Waterloo & Sweet Leaf Tea Founders & Operators Reveal What They Look For in $50M+ Brands with Clayton Christopher and Brian Goldberg

26:38So when, how do you think about this? Yeah, I mean, there's a few different ways, but I'd say kind of the most general filter that, or one of the filters rather that I'd use to think about this is like the more competitive the category, the more it necessitates a narrow and deep strategy. So like at Deep Eddy, for example, like we initially launched with a sweet tea vodka. There was already sweet tea vodkas out there. So I was like, okay, we're in, and we don't have near as much money as Diageo or Sazerac, which were the two other, you know, huge strategics that had players in the category, but I knew we had a better product.

27:14So I was like, we can't afford to outspend them or spend even anywhere close to them across the U S but we can in Texas. So we went really deep in Texas. And I was like, we are not setting foot outside of Texas until we're number one in this little category. Because if we're not number one in this little category, we don't have a chance of being number two nationally. We need to at least be number two in the small category to have a relevant business. So it took us 14 months. It happened faster than I thought it would. But, I mean, we would not set – we just narrow and deep in Texas. But then once we achieve that number one status in Texas, we then looked at kind of the rest of the states and what states were over-indexed on sweet tea vodka consumption.

28:00And so we launched two more states. Then we launched straight vodka, but we only did it in Texas. And we had very specific goals. And until we hit – because if you start – if you don't have specific, like, goals that says, like, until we hit this, we're not going to expand, all you're doing is, like, not feeding the starving baby. You know, and that baby's starving. It needs like all the nutrients it can get and you've got to get it to a certain place before you start taking the food away and giving it to other people. But when I think of like moving from narrow and deep to wide and shallow, again, going back to the Deep Eddie example, like all of a sudden we launched the business.

28:34Things were going well and then we launched Ruby Red, this grapefruit vodka, and nobody had anything like it on the market. And it wasn't some like brilliant stroke of genius. We're like, OK, what's the next flavor we're going to launch? because we've got a great consumer base. And we felt like we could make a better flavored vodka by using real fruit juice. Well, it just flew off the shelves. And all of a sudden we were like, oh my God, we have something really special and really unique here. So it went from kind of this narrow and deep because we were in such a competitive category to like first mover technology advantage.

29:07Like when you're first mover advantage and we were so confident that we had something so different that it was gonna sell wherever we went, but we also knew there was going to be copycats, like fast followers. We were like, we need to be everywhere immediately. So we, I mean, it was a, yeah, it was crazy time. But we were like, we need to go from three states to 50 states as fast as we can. So that's kind of the wide and shallow. And it was absolutely the right thing to do. And I imagine that's also pretty rare to happen when you actually see like a white space like that. So that's why normally I feel like the advice usually is go actually narrow and deep rather than wide.

29:47I mean, also, it's really extensive. I mean, we're doing the same thing with Bloom right now. You know, because we had built up, that business was almost$150 million in revenue before we ever entered Target. So it had a really, they knew who their consumer was. It was like almost 90 % female. So we had a massive launch in Target. But once we launched the energy drink, I mean, it was basically like, let's get it everywhere immediately. because you think of like how big the energy drink category is. So you think, oh my gosh, there's so much competition. But what was unique is when you look at like females, now almost 25 % of the energy drink category, but there's only two brands that are really talking to them, Alani Nu and Celsius.

30:26So when you look at it in terms of the TAM, like way under indexed on competition. So we were like, oh my God, we already have a ton of built-in awareness. We've got a huge built-in consumer base. And we're moving to this category where we see very little competition. We're like, let's go everywhere as fast as we can, partner with KDP, partner with Nutribolt, and there'll be an 80 % ACV by the end of this year, and this is their first year in beverage. Wow. Pretty crazy. Wow. It really is. That last piece there around the distribution partnerships, I think is a key point, right? So if you don't have that, it's a very expensive proposition to go very wide very fast.

31:05So that's a unique situation that Bloom had on top of the other things. But for startup companies, we typically, especially in beverage, getting local, when you're hometown to start. Like I mentioned earlier, the Whole Foods store, the Lamar kind of headquarter store. For Sweet Leaf Tea, the velocities of that store were just absolutely incredible. And we would just show everyone that data. like any any retail retailer we'd go to be like look at this one store and they'd be like that's amazing you know but it was like that was a great story yeah i mean we were like when you looked at we were you know austin we had great coverage back in the day when before nestle killed that brand but um literally we were doing like almost three million in revenue just out of austin wow and that was when austin was half the size yeah that it is now so it's a very profitable you know in terms of contribution margin is very profitable.

32:01But we would do, we would like send everybody, we'd send like the accountants out there to like merchandise the shelves. Like we did everything we could to win that one store because that was a great story to sell for everybody else. Wow. Wow. For emerging brands and young brands, how do you build leverage with retailers and also with your manufacturing partners? Because you're kind of wedged in. You have your contract manufacturers, unless, of course, you self-manufacture, but let's assume that you have contract manufacturers. And then you also have, of course, your retail buyers on the other side of it.

32:37And you sit in the middle, right? How do you create leverage with the retail buyers, with retailers? So retailers, first of all, want your stuff, but also they're excited too to have your stuff and also want to help you push product. And as well with the contract manufacturers in order to get maybe better margins and also better payment terms? Yeah, I mean, you're always thinking about how to create leverage. Like in every part of your business, every step of the way, I'm a big believer in win-win, assume the best of the person that is on the other side of the table from you, that's on the other side of the line.

33:17And so I'm just a big believer in win-win relationships. And I think if you approach leverage that way, it's much better than thinking of it as like a binary outcome. One person, I have to win, they have to lose or vice versa. But I mean, I remember like early days of Deep Eddie, we didn't have a whole lot of volume. But like we said, let's put out an RFP and basically tell these glass manufacturers it's going to be a two year contract. Like for two years, you're not going to talk to us, you know, because we're going to sign with somebody. And I was amazed our glass prices dropped from our existing supplier 30 % just from sending out that RFP plus rebates for additional volume hurdles.

34:00And that was before the negotiations even started. So, you know, like in terms of retailers, like, you know, building a really strong online business first or building a really strong data-driven sales story with other retailers, even if it's one store. That's still data that's relevant. These buyers for these retailers are risk averse. You don't go become a buyer if you love risk. So how do you eliminate risk? Show them data. And I'm a big believer. I want to create a data-driven sales story that says you're an idiot if you don't say yes to what I'm asking for. Because it's in your best interest.

34:38It's in our best interest. And I'm trying to set you up for success. But we were talking about, I love the idea of positive leverage. Like, you know, Kevin Hart was like. Yeah, yeah. So, you know, influencer partners can be great leverage points, especially for earlier stage brands. But, you know, in one of our companies, C4, Kevin Hart's an investor and part of it. He's been a great supporter of the brand and been helpful with retailers. He'll do video, you know, video messages and things like that. So if you're a buyer for a retailer and you get something like that, that's going to move the needle for sure.

35:19No, for sure. That makes a ton of sense on all sides, whether it's on the celebrity side and also just on the manufacturing and retail side. Since you both – obviously, you're investors. You're also operators. You've built and scaled a number of businesses. is speaking from your own experience on the operator side, when you did have investors on the cap table, we're not going to call anyone out, but do you think, what does it actually look like when an investor is value-add from an operator? What does it look like when they're maybe not value-add? I think we were talking about this earlier. Some of the investors that when we go back through all the companies we've been part of that are the most kind of memorable, that have been the most supportive and helpful, have been other entrepreneurs.

36:11And oftentimes not part of large investment firms, but they either came in as an angel or they're referred by an angel investor or an early-stage investor. And we had one, Bill at Sweet Leaf Tea. Bill McGaugh, he was one of the original Snapple distributors, and he was amazing. We met him through the Houston Angel Network. But he was the one that convinced me to hire Brian. I was like, I'm going to have to pay him twice as much as I'm making. He was like, Clayton, hire him. Lucky enough, Brian said he was. But that can make all the difference. But I trusted him completely. I was like, I trusted him.

36:53I trusted his heart. He had a phenomenal reputation and experience. And Tom First from Nantucket Nectars, I recruited him on our board at Sweet Leaf. He was amazing. It's just like when people have walked in your shoes, what you're going through versus like, it's just, it's different. I call it, you know, helping write the book versus reading and regurgitating the book. It's just, it's very different. You know, whereas a lot of institutional capital is good at kind of reading and regurgitating the book versus it's very different when you've kind of walked in their shoes. It's one of the reasons why we started ASTO, why I co-founded Caboo Consumer Partners, is because I felt like the institutional capital that we had at Sweetleaf was like their definition of value add was asking for more reporting.

37:38I was like, it's not what we need. Like, yeah, okay, well, Brian can help us give you some more reporting, but we need inside baseball. I want to know what monsters paying for their co-packer. I want introductions to – warm introductions to retailers. is I want help recruiting world-class talent because we see some of these first-time entrepreneurs and you meet somebody that knows how to read a balance sheet and you're like, oh my God, they're going to be our CFO. I'm like, ah, they wouldn't probably be a controller at one of our portfolio companies. So I think having that pattern recognition, we've just found that entrepreneurs have been best at that in terms of value add.

38:15Let's say a company that's doing 5 million revenue, D2C only, comes to you and says, you know, Clay and Brian have retail interests, but I don't know if I should focus on really trying to scale the DTC side of the business or actually go into retail. What should they prioritize over the next 12 months? I imagine that this is also category dependent, but how would you kind of think about that situation? I mean,$5 million is still, you know, relatively small. Small, yeah. Small, small company. So assuming the customer acquisition cost is efficient enough, I'd say continue driving, drive that number higher.

38:54I completely agree. I mean, if the customer acquisition cost is like really high and you're not getting the repeat, like what makes you think it's going to work in retail, you know, if you can't get it online? Obviously, beverage and some of these, you know, or salty snacks is different when it comes to, you know, online versus kind of retail. Totally. Yeah. Yeah, keep on going until all those metrics look great. Okay. Yeah, that makes sense. That makes sense. They just have also more data than to present to the retailers as well. So that's awesome. I've had a question, and then we'll do questions as well, some Q &A.

39:29But what advice would you give your younger self when you were early in your entrepreneurial journey? I mean, I would say I talked to a lot of people earlier in their careers, whether entrepreneurs or thinking about getting into entrepreneurship. And I was in that spot in my late 20s. My 20s, I was more of like a corporate kind of background and was at a venture capital firm a couple years out of business school. That was like the job everyone wanted. and then was looking at investing in Clayton's startup, Sweet Leaf Tea, which was a couple million of revenue, very small business. I was young and naive and didn't realize how hard it is to build something from that stage.

40:11And when Clayton asked me to come in and come down to Austin and help him build that company, for me, it was like a no-brainer. Like, of course, I'm going to do that. It sounds amazing. I'm going to be in Austin. We're going to crush it. This thing's going to be so easy. and everyone else was like, what the hell are you doing? My parents, everyone are like, you're an idiot. What are you doing? That was the best decision I ever made in my career because that jump started getting involved in a whole bunch of other things that have been very successful. I always tell people, just take risk. Risk doesn't mean you have to go start a company or anything.

40:48Just take more risk than you're comfortable taking. I like that. When I'm old and on my deathbed, If I don't do this, am I going to regret it? Yeah. But yeah, I'd say for me, maybe a little more on the spiritual side is like, figure out how to get your ego out of the way as quickly as possible. You know, it's Sweet Leaf in the early days, my identity, it was so wrapped up in the business. And I remember I got Nestle and our lead private equity firm pushed me out of the business after they'd made the investment. and that for me was like the most painful thing that ever happened. I went up to the mountains for seven days by myself.

41:30I was like, oh my God, I feel like I've been emotionally eviscerated because I just felt like in the early days, if the business was a success, I was a success. If we weren't missing our numbers, I was a failure. And then I got fired effectively from the business. And I went up to the mountains. I brought like a journal, a Bible. I didn't read the Bible at the time and some other like Sufi poetry book. I was just like, I got to get my head screwed back on and I got to screw it on differently than it was screwed on before. And the epiphany I had on that trip was like, I'm never again going to allow my self-worth to be tied up into something that can be taken away from me.

42:09Family is one thing and friends, like, yeah, I've got my identity. You know, there's such a deep love with family, but like with an inanimate object, almost like business. I mean, at the end of the day, what really matters there is the relationships and the memories along the way. So it took a lot of work. It takes work daily for me because this Western world tells us the wrong message. It tells us like the answer should be more to whatever we're striving for. And so, yeah, for me, like being able to get my identity, have it not associated with the business or with the outcome, I make way less emotional decisions I enjoy the journey and the process and the relationships so much more I wish I had learned that even sooner but usually you have to go through some death and some falling before you can realize that It's such a good piece of advice It's amazing, both of you We can open it up for questions if you'd like if anyone has questions for them My name's Ashley I'm the owner of a flavored milk company for kids.

43:17What's the name? What's that? What's the name? Jubilees. Thank you very much, Mark. Yeah, so I am really early, about two months in. I feel like I've got a lot of signals of good traction. I'm launching into seven retail chains this summer, and I've got a warehouse of 30 pallets. I feel like I'm ready to go, but I'm trying to decide. They're regionally distributed, for sure. There's West Coast. There's Texas. It's kind of all over. so um but what i have in austin is turning really quickly so i feel like it sounds a little bit like your redbird story where i'm in a disruptive place and like maybe it'll be great but i'm trying to decide like am i being bold or stupid so and going like broad and wide so quickly so early in my journey so i'd love to hear some thoughts on like questions i should be asking myself to help me decide like should i be saying yes to all of these things right now or should i reconsider like going deep in my backyard first?

44:16I mean, I would probably go deep in your backyard first. It's right under your nose. You're going to learn when there's going to be plenty of mistakes and those mistakes are all learning lessons and you're going to catch them so much more quickly. You're going to, you know, when buyers ask you like, where do you want to be, you know, merchandised in the store? You're going to be that much more confident in the answer to that because you're going to see it on shelf on a daily basis. So not that you can't do that because you're going to have some stores here that you're launching with, but just trying to think of like, yeah, launching with every retailer you can in your backyard.

44:51I mean, you can control demos that way. You've got to get liquid to lips. Obviously kids are about the, the pit as picky as it gets when it comes to, to, to taste. But yeah, I would, you know, just because as you're shipping LTL across the country, that becomes a lot more expensive. You can see freight as a percentage of revenue start to go through the roof. But I was like, God, if you can just get to full truckloads as quickly as possible, and you can only do that through volume with those chains or those retails. Are you making it around here? No, I make it in New York. Okay. Just do these for cake.

45:30Shelf stable, I'd imagine. Yeah. But yeah, even if it's just Texas, You know, thinking like, you know, there's what does success look like in Texas? If you were to launch with HEB, Central Market, Whole Foods, maybe some some up and down the street specialty, you know, some other natural like you could probably get to five, six million just in Texas. You could probably do it profitably. But I think five or six million, you know, across the U.S. and 40, 30 something states like that's probably going to be really tough to do that profitably. hi i'm jake i uh i have a tko jerky yeah and uh i just wanted to you mentioned customer acquisition costs so i know you guys have experience across the whole spectrum right like early stage middle stage late stage what would you say are the appropriate like guardrails or percentages in terms of marketing spend and then R &D spend in those different phases?

46:40Did you guys ever have any targets or, you know, thresholds? Or you're like, hey, we're blowing too much on marketing. Like, you need to dial it in. Like, how do you determine it? I mean, like, you know, typically, like, are you more online or retail? It's all online. Yeah. I mean, usually we're, you know, for I'd say sometimes it's earlier, you know, know, it's larger in the early days before you get to some scale, but like, you know, 30 % or so marketing is a percentage of revenue. Once you start to get to scale, it should probably be closer to 20. But I mean, that's kind of the general, you know, maybe it's even as high as, you know, 50 % in the early days, but pretty quickly, you should be able to establish a customer base, get some repeat marketing costs begin to come down.

47:31But yeah, I think, you know, really focusing on that customer acquisition cost, how do you get your, you know, average order volume up? How do you bundle in the right way? Do you have enough SKUs? You know, I'm not worried about SKU proliferation typically online. It's real dangerous at retail, but sometimes you need a good amount of SKUs just to get the AOV up online. Any thoughts on R &D spend and how you calibrate that? Correct? I mean, that should be low. That should be in your kitchen, largely. But yeah, usually, yeah, it should be really low. Okay, thank you.

48:14You've both played in the beverage alcohol sector, which is a sector that is shrinking currently. Do you have any outlook on what's going to happen over there? And what actually happens if a very speech conference comes to you in this sector that is not growing? We try to give them advice, but we're not going to, we can't invest in it. You know, it's, it's, I've made one alcohol investment, or I guess two, beatbox being one, and then one that was personal. But with other people's money, it's just really tough. you know, for us to invest in a category, you know, the strategics are scared of their own shadows right now in alcohol.

48:55Like we've seen, I've seen structured deals get pulled that they just did not exercise call options because their stock prices have all just gotten hammered. Um, so yeah, it's, it's really tough. I mean, there's, there's real headwinds obviously in alcohol, as you said, and, you know, at least for the next few years, there's nothing that, that I see on the horizon that's going to take those away. You know, um, the whole Delta nine thing is here to stay, even if, you know, that's a, you know, just, you know, younger generation, just, you know, there's not drinking as much anymore. There, there are some brands in alcohol and RTD that are doing, doing pretty well, but it's a, it's a, it's a handful.

49:41I mean, Like this is still a bit, it's not, alcohol is not going anywhere. But in terms of like an investable asset, you know, I look at it at a different lens. If it was a, somebody launching a company that just like has no intention of selling, like, yeah, you know, and they, they have something that can create a really unique point of differentiation. And, you know, there can still be very viable businesses, I think that are launched in that category. But, you know, fortunately or unfortunately, we always have to look at it through the lens of like, who is the buyer for this business? Private equity is pulled way back from it.

50:18Strategics, you know, have pulled back. So it's a tough one. We just want to congratulate the room. We have made it through two talks and no one has said AI. So my question is, how are you using AI? How are you recommending your brands use it? Where does it fit into strategy and execution? we actually had we had an off-site uh team off-site about a month ago and we actually had a like a half day kind of session with an ai consultant so it was it was really cool i mean there was a lot of a lot of interesting things the team teams wrapping their uh their arms around it they're teaching clayton i how it works we can't even spell ai

51:03i mean yeah we we've seen it more useful you know just in terms of like using it personally to create PowerPoint presentations, to aggregate all the trade magazines and condense them so we can read them more efficiently each week to help craft, write questions for interviews, landscape studies, stuff like that. But that's kind of been, it's more like a tool for kind of personal efficiency. I do feel like in the CPG sector, it feels like a little slower to adopt across the companies in the emerging brand space in CPG than in other sectors for whatever reason. It still feels pretty manual on the business processes.

51:54Makes sense. Anyone else? Colin. I was just wondering, so obviously having been operators in the early stage in VC, you now sort of growth equity you know what did you like about each what did you dislike what do you enjoy the most you just talked about it said you know the interesting thing i mean i think one of the clay and i both love early stage like we kind of grew up you know we have a soft spot for it. What we don't like about it is not everything is a winner. And in fact, a lot of them like naturally are not going to be winners. You just know that going in. So if you have a venture fund, you know, the way the venture fund economics work are you have a few winners.

52:46So say you have 20 investments, you know, two, three, four of them are going to pay for the rest. And then you're going to have a lot of zeros. And it's really hard to be in that environment where you have to work with companies that in your head are like, all right, this is going to be a zero. We got to move on. But those are people, those are relationships. It's just a very, it's just a harder, harder thing to operate in, I think. Yeah. It caused me to lose a lot more sleep at night, you know, because behind each one of those zeros is a relationship. And, you know, we've got like a fiduciary duty.

53:20So sometimes it's really tough when you're like, you know, company needs money. It's not doing well, other investors aren't stepping up. It's just like a kind of a cram down situation. And it's just like, Oh, God, I just hated having to, to deal with that stuff. So yeah, doing kind of the beauty of later stage is like, you can just sleep a lot better at night. You know, people used to ask me in the early days, like when I was in bed started, you know, kind of professionally investing, they're like, what are your favorite companies? And I was like, Oh, the ones that like, need my advice, and I can get on the phone with them and make an introduction.

53:53And it totally moves the needle for the company. That's probably some of my ego too there. But now they're like, what are your favorite companies? I was like, the ones that are crushing their forecast and they don't need any help.

54:09Right here. George, yeah. I was just going to ask, how do you guys think about rental integration and this alternative All that sort of stuff in terms of leverage, which you mentioned a number of times, and value as investor and operator.

54:29Yeah, I mean, generally in the early days, if you can outsource it, you're typically going to get much better economies of scale outsourcing to a much larger manufacturer that has, you know, automated equipment. And you may only be 2 % or 3 % of their overall production, but you're able to tap into the economies of scale of a very large manufacturing company. Also, it's like CapEx in the early days is really tough. That's when the money is most expensive. So having to invest right out of the gate, sell part of your company to invest in a depreciating asset. I hate that business model. Now, if you've got a product that's just really complicated to manufacture and simply being able to assure really good quality control, if that's a massive moat, then that may make sense.

55:30But typically, if you're able to outsource manufacturing well and keep a close eye on it, that's going to be much more efficient. And then, you know, it's not until you really get to scale that perhaps you start going to do a cost-benefit analysis to see, like, how quickly would this plant pay for itself if we were to bring this manufacturing in-house? Yeah, I would say, you know, if you're a smaller company, you have your own manufacturing facility, you're going to spend, like, 90 % of your management meeting talking about the plant. whereas the value of the company is going to be in the brand which is sales marketing distribution like all that kind of stuff and you're not spending time on it because you know someone's having a baby or you know something's going on at the plant that's causing an issue yes that being said there are situations like at deep eddie we made the choice to build our own distillery right out of the gate because we felt like that was such a unique point of differentiation because 90 % of the vodka brands out there were outsourcing their manufacturing.

56:36So for us to be able to go talk to, you know, waiters, bartenders, restaurant owners, and tell them like, we distill our own vodka. We know exactly the spring this water comes from. We test it. We filter it. You know, that was such a differentiator that was so important to our story that, you know, So I'd say that would be perhaps another exception, is if you feel like it really sets you apart from a positioning standpoint for marketing.

57:12During your talks, you had mentioned that in leverage, you generally see the profitability, true profitability, once a brand hits 100 million and goes forward, right? So is that generally the case across other four categories as well, or what would be different? Can you give them more examples of the main frozen or for that matter, chefs, even snacks? Yeah, I'd say much faster in other categories. You know, at the end of the day, it comes down to margin. Yeah. Right? Like, you know, you've got to know, like, what does great margins look like in this category? And can you create enough value add with your product to have great margins?

57:56And if you've got great margins, then whatever category you're in, that will allow you to get profitable that much sooner. Agree. But then when you're scaling, right, at some point you want to see the advantage of scaling, which you were not able to get those margins early on sometime, like sometime down there. So would you at some point give that benefit or the margin benefit a little bit to the retailer and the consumer as well? Would that be something that would... You mean in terms of the retailer making a higher margin off your product? Or the consumer getting the benefits of doing more markets?

58:40I mean, you want to sell your product for as high as you possibly can before volume really falls off. And from a consumer standpoint, it's like, Are you giving the consumer enough value for the price that you're charging so that they will continue to buy that again and again? Yeah, I mean, margins are just so, I didn't appreciate them near as much in the early days. And it was just so critical that you create a product that you can have great margins so you can have a profitable company. Another reason why beverages and snacks typically takes longer to make money is with DSD distribution, you also have to have a pretty large sales infrastructure because it's like a market-by-market selling process.

59:31Whereas a lot of other frozen and other categories in the middle of the store, you'll have a few headquarter salespeople calling on Target or calling on UNFI or whatever. but you're not going to need, you know, a hundred salespeople out there in all these markets around the country. Yeah. I'd also add one of the things we were talking about leverage earlier and like knowing what the art of the possible is before you go meet with a retailer. Cause you'll have like, we had a situation where one of our portfolio companies was meeting with Target. It was the VMS category. It was a sizable company.

1:00:10They had a nice business online. They were just beginning to move into retail and Target was like, yeah, we need 45 points of margin in this category. We had another portfolio company that was doing a good size business with Target in that same category in BMS. And Target was making 39 points of margin. So I was like, yeah, tell them to go pound sand, you know, in a real friendly way. What? 39 is the bogey. That's that's the go get. And they got it. They got them down to 40. you know but had they not known that they'd just taken it on the chin probably so i say it's like it's really good to know like be able to talk to other companies in the category that you're in to know the art of the possible because once you know the art of the possible you have so much more confidence going in there and having you know those those negotiations a lot of the big box retailers are doing like their own version of a marketplace like best buy is going to be launching the marketplace in August, Target has where you can work with other distributors and get online sales for them first, same with Walmart, some of these other ones as a way to like test, would they want that in your store?

1:01:19Would they want to put it on the store shelves themselves? What are your thoughts on how to leverage those marketplace opportunities with the big box retailers versus just being like wanting to do both at the same time, which is ideal to be like, I want to be in-shopping a target and also a lot of target that they stop pushing towards their marketplaces. I don't think the merging brand, any brands really get much benefit from those marketplaces. How many of us go shop at those versus Amazon or just go to the store? But sometimes it's the only way to get your foot in the door. you know sometimes they're like listen we'll tip yeah we'll test you online and with target specifically you want to make sure that they own the product you know that's not on consignment that's a good sign when they own the product it's a little more of a commitment that hey if this works we're going to put you in the stores and what we've seen a number of brands do that have a really strong on perhaps they're already doing a lot of business you know through shopify amazon or D2C is to be able to redirect some of those customers, even if they take a little bit of a hit on margin, over to a Target.com or a Walmart.com.

1:02:32It's kind of like, you know, Costco is going to test you in a store. Like, you make sure you crush it in that store, even if you're buying half the product. We've done that plenty of times. Like, you know, so we had a brand that had a big business online, and it's like Target wanted to test it online first. And we put Target on the homepage, redirecting consumers from D to C to Target. And Target's like, oh, my God, you guys are crushing it on our online store. Let's bring it into all of our stores. Do whatever it takes. Yeah, I mean, on that note, I remember one brand sponsored a NASCAR car. And they put Find Us and Walmart on the actual car itself.

1:03:17And Walmart was like, oh, my God, this is awesome. This is so cool. So, anyway, it's cool. I think this has been awesome thanks so much Brian awesome

1:03:31and there you have it Clayton and Brian thanks both so much for coming on the show and for making an incredible event in Austin thank you for Eisner Ampner and for Glimpse for being our presenting sponsors on today's show and if you're loving this show please check out the newsletter at theconsiderbc.com until next time thank you Bye.