Oliver Zak - The $50M College Startup That Scored A Shark Tank Deal

25:20I would confidently say over 500 over the last five years. 500? Probably, yeah. Yeah. Everybody listening, you're on Shark Tank. You get the money and you're still getting that many no's. Yeah. In our case, listen, I think it's particularly tough for us because we're raising money from institutional investors who more often than not know nothing about tattoos and have always classified tattoos as sex, drugs, and rock and roll. We don't really touch that side of things. Very early on, there was a lot of doubt around how big the market actually is. I had all the data pointing to the fact that, hey, in the next three years, 51 % of Americans are going to have a tattoo, which is insane.

26:05But people still look at it as this micro niche, but it's actually a mega niche. I mean, it's 51 % is pretty insane. So a lot of our early conversations and conversations today, even when we're still raising money is, how big is this market and are we able to capture it? And that is the importance of us raising VC soon after Shark Tank is we had no choice but to go all in or else we'd slow grow for the next 35 years. Accelerate the first mover and just get that escape velocity. Right. Quick quote for you guys. This blew my mind. In 2012, 20 % of people have at least one tattoo. In 2024, 48 % of people have at least one tattoo.

26:50Insane. And the CAGR, the compound annual growth rate is at 9.7, which is fairly high. So you definitely picked a good category to go into. So you have Mark, you're talking to these VCs. One on Crunchbase, I was very, very surprised with what I saw. I have not heard the name Yellow Wolf in a while or Riff Raff. I saw Stefan Diggs as well. It seems like you have a good blend of, you have the shark, you have VC, you have athletes, you have musicians. How do you look at how to communicate and how to pitch kind of those different pockets? Let's talk about VCs versus, let's just call them celebrity investors.

27:27What do those conversations look like and how do they differ? VC is obviously, they're going to look at the hard numbers of the business, right? So that's all about having a healthy business at the end of the day and how effectively you communicate the status of your business and the potential of your business to them. Contrast that with the celebrity crowd. It's often more of a conversation of how are we going to do this together? I think every VC in the world says that they add value to their portfolio companies, right? Like that's like the classic joke. But the celebrities, it's oftentimes how do we work together on this?

28:05And at least Mad Rabbit, we really try and line up the incentives so that they're incentivized to push it. So what would you say are one or two of the biggest pieces of advice you would give on how to raise money? Number one is it's a FOMO game. Very much momentum-based. Are you in or you're out? The round's almost full. No one wants to be the first mover, right? Everyone wants to be the last check. So before you have the momentum, you almost need to create it and believe it yourself. If there's momentum and exciting conversations happening, be loud and proud about them because that's what gets other people excited about investing.

28:44Another piece is just going back to the no's. Don't let a no be the end of the conversation or else you just wasted so much of your own time. Love those no's, baby. Love those no's. Because that's where you get your valuable feedback and that's where you get your more tailored introductions as well. So I've never raised big, big chunks of money, one, two million. I've never raised five million, 10 million. You get in a fat check like that, where does it go? Deployment of capital. That's a great question. Where are the big things that it goes to? One is hiring. And I think it depends on what stage you're at, but I'm specifically speaking towards C to NA.

29:20A lot of it is getting the right team around you. Once you have the kind of team that you want to build around, Obviously, you want to give them the autonomy to make their hires and build their teams out. And it's kind of just a natural process from there. So hiring is big. And then second is, how are you appearing in the market and what are your ambitions for that? So for us, after Apple made the iOS 14 changes, our advertising landscape, as with everyone else's, dramatically changed. We used to be first transaction profitable on D2C and very quickly we were not. So what that meant is we had to sprint towards Omnichannel, pitching different retailers, preparing what those launches might look like.

30:03So another portion of those funds then went to support our Omnichannel rollout. Great transition into retail. And again, I mentioned on the last episode, I want to mention again for people not listening, the iOS update was basically an update to Apple phones that if you were advertising on Meta, Facebook, or Instagram, you basically couldn't see who you were advertising to. Just you lost all of your efficiencies. So at that point, what percent of your marketing mix were you spending on Meta? Was it like all your money? Yeah, 100%. Because it was first transaction profitable. You want to acquire as many of those customers as possible.

30:35I think for tattoos, it hit us particularly hard because Meta used to know if you were scrolling on Pinterest, looking at tattoos for the last two hours, that you're probably a likely candidate to either get a tattoo soon or buy Mad Rabbit. So when Apple severed that tie, it made it a lot harder to track who is actually a likely candidate to purchase from you. That's when you really find out a strength of brand and then, as you mentioned, to go omni-channel. So you're in D2C, you're in Amazon, you're in retail. I want to go super deep into retail because, again, you had your company in college.

31:13This is your first kind of big company and you're going right to the big boy. There's a couple. We'll talk about GNC, Urban, and Walmart. Walmart is one of the most colossal. I deal with Costco and I've seen what that's like. I can only imagine with Walmart. What is it like dealing with Walmart?

31:31People warn me about Walmart in a way that I don't necessarily think is warranted or has been my experience by any means. I think any major retailer where they're giving you millions of people walking down your aisle every single, like they can be picky and have demands for your brand. I think you should expect that. In our case, Walmart has been a fantastic retailer for us. You know, they get everyday low price, so they're always going to sell your product for the cheapest out there. But at the same time, outside of that, like they're not dinging us with any unnecessary charges. They've been very amicable partners.

32:11And the interesting space for us within Walmart, where we sit is we're in the naturals category, which right now it's about 60 % natural products and 40 % emerging brands. Is there a tattoo aisle or are you guys creating? I want it. I want a tattoo aisle bad. And that's what I'm working to do. So we launched in naturals, which is again, like half natural, half emerging brands. Jake Paul just launched next to us with as W brand. But it's their attempt to compete with Target with cool brands. For us, I think that it's a really good space because it allows us to have more flexibility in terms of like, we want shelf strips and we want signage, all of which is in an effort to promote these new brands, which is kind of their initiative anyway.

32:58So as a new brand in Walmart, I'm not sure historically, and I'm sure it depends on the aisle you're in, we've had a fantastic experience. Let's rewind. How'd you get into Walmart? Did they come to you? Did you go to them? How'd that work? No, we pitched them, I think, two consecutive years. Ultimately, we ended up finding a broker called Team Direct in Bentonville, who I highly recommend. They've been great partners to us. But these brokers who are oftentimes based in Bentonville have existing relationships with thousands of products in Walmart. So they have a little bit more leverage to get you in the room for line reviews and pitches and things like that.

33:33Bentonville, they're based in Bentonville, correct? Walmart? Yes. So if you use a third party like this company, they understand and know the landscape and what are they actually doing for you? Are they negotiating the terms? Are they negotiating the shelf space? You mentioned signage for people listening. Signage is like point of purchase, end caps, putting your brand all over the place so people when they walk by can see it. What does a third party like that do for you? They handle all of those conversations as an intermediary. So we meet with them biweekly and we also meet with Walmart directly with them biweekly.

34:08So we're involved in the conversations still, but they're the ones who are providing ops support and letting us know if a shipment is getting delivered late. I think a lot of their value comes by way of just like keeping us posted on the movement of the business and the ops side of things. So how do you define success in there? for me, a tagline that I've heard probably the last 10 plus years, it's not about the sell-in, it's about the sell-out. You get in there and if you shit the bed, you're out. So you go in there outside of sell-through, how are they defining success in that relationship? For us, it's an interesting thing because they have no true comps for tattoo care, right?

34:50Like sure, they could probably compare us to Juergens or Aveeno, but is that really going to tell them if Mad Rabbit's a brand worth having? Probably not. So it's kind of their perspective that it's not really a great idea to benchmark us against them, which is good for us because we're not being held to those standards. But the flip side of that coin is we then, it's kind of on us to project. Sales? Not only sales, but also inventory. If they can't tell us how much they expect us to sell, it becomes completely on us to guess how much we're going to sell. So how they do it is they kind of in our case, they let us sell straight through for a year.

35:30And I think now that we're entering year two, they're going to start comping us to ourselves. What does that mean? Are you growing year over year? Are you selling more product than you did last year? We're a more premium product within Walmart, our price point. I think we range from $13 to$28, whereas that's very high for skincare and Walmart. And you said everyday savings. There's stuff called SMU for the guys listing a special makeup unit. Are you making special product for them? Is it the same product with a lower price or is it the same? No, it's the same products, same prices. I mean, we price match on our website and Amazon as well, but they do everyday low prices just that Walmart sells it for the lowest price.

36:09Walmart, I would imagine, is main competitor is Target. If you're in Walmart, can you go and Target? it? It's difficult, but brands do it. It depends on the brand. Typically, Target doesn't want a brand in Walmart because it's technically probably a little bit less brand accretive than going the other way. So I think it might be easier to go Target to Walmart, but there's interest. What do you think is the biggest lesson or lessons you've learned with dealing with a behemoth, a retailer like Walmart? It's been fascinating to watch what drives the needle. I mean, we've voraciously tested trying to see what drives spikes in sales in Walmart.

36:54And it's not ads and it's not rollbacks and it's not their internal marketing initiatives. It's TikTok. So that's been a fascinating learning for me. It is where people are trying your brand for the first time or hearing about it. And then that drives trial into Walmart. It's the only thing that we can correlate a spike to is virality. Are you talking about that you're potentially paying affiliates, team members, and influencers to say, go get the product at Walmart? Or are you running co-branded marketing with Walmart to say, try it at our store? What do you mean by that? We do the former, but what I'm referring to is just pure virality.

37:28So I think like the TikTok shop model, right? If you can get a bunch of influencers posting about Mad Rabbit, it doesn't necessarily need even say Walmart in it. And that just drives people's interest in trial. And there's a Walmart in every city, so it just naturally drives traffic there. So you're saying your analytics team is seeing a direct correlation between a spike in videos going viral on TikTok and sell-through in Walmart. Correct. It's actually the only correlation we can find. And when I say TikTok, I mean reels can go viral too, right? Just that short-form video is what drives. I want to go deep into that content team of yours.

38:03So let's just stay on this for a bit longer. from a money raise perspective, you talk about leverage and momentum. I think there's a lot of synergies to retail. Would you recommend to anybody going into retail, you have to have some sort of signage in store to support your brand or would you wait to go in if you didn't get that supporting signage? I would never launch retail without supporting signage, at least in our case, because we have a nuanced product that's never existed before. Like if Mad Rabbit was not in Walmart, the person who just got the new tattoo would be buying Aquaphor anyway, right?

38:34So we need to invest in, hey, tattoos are now taken care of in Walmart. Here we are, and here's how you do it. So for our brand, it's critical. And to go above and beyond, I've seen it. Costco is so crazy where sometimes they lock you in when you have less leverage to pay an exorbitant amount of money to do email blasts. For you, when working with Walmart, you have the ability to pay more money to do additive marketing within their ecosystem, correct? There's a few options. One is a program called Ibotta, which is kind of like their cashback program. So if you're a Walmart shopper and you shop on the app, brands who enroll in Ibotta have cashback for them to spend on their app.

39:14That moves the needle a little bit. And then they have rollbacks, which is discounted pricing for a certain period of time, which I believe that margin then falls on the brand to cover. So it costs the brand a bit of money, but you also get a little flag in your aisle that says rollbacks. outside of that, not a ton of marketing initiatives. We've submitted for a few that we control, like, hey, we want to do this tattooing event and we want to represent Walmart and drive traffic to Walmart. But it's been very much on us to do that. When you look at your brand holistically with retail, Amazon, and D2C, Walmart, how many doors are you in in Walmart?

39:561 ,800. That's a lot. Have you seen cannibalization of sales on D2C or Amazon or kind of all ships rising? Yeah, that's a very relevant opportunity, I'll call it, in our business is we're seeing a huge decline in Shopify. Most, I theorize, are going over to Amazon because especially if you're a tattooed person, you're stereotypically not planning months ahead, right? So you're not ordering your aftercare ahead of time. Amazon, you get it in two days. Worst case scenario, you wait 48 hours to take care of your new tattoo. too. Walmart, it's really, really tough with retail. The retention picture gets muddied very quickly.

40:36But what we are doing right now is looking at renovating our customer experience on Shopify. Because right now, you can't get it quicker than you can get at Amazon or Walmart. It's actually a little bit pricier technically. And unless you're like a brand loyalist who loves the Shopify store, or if you're a first-time customer who just got educated by the website, there's no real reason to repeat purchase there. So we're looking at membership and rewards programs and all of that to reinvent the Shopify experience. It's so devastating, the fact that Amazon can ship it faster than people's own D2C.

41:14And once you get that first sale, I would rather buy on Amazon for the most part. Oh, I buy our products on Amazon. I could get them for free shipped from my warehouse, obviously in LA, but I buy them on Amazon because I'll have it in a day or two. It's unbelievable. We might want to cut that part, but you guys should go to madrabbit.com and buy it from there. Just being real, like Amazon is, it's a necessary evil and it's changed our business for the better. It's been amazing for us. I mean, it's just the black box and you don't know who's buying, which I don't know how that's going to work out long-term, but that's a whole different conversation.

41:47So who's the dream retailer? I think Walmart was it. I mean, we had to, Mass was always the goal. Tattoos are mass, right? So that's the right place for us to be. I think we can succeed very well in Target as well. So perhaps there's an opportunity for us to do that. The only other place I would like to be that we're not is beauty, which more than likely than not is going to be Ulta as opposed to Sephora. We'll see. It's my least favorite store to go with my girlfriend. Which, Ulta or Sephora? Sephora is the Home Depot for the females. Have you been to an Ulta? I have not. I've been to Sephora many a time though.

42:22and I absolutely dread that place. Yeah. The ladies love it, but it's a great place for us because permanent makeup is a parallel industry for us. So not only are half of women tattooed now, but they also get their eyebrows permanently done and all of our products are just as well suited for that. I feel like you guys are creating this category specifically in retail. You're really turning that stigma around. I mean, you have a finite amount of ingredients. Obviously, say there's a formulation. How are you looking at competition? So up until about five months ago, maybe, we were the only skincare system for tattoos.

43:02What I mean by that is we're not like a one-off tattoo balm. There's plenty of those companies, oftentimes very mom and pop. But what we've seen is a lot of the legacy competition is now coming out with like lotions and sunscreens and things like that in direct competition with us. we are the biggest player in the space by three or four times already. I actually, the way I think about competition is all ships rise with the tide. I really, really want some of these brands to figure it out so that they can sit on shelf next to us in Walmart so that the Walmart customer says, oh, I have a new tattoo.

43:36I'm going to go to the tattoo care aisle instead of, hey, do you happen to sell Mad Rabbit? And where is that? I feel really good about our ability to compete and win on shelf. So it's actually kind of like I'm waiting for them to catch up a little bit. Because if you think about it, for the last six years, we've been the only brand spending money on this education effort that there is now tattoo care available. So if other brands can put some budget towards that as well, we'll benefit. Yeah. I mean, the reason why you're going to win is brand. Let's dive into that now, because for me, community, content, storytelling, your affiliate team, your pro team.

44:14I went deep onto your website, your funnel, your YouTube, your Instagram. You guys are just absolutely destroying everybody from a storytelling perspective. Let's start super macro and just talk about just overall marketing and your marketing mix. How do you guys market? So we have a very broad consumer. The tattooed person is not the biker or the rebel teenager who wants to piss off their parents anymore. It's military servicemen and women. It's chefs. It's skateboarders. It's moms. The audience that we have to speak to now is so broad. So the way that we like to do it is we pull figureheads from different categories, if you will.

44:58Stefan Diggs, NFL player, Leticia Buffoni, world-class skateboarder, and the list goes on and on depending on what industry we're talking about so just picking niches one figurehead to tell your story and your message as a starting place right we've done plenty of UFC guys for example fighting is a big tattoo segment for us but we have a very broad consumer that we have to speak to so we have to kind of walk a line of being engaging but not offending towards any certain population which is kind of interesting whereas you look at a brand like Liquid Death and they made their bag off of polarizing people, right?

45:35There's people who fucking love them and then there's people who are like, I don't get it, what is that? So we went with the broader approach. Obviously, there's a lot of numbers going on. You guys are omnichannel, you're spending in a lot of different places. I'm starting to see that the traditional media buyer, they're starting to kind of become less and less relevant. Like our head of e-com is now not only doing the ads, but he's doing them and performing better than an outside media agency because he's just taking the time to make sure the creative is native to the placement. So do you guys have someone kind of driving in the marketing department, the analytics, or is that more of a cross-function with like finance and accounting?

46:14I would say that's actually where Salam's skill set comes in, the heaviest. So he, for the first two years of the business, did all the media buying himself. We then offloaded it to an agency. We've made a few switches since then. As has everybody. As has everybody. I mean, it's insane. it's also an interesting industry because it's one of those where they promise you or they allude to where you can be and how easy it is to get there and then you make the switch guys don't buy it it's very rarely the reality so he is very much the analytical one holding the media buyers accountable now we have a creative team who works with Garen to inform him on what hooks are working, what we need more of and then he brings that into the content and then Salam's more on the analytics side digesting the ads, figuring out where we should scale up and down with them.

47:03And where are you guys spending money? I would assume the traditional meta, Google, organic is obviously huge for you guys. I see you guys posting a lot. Where's the money being deployed from a distribution perspective? I would say way too much meta. I mean, every brand in the world right now is trying to get away from their dependence on meta. It is still the best top funnel, at least for us. Call that the crack pipe. Everybody's trying to get off the crack pipe. It really is. I think TikTok's a new unexploited crack pipe, but it's a little bit harder to crack. I have no doubt that a tattoo brand can do it.

47:35It's just been more difficult than I would have expected. So all that to say, I'd say we're 80 % meta and then 10 % TikTok, YouTube, and then 10 % testing bucket, which is podcast, radio. We did a couple of billboards just to make sure we're always getting some learnings. From a resource allocation perspective, though, I mean, over 50 % of the allocation is just towards creative, which then is getting pushed on your organic, correct? Yeah. I think that's just the future is people just putting a heavy, heavy amount of allocation to just deeper storytelling, more quality, more quantity. And ultimately, obviously, direct response still works, but you see stuff go crazy on organic, you can then make that an ad.

48:22Have you seen Nutterbutter's TikTok? I have not, no. I'm not a TikTok. I'd like to go quickly into TikTok because you know what happens. Stuff starts. Facebook originally was college students and then obviously those people get over so it's gotten more mature. TikTok started super young. It's gotten more mature. We haven't had any success on TikTok and I keep seeing all over LinkedIn and X, all these companies saying they're smashing it on there. What have you seen on TikTok? because we haven't seen a damn thing. I've seen a lot of my friends do very, very well on TikTok and they're not necessarily cool products.

48:58Low MSRP though, low ticket price, right? No, not only, but yeah, a lot of like makeup brands and things do quite well. One of the best brands I know that's doing well on there is Gym Reapers. It's like gym equipment, weight belts, things like that. They absolutely crush it. For us, I think it's still very much like we're in the learnings of it. I don't even have TikTok on my phone. That was like the first social media where I was like, fuck it, I'm too old for this. But it's become like an essential business tool. Last I heard, like it was getting banned or something with China. I deleted from my phone.

49:30I saw like a bunch of scary posts saying that they're like tracking your phone through it. So I just stopped. Definitely need to get an expert in TikTok on this podcast because some people, I know some people that are allocating almost as much money on TikTok as they are on Meta, which sounds absolutely mind-blowing to me. Yeah. The goal, right, is TikTok shops, you get a bunch of creators to create, you send them samples and seed them, you get them to post and then one of them goes viral. When one of them goes viral, I don't know, 1200 other people make TikToks with it and they sign up to get free product and it's a self-serving funnel.

50:07We just can't get the first one to pop. So I think that's kind of the name of the game, at least currently. So you just touched on the sauce, which I'm so excited to talk about, which is your army of, correct me if I'm wrong, I thought it was 7 ,000 plus affiliates. You have your affiliates, then you have your pro team, obviously content creators, influencers. When you really think about it deeply, this is the craziest flywheel, how it's all kind of working. Can you walk us through how the affiliate program works? What is this pro team? And let's just keep talking through it because for me, I think that is your secret sauce.

50:44I should be gatekeeping this. This is why we're here. We got to get people to gems. These are the keys. So we use a platform called Social Ladder. And what that enables us to do is create a community of ambassadors who, you know, we just drive signups through email or, you know, there's a section on our website for those who are interested to click on be an ambassador, right? And what this program allows us to do is serve them extremely customizable tasks in exchange for extremely customizable rewards. They automatically get 20 % off lifetime when they sign up. So it's a really good deal to be an ambassador.

51:20And then beyond that, they make 20 % commission on every affiliate sale that they make. You got a nice unit economics. You're giving 20 % off plus a 20 % affiliate. But think about how important word of mouth is for a brand like us where tattooed people tend to hang together, right? If you can give your friend 20 % off, they're going to use it for life. I mean, that's low customer acquisition for us. And is this the Athletic Greens model, that 20 %? Is this cookied through a link? Is this cookied through a discount code? Are they getting it in perpetuity or are they getting it on one sale that they refer?

51:53As long as their code is used, they get commission on it. Wow. So we have, yeah, as you mentioned, an army of 7 ,000 ambassadors who, you know, some of them are very motivated by the affiliate side. The other portion couldn't care less. So that's the magic of the social ladder tool is, yes, there's like a traditional affiliate element to it. But on the other side, we can say, post a TikTok, tag Matt Rabbit, use the hashtag Walmart, tag Walmart, and make sure that you're in the aisle holding our product. And they have now implemented AI that actually checks that. So it's actually less and less time on our side validating that the challenge was completed.

52:30Embedded into Social Ladder or just in general? Yes. Embedded into Social Ladder. Shout out Social Ladder. It's amazing. I love it. They need to cut the check. Highly recommend. That was a very, very customized granular ask in conjunction with supporting the sell-through at Walmart, which, by the way, that's genius. That's just one example of how we can mobilize these 7 ,000 people, which contributed to a massive Walmart launch for us, right? Guys, that's a little bit of a secret. I remember, I don't know now, I'm aging myself, maybe eight or nine years ago, when a brand I was with got into Bloomingdale's, we did a little backdoor deal where someone would go in, buy a hat, and they'd come to the office, and we'd give them a free hat to push through that sell-through.

53:07It's a little different, but - It's the same nitty gritty, like you got to mobilize your fans. So give me another one or two different examples of something that you would have them do for you. And then context in, what do they actually get for that? Because they get a 20 % if they drive the sale. But if someone is going and doing work for you, what are they getting? Free products? Are they getting cash? Like, what does that look like? So you earn brand points and then you redeem your brand points. So say that Walmart challenge I was just telling you about, say that's worth a thousand brand points, they can either redeem it on free product, they can redeem it on merch, which a lot of them opt for, or they can cash out with PayPal, which I think is the really cool feature.

53:49So not only can you make your affiliate sales, but if you're socially enabled and you're posting a lot, which by the way also drives your affiliate sales, you can make more money as well off of the brand points that you then convert. What's the cadence in the amount of things that you're asking them to do? Is this weekly? Is every single day? You just keep asking, asking, asking? We have a couple evergreen challenges, like join the Discord, which promotes conversation, more engaged ambassadors. Follow us on Instagram. That's another evergreen one. But we also do monthly challenges, right? So we have stuff that's unrelated to the brand, like post a picture of your Thanksgiving meal, which just encourages people to share more about their lives and interact with Mad Rabbit in a less transactional way.

54:32We have an artist segment. So we have ambassadors, then we have artist ambassadors, which I think there's 800 or so. We'll do a challenge that's, hey, draw a mad rabbit or a jackalope inspired flash sheet, which is a flash sheet, just tattoos. And that gets them creating and creating for the brand. And again, it's feeling less transactional. So we try to make the challenges effective for us, but also fun and engaging. And what's interesting about this is obviously you backed into kind of the unit economics to make sure this is profitable. But I think a lesson that I've learned is I stopped doing content a long time ago because I'm like, oh, I'm the CEO of the company.

55:10I can't be doing content. But I know that lowered the CAC just because we were putting out more content. It's obvious. It's common sense. I think too many people just don't look at stuff for what it is and just say, this is common sense. Like you're going to pay someone significantly more money than what you're probably paying people out. What do you mean by that? No, I'm saying like, how much would you post for someone with a thousand followers to post in their Instagram feed? I'd probably pay them a hundred bucks. I'm sure that the delta at which you're paying out versus the hundred, I'm sure that it's a win-win for you.

55:38Oh yeah, definitely. It's a win-win for everyone because they make a healthy amount of money off of it as well. Yeah, they're happy about it. So you have this militia of 7 ,000. It seems like these regular ambassadors, which could be anybody that wants to potentially make money or loves the brand. then you have the artist ambassadors I think one of the genius things you did is you built out this pro team which further kind of accelerates to make you guys kind of the preeminent brand in tattoo you're getting the social proofing these are really true real tattoo artists that are endorsing your company what was the plan behind that?

56:15it's kind of the same with any industry I think like the bottom 99 % looks up to what the top 1 % of tattoo artists are doing and they want to be like that and they want to be that successful and they want to replicate it. So for us, we looked for artists within that top 1 % to draft our pro team. I think we only have 14 members on the pro team now. So we're very specific and slow about growing it. What is the filter for that? Why do you pick them? That's a good question. One is obviously outstanding art. So they need to be incredible artists. Two is we really push for diversity tattoos increasingly still are are very very derivative in style like there's probably a hundred times the styles and different kinds of tattoos that you can get today than there were even five years ago so diversity of you know just visual art so we don't want all the artists doing the same kind of tattoos and then they need to be some sort of mover in some way right like Some of them are very dedicated to philanthropy.

57:15Others are very dedicated to being teachers on YouTube. And we like to have these conversations with these artists and understand what makes them tick and what their passions are outside of tattooing, which oftentimes they're not dedicating enough time and resources to because they're spending all their money tattooing. But that's where Mad Rabbit can get behind them financially, philanthropically to help them really scale and achieve their dreams outside of tattooing. Perfect example, Pony Lawson has, I think when we started working with him, he had 40 ,000 subscribers on YouTube and we've been in business with him for a year now or so, a year and a half.

57:53And he's cracking 200 ,000 on YouTube soon. So by giving him the platform, we're able to grow together. And that's kind of like the beauty of what the pro team can be. And that's the criteria that the artist needs to fit into is they have to be on board with growing together. You mentioned Discord. I guess taking a step back from a macro perspective, you've built a great community. What are, let's say, two tips to building a sticky community? The critical thing is you're going to get out of it what you put into it. I think a lot of brands talk about community and it's a bit of a side initiative.

58:36You really need to go all in if you want to reap the rewards of it. Like we have a full-time community manager on our team, for example, who not only is moderating the discord, but he's writing the challenges for the ambassadors. He's engaging with them on a daily basis. He comments on their Instagram pictures. Like the brand needs to be humanized in order to create a sticky community. So that's having my employees be chatting on Discord so that they feel like, oh, I love Mad Rabbit. How cool is it that I get to talk to Oliver every once in a while directly? So I think showing up is actually more than half the battle.

59:09The other is making it about more than your product, right? If Discord, I don't think that there'd be constant conversation about tattoos. That's just not realistic. We have a Flex Your Ink channel in there where every time you get a new tattoo, you post it, and then people react and they engage on it. But a majority of the conversation is about, hey, how's your day going? Or what movies did you watch last night? Or what did you cook? Like it's kind of a clubhouse approach as opposed to it being like, no guys, we only talk about tattoos here. So we create like movie nights and different channels to facilitate and organize that conversation.

59:49But again, like these people aren't just going to do that by themselves. They need a brand to get behind and rally behind. So that's where it's important to be showing up in those channels. What about this place? This is so multifunctional. Contextually for people listening, I am in a beautiful, I don't even know what you would call it, office slash studio slash content creation slash photo studio, tattoo studio, everything. How do you look at this as the hub of the brand? It's everything we needed it to be. So Garen did a great job at coming up with a very modular vision. Right now we're sitting in a podcast studio, but tomorrow someone could be tattooing here or the DJ booth could be here because we're throwing a party or whatever it may be.

1:00:32Everything is very movable and moldable. It's not the biggest headquarters in the world. So I think that's kind of a necessary part of it. But what we're standing in is an opportunity for us to create tattoos as a brand, film them, put the artists who are tattooing on a pedal stool all while having the Mad Rabbit logo in the background. So it takes away the burden on our artists to film that content themselves. That's what we built here is Tattoo Shop slash Content Studio because that's our engine, right? That's what goes into the ads. That's what creates our organic content. That was kind of the vision.

1:01:12This goes back to just having common sense. I mean, obviously this pays for itself back tenfold. You don't have to rent a studio to shoot photos. You don't have to rent a tattoo studio if you want to do content of people actually taking tattoos, it pays for itself. How much does something like ballpark like this cost a month? 20? 16. Wow. Yeah. We're in a very good area in LA. Like I don't think you can get deals outside of Arts District and downtown LA like this. That is crazy that you pay 16 for this place. This is an absolute steal. Re-up that lease. Pitting back into just marketing as a whole, looking back it's been five years going on six what can you look back on that has been the single most important marketing initiative for Mad Rabbit

1:02:00take your time is it a bad answer if it hasn't happened yet I think it's ahead so we started going direct to consumer and that's why we were able to grow so fast no brand, there were a few mom and pop you know tattoo products before us but they all tried to sell through their tattoo artist friends and that's great for your community but it's not scalable right because it's very fragmented there's no chains in tattooing for the most part there's no way to like force that channel if you will so we decided to go d2c first then into omni channel as we talked about but what i think will be the most pivotal opportunity for mad rabbit is nailing the industry side of this what i mean by that is creating products now for tattoo artists.

1:02:48There's several products in a tattoo process that an artist needs, a glide being one of them, which just lubricates your skin so the needle doesn't snag. But a client would never buy that product. It's strictly for the artist. So what we're doing right now is we're creating these better for you products, getting them in the artist's hands, which the hope is that it then makes the aftercare recommendation that much more natural for them. and we talk about a flywheel, right? Someone who just spent the last six hours packing your skin with ink and it's raw and it hurts and you ask them how to heal it.

1:03:20If they say, oh my God, Mad Rabbit's the best stuff ever. It's this new brand, you got to try it. You're so much more likely to pick up our SPF next time you walk down the aisle in Walmart and you see us because you know that it's a trusted brand for tattooed people. So that's kind of the flywheel. Yeah, I mean, the tattoo artists are your best salespeople for sure. Exactly. It's not unlike a dentist telling you to use an Oral-B toothbrush. You're like, maybe I don't need one, but a tattoo fucking hurts, so you're going to listen to what they have to say. The product future lies building out products specifically for the tattoo artists to then sell more into the LTV and into more products.

1:03:57Yes. Another part of that opportunity is the retail opportunity within tattoo shops. So because there's been no brand worth selling, No tattoo shops, for the most part, sell anything. So there's a whole other retail initiative where we have these 30 ,000 tattoo shops in the United States that don't sell anything. Probably not unlike what Paul Mitchell was staring at 60 years ago when he said, why don't these hair salons sell anything? And we have the opportunity to create a retail channel where the shops make a good amount of profit and cover their overhead with something outside of their time and services.

1:04:31So back to why are tattoo artists anti-corporate? I think it's partially just kind of how they were brought up. But I think as the industry becomes more standardized, the businesses are going to do better. You don't need to be tattooing 10 times a week to cover rent if you're making half of that on the products that you're selling. Makes a lot of sense. A lot of our listeners are new entrepreneurs. They're just starting something new. What is the single best piece of advice you would give to someone if they were looking to build a community and a brand ambassador program today? Where do they start?

1:05:05I think first you need to be realistic about what drives your community. I don't think that community is necessarily a worthwhile effort for something like, I don't know, I'm trying to think of something not sexy. Some sort of substitute product like paper towel or something. Right, paper towel. It needs to be a lifestyle around it. Community is probably not going to work. But even down to a local coffee shop that you're starting, there's people who will, they post their coffee all the time. So why would you not set up a program that rewards them for doing so? So what I would do is I would really figure out what makes your community tick, right?

1:05:42If it's coffee, what else do people that like coffee like to talk about? And then our first step was building our Discord. So we noticed that tattoos on Reddit were like a highly engaged upon subreddit, more so than baseball and cats, surprisingly. So there's a natural fire. Are baseball and cats like big Reddits? I mean, you'd think so, right? I don't know, but it's one of the larger subreddits and that gave us validation that people are willing to talk about tattoos and tattoo adjacent things on the internet. So that gave us the confidence to then take the step of bringing that onto our own platform with Discord.

1:06:16We saw that we could facilitate conversation. People time and time again were showing up every day. Quickly VIPs emerged and that's when we were like, okay, how can we create a program that actually rewards these people for their time that they're spending with the brand? you're 27 years old and you know i checked online we're talking now we talked a bit before this what's your biggest failure have you had a big failure hell yeah oh my god yeah um hit us with one or two because i i don't know what that is i think i could have a whole podcast on failures that'd be a good podcast that i've had it it would be disgusting and long i think most of them have been in times of lonely solitude as a CEO, like, hey, I really could have handled that better.

1:07:04I learned this from, whose book was it? I think it was Ben Horowitz. Take care of your people first, then your product, and then profits. And I try and live by that mantra, but people management's not easy, right? And no one's always going to be happy, but there's certainly been times where I've felt like I failed my employees. So that's, I would say, the biggest failures that I have. And that's kind of like just what comes with the road of being a CEO. You have to make tough decisions sometimes and not everyone's going to be happy. I think failure in the truest sense is when you stop trying. We've hit so many roadblocks as a company, whether it's out of stocks or missed deadlines or botched holiday sales, whatever it could be.

1:07:48but like really the only failure at the end of the day is when you decide to call it quits and even then i think we built something so revolutionary and industry changing that i this it can never be a failure in my eyes at the end of the day so in the same way that i take no's as like a a yes and or a yes but um i try and look at failure a very similar way like digest what the lesson that needs to be learned is and don't make it again always and only make mistakes once. That's something that I've always thought in my head. You want to make them as quick as possible just once. And learn from other people's mistakes because that's like the most valuable thing is like surround yourself with other entrepreneurs who have made the mistakes for you and listen to them.

1:08:32And that's why I think you should do maybe a segment on failures because it's so true. You can avoid these things. What is the biggest lesson you've learned from Mark Cuban? Mark Cuban's best advice is spend less and make more. No, I'm kidding. He's been a very... That's decent advice though to start. Yeah, it's more so like how do you actually do that? But he's been a very good partner in terms of like providing perspective on what it means to raise VC. He in general is like very against raising money. On several occasions, he actually voiced that we shouldn't, ultimately ended up disagreeing with him.

1:09:14His famous line in Shark Tank, well, why are you here? Yeah, exactly. And he believes that you need to have a big reason to do so. And I don't disagree. It's a very serious decision to get on that VC treadmill. And I have plenty of regrets about doing it. And then I ultimately come to the perspective of we couldn't have done it without it. but his perspective has always been and the advice that he's always given has always been very founder first like don't delete yourselves to nothing and just grow slow which I think is counterintuitive from someone like Mark Cuban you'd expect him to be chasing the growth but he's so much more about building a strong stable company and has always been the voice of reason pushing for profitability all along What is your biggest regret of raising money?

1:10:04Um, besides that valuation on Shark Tank. Biggest regret of raising money is I think it makes the hard times harder because the weight that you have on your shoulders of having taken other people's money is very, very serious, or at least I take it seriously. So in the, the down times or the scary times or the uncertain times, mental health wise, it just really compounds at once. Um, other than that, I think it's a necessary evil if we wanted to, to have this built in 2024. So, um, I don't know. I couldn't have changed it. It was very necessary for our path and our journey, but, um, it's not without its headaches for sure.

1:10:44Makes sense. All right. We're going to, uh, fly into some segments here. Had a great time thus far. Me too. Let's do a lightning round. Uh, I'm just going to fire off some questions. Tell me what you're thinking. Biggest influence. Biggest influence, uh, my father and because of that journey that I shared at the game. The GOAT. The GOAT. John Zach. Reinventing. Shark Tank experience in one word. Thankful. Most valuable college class. Financial modeling. Finance 301, Miami University. How's your Excel chops? One to 10. Today? Yeah. Not good. I lost all my shortcuts. Do you like VLOOKUPs? Like simple stuff?

1:11:24I could throw down a VLOOKUP. You gotta be at like 7.5. My shortcuts are gone. I'd give it like a 6.8. That is my biggest regret is the only thing that I wish I paid more attention to is just understanding, quite frankly, financially modeling, but more so just Excel. You could do some crazy things in there. One thing on your bucket list. Japan. I love skiing. I love Japanese culture. Got to make it there. And tattoos from Japan are fucking awesome. Dream collaboration. Ooh. A license, a human, a tattoo artist, anything. Bieber. Why? Give us Bieber. Why? I think he walks the line of humility, but also massive stardom.

1:12:10He's known for his tattoos. Funny enough, I remember when he first got his full body done, I was like, why would you ever do that? I don't get it. I didn't even love tattoos at the time. And then I come full circle and now I'm like, wow, he's got some awesome ink. So I think he'd be a great one, not only for his platform, but also he just seems to fit the authenticity of the brand that we look for. I feel like 2020, 2024 Bieber, not like 2015. Not 2015. We're talking like full circle Bieber. Do you know what's so crazy you say about that with tattoos is I have a bunch of my friends that have tattooed like their head.

1:12:46And when they first got it, I was like, you guys are crazy people. And now I look at them and I think it looks good. Not to say that I am getting that, but just - I'm starting to feel that way about face tattoos. like I think they're fucking cool sometimes I'll admit it it's a little aggressive there best tattoo artist oh man that's a tough one and it can't be on your roster I think I have to plead the fifth on that one I have too many friends in the industry best piece of advice you ever received trust your gut I think a lot of a lot of this road is it's easy to second guess yourself, especially if you haven't grown and scaled a company before.

1:13:30You're learning on the fly. And a lot of times you're hiring for positions. You're hiring people who are better at them than you are, right? So it's like, that's okay. And that's to be expected. That's actually a good thing if you're surrounding yourself with better people. But it comes with a questioning or like maybe like an imposter syndrome. At least it did for me at first, but I've really learned to trust my gut and my vision. Favorite book or podcast and why? I got to say, I'm going to pump it again. It's this Ben Horowitz book. Hard Things About Hard Things? Hard Thing About Hard Things.

1:14:02Oh, that's a good one. You know what? You've read it? I think that what the people that I want on this podcast for everybody listening is the true operators. The operators where the buck stops with them. The operators that know this is my daily burn rate and in nine days, we're going to run out of money. The people that have been thinking and understand and know that I've been there many a times. And you just find a way to get out of it. That book, for anybody that thinks that they have problems, these are very small problems because that guy is burning millions of dollars a day. Insane amount of huge investors on his back.

1:14:38And it's interesting too, he's like into like rap culture and stuff. So he plays into, I love that book. That is by far the best business book I've ever read. I just, yeah, I can't, it makes you feel like less alone in it. Like, hey, someone else has fucked up worse and he made it, you know? It's so funny because I'm being so particular in who I bring on this. And I'm obviously doing a bit of research, but some people I'm meeting for 15 minutes first if they don't have any stuff out there. And like one of my probing questions is to probe into that lane to see like how deep have they gotten where everything is on them and the whole thing goes down unless they figure it out.

1:15:15I love that pressure though. It's amazing. Captain goes down with the ship. For sure. So weapons of choice. These are basically your keys to success. So a couple of things that you need to perform as an entrepreneur. It could be an Oura Ring, an Apple Watch. It could be the slate milk that I drink every single day. Let's assume that you're breathing and have internet and a computer. What are a couple of things that you need to operate at your highest level? Not much, to be honest. I think fitness is very, very important. Even if it's 15 minutes a day, my head is just not right unless I get it in and I have to do it in the morning.

1:15:50So I make a really strong effort to try and get to the gym early. Definitely not like a fitness freak and I'm not like anywhere near where like I ideally would like to be, but it's just about even 15 minutes a day, just do something first thing in the morning. Outside of that, cannot function without my coffee. And then ultimately it's like communication with team members, I guess. I don't know if that qualifies as a key, but having touch bases a few times a week with my key employees is absolutely critical for me. Highly recommend Mudwater. You ever try that? I have tried it. It's 40 subs. Yeah.

1:16:29It keeps you focused. It's like 35 milligrams of caffeine. I'm a huge coffee guy. I need to get into the biohacking side of things, supplements and all that. It's good. Entrepreneur or brand that you want to give flowers to and why? and this could be someone huge this could be someone small that you've been watching or seeing and you know they're putting in the time and you just want to give them some flowers as you did with Social Ladder yeah Social Ladder get some flowers let's do an individual

1:17:00there's a really cool brand I actually advise for them so you know good disclaimer good disclaimer called Highland and they make natural hair care products that are just better than the synthetic stuff that's in the market. Kind of a similar model to what Mad Rabbit's doing. They had a similar story. They started in college. And I've just been able to watch them grow at their own pace. They never raise venture capital, but they're growing year over year over year. And their product is just fucking awesome. So it's really cool for me to have been able to share some of my lessons and my failures and my mistakes, help them avoid them, and really make an impact on their business.

1:17:40How do you spell Hyland? Let's give them a shout out. Hyland.style. So H-I-G-H-L-A-N-D.style. Check them out. Great product. Last question. How big can Mad Rabbit be?

1:17:55So my answer is really, really big because while we look like a CPG products company today, that's not the end game. As I mentioned, industry is very antiquated and eventually it will become more formalized. And by becoming the leading brand in the space, whether you're talking about skincare or tech services or having the best artist tattooing with you in the world, it really opens up the door to capitalize on other opportunities in the industry. So I think very big is the answer. Love to hear it. And stuff like that, is that stuff that you have a couple ideas and you're going to let things kind of unfold and then pick from there?

1:18:35Or do you have a crystal clear long-term vision of where this can go. I have a five-year game plan to get us to a hundred million plus in revenue that I try and track towards. Of course, projects and opportunities come up in between and you need to evaluate and decide between them in real time, but we have a North Star. I'm excited to see that, excited to watch. Dude, you are at 27 years old. Very impressive, man. I remember myself at 27 and I was in a whole other universe, this new age of entrepreneurship where people are starting early. I'm not going to say I'm against college, but I think people need to start taking business and learning seriously earlier.

1:19:19I think that you're a perfect example of what could happen. This is already an empire. You're 27 years old. So congrats on everything. Why don't you tell us where they can find you personally and the brand? Just shout it out. Instagram, URL, where can they find you? Yeah, we're just about mad rabbit on everything. on Instagram, TikTok, YouTube, check us out there. If you want to find me on Instagram, I'm there, Oliver Zach. And then LinkedIn too. My inbox is a bit of a dumpster fire, but I try to be really good about giving back. So I'm always down to connect on advice or anything like that. LinkedIn will do that to you.

1:19:54And guys, I was supposed to get a tattoo today. I am not. I'm going to do something on LinkedIn, YouTube, Instagram, where I'm going to give one of our listeners a tattoo on me. You're going to come get a tattoo with me here in the Mad Rabbit Studios. Hell yeah. Excited for that. And yeah, guys, it's the beginning. I'm starting this community personally. So if you like it, subscribe, tell a friend. And yeah, man, great episode. Appreciate you coming on. Thank you, Mark. Appreciate it. Peace.