E133: Goodbye Websites. Hello AI Commerce.

26:18Nano banana. Tell me you've never had sex without telling me that that's how you name a product. I was going to say, I was going to say it was a great name. Um, because terrible. Well, I mean, I don't think you guys, I mean, so here's the story. So there's like, there's all these like, um, you know, AI leaderboards, there's hugging face for models and there's, there's an image one and someone released nano banana on there with no tie to Google. It was an independent developer released it on there. It became the number one model and And people are like, what is this thing? And then the next whatever week, Google's like, we did that.

26:50It's like a way that they can prove that they're the best without using their distribution, which is such a big flex. Very nano banana of them. Yes. That's awesome. Look, it's incredible. I was playing with it yesterday. This is what I mean. I say I was playing with it. Can't do that. You were playing. Would you say you were playing with your nano banana? Dude. I'm dying over here. The whole time. I'm like, I'm a child. I know. I get it. You're listening to this like he's a child. Yes, I am. I'm a 12-year-old. But still, guys, Google, please. So look, I'm all in on agente of commerce. One reason why I think we should be kind to the SaaS providers now is that I don't know how much longer they're going to be with us.

27:31It's like there's no VC dollars coming into it. Because I bring up like, look, RichPaino is a good example. And Revo is a good example where there's teams of two to four people who are just grinding out features that people used to raise$50 million for. Status went out of business, they raised$20 million because fucking Stuart at Revo does their whole product in an afternoon. Well, it's like the judge me review app where it's like, you know, like that's what you're competing against. I think, Sean, to elaborate on your idea, here's a really simple maximum for everybody. Be careful whose grave you dance on because next week it might be yours, you know?

28:06And like that's what AI – I remember when media, traditional media was being disrupted by technology and people just kind of ruthlessly were like, learn to code, dude. You know, like this – just very disrespectful to the people that were losing their jobs and their livelihoods. And you know what? Right now, you know who's getting disrupted? The freaking coders. Like, it is harder to get a programming job than ever before. And it isn't going to get easier over the years to come. And so I just think we're going to get disrupted too. Like, this is going to happen. Everybody's going to eventually get disrupted.

28:44And so being compassionate is obviously always in season. It's actually one of the core theories in our company right now. And we have not actually looked at it through the agentic lens. We looked at the whole idea of the me store simply through product. and personalization and just saying to people, like when you come to Pila, it's like you are here to buy your product and nobody else's, right? And it should feel like yours. And I think that AI, like the way that we're going with the shopping experience with the whole AI, I think I could see that like, like, okay, I want to, I think I want to be there.

29:20I want to be in a place where like, I can show somebody, like our feed from our brand would be like, you can have anything that feels like yours and we'll just make it for you on demand and you'll have it within a couple of days. Okay, I've never felt so compelled by an idea than this me store because I think it perfectly summarizes where the future is going with a chat-based interface. It's like everything is threatened. It's like email newsletters, no. Chat's going to read every email and it will tell you the five things it knows that you're going to like, right? Rage will have to send an email to chat of our new launches and it will decide who gets to hear about those.

29:57There's going to be another layer between you and the user. Absolutely. And as a user, you're like, yeah, I don't have to get 8 million text messages or phone calls or spam or whatever. All of that would be filtered out. And you will just have the me store. You have the me world where you go on there and it's like, here's the movie you need to watch. Here's the food you're going to like. Here's the new clothes that are coming out. And it will be way better for you. And that's why chat can be monetized so aggressively. The me store perfectly summarizes it. And the counterfactual is Amazon sucks.

30:26Like go on Amazon. It's so bad. Yeah. And try to buy a product. Like you're going to be like, oh, I need a shirt. Okay. Do you want a shirt from you fan, dash, dash, whatever? It's like, it's like, no, all of it's game reviews, all of it's fake. So dude, the me store is so happening. And that's the biggest threat to my life and your life and our jobs. Well, and I'll take it a step further, Sean. So I think the me store, I think Cogentic, this stuff is all like, we can disagree about exactly how it's going to play out, but some form of it will happen. And I'm also really kind of fascinated with the move from prompting to being prompted.

31:01And I think that that's going to be the most fascinating part of AI right now. The way that ChadJPT works is it's like, yeah, I can pull it up and I can ask it anything. And then it's great. It given me an answer and we're getting on the very early edge of me asking it to do something and it being able to do it. That's not what the future is going to look like. The future is going to be like, I wake up and my personal assistant's like, hey, good morning, Mike. Like, hey, here are two or three things to know for your day. Also, you know, I think you're almost out of toilet paper and paper towels.

31:32You need some more milk. I've gone ahead and created an order of all the things I think you need to get from Walmart. Are you OK with me going and placing it? Oh, hey, also, here's a couple of people's birthdays. You know, you're going to want to send them texts where it's telling me now, hey, here are all the relevant things you might want to know instead of me asking it. And I think once that happens, it's kind of a tipping point. and like you can imagine how shopping looks really really different where instead of like my shopping is basically me being like i need to do a thing and then me prompting the system and now the system's prompting me it's really disruptive yeah i think uh your preferences no different than how meta can like extrapolate preference from all of its data points on you it's it's like that but for your whole life right so it's like imagine if now you're in real life interactions are recorded and that they are somehow all this is like long view out right like the idea of like a real me store where it's proactive in saying hey uh kylie jenner just dropped this new thing i thought you'd be interested in it based on what you showed me before also here's three other brands that like these other products came out like if you're a shopper it is the personal shopping experience but like all the time and whatever you wanted and i keep coming back to that because like anybody that I know that has experienced having a personal shopper would tell you like, oh, that's how it should be.

32:57Like that's what it should be like to buy stuff. Like I don't go to a mall. I don't go to the store. They go, they pick out all the stuff because they know me. They know the exact sizing. They bring it home. They try on what you want and they just take away the stuff that you don't want to keep and they bring it back. That is where Agenda Con is. But it's a personal shopper, you know, to the nth power because it can look at the reviews on every single item you could possibly, you know, it's like, you need a t-shirt. I can look at every single t-shirt you could possibly buy. Yeah. I just looked over the entire internet.

33:26I know what you care about too. It's going to read the review. It'll, it'll have access to like what other people are saying. And it'll be able to just like, you can use judgment as a shopper to say like, well, I don't care that that person thinks it's too expensive because I'm, I'm price insensitive and I don't care that it has this thing. Cause that doesn't, that's not important to me. All right. Operators quick break. This episode is brought to you by Northbeam, the marketing attribution platform that we use every day. Now, we all know there's a ton of attribution solutions out there, but I want to talk about what makes Northbeam different and why everyone across the operators trust their data.

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34:36Years ago, if people would have looked at our Facebook ad account and told us to stop running ads, you know, like without having the right look back and attribution windows, you're just not making good decisions. Northbeam tracks both clicks and views. And you hear a lot about that now, view through being really important. So you can finally prove TikTok, YouTube, Snapchat campaigns are driving revenue. So check out their clicks and views, clicks and deterministic views model, which is one of their newer models, which we found really, really useful. This model separates new and returning customer acquisition clearly.

35:10So you know which ads are driving incremental growth. Northbeam Apex is crazy. This is an integration with ad platforms like Meta and AppleOven that allows those ad algorithms to actually drive your ad delivery based on first party performance data. Nobody else has this. The immediate efficiency returns at the push of the button here are pretty amazing. And then, you know, it never inflates revenue, just the real numbers that actually line up with Shopify. So it's a true source of truth. That's the North Beam difference, just the real numbers that actually line up with Shopify and an analytical rigor in the platform that I personally trust and have trusted since like 2020.

35:53Look, you know, I don't like paying for SaaS. The people on the pod don't like paying for SaaS solutions, especially Sean loves to talk about it unless they make us money. And clearly, Northbeam has paid for itself over and over. And we'd be flying blind without it. So, I mean, everyone uses Northbeam. Every big brand I know, every good brand I know uses Northbeam. Mains, Manscaped, Dollar Shaped Club, AG1, Ridge, everyone in my chats. I trust Northbeam. They're one of the foundational platforms that we use here at HexCloud. And so if you're ready to cut through the noise, stop guessing and actually see which ads are driving your business.

36:32Book a demo at northbeam.io forward slash demo and tell them the operators sent you. Join the club. Okay, so like this is a fantastic segue into what we wanted to talk about, which was like the second piece of the brand thing, because we're all kind of riffing on an idea that I think some version of this is going to happen. I don't know how quickly, but it's going to happen. and obviously the brand conversation is pretty important in light of that. In a world where the technology is that dominant, you have to start asking like, well, how is the technology going to make decisions about what it should recommend to you and how are your preferences going to be shaped?

37:14We talked last time about brand and I know that we all felt like we could go deeper on it. So where do you guys want to pick up in talking about this brand conversation? Before we move on, I think Matt had some genius insight that so much of technology has been unlocking the 1 % world for everybody else. It's like everyone has a chauffeur. Everyone has a private chef, right? That's what Uber Eats is. It's like a king could be like, make me a taco. And now it's like, yeah, I'll get you whatever you want, right? the private shopping like the private assistant like all of these things all of that is happening because it's just the next level of wealth being opened up for everybody and there's so few things left it's going to be like yachting it's going to be golfing it's going to be private jets but eventually someone will just make a startup that is a bunch of mini private jets to fly wherever you want to go and it costs $45 like yeah it's crazy like there's an article that I read called You Were Richer Than Rockefeller.

38:15I think I've referenced it before. But if somebody said, I'm going to give you the opportunity to switch places with John Rockefeller, but here's the key. You switch places, you get all his money, he gets all your situation, but you have to go and live in the 1890s and he gets to live in today. Are you going to take that trade? And the answer is no, of course not. Being the richest person in the world in 1890 is not nearly as good as being even moderately wealthy in 2025. We just have so much higher standard of living. And I was having a conversation with my dad the other day where he's really concerned about income inequality and the bottom 10%, the bottom 25%.

38:52And my argument was like, this is the amazing thing about capitalism. Even if you're in the bottom 25 % of America, you still live like a king compared to most people throughout history. It's just amazing how technology has raised the standard of living exactly the way that you're saying, Sean. Like, you know what? I use the same phone as people worth$50 billion. And there's homeless people that use the same phone as people worth$50 billion. Like, it's amazing that you end up having like - There is very little ground left, Mike, between, Warren Buffett said this, I think at his last annual meeting, right?

39:29He's like, we and everybody in this room lives exactly the same life as I do, barring the exception of maybe flying. like that he's like that's kind of it right like that's what's left flying private is probably the i mean even food like the level of food you can get for 10 or 20 bucks is like it's crazy yeah you can spend a thousand dollars on a meal but is it is it 50x better than going and buying something at chipotle definitely not well dude yeah you know johnny rockfeld went his whole life without having one burrito it's like could you imagine having all the money on earth and i'm never eating a Dorito.

40:04Yeah. But look, Mike, I think that you are right. Like this is the, the thing I think about is product development and brand. And I, I'm trying to find like the vectors to come at it where I can sort of plan the future of the business. Because on one hand, if you look at the history of stuff and like, how do brands really get big is they start off a product and a brand start off serving like this little pocket of people and it's cool to those people, right? Like they're, they're in the know. And then eventually it kind of crosses the, the chasm and the zeitgeist happens. And like, everybody wants the thing that the cool people have.

40:44So like, there's the whole, that's why influencers work. That's why like nightclub promoters are typically attractive and great people to hang out with. They can bring out cool people and the cool, everybody else follows the cool people. We are like a tribal species, right? So my theory is that like all products follow, almost all products follow this curve. It's like it can start off commodity and wind up brand, or it can just start off brand and wind up commodity because of that dynamic. And then I layer into it making products that people do feel like they're entirely theirs. Like I have the only one of this thing.

41:21I'm the tastemaker. Like everybody wants that feeling, right? They want to be the person to introduce somebody to something else. That is straight up status. It's all going to come down to that at some point. So I, this conversation about like, I think Sean, you asked in the last time we recorded, like is, or the relationship between organic search and brand, right? Or to some effect, I forget how you actually phrased the question. Right. Okay. Well, this is where I went. I want to re I want to restate my, my assertion here. So I make sure we're actually arguing about the same thing. What I'm saying is that there are a lot of different ways that people come to purchase your product.

42:02And attribution is us trying to kind of understand how and why they did those things. And there are some things that tend to be associated with organic purchasing, like organic search or direct visits to my website. But they're not all actually organic. We know this. Sean made this point that when you run more advertising, you get more direct visit, you get more Google search because some people don't want to click on the ad. And I'm not arguing about those people. I'm saying in general, if you had the insight of God himself and you understood the entire purchasing journey of everybody who came to your brand, what you would find is that there's a percentage of them where all the heavy lifting of getting them to purchase was done by somebody else.

42:47somebody else talked them into why they had to have a Pila case or a Ridge wallet or Hexclad or whatever. In fact, I bet we've done that heavy lifting for each other before. Like Matt, I've sent customers your way where you didn't have to do any lifting. Same with you, Sean, same with Jason. And that if you look at those people, because they come in and that functionally you haven't had to spend on those particular people, you haven't had to do the heavy lifting on those type of people. They're insanely valuable also because their user values tend to be higher. Like when a friend refers something, you're even, it's even stickier, I think than when an advertisement sells you.

43:25And that like our, our, our organic user values were always the highest in every business that I've run, um, to the extent that you could ascertain who the organics were. And so that's my point is that those people are a lot of the contribution margin of your business. And that those people that one of the ways you can measure brand is how willing are other people to spend their time, their words, their effort selling your product for you. It's the world's most expensive A-B test. So go ahead and shut off all of your ads for six months and figure out what your organic revenue looks like, right?

43:59But no one has the guts to do it or the business sense. I definitely do not have the guts to do that. But look, so to tie the two thoughts together, agenda commerce is coming. I think websites are going to be taken out basically. So what's going to feed the beast of AI recommendation engines is you want to be the most popular brand or you want to be a brand that stands something for some people or whatever. And what we're saying is how can you measure what your brand is? Because people often point to, this is my point, people point to branded search or direct non or organic traffic and they're like, look, look how many people love us.

44:37And Rich has done the test where if we spend another$10 on advertising, I'd get another two branded searches. So it's like the advertising is driving all of my branded search. I spend so much on advertising, I'm the most searched wallet on earth, right? Now, the second most searched wallet is Gucci, and they also spend a lot of money on advertising. There's nobody who's the most searched who isn't spending money on advertising, right? So those things, it's not a good proxy for what your brand is. And I would love to try to figure out what is a good proxy because to state my previous point in the last episode that we recorded a week ago, brand is just, you have pricing power, you have margin power, you have repeat rates.

45:20That's like the mathematical proof of brand, but I would love to find some more intrinsic value points. I think what I'm saying, and I get what you're saying about the proxy. So I guess what I'm saying is brand evangelism is the number one sign of brand. Like that people are so passionate about it that they spend their time and their effort preaching the gospel of that brand, whatever that is. And I don't know how you measure that exactly, but we've all seen it, right? Undoubtedly. Look, and I'm going to pull up my post-purchase survey right now, and I'll tell you how many people say they heard about us from friends and family, right?

45:55It's always like in the thirties for us. Like it's always about a third of our customers are actively saying like, somebody told me about you. I, even in our, I mean, it's a local town thing, but dude, like my coffee shop knows me as Pila Matt. Well, and one of the reasons why my history here, I think influences my thinking is that our marketing budget was basically zero for a long time at Simple Modern. Like we grew in a very atypical way. and so we had to grow through word of mouth like we've definitely seen that you know like you can certainly grow that way there's just your tam is limited and that's i think my one of my biggest things i've learned from you sean is that like my tam is limited to one tenth of what it can be if i'm just relying on great product at you know great value to people that if i'm not really actively spending money telling the story of my brand and growing my brand that way that I just can never scratch the potential of what we're capable of.

46:57So no disagreement from that from me that like there's an intrinsic link between how much marketing you do and how much brand you have. I'm more trying to say there's people that do a lot of marketing that don't develop any brand in the process. Right. So it's like it's not like lots of marketing equals brand. We know that. and and i think there's even like i'd give an example of like a broadband provider i used cox communications for several years because it was like my one option and i freaking hated it like i threw a party the day that i was able to churn from them you know and so they had a lot of repeat purchasing from me but it wasn't because it was kind of that i was just captive you know they just had kind of lock-in and so like i don't know how good repeat purchasing is because sometimes it's begrudging repeat purchasing.

47:41I mean, maybe it's one of those characteristics that's kind of usually true, but I really think the way that people talk about you is extremely qualitative, but it's probably the best encapsulation of brand. Airlines, telecommunication, health insurance, things you have to buy that you hate, and you're happy to have a net promoter score of negative too or whatever, right? I call them dissatisfaction businesses. Yeah. They're all in the business of dissatisfaction. And we are in the opposite business where we have to surprise and delight customers, right? We are in discretionary consumer. Like if someone buys a wallet for me, I should be fucking kissing their feet, begging and thanking them for it, right?

48:24Because they could not buy a wallet. That's the first option. Lots of people just don't buy wallets. And then if they do choose to buy one, they have infinite options out there in the market between Amazon knockoffs and luxury brands. So me winning a sale is we have to have, you know, my CSAT score is 95%, right? Like my customers need to be so happy to engage with us and we have to go above and beyond. And that helps with the whole brand thing. On-brand responses. So this is 10 ,000 transactions over the past, I'm going to call it a couple of weeks. YouTube was the number one response. That's 20%.

48:58Instagram was 17%. Friends and family was 15%. Facebook was 12%. Existing customers was 8%. 6 % of people were searching for a new wallet. Podcast was 4%. Other was 4%. Then there's a long list of just a bunch of smaller 4 % options. So if Matt has 30 % coming from friends and family, I assume what that means is that you could cut all of your marketing and 30 days later, you'd have a third of your revenue still showing up, right? That's really awesome. I think if I cut all my marketing, I'd have about 15 % of revenue showing up. And it's like, is that a more powerful brand? Is that scale? Is that category?

49:34I don't think one is better than the other though, Sean. To me, it just means that I'm probably not able to spend more money. There's other mechanics in my business right now that are keeping me from scaling up ad spend. So I don't know that that's a good or a bad thing, right? It likely means that I'm leaning a little heavily on word of mouth and repeat. I think, Sean, you posted something today. What is your repeat revenue month now? It's like 30 %? Yeah, 33%, something like that. Yeah, like we're around 35%. Like if we can kind of hold our business to like 65, 35, 65 % new customers in a month, 35 % is coming from returning, that's a growing business at like 30 to 40 % per year.

50:20Somewhere in there, like that's the level. So my word of mouth is, I think it's all two things. One, it's indicative of my level of ad spend, probably being lower than yours as a percentage. and two, it's the purchase cycle of my product category. I just don't, people don't, it's like your wallet. We don't come back and buy, like most people don't come back and buy more than one case every few years, every three or four years, right? So like it's higher only because the brand's been around a while and we have really strong repeat rates for every cohort that we've ever acquired. Yeah, I mean, it's super impressive, especially if you're growing new customers at the same time.

51:01to have 30 whatever percent of people say they heard about from friends and family. I would, that would make me seriously doubt spending money on ads. It's like if you're getting good growth and you have so much built in brand lock and referral or whatever. I mean, that's awesome. Operators, Black Friday, Cyber Monday is coming up. Is your SMS list ready? If not, get on PostScript. They're helping us drive 14 % more email signups through their better opt-ins are helping us get 6 % more SMS subs every single day because they have perfected the art of pop-ups. You need to build your list. You have to nurture your list.

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52:55Like I guess identity is the way to describe it. Like these people value these things. I think Sean, you've once, you and I were talking once a year or two ago and you're like very blunt advice to me was like, just build the Patagonia of accessories. And that's, I think in a lot of ways we've always looked at it that way. It's like, well, we just want, I want to acquire like people who are very aligned with the brand values. And I think that's the lock-in for that, that core. If I gave you that advice, That's a genius advice. I stand by that today. It's that simple. Listen, it's a simple math.

53:28Just build Patagonia, but for accessories. That's it. He wasn't quiet about it, Mike. Sean, Sean, I just need you to build the Apple of wallets. Oh, dude, I'm there. I have the iPhone wallets, bro. But anyway, so, okay. So thank you, Matt, for sharing that. I shared my numbers. Mike, what percentage of your customers are referred by each other? Is this a good proxy for brand? Yeah, I'm trying to track it down. We see different numbers in different places, but I mean, somewhere in the 20 to 30 percent range say that like referral was like a heavy part of their buying decision. So it's significant for us, I think, because of the way that we've structured the business and the percentage of revenue that we spend on ads, which is significantly lower than anybody else on the podcast.

54:19it kind of has to be, or we would like kind of be defunct as a business. I actually think for us, we want to be driving that number down over time because we need to be spending more money on ads. So like I'm kind of, I might even, you know, might even be in the high thirties at points and I need that number to be a little bit lower. So like, I think that's a sign of health, but I also think to your point, Sean, you're just, you're limited in how much you're going to be able to spread your brand fame if it's completely dependent upon other people to do it. And so we're building the muscle of doing that ourselves.

54:54But in the early years, it was like 80, 90%. I mean, it was a ton of it. Yeah. So we've acquired in Shopify over 10 million customers have gone through our Shopify store. Yeah. Yeah. And every quarter we acquire hundreds of thousands of net new customers. These are people who haven't bought from us before. And And like, that's the superpower of Ridge is being able to go out there and every single day win the ad auction and acquire new customers. But that's why we have new designs and new whatever, right? And it's probably just because my first training was in digital marketing. And it's really hard for me to just square what brand means when it's not doing that, right?

55:34So anyway, that's like, look, I would love to have more organic revenue. but like the way I think about brand is those three rules I said earlier in the show. And I would love to find a new way to prove it if I have a good brand or not, if I'm not doing those three things. Well, I will say this. Qualitatively, you clearly have a great brand, Sean. I think I can say that definitively from the outside. Oh, totally. I think that the point that we're trying to kind of dance around here is understanding why it's great. Like it's one thing to build a great thing and sometimes it's different to understand why it worked, you know?

56:06And why it worked is pretty important, not because, you know, Rich has value and you're going to recognize that value one way or another. And you don't even necessarily need to know why it worked in order to do that. But if you're going to replicate it, you sure do. And that's the part where I'm kind of fascinated is understanding the things that worked in a way where I could then take it and do it again with another brand, whether that's Trevi or another brand I spin up or even a different type of business. And so that's the piece that I think is really interesting. If you can really become good at consistently being able to understand how to build brand affinity, then like you're going to, I mean, I think you're going to be like a billionaire eventually because like there's just so many different opportunities to use that skill.

56:51Yeah. And I think I'm just so jaded because when I was cutting my teeth in marketing, brand meant hot people in Brooklyn and Silver Lake. You know what I mean? People with tattoos and funny haircuts, if they liked you, you had good brand. But then everyone who raised money to sell to those people ended up going bankrupt, right? I think there's a real big difference between brand and trend. And I think we conflate the to a lot of times. What do you mean? Well, so like one of the things that we've looked at in our industry, our industry has been very trend driven. So if you go back like 10 years ago, there was a company called Swell that had, you know, they really experimented with colors.

57:34I think they were very innovative and they, you know, grew to over a hundred million in sales pretty quickly, but then it kind of flamed out and ended up being acquired for, you know, like$10 million or something and like is just a shadow of what it once was. And then after that, there was a huge trend with Hydroflask and the VSCO girl thing. And really Hydroflask has not come close to those heights since like they went down the other side of the mountain and just as much of Helen of Troy has, they've really struggled, I think, since then. And then you kind of keep going down the line. The most recent one that we are on the other side of is Stanley.

58:12And lots of respect for Stanley. Just going to preface what I'm saying. Lots of respect. But the numbers are just very tough for them this year. Very tough for them this year. We're not going to get into details. Are we talking a 50 % decline? Yes. We're talking about those kinds of declines. And so, wow. So you look at that and you're like, well, obviously there is some kind of difference between I am on trend, I am the trendy thing, and everybody identifies me by my name, even though I'm the trendy thing. Because I mean, everybody knew that Stanley was simultaneously a brand that was gaining an awareness, but a huge trend.

58:55And so how much of that was the Stanley brand and how much of that was trend? Well, I think the numbers are kind of saying a lot of it was trend and less of it was brand. Part of the reason I feel that way also is that we benefited to some extent from that Stanley run up. And we've seen some suffering in parts of our business based upon it. And so like, I think what we're seeing is like, well, hey, some of our financial, like, you know, there was a year where we doubled some of that was more trend than it was brand. Because and brand, you don't typically double your brand affinity in a year, for example.

59:32So I don't know how you peel those two things apart. I think brand is usually built more slowly over time. I think what you're talking about, Sean, is trying to like make the cool kids like you. But the problem with the cool kids is they're pretty capricious. Like they jump around. They like to find a trend and they like to hop on the next trend, the early adopters, whatever we want to call them. And I think brand is sticky. Brand is enduring. Brand is conviction. Brand is like something less transitory and that that's what you're really trying to create. Because otherwise what you're doing is you're creating trend and you can make a lot of money doing trend.

1:00:12It's just not sustainable. how much do you guys think i guess product and brand being very tightly coupled right how much do you think the brand the great brands that we can think of in consumer are built because they focus their storytelling around a core customer they never really deviate from that core customer and that that core customer to them is aspirational in a way and lululemon is what comes up for me like their sort of girl that they've kind of gone after has really been the same for 30 years yeah i can't remember the name that they call her but like i think it was stacy or something it's like they it was like she makes a hundred thousand dollars a year she works in marketing like they had like the whole thing dialed down the whole avatar yeah um so the question is do you by sticking to that customer is that is that how you build affinity over time and build brand over time and and that they just have such a great core that is aspirational to everybody else that they always win and it kind of hit it was most striking to me i was in calgary i don't know if i share this but i was in calgary in July and I went into a mall and an aloe store and a lulu store were maybe like they were on the same hallway but like maybe just a few stores apart across the hall from each other aloe was empty there was two people in there and lulu looked like there was a like a celebrity book signing it was just rammed full of people and I'm like aloe's supposed to be the cool new kid like the new hot chick on the block or something.

1:01:58Dude, Lulu was packed. I don't know if that's a Canadian thing. Maybe it is. Or it could be a demographic thing. It could be that Lulu's target core customer is the type of person that shops there. And I do think this, great brands are built on standing for something. And it's - I agree with that. I think the reason why the core demo, like the target customer thing is powerful is because it forces you to actually stand for something. And if you don't, it's very tempting to just kind of be like, well, where can we sell more stuff? And to try and kind of be something for everybody. And like, you can never build an enduring brand by being something for everybody.

1:02:40You just can't. I 100 % agree with that statement. I think, and I come back to Sean's comment about like, can you sell more products to that person? And I don't know that you can by just making cool things. I think you have to have like, you have to stand for something. You have to like, your brand has to hold a place in that person's. Well, here's an easy way of saying it. When they buy from you, they have to be buying more than a use case. They have to be buying an identity to have real like brand, like huge brand halo. Like people buy from Patagonia, not just because they need outdoor gear, but because they care about the planet.

1:03:18And that's their way of identifying as somebody who cares about the planet. People buy Nike, not just because they need shoes, but because they want to be known as a winner and somebody who competes. And we could go down the line and talk about a bunch of different brands and what does it communicate about me. And I think that this is actually, to be self-critical, I think this is a place where I have not been as successful as I'd like to be over the last 10 years. And I hope the next 10 years I'm better at this. I think if I'm selling water bottles that are really high quality and a great value for what you get, I think I can do that as well as anybody else.

1:03:53What I think has happened in our category is that people are no longer really primarily buying a water bottle. They're buying an identity of sorts, or they're buying like a billboard of sorts. And so that's a very different type of competition. Welcome to the phone case industry. Yeah, exactly. We've been here for a minute. And this is what every brand's doing. You're trying to sell more than one thing or even the primary thing you're selling might not even be the functional use of the product. I don't know how Lululemon built their brand, but I can tell you they have one because they have pricing power, they have best-of-class margins, and their repeat rates are crazy.

1:04:36So it's like they passed the test of having a great brand. Obviously, they're worth$30 billion in the public market, so no s*** to have a great brand. But going back to like, can you sell something to everybody? Maybe this is a critique of Ridge, but I'm like, yeah, I need to sell more s***. So I started launching s*** and acquiring those customers, right? And if I was in charge of Simple Modern, you know what I would do? I'd launch phone cases. Sorry, Matt. I'd be like, yeah, s***. I mean, I have the licenses. I'm in the wholesale distributors. I'm like, I'm going to sell$20 phone cases to Target.

1:05:10That's my new business. And that's what I would do. I'd be like, what does Simple Modern stand for? We are going to be the best product at the best value price point across mass market retail. And it makes so much sense to get into backpacks and phone cases and everyday accessories, right? And that's how I would take Simple Modern to a billion-dollar brand. Just like if I was Matt, I would be like, yeah, every accessory we're making the sustainable version of. So I'm like, laptop cases. Our product roadmap is no different than Ridges or Simple Moderns or anything. It's just like, but I'm going after identity.

1:05:46It's like, I'm just going to make the least wasteful version of this. And I'm going to just lean hard into design and personalization. look like that's it this is happening in software i bet all of us start getting very sharp elbows what i mean by that is i'm like matt you get into every category i get into like i get into every category you get into mike's in every category we're all into but the difference is like i'm for guys matt's for climate enthusiasts mike's for families i think that's a big you know like because sean you're going to get into something hydration related and i gave you the referral And so it's like ostensibly I'm helping create another competitor, but it's also like one, the ocean's really big, but also number two, you're going to go after a different core customer than I am.

1:06:36And I do think it gets more difficult when you're trying to do the same thing going after the same customer. Although one of the guys who's a co-founder at Corksicle is a good friend of mine. I have good friends that have been in kind of competitive places, but it does get tough. And I think that this is the hard thing about being a really ambitious and gifted founder or leader that has capital is that you are going to end up bumping up against other people you respect. Well, dude, and it just, if I look at all of our brands, right, it's like all the categories we're in make a lot of sense for the other person to be in.

1:07:12But like slightly different customers. Like I do think I have, Pila probably has some overlap with Mike. Some, right? And we might even have like a very small overlap with Ridge. But with Ridge, I always just assume it's because I have the girlfriend and she might buy it as a gift for her boyfriend. Like that's what we look at, right? It's like that's the only way I get a case on a guy's phone in our view. And with Mike, it's just I do creep up in age a little bit sometimes. Like most of my customers are like 25 to 35-year-old female. But I have like 35 to 45. I'd much rather compete with you guys than black hat overseas sellers.

1:07:52So if you guys want to launch wallets, please, please get into this space. Yeah, yeah. No, I think it's, I have been thinking a lot about, like, we're launching six new categories of products over the next 12 months. A lot of that has also just been like talking, watching Sean put on a masterclass of category expansion. Half of it's that, half of it's also been like, we were so focused on Lomi for so long as a product team. And now we're coming off of like, Gen 3 is in market. It's great. what are we working on next? And it's incredible to watch my product team go from like, it took us years to build these damn machines.

1:08:24Now we're looking at categories for Pila and we're like, oh yeah, we can do that in like five months. Like no problem, man. The expansion is fast now, relatively speaking. In the last 90 days, my brands, Pila and Lomi, have doubled our support capacity without adding a single new hire. And 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 their 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.

1:09:01And the migration was probably the easiest part. I was surprised. RichPanel 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. Not 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 Friday's 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.

1:09:33Tell 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 think the ultimate testament to brand is can you sell something else? Like Lululemon selling shoes. I think it's a great way to look at it. Like, you know, they went to women's, they went to men's, they went to shoes. It's like aloe cell supplements. If you go to the aloe store, they have aloe vitamins and aloe skin. That's weird. So is it trust? I mean, is trust one of these vectors that like just - I think that's part of identity. Yeah. Yeah. I mean, because I think that that's why people will buy other things from you.

1:10:03It's like, oh, if Ridge makes a carry-on, I bet it's pretty good because they make really good wallets. Well, dude, and it's like going back to simple modern-graded tech accessories. Target sells a ton of cords and wall chargers and whatever, and they're priced at$10 to$15 from brands you've never heard of. A simple modern version with a$2 markup, that would just sell good. I'm telling you. And that's the brand insight inside of me. Let's, like, hang on, like, double click on Target for a second, right? I think part of the reason that Target is suffering right now is they moved away from their core.

1:10:38Like, they tried to be something for everybody, and it doesn't work. Like, they moved a little too close to Walmart and Amazon. And that Target should have stayed up in the old Target territory, where it's, like, a little higher-end version of that and a little more tastemaker and a little less I sell all the s*** at the cheapest prices. Why is Target suffering? What I would say is that to be Tarjay, to be the high-end thing that I like to walk around when I was in high school, none of the s*** was locked up. Yeah, it kind of kills window shopping when it's actually behind bars. Well, look, and it's the problem with being a public company, right?

1:11:15You have to cut costs, right? So there's less staff. So if there's less staff, then they can't unlock the thing. So I'm just not going to shop there, right? And they haven't been able to win on.com like Walmart has. Walmart's putting up great dot com growth. So yeah, I don't know. I mean, they're going to turn around because at the end of the day, there's only three, you know, mass retailers. It's Walmart, Target, Costco. And then there's like, you know, Kroger, which owns half the grocery stores. So it's like more or less it's... It comes back to the multi-brand, like the whole brand versus multi-brand shopping experience, which like just to loop it back around to the agent, the agentic thing.

1:11:52if you are a multi-brand retailer like a target you've got to be really good at defining like the target brand because you can't rely on the product brands because every product brand in your store is trying to take your customers as the retailer like we all want them directly yeah i don't know how cost has been able to do it so well because people would rather die than give up their cost membership right like their value stack is just so good sean and i think that i mean look at the shopping experience. Again, go back to the me store and the agentic experience getting better. Target has, the average Target or Walmart has like 100 ,000 plus SKUs in that warehouse, in that box.

1:12:32The average Costco has 3 ,000 to 4 ,000 individual SKUs in the same size box. When you go in there, you are not experiencing the same thing. It is far more curated. there is a lot more trust because of the curation it's not just like let's throw all the that you basically target target walmart and amazon are all in the same business and amazon has a better modality for selling that much right right cost goes in a different business than the other three yeah because amazon puts the risk of inventory on you right and they charge you fees to move it through. And then, so really the question is, why is Walmart so good?

1:13:15It's like, it's not, it's not because we, I think Target gets picked on a lot because of the stock performance and the sales performance. But what happened to Target has happened to Nordstrom's has happened to every, every mid-market. Oh, and I hope Target really turns around. I'm with, like again, not dancing, I'm definitely not dancing on Target's failure here. I'm, I'm actually like, I am bullish for Target long-term because I do think there is a place for them to answer your question on Walmart. Walmart has never really deviated from everyday low prices. Like they just, their brand is still the same.

1:13:46Like I know exactly what I'm getting when I go into Walmart. I don't go in because I don't know, I don't like what I'm getting, but a lot of people do. Yeah. Look, I actually, I would totally shop at Walmart. I don't know where one is. That's the best of the big challenge. I love Walmart, man. Walmart's the best. Walmart's awesome. Like Walmart is like capitalism. It's peak capitalism. It's like you go in there and you're like, the modern world has brought us the ability to bring inputs from every nook and cranny everywhere. Anything my heart could possibly desire. It's here. It's cheap. It's within arm's length.

1:14:19This is amazing. And they try and price it as low as they possibly can. Hallelujah. I love it. We, it's just, you know, living in Los Angeles, like the only Walmart I know about is in Van eyes, but it's like where you go if you want to get shot at. Okay. So on this, like the product brand thing, this is just the Walmart targets making me think of the Sean, your, do you mean to tell us that like, when you guys are adding products to Ridge that you're more like, I think I can just sell anything versus I think our core customers are going to buy this because it's like, it fits the Ridge brand. Like you once told, I think, I don't know if it was on the show or maybe it was when we were in LA, you were talking a lot about like, one of the things that defines Ridge's brand is material selection.

1:15:06It's like, we just pick really great materials to make stuff out of. Yeah. So I'm looking at what we have coming out in Q4. I mean, it is, it is just like colors and, um, look, I have no new category launches in Q4. Um, but like, we think we can make the dude version of stuff. Right. So like we're, we're getting into power. We have a power bank And I think next year would be the best-selling power bank in America, right? And that's just because it's like, yeah, we made the guy version of it. And what that means is just it's a power bank that's a little more masculine in tone because every other power bank is just – they're generic.

1:15:42It's like a dishwasher. There's no one's making the men's dishwasher, right? So we take that same sort of core DNA. Yeah. So maybe we are thinking about who our customer is and how to appeal to them. But it's not like our current customer. It's like, are there customers out there that we can acquire who might like this? And that's where we found success. Yeah. Because I think, I don't think Mike, like Simple Modern and Pila, like I don't, I do think about this a lot. I don't look at it from this lens of like, I can just add any product to the brand because we do have sort of like brand power in our core.

1:16:19I see, like we look at it like we need to be true. We actually have to sort of like keep some sort of direction and trueness to what will like further reinforce the brand's story with those customers. Yeah. Well, and I think practically how this happens is that brands, they test the boundaries and they try things. And Sean's tried things like, oh, well, watches would make sense. And then it's like, well, no, not going to do that. You know, and it's like, that's the way that it works. Every great brand has done a lot of kind of pushing the boundaries and trying to like launch into other areas. And sometimes the market kind of slaps its wrist and says, nope, we actually don't want you to sell that to us.

1:16:59And other times it's more receptive than you could have guessed. And then you're like, this is great. We just grew the base. And that's been our experience as well. Like, so I think the thing that we keep saying on this show is like, you have to be testing the perimeter of like, how can you push out? You have to be pushing out in order to create consistent growth. But I don't think you can get dogmatic of like, it has to be this one way. Because sometimes the market comes back and is just like, you know what? No. Uh-uh. And you got to listen to it. And that's why, look, I think we were supposed to talk about product development today.

1:17:31And we just did an episode on that. We'll have another episode coming out. But rapid product development is such... It's the 2025 version of rapid creative, right? Like creative defined success from 2022 to 2024. And now you just need to be rapid product development. So that's coming on the next step, guys. We talked about brand today. The Sean Frank three rules of brand. We talked about you have to have margin. You have to have pricing power. You have to have repeat rate. We talked about organic versus paid revenue, how to measure that. What does brand really stand for? We all had some pretty hot takes.

1:18:09Matt, Mike, any last words for this episode? No, I'm kind of stuck on the me store. I think that I got to do some thinking on that. I like it. The agenda commerce piece is such a good hook. If people can tune out, they're lost. That was a great opening to the episode. Mike, anything you want to add? No, I want to dig more on that. And what I want to get into is practically how do you prepare yourself for it? I mean, we had a meeting with our tech roadmap last week and it was all AI and agentic commerce. And how do we prepare ourselves for it? I think it's actually one of the things that I'd most like to talk with you guys about and that we could probably add the most value to our listeners is actually like practically what do you do to be not left in the dust in this transition?

1:18:50And how do you set yourself up where you'll be able to know when it's really happening? Those are the things I'm paying attention to. But I love the brand discussion. I think it's great. I guess my one comment I'd make is like brand building is very messy. I think all these brands that we tend to like, you know, look at now and we try and tell a pretty story. You have no idea the number of boardroom fights. You have no idea the number of failed product launches, the number of stupid marketing campaigns, misses, overcorrections in the history of every great brand. I mean, just as an example, you know, we use Nike as an example here.

1:19:24Nike got its butt kicked the few years after its IPO. Totally missed. Aerobics got it. I mean, Reebok comes out of nowhere and becomes bigger than them within like three years. And then the Jordan thing happens and they reinvent themselves. And even, you know, in the last couple of years, Nike's really struggled. So it's not always up in the right. It's not pretty. But I think focusing on brand is the number one way that you build enterprise value. Dude, brand building is messy because brand building is a human experience. and the human experience is messy. And humans change, right? That's the other thing is that a lot of times you'll see brands that are great for like this moment in time, but it's because they connected with a particular generation in a particular moment in like the zeitgeist and then it's gone.

1:20:10The great brands are the ones that find a way to continue to be relevant for really long periods of time and reinvent themselves. Yeah. And I think the comments you had on Stanley were best in class. Like what I took away from that is you never want to be the fad because as good as it feels to be on top of the mountain, falling down that mountain hurts. It's like my wife, my wife and I had this conversation the other day because a wallet is really hot right now. And she, and she's like, I think you kind of want to be a wallet. I'm like, I don't know that I do because like they've been tremendously successful, but the comps are going to be unbearable next year.

1:20:46And she's like, yeah, but you're an achiever. And I really think you do. And so like there is this kind of like anytime you're competitive, you hate it when somebody else is beating you. But to your point, Sean, when somebody else is beating you just because they're the trendy thing, that's not sustainable. And that's not the thing you have to look at long term. Mike, you need a picture framed in your office with a circle with a dot at the top and a dot at the bottom. And at the top, it says be sexy. And at the bottom, it says stay boring. And that's the continuum that you should just live in.

1:21:16Right. It's like, don't ever get too sexy. Pull it back to boring. And don't get too boring. It's like you're trying to balance those two things, right? To end on this story, T-Pain had three number one songs in six months, something that almost nobody's ever done, right? He's on top of the world. He's flying private. And someone told him, they're like, hey, man, save some money because this is going to end. He's like, it's never going to end. I got so much more music. Next year, he was bankrupt. So he's been able to work it back up. He's a star again. but it's like you could only be on top for so long, right?

1:21:49Everyone has a moment where they fall back down. You'll get right back to the top eventually, but it's way better to be a touring, steady musician. Keep it going. Do not be Stanley because the fall down that mountain hurts. So I've never shared this one on the podcast, but I love this. When Roman generals would go and win a huge battle, they'd get a tribute, right? Like this huge parade, right? And apparently during that parade, there was a guy and his only job in the parade was to sit right next to, you know, you talked about Bill Clinton who had the guy who whispered people's names. Well, this guy sits right by the person who they're throwing the parade for.

1:22:33And all he would do over and over again is he would whisper memento mori into. And what memento mori translates to is remember that you will die or remember that you must die. It's basically like even at your peak, you are just a man and you will die. And it's like so interesting. I do think there's something to that, that like when you are writing high, when things are going awesome, it is important to have people in your life that are whispering that in your ear so that you don't get too high. Kind of like what you're saying, Sean. And anyway, so great episode. Great talking with you guys. From T-Pain to Roman Parades, we got it all on the Operators Podcast.

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1:23:44We all know what you guys like. And we'll end it there. Thank you so much.

1:23:54You