E132: Time to go back to the office?

25:35And they might both be, you know, top 0.001%, but the way they see the world and the way they think about culture and the idea of having a cohesive culture gets harder and harder. And so as much as you hear this talk about like the access to the best talent, who is the company that we would say this is the gold standard where they've really taken people fully distributed all across the world and really made it work and turned it into a huge home run success? That's a great point, Mike. Sean, I don't know who the avatar is. I'd love to hear, Sean, your perspective on the whole remote culture. How would you describe yours?

26:15Yeah, well, just like you guys can't refute the point about talent, I can't argue culture because it's a nebulous thing. It's like, I don't know what we're going to be arguing. But I guess the avatar of remote is every large corporation has like a million satellite offices, right? Right. Like Amazon literally has an office in every single city and they get a lot of stuff done. Right. And it's like, how is how is not hub and spoke million little nodes the same as remote? Like because I guess the culture in the Atlanta office will be different than the culture in the New York office or whatever else.

26:50But that but that company continues to function. Right. So, you know, and they function. It's really hybrid. It's not remote. And that's kind of my argument is that everything is somewhere in the scale of hybrid. like even with Amazon, it's like they're going to call everybody into Seattle for meetings and for things from time to time. And then even, you know, even if you're in the New York or Atlanta or whatever office. So I think you're right, Sean, I'm just arguing like everybody is some form of hybrid and even you guys are some form of hybrid. You just do it as an annual retreat. It's just kind of understanding where on that hybrid spectrum, like you cannot get to where you never see these people in person.

27:26Can't do it. You just can't do it. Yeah. And I see, I see my leadership team, you know, pretty often, right? Like I was just in the office on Monday, right? But yeah, look, we'll save this for a different debate. Matt had a real agenda. I actually really like this because this is sort of, this leads to the whole conversation about brand, right? Because like, Mike, there's like a whole, you probably know this better than I do because you seem to just retain books and whatever. But there's this whole thing that like, if you take care of your people, that people take care of the brand, right? And I do think that your culture, like how you think about your company and how people think about it actually impacts what the brand is.

28:07So this is actually a great conversation. Yeah, I mean, I think that the best companies, the brand is an extension of the culture, right? So like one of the famous stories about Philip Morris, they were going through like the government lawsuits and all the stuff. And they would just show up for board meetings to strategize. And they would just throw like 100 packs of cigarettes on the table and everybody would light up. And it was just like defiantly like, now, is that the culture you want to have? Maybe not. But it was like a great example. Like Philip Morris was like, smoking is awesome. And we love smoking and we are going to fight for the right to smoke.

28:44And like I so I think the most effective companies, what makes them so effective is that they have a really clear lens of here's how we view the world. Here's what we think is good. Here's what we think is right. Here's how we think people should live. And it's expressed internally. And the external brand is just a manifestation of the same thing. I mean, Patagonia is one that people love to use is that like these people are crazy about hiking and fishing and being and climbing. And they are fanatical about protecting the planet. That's both part of their internal culture and it's part of the brand they project, which is also what makes them really popular.

29:20And so like you have to like I think you're right, Sean, like but it's it's kind of a cop out to say culture is hard to define. it's nebulous. And so like, I'm not going to try to, I think the fact that it's hard to define is what makes it such an alpha generating thing. Like the, like it's, if you can have a sense of how to build good culture, then to your point, Matt, you get a lot quicker from A to B in terms of building a strong brand. And that's what really great companies do. Yeah. So here's my whole debate on this. Um, undoubtedly, if you have four people locked in a room together, You can get them on the same page quicker, more often, and if all information they hear is shared, right?

30:04But that falls apart. You know, Disney, like when we debated this with Steven from Cuts, I'm like, yeah, Bob Iger doesn't walk past every desk every day making sure people are working, right? They have to build a culture or management chain where like the top-down ideas and what's most important gets done. And like a film is done by, you know, a hundred different teams in a hundred different locations, right? There's like voice acting is different than editing, different than lighting. And it all comes down to make something. So it's like all I'm talking about is like distributed work can work at scale and.

30:41Making sure what's the most important. I mean, I think it's easier to resonate that out across the remote environment, because I think if you have strong culture, that makes remote might actually be easier, I guess, is the point I'm making, because in your movie example, if I've got a bunch of different distributed teams working on this, it's even more important that they have shared values about what they think that movie can become, right? That they have a shared bar of excellence. Because otherwise, it becomes contingent upon the individual managerial abilities of every single group. So you know what?

31:14The sound in this movie really freaking sucks because their manager was not very good or didn't really care, but the visuals were awesome. Instead, culture is kind of this idea of like, hey, everybody is passionate about making the best possible, most creative film that intrinsically motivates them. Do I have to manage that? Yes. Camera, motor, in-person work? Yes. But it's a lot easier to make that film if everybody working on that film shares this vision for great art and is passionate about making great art. Yeah. So I guess my whole debate is that a film takes 100 people or 100 different teams working 100 different locations.

31:50Your company has 100 people working in different locations. What's the difference? It's like, if you're by yourself in your room or you're in a satellite office with four people, it's like, what's the difference? It's, you still have to build meeting structures and chains so you can pass information across. I think there's like, just to give you an example, I think you're right. Like if I'm drawing, if I'm animating a film and I'm just doing it in a vacuum, then like maybe me being remote, like it doesn't matter. But as an example of the other side, have you guys ever seen like for a show like The Office, how the writer's rooms, they basically get all these people in a room and they riff off of each other.

32:27They're like, what if, you know, for this episode, Michael goes on vacation with Jan and they get it on? That'd be pretty funny. Let's riff on that idea. And somebody says, well, what about this? Somebody says, well, what if Michael took a picture of her and he accidentally sent it to the company? You know, whatever. And they kind of build on each other. And I think that that's a lot of times how great ideas work is it's like Like one person doesn't have the entirety of a great idea, but they have kind of a kernel of an idea and they can bounce off other people. That's the part that's really difficult to recreate remotely.

32:59And so the reason why it's easy to talk past each other on these types of conversations is I think you're totally right, Sean. I think there were some activities where I am way better remote. I'm way better just by myself in a room separate from other people. And then there's other aspects of leading the company or creativity that I like. I can't unlock by myself. Like, even on this podcast, as an example, there's times where I've sat down and been like, I'm going to write something. I'm like, I don't know what I want to write. I don't have anything. But then three hours later, I get on a podcast with you and you say something and it triggers me thinking a thought.

33:34And like all of a sudden I've got something where I'm in an executive meeting and somebody says something that triggers a thought or a way of approaching a problem that I wouldn't have got to. And I just think that part's a lot easier, at least for me, when I'm around people in real life. But there's no argument that it's like super effective, which is, again, why my argument is like hybrid is the answer, that it's elements of both. Operators, Black Friday, Cyber Monday is coming up. Is your SMS list ready? If not, get on PostScript. They are helping us drive 14 % more email signups through their better opt-ins.

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35:18You want serious gains. You want PostScript. Thank you for supporting the podcast. Thank you for being here. I want to bring it back to the brand thing because I think this, what you guys are all saying actually ties in nicely with really why I wanted to talk brand was Zach Stuck put a post on x about starting a facebook group and jason i want you to start here because i'm really curious how you think about this um because like i i think i'm gonna say but i want to hear you say so here's the crux of it he said i wanted to start a facebook group for hollow okay and the team has hesitation because our customers come from very different walks of life we're mostly worried about controversy example crunchy granola vegan hikers posting photos on trail versus blue collars hunter blue collar hunters posting photos of the latest trophy, which to me prompted the question of like, if you can't put all of your customers or like in this case, like all of your employees in the same place and not have them fight, do you have a brand?

36:19Yeah. I mean, that's pretty funny. That, that bit of it is pretty funny, but like the bigger picture about building a, first of all, like it starts with what is your business and what are you selling? Like, I think a brand is about projecting some kind of lifestyle too, in my opinion. So I think that like a sock company versus Ridge versus Simple Model. Look, anyone can build a brand if they have a good product and they work hard at building a brand. I don't think a Facebook group is like the defining factor of it. The idea that you've acquired all these customers, but my gosh, if I put them in the same place, they're going to murder each other.

37:05Do they have a reason to talk about the brand? Because that's what a brand is. It's something that people are interested in and want to talk about. Everyone wants a brand is building like an organic flywheel to sell your product. So it takes it to the next level beyond just paid advertising. And to some extent, I think if you have a good product, you should work on building your brand properly, whether it's just by having the right look and feel and having your communications be brand native, being harmonized, all that. Not every business. Look, a sock company. Look at True Classic Tees. If I were Zach Stuck, True Classic Tees would be my model because they took essentially a commodity product and they created a great business out of it.

38:01And arguably, they've created a brand. I haven't thought about it enough, but arguably, they've created a brand around just something super basic and not terribly differentiated. So I think it starts with the product. We had a Facebook group early on, but that's because cooking is one of those things that is super easy to talk about that people want to share about. But I could see a world in which the appeal of his sock brand to these certain different types of people, they have things they want to talk about. I would not be worried. You moderate the Facebook. I wouldn't be worried about that.

38:44But overall, I think any brand should have a Facebook group because why not? Well, I get that. Sean, what do you think? Like around the – you and I chatted about a previous episode with like the customer avatar. Like who are you acquiring, right? And you guys at Ridge were pretty disciplined on this. Yeah. What I was going to say is you can't get 50 people together in any room and not have people fight about ****. So it's like, I'm like, the reality is like, like, it's a fractured state where everyone's mad about something all the time. And the controversy is good, right? Facebook likes people arguing in controversy.

39:21I mean, join Facebook groups. And like, people are like, you're an idiot. Like, that's, it's just people fighting back and forth. Right. Right. Now, I think most great brands have, you know, a division in their fan base, right? Like you can look at Apple is ubiquitous. So it's like, yeah, grab any five people who have an iPhone and they'll have nothing in common with each other. Right. But then there's the Apple fanboy who is Apple everything. Right. And that is a very certain type of person. We all know who I'm talking about. They live in San Francisco. They're a super nerd. Same thing with Tesla.

39:54There's people who just wanted the best car. And then there's people who want to save the environment or whatever else. So I think the division among super avatars is just super common. Zach shouldn't care. He shouldn't think about it. The bigger your brand gets, you're going to attract people who don't like each other. And it's just, dude, it's just a part of life, man. He should just continue to make great products. I think the true test to a brand is, can you sell something else? That's the whole thing. Oh, damn. Matt has people bringing him coffee, dude. Matt's getting Starbucks just delivered to him mid-podcast.

40:31Let's talk about that. Forget this brand stuff. Come on. Dude, there's some people. Katie's going to bust my balls the minute she sees this, if she watches this episode. This is why we got to be in person. Somebody's got to hand me my Starbucks when I'm on camera. Is that eco-friendly, Matt? Are you going to recycle those? This is all paper, boys. This thing is compostable. I'm on brand right now. uh yeah but like the only test a brand is can you sell somebody something else right or else brand's meaningless right do you have permission to product expansion if not you're just selling socks and there's nothing wrong selling socks but when he launches a patagonia style vest that's brand and people buy that thing yeah i guess i guess what i'm getting at is like the way i look at great brands is is they all do have some kind of like story that's very cohesive you know like jason uh and mike i really do want to get your take on this too but like jason And I heard somebody introduce your brand to another person last week, which also made me want.

41:24So I had like four or five different things happen in my life, guys. I'm like, we need to talk about brand. So I saw a buddy of mine. We were out with some friends. And I saw him introduce Hexclad to another guy. Guy was asking about cookware, right? He's moaning about the stuff he has. Ask him about cookware. He says, oh, I've got, Matt got me on Hexclad. And the guy's like, what's that? And he's like, that's Gordon Ramsay's cookware. Super simple. The guy right away got it. And I'm like, oh, that's a brand. Right now, obviously, Gordon Ramsay is super recognizable. But that idea that like you can summarize and you can just say like Hexclad is blah.

42:00And it was so fast. Just made me think that's a brand now. And I get like great product, but that's the story matters more. There's a lot of great products that die on the vine because the story sucks and there's no brand. There's no thought. And I think that we do live in a time where like acquiring customers because Matt has made it so easy, we can do that. And you can spin a product and a brand, you can spin a product a lot of ways to a lot of different people. But it actually got me thinking like early on, maybe you should actually focus on acquiring one kind of person. Going back to Jason's flywheel comment, Mike, like acquiring one kind of person actually does create word of mouth.

42:40If you acquire a vegan and a meat eater, do they're not referring each other? Well, not if you're trying to acquire them on the dimension of what they eat. Yeah, totally. You have to have some kind of demo where it's like, this is the shared value. This is the shared characteristic. And one of the reasons why I think, so one of the ways we could just talk about brand is why brand is important is when you pay to acquire customers, they're almost never profitable. when you actually pay to acquire a customer, they're almost never profitable. This is what I've come to believe based on a lot of experience.

43:19Where you make all the juice is organic purchases. Like that's what falls to the bottom line. And so if you launch a business where it's like we are literally paying to acquire 100 % of people, it is exceptionally difficult to make money. I bet if we could peel apart Jason or Sean's business and we could just say, okay, I want to watch the customer journey for every single person that buys. There'd be a whole bunch of people where it's like, okay, they saw this paid influencer or they clicked on this ad on Meta or whatever else, and then they bought. And if you summed all that up and you took it across their marketing budget, you'd be like, they didn't make any money on any of those people.

44:00And then you'd be like, but there's 15 or 20 % of people that had a conversation like the one that you heard, Matt, that somebody who already had Hexclad mentioned it to him on an elevator. I mean, it's interesting. Yesterday I was speaking at something for JP Morgan and I'm telling them about the podcast. And one of the guys, he's like, yeah, who are the other hosts? And I'm like, well, one of them, they sell Ridge wallet, you know, and he's like, he pulls out a Ridge wallet, you know? And so like there are 10 to 15 to 20 % of your customers that are truly walk up, truly organic that you get through word of mouth of other people.

44:36And because of that, you have no customer acquisition cost. They're exceptionally profitable. And all that falls to the bottom line. Here's my point. My point is, number one, if you don't have truly organic people, I don't know how you make money. You certainly don't make industry leading numbers on net income or anything like that. It's just not possible. And number two, you have to be remarkable. You have to be remarkable because if you're not remarkable, then people will not remark upon you. They will not share your story with other people and you will not get organics. And so this is something I've actually with our team for a long time, we were remarkable in that our combination of quality and price was remarkable and that brought us customers, but that's not really going to be the playbook for us over the next 10 years.

45:17We have to be remarkable in some different ways. And product design has to be part of that. There's a number of, I think we're remarkable in terms of like how we run the company, how we think about using profits, things like that. And that's our job to tell that story so that then other people can tell that story for us. Because that's free marketing, that word of mouth, that remarking is free marketing, which leads to organics, which drives your economic flywheel. That definitely, like, Sean, that gets me thinking that it isn't just about having a great product. Because the problem in consumer, at least the way I look at it, is product is really hard to build mode around, right?

45:57Unless you can wrap it in IP, like real IP that's super difficult to break. Like we're talking outlier probabilities here that that's even true. You need to take product and combine it with some other variables to build a brand, right? Because somebody can rip your product off. Like we see it all the time, you know, like, especially in the, in the case of like, look at my, look at me. Like I sell a phone case guys. Like that's where Sean sells a wallet. It's just a wallet. It's just a phone case. But like, it's, it's the combination of either price or story, celebrity, like some other set of things that builds the brand.

46:31Right. And I guess the, I've always looked at it, like I come at it from a customer first perspective is I kind of want to acquire the most amount of the people that look the same and talk the same and share the same values, because I do want that Jason's flywheel thing. And I don't know if you ever saw that, Sean, like that focus on what's your main customer's name, Ed or Ted, or like, who's the, we have both Ed and Ted, but Ed and Ted, like who, Which one would you say drives the most word of mouth to what Mike is talking about? That flywheel thing that Mike and Jason are kind of hitting on.

47:05Yeah. Our brand has always been led by Ed, Everyday Dad. And we have sayings internally, like respect Ed, right? Like you have to put a lot of reverence into what Ed wants. But going back to like how to, like what I want to answer is how brand manifests itself. And there's like three things you can look for in a business. It's like, do you command industry leading AOV? right? Brand should lead to higher AOVs. Because brand leads to higher AOVs, brand should have higher margin. So if you are a brand, you should have better than standard margin. And then the third one is repeat rate. So we sell luggage.

47:44I do eight figures a year in luggage. Luggage is a very, very difficult business. I wouldn't have got into luggage understanding what I know now. It's really insane you've made luggage work, honestly. I've never said this, but it's about as hard a category as you could have hopped into. Yeah. Look, I'm fucking stupid because I tell the team, we're going to make all this shit. And then they make it and then we got to launch it. And then we end up selling it. The reason why luggage is so hard is the gross margin of Samsonite, which is the largest publicly traded luggage company, is in the high 20s.

48:16Yeah. Okay. So they have product margin, which is in the 60s. And then below that, they have what they call fulfillment margin. They spend 30 % of all revenue just shipping this luggage around places, right? And that's the big challenge. It's like they're really a logistics company. It's shipping empty boxes across the entire world. So that's why that business sucks, right? Samson, it's the best to ever do it. And their gross margin is maybe 30%. Now, they own Tumi. And Tumi has a gross margin probably in the 40%, right? Luxury price points, luxury luggage margin. So we're out there trying to sell more.

48:54We launched our luggage. We're like, yeah, we need 75 points of margin, right? And then I realized just how fucking hard that was going to be as a business. We've had to re-engineer all of that. But anyway, the point I'm trying to make is brand should unlock higher AOVs. You should be able to come out to market and not be the cheapest thing out there. You're kind of saying in some ways the other side of what I was saying, Sean, if I'm saying that brand helps you to acquire people you didn't pay for, but other people told your story to, you're saying brand allows you to take people that you have acquired as customers and to sell them additional things without a lot of incremental marketing cost.

49:28And I think that that's really powerful as well. But it's also pricing power. But what he's talking about is there's a level of pricing power when you are a brand, people will pay more for your brand. Because they want your thing. There's a brand premium out there. The other thing that the brand gets you is not just the higher AOV, but a better LTV. And like Sean said, if you have a brand, that means you can sell the next product. We've actually just done this. We've actually looked at LTV cohorts over time from like 21, 22, 23. And first someone sent me the one year LTV cohort. I'm like, that's dumb.

50:10Get me more time. I need more time. So I got 24 month LTV cohorts. And it's fascinating. Like our LTV of each year, each year's cohort over the next 24 months, it keeps getting higher. And it's not because we raise prices. It's because of our brand, our brand flywheel, our ability to sell more products, to add more LTV. So that's the power of the brand. And then, you know, Matt wanted to talk about, I think, how we build the brand, right? So I think we could all agree that the brand is powerful, right? In the last 90 days, my brands, Pila and Lomi, have doubled our support capacity without adding a single new hire.

50:56And that is because we moved to RichPanel. Our CSATs are at an all-time high. I think we're in the 90s now. 50 % of our tickets are fully automated, which means the team can basically handle two times the volume without burning out or adding more people. and with a Trustpilot integration, both brands went from a two-star to a four-star plus, actually, I think four and a half, in like 90 days. And the migration was probably the easiest part. I was surprised. Rich Panel handled everything, data migration, automation setup, training. We were live in just 14 days. That's insane. And the guarantee you'll cut at least 30 % of your tickets in the first 60 days, or you get your money back.

51:31Not bad. So if you want to be ready for Black Friday without scrambling to add extra agents, because, you know, I'm recording this and Black Fridays around the corner, you should just head to richpanel.com slash demo. Tell them Matt from operators or Sean or anybody, we all use this thing. That's why we're promoting it. Tell them that we sent you and they will take very good care of you. That's it. Let's get back to the show. I do want to make one point before we move on. Not everybody translates brand power into higher AOVs. A great example of this is Nike. If you look at what Nike sells its shoes for compared to the number two, number three player.

52:08Like they don't actually take the brand premium in the sales price. Sometimes they just will move a lot more units. They'll use it on the customer acquisition side. But the point being that having the power where people would be willing to pay more for your thing, you can translate that into more customers. There's a lot of different ways you can use that tool. And so like the point I just want to make is that it's not always charge more. but that it definitely is the more people are like, I want the swoosh on my thing, the more power that gives you when it comes to thinking about how you structure your business and customer acquisition margins, everything else.

52:49Yeah. While you guys were talking, I downloaded the past five years of my business from Shopify, new customer versus returning customer. Is this like the matrix? Sean just like plugged in and just was like, yeah, I'm downloading all this directly to my brain at 30 seconds. And then I upload to ChatGPT and I start asking questions. Because I truly believe, look, there's a lot of people on social and they have great accounts and they talk about this brand as being beautiful, right? And when you think about brand, you think about Soho and cool people and cool clothes. But when I talk about brand, it's just any sort of affinity that drives repeat rate.

53:28Agreed. I don't think it has anything to do with the beauty of something. No. Yeah. And like when people hear brand marketing or whatever, like they think about like, we're going to have the hottest people on earth at Coachella in a club, whatever. Right. And it's just like, that is a form of brand marketing, but also it's just like any, anything that builds affinity to drive repeat. Right. And I think like Ridge has put on a masterclass in that where it's like every, every single year it used to be$0 came from returning customers. And now it's eight figures. I've done over a hundred million dollars in returning customer revenue.

53:59And to Mike's point, it's like, yeah, I bet if you look at my net income and my returning customer revenue number, they are probably one-to-one. Now, I think I acquire customers profitably, and I think there's probably some unprofitable returning customer revenue. But that is the benefit of having bread is being able to drive repeat rate. So to Mike's point, you don't have to take advantage of it on pricing power. There's probably some other great brands that don't take advantage of it on pricing power. Probably anything in the grocery store. Like Coca-Cola. Coca-Cola, yeah. Anything consumable, they're not going to use it on the pricing power side, most likely.

54:33They're going to use it to just drive more throughput and more customer acquisition. It's funny. I don't know, Jason, if sometimes you think this, but like when I hear Jason be like, yeah, look, we're a pretty big company now. I also think, but you're not. Like in the grand scale of things, right? Like none of us are. When you compare to a Coke or even like in physical, like durables, we're really not. But like at our size, or if you go down to like 10 million, 50 million, whatever size you would like, I, I'm, I'm hearing like, Sean, when you talk, all I'm hearing is you have customer concentration.

55:03Like you definitely have concentration in a bunch of these like groups of people. And that's, what's driving the repeat rate. That's what's driving the referrals is there is focus. You're not like, you didn't go out, start Ridge and say, all right, we're going to acquire Ed and we're going to acquire Ed's wife all at the same time, you know, or Ed's cousin, Julie, like you didn't do that. It just seems counterintuitive, but it's true that you're like, well, I want to sell as much as possible. So I have to appeal to as many people as possible. And it's exactly the opposite. The way you sell as much as possible is by really narrowing in and saying, I'm going to really speak to this small subset of people.

55:41And this is why brand building is in many ways as much about saying what you're not as what you are. Like it is about defining the things you aren't. But if you look at really successful brands, a lot of times what they're doing is they're counter positioning against other ways of viewing the world. Right. It's not just we believe, we believe, we believe. A lot of times they're like, we're not that we're not that we're the anti Microsoft, you know, like the I'm an iPhone, I'm a Mac commercials are a great example of this. Right. It's like we're all our brand building is like basically just saying we're not that, you know, we're not what Microsoft is.

56:14and so it's both and that it feels hard to kind of say i'm just gonna like be okay with not like for ridge like you said sean i very clearly get the message that this is for ed you know and so it feels hard it feels hard to say like well we're just going to forego all these different um swaths of the market you know we're generally not going to talk to women as much we're going to do this we're going to do this but you guys have actually done a really good job of showing how when you get very focused on a segment, then there is the potential to expand that outward. Because like now you do sell stuff to women, but you did it by first focusing just exclusively on Ed, or at least this is my perception from the outside.

56:56Mike, you still, like when I go to Ridge, I know I can like go to their social and go to their site and I can tell you who it's for, right? Same with like Hexclad, you know, like when I go and look at Hexclad's site and I like browse the brand and I go on social and I look at the content that's being made around HexCloud, like, oh, I know who that's for. It's very clear. And I think, Mike, you said something, and I'd be curious to get everybody's take on this, but it really depends on the dimension in which you're marketing and acquiring customers through. There are products that can acquire customers on any kind of walk of life because they're acquiring on a dimension of this product does this thing, this feature functionality does benefit to you really well.

57:39And then I think there are brands who acquire and build brands around a set of values like identity right or jason you said lifestyle and ridge is ridge is like your lifestyle man like even if like you look at your sweeps right now the cars you give away tell me who your customer is like you're not giving away a prius dude it's amazing it's got like it's got like two supercars in the desert you know and it's like yeah that's that's awesome yeah i just the only advice i have for for for new brands coming up is until until you have customer pull have a vague idea but be fluid about who it's for that's great advice i've seen so many brands die and i worked in an agency before rich people would raise money and they'd come in and i've told the story a dozen times but they're like my customer makes$200 ,000 a year, shops at Lululemon and lives in Silver Lake.

58:37And I'm like, great. So there's 50 people who are your customer. Awesome. They're like, well, that's my avatar. We're going to go find everybody like that. I'm like, yeah, you're not serving a big enough market. And if you can ruin your brand by being hyper fixated on who you think the brand's for, you have to let your customers tell you. You know what I mean? Because a lot of people who've come and go at Ridge come in and they're like, no, we actually want to go after an even cooler guy. We want to go after people who are in New York, who are tastemakers, who like are in jogging clubs. And I'm like, yeah, that's awesome, but they don't like us.

59:08So I want to dance with who wants to dance with me and Ed likes us. So we're going to sell products to Ed, right? And that's how we've built out this cohort. When we launched Ridge, we didn't know who it was for. We're just like, we're going to sell wallets. It was a natural journey. So just - I do think that's actually a really good point, Sean, that we should make because it's easy when we talk, we're at the nine figure level. And it's easy to kind of create this kind of founder myth, alternative history where it's like, well, day one, we were like, we got to pick our target market. And we knew it was going to be this.

59:39And it's like, that's not how it works at all. It's very iterative for us. All we saw was like there was room to do a lot of different colors in water bottles. There's a point where Yeti was just doing stainless steel. And as we leaned into it, we realized, oh, wait a second. We're really skewing female. We're skewing female 25 to 45. thought. And so like, we kind of leaned in a little bit to that. And the more we leaned into it, the more it was like, that was our demo. And then to your point, it was like, well, what else do females, uh, 25 to 45, uh, buy? I was like, well, they have kids and they buy kids stuff.

1:00:08And then we started leaning into kids things in it. And now we've got this really defined brand persona, but it was an iterative process. And certainly like three dudes starting a company when we started it, I would have actually kind of laughed if you told me like your target customer is going to be a female that's 25 to 45 because there's no reason like the three of us would have naturally gotten there. But sure enough, that's where we are. And we've gotten really good at taking care of that particular customer. Jason, on this topic of like, Sean, this idea of like fluidity, it's like have an idea about who your customer might be, but be fluid with that.

1:00:46Sean, I think that's brilliant advice. When you look at early days, HexCloud and they were building the product, like, did they have a, were they really set on who the customer was going to be for this, like the brand story? Or did that kind of just wind up happening because of how the product looks and, you know, I'm just curious. The look and feel of the product enabled us or let's say motivated us to come with a certain viewpoint on how we wanted to present the brand on top of the product. It started with how the product looked. I mean, when the product was developed, it was like, wow, this looks pretty freaking cool.

1:01:26And so we want to leverage that and make it the techie, cool cookware brand. And as we've grown the company, we're like, okay, how do we get the different personas? How do we get to different customer types. It's not something that, um, it's, it's very rare that you start with thinking about, Oh, how I want this brand to be like, and then, and then building and building around it. It's like, you need a, you need a trigger. And for us, the trigger was the product. I would imagine it's the same with like the Ridge Waller, right? It just would totally make sense to go after certain people, you know, the same thing with the, with the, with the water bottle, like with simple modern hydration.

1:02:05It's like, we know, we know the consumer of these things. And then how do we take like the look and feel of our product and marry that up to who's going to use it. And, and then slowly, it wasn't until like, we always had this, this thought in our head. It was started with Danny, right? That we were going to be the bad cookware brand. You know, he had this vision of Johnny Cash come out of Folsom Prism, Giving the Finger. That was always Danny's idea. But at the end of the day, that didn't match up with who's buying cookware necessarily. But we stuck to that vision in our branding in 2022. That's when we really changed the brand to make it look and feel like it is today.

1:02:51That whole exercise happened starting in Q1 of 2022 when we hired Big Daddy, the agency, to help us implement that vision across all of our different customer touch points, etc. And it culminated in the new website in September 22 and the packaging later that year to make everything look and feel like we wanted to feel it. That took some time. I started in May of 2020 and it wasn't until January of 2022 that we kind of got it sort of right. You know, when you hear founder stories of like really big consumer brands, I don't know if you guys have ever listened to Chip Wilson talk. There's definitely this like beginning of a, they always had a strong vision of like, this is the brand we're building.

1:03:41Like this is who it is for. I do wonder how much truth is in that. Like listening to Sean's advice around like being a little fluid at the beginning with who you think it's for. Because you probably have no clue. Like, I think that's more probably true, like probabilistically true, but you hear all these founder stories, these large brands and their version of history is always, no, I knew exactly like we knew who we were trying to be. We knew the brand positioning. Like we have this strong vision. I think you see it a lot more in apparel and goods, but Sean, I don't know if you've, you're, you're such a student of this stuff.

1:04:14I'm curious if like, you've ever thought, oh, that guy's just full of it. There's no way he started out. They're all, they're all full of it because it's, it's, it's all just myths. Because if it didn't work, they'd pivot because that's our job. You know what I mean? It's too survivorship bias, right? Totally. All right. Operators, real talk. If your dashboards are a week old, they're not insights. They're history. You probably heard me talk about cleaning up our data. Well, we finally have it dialed and it's because of Sarah's pulse. We have a data foundation we can fully trust. Pulse connects us to over 200 sources.

1:04:48We've got to connect it to so many sources, Shopify, Amazon, TikTok. Fulfill, NetSuite. Every dashboard is complete, accurate, and exhaustive. My team is in the dashboards all the time. No gaps, no mismatched numbers, no manually assembling spreadsheets. We must have killed 12 spreadsheets and combined them into one dashboard. And our daily growth dashboards are integral to the growth team, showing the true CAC by channel, by country. Our executive dashboard ties revenue to contribution margin down to the SKU level. And more importantly, like we get this fast. And these are actuals, not estimates.

1:05:28And in today's environment, every percentage point in margin with tariffs and costs of marketing costs going up, every percentage point matters, right? And for us, it's all automated. So the team could focus on doing what they do best, which is growing the business. And so we're also testing something brand new with Saris IQ. It's an AI chat layer that lets us just ask, which SKUs drove margin in Amazon, for example, Canada last week? And what promo impacted repeat purchase rate? And it gives the answers quickly backed by clean data, unified data. And so here's the part you want to hear. A few operators, podcast listeners can get early access to the beta.

1:06:11Saris will even co-design an IQ proof of concept tied to the top three KPIs that you want to move. It's not a canned demo. It's your data, your metrics, your insights. This is huge. Just to see it, like see it alive. It's extremely limited. Only a handful of brands will get in as a launch offer. If you want dashboards that you can trust and instantly answer your toughest questions, talk to Saris Analytics. And yes, this is just for our podcast listeners. Sarris has just been a great advocate for the pod, great ally of the pod. And there are going to be a lot of AI tools coming out from Microsoft, Shopify, et cetera, but they can only be as good as your underlying data infrastructure.

1:06:50That's the thing. Having your data infrastructure set up properly is everything. That's why we started with Sarris and then they keep building more on top of it. But no matter what, in the AI world, you need to have a data infrastructure that works. And I don't think there's any better place to do it than Sarris. So you can also take an assessment and understand your business's AI readiness with Saris at sarisanalytics.com. So get AI ready the right way. Get your data in the right place. Go check out Saris Analytics. The beauty of Hexclad is the counter positioning. The reason why it's the biggest cookware brand is because everyone else went after the same goddamn customer.

1:07:27And you can name them. They raise money. They all make the same cookware for the same person, right? So if you're shopping for cookware, there's 80 options in millennial pink for the same person. And then there's only one person going after a more gender neutral or even like a slightly masculine. I think it's masculine. I mean, like even the most recent thing that you just posted, Jason, with the F1 partnership, like I don't know if that's overall F1 or just the driver. But I mean, it's like that. First of all, the spot's awesome. It feels badass. Like just like the feel of the video is like, this is very cool.

1:08:05And it feels very masculine. It codes, for somebody like me, it codes really well. Like you said, Sean, like I think that they've just done a great job of counter positioning. It makes sense that for most people, if you're selling cookware, you're trying to sell to mom or you're trying to sell to a woman and the head of household or something. And here, like, they've just really made cooking, especially cooking aimed at men, very, very cool. Well, we're going to do both. You know, it's just like it is we're constantly talking about like the, you know, the more feminine vibe, the female vibe. But we just know that that this bit works.

1:08:42And then how do you get, you know, and how do you get to the others? I mean, there are a lot of women who like really they gravitate to or appreciate like the technological feel of Hexclad and the slick look to it. But yeah, it does skew more Max DeLin. And it's something that we're always, but like it works. I actually don't think it matters. Jason, I honestly, like I watch and all of my, it's been so funny to watch Hexclad spread amongst my social network up here. Yeah, thank you, Matt. Good job, buddy. I've sold so much of your shit, man. Like, dude, Kelowna is going to be a great zip code for you.

1:09:15But it's so funny to watch because it always enters the home from the dude. Like it's the guy who's like, I want a pan that I can cook eggs in or a steak in. He doesn't cook. He's not the cook in the house most times. But then the thing enters the house. And I watched every single time. It's always whoever the primary cooking person is, they reach for the hex clad. Like my wife now reaches for your pans. And we have other stuff. She's got all of her pretty things that she's owned for years. She's got all the reasons she bought all that stuff. I bought the hex clad products. And when we go to cook, she pulls yours out.

1:09:52That's like the go-to. I've brought this up like a dozen times. Women are better consumers. So like if you make things for women, I'm sorry, if you make things for men, women will cross the gender line, right? Like there's a dozen brands that start as men's first and then they end up having bigger women's businesses, right? Ralph Lauren's like the perfect example. Going the other way is incredibly hard. If you're our place, it's very hard to start acquiring male customers first, right? The only brand who's been able to do is Lululemon. And I don't know how they've been able to do it, but like every other brand typically starts male first and then opens up women's and it's a bigger business.

1:10:29Nike's did the exact same thing. So I think Hex Class has a big future being a gender neutral brand for everybody, but because they have the male DNA to start. hmm i've never quite thought of it that way it's kind of like politics it's like in politics in the primaries you you appeal to like the base and then you kind of moderate and you try and go broader in the the general election and i think the really big brands that's what you've seen them do i mean like they initially had a really hardcore uh group of people that they focused on you know with nike it was like runners it was like really hardcore runners wore nikes and then And they eventually expanded out to other sports and they expanded out across genders.

1:11:10But I think it would probably, I don't know, it'd be interesting if Nike, if it was around running or if it was around male runners even. My guess is it was probably male runners. I think it was always around athletes. And you read that, the story of Nike. Actually, it's a great book. I'm sure, Mike, you've read it. Like Too Much You, Dog? Yeah. Funny note on that. So good. In our office, the Wi-Fi password is cupdog. No kidding. The, the, I would always tell people when I wrote my autobiography, it was going to be cup dog and sissue dog. And, uh, we, we all, the whole company read through that book in 2017.

1:11:46And we just, I think honestly, for two years, that was like my most recommended book for people. It's not, not cause like, I don't, I don't, I think I recommended it to telling people, I don't think you're going to learn anything. I think it's just really entertaining to listen to this total psycho talk about his life, building this brand. But it was just a train wreck of a story. But my takeaway, Mike, from that is like it was always about athletes. Like Nike was always about values. And I don't think they've ever really veered from that. It's like you look like this and you do these things. So you should buy our product.

1:12:19It was never really like we technically make the best shoe. Well, and this really goes back to the culture thing. Nike is an organization about competing. They're about competition. more than anything else. And they attracted people internally that were highly competitive and they, uh, in their external branding, it's all about competing. And they, they built a really great brand around that. But, you know, like even in the, you know, kind of to Sean's point, the revisionist history, like famously when Phil Knight first heard, just do it. He's like, I don't know. I don't love it, but maybe it'll grow on me.

1:12:58You know, same thing with the swoosh, Like they were like, it wasn't like they saw these things and like, this is it. It was more like, ah, it's okay. You know, maybe I'll grow to love it. And now we think about them as iconic and these strokes of geniuses. But I don't know that the swoosh is naturally like an amazing work of art. I think Nike made it a work of art, you know? It's like Nike took that thing and they infused, when you see that, you think competing. and they've made it into this symbol that really when we the way that we process that symbol when we see it is like yes that's the starter gun that's that's grinding it out that's sweating that's being in the gym until you know the extra hour and like and it really resonates and that's why we want to buy their products dude they also got incredibly lucky right like they couldn't afford, you know, Magic Johnson.

1:13:50So they ended up settling for Michael Jordan. So something I didn't, I did not know this, but in their contract with Jordan, not only did they give him like the royalty on all of his shoe sales and like a huge minimum, they gave him, they said like, here's how much we think Mikey is a brand across everything is going to sell. And you get a percentage of any outperformance across the entire brand. So they more or less like made him like an equity holder in the company. They gave him like a, you know, like, I mean, I don't even know what that would equate to in terms of like a percentage of the company, but they gave him a huge amount of upside just on Nike selling more things because Nike understood that selling more basketball shoes and Michael Jordan association with the brand raises our ability to sell jogging shoes and shorts and everything else, which again is kind of your point, Sean, it's brand.

1:14:44When I have a great brand, I don't, I'm not able to just sell more basketball shoes. I'm able to sell more women's yoga pants. And because like that brand halo is really big and it leads to more customers and the existing customers buying more things. And that to me just comes back to values guys. Like the brand is, I speak to these people in a way that they're, they're my people. They'll buy anything from me because those are my people. And I'm just trying to ground us back in reality that they didn't know Michael Jordan was going to be good. Obviously, he was in the NBA. I think they had a pretty good clue, dude.

1:15:18So the way they structured the contract, they thought he could be special. And the way the contract was structured, he had to achieve one of three or four things. One was being an all-star, one was being MVP, one was winning the finals. I don't know. He had to achieve one or two of these check marks. Now, he hit all of them, but they definitely made the bet under the assumption that this is a guy who could become the best player in the league. And if he did, then this would be great for us. And so they weren't ever thinking like, hey, this will be a great deal if Michael Jordan's the 18th best player in the NBA.

1:15:51They knew, yeah. And I'm just trying to highlight, they got very lucky. Not only wants he's the best player in the league, he's the best player of all time. The greatest athlete of all time. It's the best influencer deal in the history of business. Yes. And so like it's unless you have like the next best influencer in the history of business up your sleeve, like you probably can't replicate that. Well, no, Hexclad did okay. Yeah. I mean, the Gorgia thing is pretty amazing. Yeah. But in sports, it really is a one of one. Like Tom Brady hasn't been able to get a brand to be successful. And Tom Brady, Wayne Gretzky, these are people who are just as good in their sport.

1:16:27They have not been able to do a brand the same way. No. Michael Jordan really was special, like once in a multi-generation thing. But then once you get outside of sports, yeah, dude, we got Gordon, we got MKBHD. These are the Michael Jordans of our respective industries. I don't even know if it's possible to replicate the Jordan thing because the Jordan thing happened in a period when mass media – you both had mass media, but you also had concentration. It was still the networks in charge of things. You know, and we're so fragmented today that it's really like you, like SGA is, he plays on the Thunder.

1:17:03He is the MVP. He is the kind of presumptive face of the NBA. But like his impact and Michael Jordan's impact are very, very different. And part of it is the NBA's impact is different than it was during Jordan's period. And part of it's that the media is just way more fragmented. like all of the legacy media put a lot of their weight behind pushing Michael Jordan as well. And that's just not the world we live in anymore. This is also why Brad Pitt is still being cast in starring roles when he's 61, because he's at the end of the kind of broadcast era. There are some stars that were kind of like the mass media broadcast era.

1:17:41Jennifer Aniston's another example where their faces really meant something to everybody. And so people kind of want to keep going back to using them. Whereas you're like, who's the most famous actor that emerged on the scene post 2010? And do they have anywhere near the name recognition of Brad Pitt? It's like, I don't think so. Yeah. Yeah. And, and, and new media will change that a little bit. Like I think we'll, we'll, we'll have echoes of success, but grounding it back in the brand conversation. So much founding mythos is just bull, right? We all want to sit here and talk about how great Nike is and the swoosh and how they mean something, whatever else.

1:18:19We've just given you five examples of how like it was a lot of it was luck. A lot of it like because the brand made great products and continue to out market, those things ended up being worth something. Dude, read the book. It's just lucky. He got lucky over and over and over again. It was a show. Well, and they were fully maxed out like they they basically borrowed every dollar they possibly could even more than they should have been able to. It was just like the whole thing was just a walking time bomb. It's incredible. You got to stay in the game. You know, you just got to be able to stay in the game.

1:18:53And that's what increases your odds of being successful. You know, just keep going. I want to finish. We're at time. But I think, Sean, I want to piggyback on the advice you gave and also tell people that, in addition to being fluid at the beginning with who your customer is, once you find that customer, it's probably a better idea to acquire more customers close to that first customer. profile than it is to go acquire completely different groups of people that have no relationship whatsoever. So like I would tell, I would advise any founder early on, you should be thinking, once you figure out product market fit a little bit, you should put some thought into how that expands out over time.

1:19:33And it shouldn't just be like, well, I can get that funnel to work over there for that 22 year old girl. And it's also working for this 58 year old female male customer I have, I don't think that's smart. I don't think that's how you build organic word of mouth. I don't think it's how you build repeatability. I think it's lower probability to do it that way, is all I'm saying. And let's do a part two of this episode, because what I would love to break down is, does organic equal brand? Because I like to remove from the ether, and brand to me means three very specific things. You have pricing power, pricing power leads to world-class margins, and there's repeat business.

1:20:13Those three things equal whatever brand is, right? And then I would love to have an additional debate if organic equals brand, right? Like maybe some products just have better built-in organic, maybe not. And I would love to have that debate with you guys next week on the Operators Podcast. So thank you, Fulfill, Northbeam, Postscript, Ceres Analytics, Rich Panel, five great softwares, five softwares I use and pay for. Jason uses about four of those softwares. Matt said three. We love these things. They're fantastic. They pay for this show. We have a partnership with e-commerce fuel. These guys all promised to me, it's Mike's birthday, he's going to post in e-commerce fuel today on record.

1:20:55And then you're going to write a newsletter, write a newsletter reflecting on being 21 for the first time. So, hey, I'm going to e-commerce. I'm going to ECF live at the end of September. Beautiful. The community is great. It's awesome. Everybody should check it out. We have e-commerce fuel. We have newsletters. We have spinoff shows. We have sponsors. We come here every week to talk. I would do this for free, but Jason wouldn't let me. So thank you guys for being here. I appreciate it. I love this podcast. Goodbye.

1:21:30Thank you.