out there and with Berkshire Hathaway and Microsoft stock and whatnot and the end result is by at least I've read into sources now CNBC in Fortune Bezos is the most rich person in the world at 90 billion dollars so so congrats Jeff whenever you're a big listener so, big pat on the back for that and yeah we know congratulations. Jason: [18:10] Pour yourself a drink with that top shelf a beverage of your choice. Scot: [18:14] Boom get a Diet Coke go crazy. Jason: [18:16] Exactly other I do things gotta actually read that that he hit that Peak based on the stock having a nice little uptick before the earnings were now it's because the, that anticipation was that it was going to be a good quarter, and then I think after the announcement that the stock actually corrected a little bit and I think you might have slipped back under Bill Gates for the time being. Scot: [18:38] Yes it gets it like 10:20 to 10:25 somewhere in there so I'm sure he probably doesn't care what's another. Jason: [18:46] I think if you really cared you would have skipped a year of space exploration and you'd be there. Scot: [18:53] Cool so that's our hot take on Amazon's earnings for Q2 and and if the way I would summarize it is. I think it was really strong and they are just pouring more money into Investments and they're very profitable lots of free cash flow that they are just spending as rapidly as they can into. Things that I think are pretty. Conservative that are going to pay off for them another fulfillment center Prime now launching in Australia launching in Singapore all these things are our kind of no-brainers. [19:28] Soup that is Amazon news and now it is time for. [19:43] Question question question. [19:50] Who's the first wanted to thank all our listeners to most of these come from our Facebook page so as reminder if you just go to Facebook and the search for Jason and Scott show you will be taking there, or if you go to Jason and Scott. we have links to Facebook page there and it's Scott with 1T so our first question Jason comes from Curie Masters so it's also say a blanket statement of I apologize if I say Jason right I say your name wrong, security says I'd love to hear Jason Scott talk about their Global e-commerce out, Amazon in particular seems Keen to expand aggressively in international markets does the growth opportunities matched regulatory operational complexity for Brands interested on your take. Jason: [20:34] Yeah so that that's a great question carry like at a high-level like you know I think certainly we're all bullish about. International e-commerce growth so just kind of. The level set this is a milestone year in 2017 globally e-commerce will surpass 10% of all retail sales across the globe so, we can I hit that inflection point worldwide and Global e-commerce growth is about 23% so even Scott mentioned earlier, we're in one of the more developed markets here in North America and its about 15% so so the worldwide growth prospects are certainly higher. [21:12] But your your question sort of implies the real trick to all of this is you know in those markets where there is considerable growth. [21:23] Is it cost-effective to see that growth either because of the. The individual complexities of those markets it because of language and Logistics in in those sorts of things and in particularly is the growth opportunity constrained. [21:37] That because of rigor Tori issues right and so you know that's the. The sort of equation you have to apply but certainly I think the the conventional wisdom is you know that the super exciting market for most. [21:51] Folks at the moment is India and you know to kind of put that in perspective. In North America about 75% of all the consumers that have access to the internet or online Shoppers in fact I think it's like 76% in Asia. [22:09] It's closer to 2:50 or 60% of of all users. That have internet access are shopping online but where it gets interesting is in North America the overwhelming majority of all users have internet access in Asia only about half of all users have internet access so when you look at. [22:31] The percentage of the total population that are shopping online you don't in in North America where about 65% in Asia were at 25%, so India in particular is even a little lower than that and has a huge population so you have a huge population you have an emerging middle class. And you have very low penetration at the moment so those are certainly. You know all the the favorable characteristics that have caused a lot of big International companies to come in and make big bets in it in India which is why it's. Kind of the the global e-commerce Battleground right now and as you've directly pointed out there some, challenging Logistics and Regulatory environment that make it difficult for for businesses Amazon in particular to sort of. Completely replicate their their North American model in India so so that's that's the barrier. Scot: [23:27] Yeah and um. So I'll specifically can't talk to Amazon a little bit I'm not an expert on regulatory issues but you know so Amazon is growth strategy has been, is it interesting so they start in the US and then they did Europe and then they, the only time Amazon has not kind of. [23:50] Really focused and become number one is China and if anything in China I think they're like number four or five which is pretty interesting and I think they've learned a lot from that experience I think they they realize that. [24:05] They have to really adaptive local market and build a team and maybe acquire a company and, just kind of be more Nimble than they had been since the China was a real big learning and and ever since then you know they have when they going on Market they go guns blazing and, to Jason's Point India seems to be that's really interesting Battle Ground right now between all the big. Global e-commerce companies so so Amazon got a bit of a late start because there is some some regulatory things they had to cross over and India and they. They can only open the third party Marketplace are they Amazon still does not retail so there's some kind of protectionist law that you can't afford company can't be a retailer and India so so you had. [24:50] Flipkart and Snapdeal as kind of the incumbents local companies and then Amazon dinner and they started taking sure then what's happened is Alibaba and eBay of each continent. Southside Bank in so he's really big players have kind of bolstered those anti Amazon companies so Amazon is is, pretty publicly said they can spend billions of dollars in India there's something like I tracked us pretty close 15 to 20 fulfillment centers they're building Justin India so there. Derp derp pretty much betting that the Playbook of getting product close to Consumers can be really important India because it is a very large country. No what is a six billion people in the Diaz Harrison. Jason: [25:34] Yeah I think that sounds about right no maybe like 3 billion. Scot: [25:39] Maybe China sex so. So you have a very populous country spread out lots of cities lots of different ways not a really great career system or delivery system, like a FedEx UPS USPS so I think Amazon is really investing in that so it's been interesting to kind of watch in and they know they've been way more aggressive there than they, did when we went to China I think day and when I read the tea leaves I think they kind of regret not being more aggressive in China and Android building that out better and they got kind of beat by JD with a 1p model and Alibaba other 3p model. [26:12] What kind of stick to Asia pack there they that's been where they've been investing for last 3 years they haven't been, expanding much but now we're starting to hear they're definitely opening Singapore and then Australia and so it's interesting to see them kind of pick up those countries, then just a reminder they did a choir a the top Marketplace in the Middle East called souq souq. Jason: [26:42] Yep exactly. Scot: [26:44] And that's a pretty big market place I think it was like 2 to 5 billion and GMP which is pretty sizable and, that's going to pick up you know Saudi Arabia Qatar Kuwait some of the Middle East countries there and it's a lot like mercadolibre we've had on the show or it's kind of a family of little local marketplaces it's not kind of. Homogeneous Marketplace it's kind of every country has its own rules and regulations and language and currency and careers so they kind of like have built that in each country in the Middle East and then they. Did you have some glue that kind of combines it together so some cross-border trade kind of things payment platform that I think is is kind of somewhere across there and that kind of a thing so so for that gives you a flavor for Amazon is and then the last one I'll talk about is, kind of something America so, so Amazon so South America for long time was one of the fastest growing e-commerce markets yes you would have China so Jason was talking about, Jason did you say Global at 23 or 25. Jason: [27:53] 25 Scot: [27:54] Cuz I didn't you used to see Brazil kind of this 35-40 and China kind of like maybe it 2830 Brazil has come down pretty considerably because just politically rest in the country also have right next door is Venezuela is kind of Hit the skids, do the some currency devaluation things going on there so loud political and currency things in the South American countries have caused the Slowdown I believe in we had mercadolibre, on the show they were talking about kind of 25 28% growth that they were seeing so that used to be like the fastest grower and I think China has kind of supplanted that that kind of what your data shows Jason. Jason: [28:36] Yeah and I I would say like so. Latam is kind of right in between Asia and North America in terms of digital Shopper penetration so there is a lot of Headroom there but is you you rightly pointed out it, it's actually a lot more fragmented so while you can kind of you know list ones q and and reach all in India. You know you you are what you really need to do is West as you know a separate skew and in each country in Latin America are the Middle East which make the the logistics a lot more challenging. Scot: [29:08] Yeah and I've never had the pleasure of meeting Carrie but I see from her LinkedIn that she she always Brands sell on Amazon and other places and you know when when I talked to brands in the US about this. [29:22] It's interesting so. [29:24] Two years ago plus they were they were obsessed with China and like what's our China strategy and I've seen the last 18 months that has cooled down and it's very much. What's my direct consumer strategy what's my Amazon us strategy, so I think I think that people have pulled back a lot on this kind of global international thing because they are feeling the heat in their home market and there's this is us Brands I'm talking about, so You know for those brands that aren't concerned about that you know where where we see a typical road map is let's see it to us brand they starting to us the natural place to go is the UK because you don't typically have a language in Madera, it's a very kind of us feeling kind of a country obviously and then you'll see some expansion into Europe usually Germany and France being kind of the next biggest e-commerce markets. [30:15] We have a lot of customers a challenge to do really well in Australia Australia is kind of an easy box to take off its English-speaking and is very friendly to Imports and, there is a lot of infrastructure out there for supporting these countries so there's a lot of lot of the marketplace provider so eBay has a really excellent program around this so does Amazon, around global Shipping say allow you to they'll take care of lot of this operational kind of complexity you talk about where you can have a crawl walk run metaphor so, eBay brand program for example you start out like let's say you're a US company and you want to start selling into eBay Germany, you can just kind of set a flag that says I want my part to show up on eBay Germany they'll actually translate it for you using a Google translate consumers there can see it the order it and then you'll get an order that just shipped to the US and does it reshipping, that's that's nice because you can kind of test the waters without having to make huge Investments Santa Crawl part then is what we say to folks is as you see that volume take up it's not the best customer experience so really kind of go to that next level of customer experience you need to start kind of shipping pallets over to, the destination country and selling in more of a localized way that's the walk and then run is when you, you know you actually kind of maybe create a store footprint or a fulfillment footprint actually put bodies over there answering questions of that kind of thing and that's the run so we sit up that model work really well for both small and medium-sized retailers as well as Brands and. [31:46] I think we'll see more and more of those kind of solutions that come out to really help everyone kind of, peel this cross-border trade peace and understand how you selling these International markets. Jason: [31:57] And I'll just head one one points and Scott and I both won't geography China has about like 1.35 billion people in India has about 1.3 billion so there, they're the two most populous countries in together they're almost three billion which is. Scot: [32:13] Yeah there's like eight billion people on the planet. Jason: [32:15] Exactly. [32:18] But so yes I think that that that's a great answer to carries question the next question came from Josh tarasoff and Josh wanted to know what our take is on Amazon strategy, behind buying products at full retail price for Marketplace Sellers and he gave us a link to CNBC article talking about this this new deal. Scot: [32:43] Yeah and this is kind of a little bit of a head-scratcher and as I've talked to a lot of sellers are concerned about this because, the way it was announced was just kind of like Amazon didn't exactly say why this kind of said hey you know you have some product and FBA and you may see. Amazon.com is the buyer which kind of people like what what's that mean so what I think's Happening Here is. Yo again these global Shipping program let me kind of explain how eBay does this so a seller on eBay. [33:18] If you don't opt out of it they will actually. Up to your default opted into that global Shipping program I was talking about I think that's what Amazon is doing because what they want to do is when they pick a new country but this is true for any country but when they ruined Australia. They want to show as broad assortment as possible and people and I'll show you love Western Goods so this this program will allow Amazon to say to people in Australia. Look we have you know 30 million products that that are available to come into your country, versus if they did do that then maybe it's a million or two million that they would kind of host, so they would still have a million to 2 million local and then like another 28 million that are kind of cross-border trade that could be shipped from the US, that gives that gives them this kind of I would call the backfill strategy so it gives them this perception of lots of selection. Using cross-border trade as a back film then let's do it lead you do is so imagine people start buying from. The cotton country in the outer country product they can very quickly learn from that and say oh. [34:23] These widgets are very popular in Australia let's kind of source them local or let's get pallets instead of each is from the u.s. FBA let's work with Our Brands and sellers to kind of say hey. Hey mister customer your widgets are really popular in Australia that was kind of wrap this up so that's what I believe is going on it's easy to kind of make it seem more nefarious and Jason turn over to you for that Park. Jason: [34:52] Yeah though I have to say I have a slightly dishonor different understanding of what's happening so be interesting maybe there's a little both happening but I've talked to a few 3-piece Sellers and it was less than automatic. To the program that you had to opt out of and more it was an offer to opt into a one-time transaction. [35:14] And so like what these sellers were told as hey you have an inventory that you're selling 3p in North America. We want to buy that inventory from you one time so that those listings will go away in North America cuz you'll no longer have the product to sell and we're going to take ownership of that inventory and sell it in another country and so it was basically an offer. [35:38] From Amazon to the seller to buy their inventory so that Amazon could resell it and they were offering to buy at at at. [35:46] Full ask price from the seller and how I interpreted that is. That they were looking to buy inventory to fill in brands or products that they were missing in some of the new markets that they're entering like Australia for example. [36:04] Interview if you think back to the early days of toys and Amazon you remember they originally had a deal with Toys R Us Toys R Us to the famous we pulled out of the deal. Right before holiday would you have to Amazon in a bad spot and Amazon actually sent a bunch of employees to go in the retail stores. Buy toys at full pop and put them on the market place so that the customers would be able to buy toys from Amazon and that really kicked off Amazon's. [36:32] Foray into the toy space in so I look at this this 3p thing and I said hey Amazons. Doing the same thing in new markets today only they now have a convenience they didn't have back then they don't have to walk in the stores and buy products, have a bunch of sellers in their own Echo systems that are they have products in their warehouses so they just go to those guys and say hey do you want to sell me your inventory if you do great I'll buy it. [36:56] I'll sell them in another Market you know in the long run I'm certainly going to look to get them more efficient supply chain but but as a way to get started I will do that. There's nothing wrong or nefarious about doing that but what what does happen is there a few brands that three-piece Cellars. Are selling on the marketplace the do not want Amazon to be able to sell them in and most famously, these days that would be Birkenstock and so Birkenstock had a number of, of authorized resellers that were selling their products on Amazon is 3p and they got letters from Amazon saying he will buy your inventory and resell it. And the Birkenstock CEO reacted very badly to that he sent out a very dire letter saying you know any retailer that sells even one pair of shoes to Amazon to allow them to resell will never sell Birkenstock again and he, he called it Amazon's attempted modern-day piracy and and you know there's a pretty pretty lengthy article about it in Washington Post, which is I guess somewhat ironic since it's paper owned by Jeff Bezos and will put a link to that in the show notes. Scot: [38:10] So our next question comes from a nuke goes off in a noob says hey guys I love your show so Anup obviously has, impeccable taste and yeah where was he says we would love to see your take on when if Brands will be active on messaging platforms like Facebook messenger Kik Etc is it a better Channel than email is there any kind of signal in the noise where do the opportunities risk thanks. Jason: [38:39] Great question on oops so it it depends a little bit on the parameters of what you're asking so when you know you mentioned, Brands being active which is different than brand selling stuff on these platforms and you predominately named platforms that are. They're pretty prevalent in North America although kick kick has a more Global footprint. [39:06] The answer varies widely depending on your geography so obviously we talk a lot about we chat, in China being you don't Super Active platform for brands, there are millions of sponsored accounts on on WeChat kakow chat and other parts of Asia like Korea is very popular and a ton of brands or have are active on that here in North America although messenger has a billion users you know we only see about 30,000 Brands active on it right now which like compared to Lee isn't a lot, and that's really because the the platforms that are most prevalent in North America like, messenger Snapchat Instagram historically haven't had the best tools for Brands so the advertising tools have been kind of poor and those are rapidly improving which. Makes me think we'll see Brands using those platforms more as an advertising vehicle and then the Commerce tools are still very poor and what we what we just painfully lack in North America is a. Universally adopted digital wallet that enables you no friction full free transaction on all these platforms so when you look at what the big difference between WeChat is and Facebook Messenger, it's really, that we chat has 10 since digital wallet built into it and it makes it really easy to do a transaction right in the platform and we don't we don't have that on Facebook Messenger today. [40:35] And so I do I guess you know roll all that up we are starting to see brands use those platforms more, more degree brands that are very Visual and that are using like Snapchat and Instagram as a discovery platform, all the platforms are rolling out better advertising tools they're rolling up better self-service tools and their ruling out visual search tools like the Pinterest new lands feature for example and those all lend themselves to do. The platform's Becoming better product Discovery platforms so I do think we're going to see progress but I don't think we're going to see anything like, the adoption of WeChat in China unless and until we get a universally-accepted digital wallet. [41:21] So I would just add one more thing, these could all be good tools for your mix but at the moment none of them are going to give you an Roi anything close to email which is you know still a great bang for the buck. Scot: [41:32] Yeah I totally agree and we talked about it a lot and our annual predictions and you know I think. Everyone every us company wants that China mild work here in an in it just hasn't kind of. Taking it I don't know if it's even if we had a lot I'm just not sure consumer behaviour the same so it's going to be really interesting to watch that play out I wouldn't count it out yet because you know you have some really serious multi-billion-dollar companies kind of playing this it is interesting, kind of a dark horse in this is Amazon so they we mentioned this in summer Amazon news last episode so they've got theirs a lot of rumors that they have a messaging platform in the works. I have to believe that would enough. If I think of what would Amazon do to make their messaging platform different I think buying stuff would be the one thing that other thing I would think would be kind of unified Echo, and text chat kind of you know, kind of hook up maybe pretty resting so let's kind of see what they come out with and then also as a reminder they came out with I want to call it. Sprint's but Sparks I guess is there a kind of. Pinterest e instagrami product oriented kind of think so so Amazon is the first e-commerce company to take a shot of this so that could be a different take but I do think there's a lot of headwinds there. Nothing I would draw your attention to that's an interesting case study is, the the retailer everlane came out and they were kind of the poster child for this and they've been lockstep with Facebook the integrated everything they did the transaction notifications they did the wallet they've done all that stuff and then in March of this year they actually announced they were just going to end a life that so I think you know. [43:15] I think that we went to a hype cycle there and we're definitely in the trough of disillusionment kind of phase I don't know if we going to make it out of that truck or not. Jason: [43:24] Yeah it's going to be interesting to watch I tend to be bullish but I think you it could be really risky to overestimate the timing so, you know what remains to be seen like how quickly it's adopted, and I guess I would add just one of the point I have seen some interesting new pilots including one by I think Adidas with a really trying to. [43:48] Use SMS as that that sort of transactional platform, and add the ability to do auto reorders and things like that using SMS witches sort of interesting cuz that can be well or friction than some of these other platforms. [44:05] So let's go to the next question which is from Lauren Tonkin and Lauren right side love your thoughts on auto replenishment, why have other retailers not adopted this tactic probably Beyond Amazon at Target. Do auto replenishment models differ globally what non-intuitive product categories do you think him venefit from the NADA replenishment strategy thank you keep up the great work Jason the sky. Scot: [44:33] Fix another person with a great taste I have to say Jason let me let me kind of. Paying this off of you so we make sure to talk about the same thing so when I think about Auto replenishment it is. There's kind of nuance here so Amazon free sample has subscribe and Save which is a hard I want to subscribe to this Auto replenishment to me means the platform saying to you, hey Jason you ordered toothpaste 30 days ago is this a good time do you want to go ahead and order more is that kind of how you think about it or do you want them all together. Jason: [45:06] No I think about exactly how you do I think there's two tears and implied in Laurens question is when she says Auto replenishment I think she's actually, initially talking about subscriptions because she references Amazon and Target and you know Target does support subscriptions but not through Auto replenishment, and and your point like you know I think the Step Beyond subscriptions is this entirely implicit process where the stuff just shows up. Scot: [45:34] Yeah and it's too kind of background things to answer this question in number 1 full disclosure I'm on the board of a company here in Research Triangle Park called Windows Circle and their whole thing is applying data science machine learning to transactional data retailers to cut a fine replenishable products so it's actually know a fair amount of this and then I would also Point folks to, the excellent Deep dive Jason let us onto machine learning this is a great way the other, to leverage machine learning so this is obvious right so. Dog food any replenishable kind of a consumable product is going to have a certain period of time and it's done. Other ones are harder to tell so it's harder to tell the duration like even dog food you know I you know I may have a dog that only eats one cup versus Jason's dog eats two cups we all know MacGyver loves to stuff it and. And then also another good example is maybe batteries because maybe person a has six kids and they just. Turn two batteries like crazy person be being doesn't burn two batteries that much of This Is War Machine learning is, nursing because it can look at that transactional data at a very personalized level and say you know this. This customer is seems to be replenishing on this product on this level let's automate that for them. Or maybe even surfacing it up to that that top to your of subscribe and save I do think it is very interesting. [47:04] I think Why are retailers not really kind of attacking it I think when retailers list the things they're going to move the needle for them, they are stuck at night number one into which typically and Jason you're more of an expert on this but whenever I talk to retailers they're obsessed with 3 platforming, so they spent a lot of time I just like choosing the platforms Andrey platforming and kind of doing that kind of stuff. And then there are spending a ton of time around omni-channel Integrations and these kinds of things and then you know like. Replenishment subscribe and save is like number four and five personalization maybe this number three so so my view is it just kind of like it's hard for your average top. 200 retailer to get to this to spend time on it so I'm curious to hear your thoughts Jason. Jason: [47:51] Yeah I do think one of the challenges is just the band with challenge that you know and he's big roadmaps if if it doesn't pencil out as that you know. First or second most valuable initiative it just hard to get bandwidth to get to it, but I do think there are some nuances I think the majority of subscription programs at the moment are pretty brain dead and tendon not work very well, so you know you think about a lot of these subscription services. Like a blue apron or Dollar Shave Club and after awhile you get behind you didn't cook all the food the Blue Apron sent you or you have an excess supply of razors and you get subscription fatigue and you turn it off and so we're left in North America with this irony there all these subscription-based businesses, Stitch fix Trunk Club. It started out as a recurring subscription in and they all have had to shift their model to not be automatic subscription because customers. In general just don't like receiving the product when they don't need them and so just sending stuff on a fixed schedule hasn't worked very well you know I do think. [49:00] An exception to that rule is the Prime Pantry and I think boxed is probably an exception to that rule in that regard but what we really. Like close to and just haven't seen enough good examples yet is the artificial intelligence based, replenishment witches I think more what's Scott's talking about an interested in and you know they're there certainly are some good examples of that we're doing a lot of work with Sephora which has a huge data set and, you can imagine you know everyone's use case for a Cosmetics as wildly different, and so it's not a matter of just figuring out that people need mascara on a monthly basis it's a matter of figuring out you know the individual usage patterns for for a particular consumer. And and predictively shipping for that consumers use case and so I do think that's going to be successful we're going to see more of that and then I would also say. Did to me the big the big picture here is instrumented Auto replenishment in you know and said this. Amazon has a little bit of this and what they called their Dash replenishment program but your you know your Canon. Inkjet printer that automatically orders ink when it knows it's running low or The Brita water filter that orders a new filter cartridge when it knows you should change the cartridge. Those are the today examples but you don't have to go too far in the future before I can virtually assure you that the, your toilet paper holder is going to count how many squares of toilet paper to use and know when you need more toilet paper in your house and you know you can imagine that Amazon Go technology that they're using in the store to see what products you put in the cart you can imagine that same technology being in your kitchen to know when you're running low on milk and you know so I think. [50:39] In the not-too-distant future the internet of things will be the trigger for a lot of these Auto replenishment orders in and when that happens we're projecting that about 40% of the skew used in the center of a grocery store, you know the people go shopping for the day and drive trips and causes serendipitous Discovery and all these other things are going to go away because about 40% of those goods you're just going to have magically show up at your house when you need them. Scot: [51:06] Yeah and there's kind of a news item here just recently Walmart filed a patent that would it was kind of like dash button but the products would order things themselves so there's there's a lot Innovation going around that area to be interesting to see that. Play out and see you know. Is consumers adopt that or not it's kind of like creepy when the milk kind of self their nose is empty and orders it for you I'm not really sure if if how folks are reactive. Next question is from Ben Cates and been really wanted to just kind of talk about our point of view of off-price retail both online and offline. Jason: [51:45] Yeah and that it's a tricky topic right now cuz it's, in North America off-price retailers in one of the few bright spots in brick-and-mortar retail so you look at the dollar stores you look at TJ Maxx and and there you know really one of the. The few growth areas in brick-and-mortar retail. You know obviously consumers are getting more price-sensitive and and that's become a super popular format in the challenge has been how to manifest that off price format, online Frank and you have sort of two problems when you get to these really you know inexpensive low-cost items like the things in a dollar store. The shipping becomes really challenging for e-commerce so that that's a you know the Majestics cost become a big impediment in Amazon parlance you know most of those items are crap items items you can't realize a profit and e-commerce on in the even bigger problem is, a big part of the shopping experience in these off-price stores is the treasure hunt it's that you don't know what you're going to find when you walk into the TJ Maxx and your you know hopefully going to find something that there's only one that's a great deal and it's really. Cost inefficient to, create a product detail page for that SKU you only have one of them and it sells super quickly and in many cases it just makes more sense to put that coat in a store then it does to. Put it online and so I would say the moment that the best off-price retailers are really struggling to figure out what the Digital model is I mean you know that. [53:17] TJ Max is in the Nordstrom Rack I'll have e-commerce sites but the. Assortment of product they sell in their e-commerce site is very different than the assortment they sell in the stores and the percentage of their sales that are online are much lower than a traditional apparel retailer for example. Scot: [53:36] Yeah I think I don't have a ton dad there there's a there's a chart maybe we can put it in the show notes that this kind of shows this disparity that that you have been kind of talks about here where, if you look at it just kind of physical retail the only things that are growing from a same-store sales are the dollar stores and the the warehouse clubs and, it's ironic because those actually don't translate to unlined very well no one is figure it out we've had boxed on the show I kind of put brandless in this bucket. Amazon Pantry figured out how do you bring that that Wholesale Club kind of an experience, bolt products and end up getting the unit volume unit cost down and butt by having you buy, large assortment some things no one's figured out how to bring that online and at the same time the guys that are really struggling offline are the the non off-price retail so if you're not a value-oriented or kind of a convenience oriented play right now that seems to be there studies that show this will have time to go into it but there's this kind of, bifurcation in the US by our Market where a pretty big segment loves value and they'll go to the TJ Maxx and they'll sort through every. Apparel item in there looking for a great deal so they have at Skyway I think about it as they're willing to spend a fair amount of time to save save money and they like that hunt and other side is convenience wanted so so I think's happening is the guys that are really struggling offline you know the ones we've reported on the Sports Authorities to Macy's the Sears guys closing stores. [55:06] Then really have value and they also don't have convenience so they kind of in this no man land where consumer behaviour changed and and I think the off-price guys have been very fortunate that they they are squarely in that value bucket. Jason: [55:21] Yeah I think that's absolutely right and I think there's there's one outlier there which we won't get into on the show but the affordable luxury is is one other bright spot and that's, mostly cosmetics in the form of Sephora and Ulta in North America but those guys are killing it, so if you need to make an investment right now that might be a place to walk. The moving on Gareth Haynes from the UK from across the pond sent us a great question enjoying your podcast from the other side of the pond I would be interested in your take on the recent in the UK anyway growth the product sold on Amazon, buy Chinese 3p Merchants which are presumably the manufacturers, using FBA and Garrett says I've noticed transformational changes and some product groups where new skus and brands of being strong traction very quickly, is propelled forward by a combination of aggressive pricing and supported by AMS NFPA. Scot: [56:19] Yeah this is this is very much in my wheelhouse and, this is huge said this is a massive Trend Amazon it's in Orson cuz you think Alibaba would solve this cuz all these guys are all about as customers but all he bothers so focused on, new Chinese manufacturer selling to Chinese consumer they've kind of dropped the ball on this they do have a platform caught AliExpress but it really hasn't gotten Traction in our Market or Europe it's very popular in in a couple other areas where e-commerce is underrepresented like Russia and what not, so when Amazon is done is. Yeah I would say two to three years ago they realize there's demand people like this product direct from China manufacturers what they don't like is the stuff takes you know when it gets shipped from the Chinese manufacturer. Honeycomb Core slow boat from China it literally is a slow boat from China it takes kind of four weeks to get here if you've ever bought anything from the marketplace wish you've experienced this. That's a fun Marketplace and have been all kinds it's the closest thing to a dollar store if you will kind of that his kind of nail dad and you know it's a great company they're growing but the. The downside is you order these things for three to five six bucks and they take 6 weeks to get here cuz they're coming from mainland China so so. In a world war addicted to Prime that feels like it takes a thousand years so it would Amazon cleverly did as they saw demand for the stuff on the platform. But it was being shipped directly so they have built a whole entire infrastructure call Dragon Boat that essentially uses Predictive Analytics and looks at these folk song on the platform that are shipping Direct. [57:53] And says to them look at instead of doing this direct we think your volume would increase this much if you did pallets and they'll actually then work with them too. Pallets on containers onto an Amazon boat they're cut off all the middle men they see six of middlemen in this exchange so all draft right from Amazon Amazon has part of Amazon China is all. Set up for this to get them into the u.s. in FBI and then now they're Prime eligible. [58:18] And the same is true for the UK this is been extremely disruptive especially for non-branded kind of things so. Yo electronic accessories was the first category now we're seeing it in apparel so you're the same Factory that's making the Vera Wang. Wedding dress is now selling a wedding dress for $200 versus the. The 20K kind of thing so yeah it's been hugely disruptive and what's interesting is you start to see this trend now where. Let's see what can I pick on I was buying some shorts other day and I bought a Columbia pair of shorts for like $80 so that was the name brand, and then amazonbasics had a pair of shorts so then Amazon has worked probably with a China Factory too kind of say here's what we want it to look like in the quality and is not half price so is $40 and then I could actually buy a comprable products direct from a, and you find these guys using AMS to your point using a Chinese manufacturing never heard of and, yeah that one was $20 so what you start to see is this differentiated price we're branded is attacks Amazon Prime as half of X and, Chinese seller is 80 to 90% of X and I think what Amazon is saying is let's give consumers the trade-off and if they whatever they choose they choose and they they understand the trade-offs there and we'll make it very transparent. And so is very interesting and it's extremely disruptive. Jason: [59:49] And I would totally agree and I do think that three-tier, model is going to become more common I mean you even think about like you know Gillette razor blades cost $7 each Dollar Shave gun, Club disrupted the market by you know selling blades at a dollar each and now the Chinese manufacturer the dollar was using as is selling directed $0.20 each and disrupting Dollar Shave Club. And I think that is common. I will give Scott Galloway credit which I hate doing that he has a funny quote about how you know people that have way over estimated 3D printers we already have the world's greatest 3D printer it's called China Anne and I think these marketplaces are really just a sort of facilitating, us using China as sort of a 3D printer that can you know really quickly manufacture these products and get them in the market. Can I guess I would say the one cautionary tale is there have been two huge hits, in in North America that were direct from Chinese Factory products with no brains right and said I was to holidays ago we had all the hoverboards the the stabilized skateboard stuff and you know those were all like designed by Chinese factories and sent over here and they were you know, all also direct from Factory and right now we're in the middle of this silly affair with all the fidget Spinners and most of those are our direct from Chinese factories and in both cases their electronic products were the battery and we're having some scary. [1:01:20] Consumer malfunctions and so I do think there is there's a potential risk, that that these these products are going to get a bad rap for safety concerns and therefore it's going to scare consumers away and so you know, I think we have to make sure we steer clear of that you know for this trend to continue. Scot: [1:01:42] Yeah and the time and puts it in Gareth question. quickly is what's a brand to do so so you're a brand or a retailer you're in category X and suddenly there's a Chinese seller and I think this is really this is the world going forward and to your at the top of the show you talked about how are you more agile I think the answer is. Brands and retailers have to partner to be much more agile there's some things you can do around you know what's interesting is a lot of these things are coming out of the same Factory so they'll do a run for the brand and then we'll do it run stuff, and so if I'm a brand I think I would go back to my Factory in negotiate that they're not allowed to do that in some way you know there's certain constraints that that you can put on there especially with your Electro property, there's some stuff you can do there but it is a day there's so many use factories that you know just shutting down the one there's one next door, so I think its Innovation so you know. And if that's what your brand has to kind of stand for just just kind of these lifestyle Brands and things, those days are are are going to be hard to stay on top of if you're not doing something Innovative around the fabric the technology, all these kinds of things to differentiate your product as a brand and that that treadmill a lot of Brands I talk to you kind of say we've had private label in grocery whatever for years and it doesn't matter I think this is way different than Ethan they face before and it's a new world and. The only solution is in a bit. Jason: [1:03:10] That absolutely and I think it comes down to being close to your consumer if your brand that they can really stay close to your consumer know them you can innovate products that. Particular meet their needs or fit their life and it best that the Chinese factories are going to be fast followers and so I think in the New World, those. Does he know great Innovations you come up with their going to have a shorter lifespan because you know you are you are going to have the Chinese competitors coming in and and challenging your price point so you need to be ready to move on to the next product little faster than we used to do. [1:03:46] And with that I'm sorry to report that it is happen again we've wasted a perfectly good hour of our listeners time, and I'm even sad and report we didn't get to all the listener questions so we're definitely going to have to do another one, so if you have any thoughts about the questions we covered on this show we'd certainly encourage you to hop on Facebook, let your thoughts be known and if you have some other questions we'd love you to leave those on Facebook as well and will get them in the next episode and they've you did enjoy the day show we would certainly appreciate a 5-star review on iTunes. Scot: [1:04:20] Yeah thanks for when we really appreciate the questions and hopefully even enjoyed the hot take on Amazon's quarterly earnings and listener questions. Jason: [1:04:31] Until next time happy commercing.

David Pakman is a Partner at Venrock and the man behind Venrock’s leading of the Series A and B rounds for Dollar Shave Club. Prior to Venrock David spent 12 years as an internet entrepreneur. Including being CEO of eMusic, the world’s leading digital retailer of independent music, second only to iTunes. Prior to eMusic, David co-founded Myplay in 1999, which he later sold, in 2001, to Bertelsmann’s ecommerce Group. If that wasn’t enough David is also the co-creator of Apple Computer’s Music Group. In Today’s Episode You Will Learn:  How did David make his way into the world of VC with Venrock? David invested in Dollar Shave when subscription ecommerce funding was largely out of favour. What was it that excited Dave about Dollar Shave and why did he choose to invest? To what extent do we see the existence of party rounds in today’s funding environment? Venrock took the rather unusual position to lead both the A and B rounds for Dollar Shave. What was the internal conversations like within Venrock towards this decision? Dollar Shave was growing at phenomenal rates with impressive growth, what was behind the decision to sell at this time? What were the incentives behind selling to Unilever? Will we see other large e-commerce exits in the future? What does the future M&A environment look like for consumer businesses? Items Mentioned In Today’s Show: Matt’s Fave Book: Mindset by Carole Dweck Matt’s Most Recent Investment: Pearl As always you can follow Harry, The Twenty Minute VC and David on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.uk and enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve.

(Bloomberg) -- Taking Stock with Kathleen Hays and Pimm Fox. GUEST: Michael Dubin, CEO and Co-Founder of Dollar Shave Club, and Fadi Mourad, Chief Product Innovation Officer, on disrupting the razor industry with their straight-to-consumer delivery business, and the company's new personal grooming products.

In this week's episode, Joe and Robert discuss why YouTube has a leg up on the streaming music business, and someone actually wants to kill the term native advertising.  Dollar Shave Club launches a new content marketing program called MEL, and the boys fight over whether it's transparent enough.  Rants and raves include NYTimes Virtual Reality project and a Wharton article.  This week's TOM example: Fold Factory. This week's show links: YouTube Opens Enormous Music Collection To Allhttp://www.wired.com/2015/11/youtube-music-opens-sites-enormous-music-collection-to-all/Can We Kill The Term Native Advertising?http://www.alleywatch.com/2015/11/can-kill-term-native-advertising/Dollar Shave Club Launches Mens Interest Editorial Destinationhttp://www.wsj.com/articles/dollar-shave-club-launches-mens-interest-editorial-destination-called-mel-1447270170 Sponsor: Marketo and Solved Mysteries - http://bit.ly/marketo-solved-mysteries Joe's Ravehttp://www.nytimes.com/2015/11/08/magazine/virtual-reality-a-new-way-to-tell-stories.html?_r=0https://contently.com/strategist/2015/11/09/are-the-nyts-virtual-reality-films-for-brands-the-next-big-thing/   Robert's Rant http://knowledge.wharton.upenn.edu/article/imagine-theres-no-marketing-its-easy-if-you-try/   #ThisOldMarketing Fold Factory - https://www.youtube.com/user/foldfactory

Pete is back and on full form, and this week talks to Dom about Continuity - generating residual income from your business by setting up products and services that can be charged for automatically on a regular and repeating basis. Action Steps: Work out a way to build continuity into your business -= Links =- - Online: http://www.dollarshaveclub.com Dollar Shave club is a great example of a continuity service. http://www.7levers.com The 7 Levers of Business Home Study Course is now live. Sign up today and get 2 months free access to our Preneur Platinum private members area. - PreneurCast Episodes: These previous episodes were talked about in today's show. If you missed them, go back and listen over at http://preneurmedia.tv PreneurCast Episode 37 - The Preneur Hierarchy PreneurCast Episode 52 - 7 Levers of Business Redux - Special PreneurCast Listener Offers from our Sponsors: http://GetTranscribed.com - The transcription service we use for PreneurCast. Mention preneurcast and get 25% off your first order. -=- For more information about Pete and Dom, visit us online at http://www.preneurmedia.tv or drop us a line at: preneurcast@preneurgroup.com If you like what we're doing, please leave us a review on iTunes or a comment on the Preneurmedia.tv Web Site.