Every Step to Start an Ecommerce Business Revealed: Operators Build (E1)

24:21But if you think about, we have an opportunity to evaluate what product market fit is. Like if we can nail some level of product market fit by the time our first lump kind of invests into the company, I think that's when we're going to have to evaluate like if we move forward or not. And I think also what's worth noting is that we have a unique advantage in the fact that we're starting a business with AI extremely relevant. Like, you know, what can we do to implement tools, agents, platforms that are AI driven, that we can keep our costs down that we can. And that's that's another reason why I think to Mike's point that we can't go super fast.

25:04We don't want to go super slow. But what we can do is we can build in real time using AI tools so we can keep our head count down and be efficient, be effective, and build something in real time to show people that, yeah, you might not need 500 grand to start a business, but can you implement AI tools to be more efficient, more effective, and build an AI-first company? Because you couldn't do what we can do today three, five years ago. That's actually a great point. One of the things, Mike and Sean, that we've talked about, I know Cody and I talked about too, is like, of the money we're putting in, we want as much of this to go to marketing as possible.

25:44Yeah. Right? Like, we really want to, like, take that capital and go and test and try as, like, just basically try as many things as we have to to figure out PMF, like whatever we define as PMF, to figure out what CAC and LTV look like. So Curtis is hitting on product market fit. The PMF would be what you hear a lot of us say. Mike do you have a give us your take on like what do you think that means like you started a supplement uh not even supplement like you literally have a product with Trevi in market you've you're the furthest ahead on this out of all of us right now what does that look like for Wix yeah for sure well I mean I think there's two elements of product market fit and one is are you solving a pain point problem and the market really is looking for a solution and do you have a great solution?

26:31Do you have a great product? And I think the great product piece, you just have to get your product out there. You have to sell some to people. You have to look at the reviews. You have to look at refund rates. You have to look at a churn, retention, things like that, that we're going to look at. We just don't know. We try. We'll try, obviously, to design a great product. And I think that that actually could be one place where we're elite is being able to come to market with a truly great product. I think the days of like, hey, hey, I'm just going to show up with a so-so product and Meta is going to power this thing to be awesome.

27:03I just think those are over. I think you've got to have great product plus great marketing, plus you really have to be addressing a need. And we're going to find out if that's true. And really the thing that will probably show that over time, like I said, is retention and your customer acquisition cost. Because my intuition from having talked to all the people that we know is that you're going to have insane customer acquisition costs if you're not getting some good word of mouth. And that if you're not retaining people, if you're not getting people on subscription and retaining them, the economics just can't work because you just cannot make it work with acquiring people that make one or two purchases.

27:41You really have to have people that stick around. So I actually think in going back to the discussion about how much money is this going to cost to start this business, I actually don't think we're going to burn through$400 ,000 really quick. I think the experience is actually going to be we're going to feel like we're going quite slow at first because until you start to get some economics you like, you're really not going to want to ramp your spend at all. So like another thing that is worth talking about here is what is the cost in time? All of us have very expensive time. And so I actually don't think burning capital, burning money is really the bigger risk here.

28:16I think it's that it just takes us a lot of burning time to get to figuring out what it's going to take to get to product market fit. And we're also doing something in a category that, I mean, a lot of people are trying to do this. I think that this is obviously kind of the playbook that is out there right now. And a bunch of people are trying to replicate the strategy that, you know, Pablo Escobar proved that selling powder is one of the best business models in the world. So if you can find a way, it's like the perfect e-commerce product. Like if you can sell a powder, it's super light. It doesn't spoil.

28:49So it's perfect from the fulfillment end and super high margin. Like there's a lot of reasons why this is such an attractive category, but we've talked about this on Nine Ops all the time. The more attractive the category, the harder it is to get to product market fit because there's so many people that are going to compete in that space. So I'm fired up. This is like putting it on insane difficulty mode and saying, with our chops that we've developed running all these companies, can we come in and can we compete with everybody in the world that is going after this in e-commerce and build something of value?

29:24I'm super excited to find out what the answer to that question is. I guess on the other side of that difficulty, though, is large TAM. Right? It is like sleep is a massive market. Yeah, it's like I just said. Direct relationship. The bigger the TAM, the more people that are going to be, you know, it is going to be the absolute octagon here. And I'm here for it. Like, if you don't love competition, like why start a business? Why be an entrepreneurship? So like part of the reason why I'm doing this is like I want more competition in my life. This is like my drug of choice is like actually pushing myself.

29:57What can we do? And I love the idea of trying to do that with this group. So I want to hit on, there's a few things that we have decided to do starting this business that I think is relevant for people who are going to be listening. So the first, actually, let's start with like what we did, what we're doing, what we're not doing. So what we're not doing is this is not a drop shipping business. This is, we have bought inventory. It is at a 3PL. So we are using a 3PL. We are not, none of us are using our own warehouses. We're going the normal route. It's at a 3PL. We are starting direct consumer.

30:31So this is like Shopify meta ads out of the gate. We're running a playbook that we're all very familiar with. And we are, I guess, initially also just single channel. So we're not trying to boil the ocean with our go to market. Right. We'll do a whole episode on why we're choosing this, like around like what our channel strategy is and how we're thinking of launching. but i think one of the key things when you're starting any business is like we actually while we know the market's big and we know powders are great we understand like all that we also don't know what messages are going to connect with customers so like we don't know who our initial customers we don't know like that beachhead persona we don't know the ones that scale so like what mike is hitting on is it's it is a little slow to figure some of that out of the gate right like we're not just going to come out hit the gas pedal it's like no but there's a lot of discovery and in sort of like marketing that we have to go do just to figure out who the hell we're selling to and we got to figure out roles with the team like what are the ways that we play together we got like you know five cooks in the kitchen and so like we've got a ton of chef expertise but like somebody's got to run the food you know like somebody's gotta gotta uh do some of other stuff.

31:44And I think that'll be fun too in a team that's as talented to figure out what is the way that each of us is able to contribute and where do we defer to one another. Yeah. I think Cody's first favorite Slack message to me right now is he's like, am I okay to do this or are you doing this? It's basically how he starts every conversation. It feels so weird delegating work to a CEO to Matt. I'm like, hey, can you integrate this? Can you do it? But no, Mike, I forgot what it was that you said you felt strongly about, but one area that I definitely feel strongly about is just the low Alpex. I just think it is so hard to go backwards and talking about all the lessons that we've learned from our businesses, trying to, again, to be a D2C brand, you have to have low Alpex.

32:27It pretty much is impossible without it these days. As much of your P &L should be going to CAC as you can reasonably afford. And I think we're in such a great time with AI, obviously. But that's, I think, one of the biggest constraints we should give ourselves. and it is so hard to do for an existing brand. So that's one of the things that excites me about this. Trust me, I've tried very, very hard at an existing nine-figure business. It's really, really, really hard and really frustrating. So that's, and that's it, where it's like before we go and hire an email agency, like I built all of our emails that we'll need, right?

32:59And so we can do that and then statics and then landing pages. So like we are able to have a really lean up X at least for now, but I also think that goes in, like Connor McDonald talks about this all the time, high leverage businesses. If we're launching multi-channel from the beginning, we need a lot more people to do that. And so I think before we need to, let's keep it very consolidated. We don't need massive TAM. Let's dial things in, which really means low channels and low SKUs. And that allows us to keep low OPEX. I haven't seen P &L yet. Do you guys have a number in your head of OPEX percent of revenue that you think we should be targeting for this to be successful?

33:36Zero. I've talked about this with brands. We were actually just chatting about it the other day. I want it to be 1%. And I think if you think about the three big drivers of your P &L, you've got your people costs, you've got your product costs, and you've got marketing costs. And I think all of us are seeing a future where the people costs and the product costs have to be as small as possible. That leaves as much room for your marketing costs to still be big and there's still to be a margin. uh i one thing i would disagree with by the way that we've already said we should be on amazon because we can stand that up and that is going to be it's going to be a demand capture like i'm not saying we need to like and also like i guess this is a place where i have personal experience where it's like you can automate a bunch of that stuff yeah and so cody i think your principle is really good but i i actually would say like the principle is more like you want to be as broad as you can with as small of an OPEX footprint as you possibly can.

34:33So if we can be on Amazon, this is also, as a side note, this is why supplement companies like absolutely print in wholesale because it's a low SKU count. It's not complex. It's just money that comes in with almost no additional headcount. So actually like the best situation for us would be to get multi-channel because we would find that we could get a lot bigger without growing that OPEX very much. So anyway, my one thought is like the best in class right now is that you have a demand creation engine and then your demand capture engine is a combination of your website and Amazon. We should definitely at least stand that up.

35:15Yeah, and it's really just what positive signals do we see before we go to the next level, right? Because right now it's single SKU, no employees selling on.com. If we get a$250 CAC, okay, let's throw Amazon on there, right? If we get a$150 CAC, we'll set a TikTok shop. The other thing is those can be very high leverage, meaning you don't need to do any work when they're set up, right? Like I could set up our Amazon in three hours. It's like we got all the assets, we got the listing, I could just set it up, right? So I agree with all that. Cool. So one of the things that we did, guys, that I would say is not, maybe not normal.

35:57for somebody starting a company. So like, usually before you enter a new category, you start a new business, you would do some amount of testing of your idea before you even place your first PO. Like we have already bought our inventory. And I think it might be good to hit on like, what would you do differently? If you were starting another brand, like another business, would you just do what we did? Which is like, we just really believe in the category. We worked on the product. We invested in the product. We ordered the product, like we ordered inventory? Or would you do some amount of testing customer message, like price?

36:33Would you run ads first? Like Sean, I don't know if you've got any strong views here on like what would you advise somebody to do? Well, I don't think they should do what we've done. I mean, Curtis spent a year making this product the best to launch. And most people just don't have a year. Like I would just take whatever is off the shelf and start selling it and then see if there's demand and then eventually land on the product you want. If you're proud of the thing you launched when you launch it, you launch too late. It's a very classic thing in tech. And we're very proud of the thing we launched.

37:09It's just, I would have just launched the melatonin gummies or whatever, whatever the earliest sleep thing I possibly could. And then once you get tax, once you get traction, once the Amazon account's set up, go towards the ultimate goal. So I think everyone listening to this is not going to have$500 ,000, right? And what you seem to do is find whatever you possibly can to sell that's close enough if you squint to get to what you want to sell. I'm getting back into the weeds. One of the things I'm probably the rustiest on is email. I'm super excited to be using OmniSend. They're using them on Winx.

37:44We're AI-pilled. We are using it to do everything. I'm running most of our email program from Claude and Codex using the MCP, and it's awesome. We also have email, SMS, and pop-ups all in one place. We have all of our flows, welcome series. It's all talking to each other. I love the platform. The analytics are really good. I highly recommend it, especially if you're in the position that Wings is in. New brand starting out. But if you're on a different platform and you're paying too much and you want to switch, they will do the migration completely for you. No lost data, no lost list. It takes only five days start to finish.

38:15And they are giving our listeners 30 % off the first three months. go to omnisend.com slash nine operators to try it out for yourself. All right. So then like, this is the actual question for me because I wasn't involved at the beginning. Like why not take that 500 grand, put it across four or five different ideas, put a hundred into them. I don't know MOQs, but I have talked to people that are doing that and like spinning things up with as little as possible. See what hits, give yourself a better chance for success and then go all in on that one. Well, that's a great question. Mike, why don't you Okay, so we talk about this all the time.

38:49It's like, what is that balance between putting shots on goal versus just having conviction? And I don't know what the answer to this is. I can tell you where we came out. Where we came out is make the best product that you can. That ultimately, efficacy is going to lead to retention and happy customers, and that's what's going to drive the business. so the product that we ended up building is one that is very scientifically proven we have experts weighing in on and i'm sure we have a whole episode about how we got there but it's going to be a very effective product that actually solves the problem and right now like you've got i mean gummies are so huge but also with gummies like there's all kinds of problems with that form factor like i guess adults love eating candy and so like gummies are pretty close to candy like i I like eating gummies.

39:36So like, I understand the appeal, but in terms of like, if you're actually trying to solve a problem, I'm really uncertain that gummies are the best way to solve it. In fact, I know they're not the best way to solve it. So I don't know. I think you have to kind of like ask this question between how much am I trying to crowdsource judgment versus having judgment and discernment myself. And this is a, this is coming up over and over again in an AI age of, okay, in an age where the computers can do everything, what's my role? And I think it has to be editing and judgment and discernment. So for us, we were like, we're going to go big on what we think is the best product.

40:16We did a similar thing with Trevi. And there are times that I've been like, man, if I could reorder that, I would have done A, B, and C differently. But also like, we've got the best reviewed electrolyte now. And I think that that's going to power the business to success. And so I'm always a believer if you have the best product that in the end that wins. And I think that that's where we came out. I'm pretty happy with the product that we did. I certainly know from like a scientific basis, like we were really intentional there. Honestly, Cody, it'll be interesting for us when we do like the kind of postmortem on this, should we have done that?

40:52Because, and I do think some of this is that we haven't talked about yet is like, what are we trying to do? And if the answer was we were trying to make a quick buck, definitely we should have just shot a gummy out there last summer and just immediately tried it. But I think if you're like, hey, we're really trying to build enterprise value. And I don't know that we've actually really clearly said that either, Matt, in this. No, we haven't. What is a good outcome? And I think that one of the things we should really emphasize is that with a group like this, that's basically pouring in their time, that's very valuable for sweat equity, it needs to be a really big enterprise value outcome for this thing to make sense.

41:28That's what I was going to say. I think, Cody, taking$500 ,000, making$500 ,000 bets, to me, it's not how I operate. I tend to be with Mike. I do the work and the research to get high conviction on something, and then I go all in. And the reason for that is what Mike is hitting is that I'm not looking to make like five$20 million businesses. Like I would rather go all in on something with high conviction in a large market where you put the right team together and you can actually like take a decent chunk of it. That sounds more interesting to me. So like that's like sort of the business side of how I thought about it.

42:08The other side of it was in this category in particular, like Curtis knows this because I've known Curtis a long time, but I happen to have a child. my daughter's almost 11, but she's an awful sleeper. Like, I think I've said this in the show. Like she has been a terrible sleeper her whole life. Sleep is the thing that plagues my house. My wife is a terrible sleeper. I'm a great sleeper, but this is a product that is like very close to home for me. So I think it also was a let's do it right. Because I know the power of like, if you can just figure sleep out, it is extremely important. Right. So I've been on the other side of that where we haven't figured it out and this product is freaking awesome so i'm i'm yeah i think i'm more like concentration of bet and i'm with mike that like if we're going to do something and put our time into it our time is valuable let's just go big on something then test a bunch yeah i think we should and i don't know if this is a time or the place to figure out what the goals are and maybe we you know sean just hopped off because yeah i i think we totally should because one of the things that's exciting to me like i agree all that is like if this works it also feels very repeatable.

43:17With our network, with the funding, with the audience, which I don't know if we want to use. It's like, all right, cool. How do we spin up a few of them? How do we do more? And then that would be, for me, it's like, I don't know. It doesn't sound that much fun trying to build a$300 brand, like a million-dollar brand. Maybe you guys would be better there. Maybe I could be more of the starter if we did more of those. So I think it would be, I think we should, yeah. The earlier we get alignment on that, I think the better. Curtis, what about you though? I want to hear your thoughts first on why not try multiple things?

43:49Why this one? Yeah, or speed to market. I mean, I think at the end of the day, that's how this conversation started. Sean had mentioned most times you bring something to market in a very bootstrapped, quick way, assess, evaluate the market, see how it responds, iterate the product, iterate on route for a product market fit. And this did take longer than we all expected, myself included. It totally did. Like a lot longer. There was delays. There was, you know, challenges. I think the category we play in, I think also it was important to actually analyze and evaluate. The assumptions that we made is that we're launching a product that is speaking to both adults and kids, to families.

44:33It's a consumable product. It's consumable. And so it's not a hard physical product that people don't consume that you can iterate over time. I mean, at the end of the day, efficacy is being scrutinized more and more often and more frequently with supplements. We're trying to market to a family-oriented product. I think that's even more important. I think there's a lot of reasons why we wanted to do it right the first time and spend the money on quality, efficacy, ingredients, product. And then, therefore, we layered on marketing. The one good thing that we have is that we all have experience both running businesses, but also we got four to five guys that are marketing savants.

45:15And so when you look at that, that is the biggest problem and challenge I think people have. It's usually not the product. It's actually how do we drive our cost of acquisition down over time and figure out how we actually bring this thing to market. And I think our experience allows us to make a lot more assumptions than most people. So we can spend a little bit more time on getting the product right beforehand versus, you know, getting it into market and then trying to figure that out. I would say that we are making a lot more assumptions than we typically all would. But I think our experience and our time running businesses and understanding this market allows us to do that.

45:54That's a fair point. Like we sort of did skip some steps. Something that you said, Cody, that I think is interesting is, you know, that you don't really want to run a$300 million brand. One challenge to that is you don't want to run a$300 million brand the way that it was trending with Jones Road. But I think that part of this experiment, part of the experiment that I'm running internally with my brands is how big can your brand get without getting away from a very, very small team? And that could be a really fun part of this is like, can you get to nine figures with five people working on the project?

46:26Can you get to, you know, 200 million, 300 million? I don't know if that's even possible here. But I think it's interesting. And I think it's more possible than ever before. And one of the things that I think all of us have experienced as leaders is that as the organization gets bigger, so much of your time starts to be like managing and things other than like doing the work and scaling the thing. And so I think it's an interesting kind of challenge for this. And when we talk about success criteria is how much can we scale this up without adding people? And that being an interesting constraint is like, realistically, how big can the business get when you're using AI and you're using these tools?

47:01How big can you get without adding all of the parts of business building that are maybe more of a drain than life giving for this group? Yeah, I'm with, I think I'm with both of you guys there. I think I'm not anti people. I think it should be said, like, I actually like building companies with people. I think that's actually part of the fun. Right? That's the reason why we're all here. You know, we're friends. We're, I mean, Mike, Sean, and I are business partners in this, this media company that owns this podcast. So I think I'm with you, Cody. There is like an old way to build a company. And then we're going to go and part of our goal here is to say, like, can we find a new way or a version of the old way that we all like?

47:38And then just see how far we go. I think, Cody, you're also hitting on an important question, which is like, what are the other goals of this, right? One of the reasons that we decided to do this and why we're doing it publicly, and we'll share this publicly, is we'd like to launch a brand every year as a group, right? Like that's, that's sort of one of our ideas. So like, if we go all in on an idea like this and we put our full weight behind it to what Curtis is hitting on is like, we're pretty good at go to market. We're pretty good marketers. We've all done it a bunch of times. If we figure it out and we have a model we like, then we are also looking for a model that we can repeat in the future.

48:16So that was definitely part of, of the conversation, Cody, what you're asking. Yeah, no, fair. And I also agree with Mike's point. That's partly why this is so fun is because we can take our experience and what would we not do again a second time? And like, all right, yeah, Mike, that's a really good point and pushback. But it's like, all right, I'm not going to do a non-subscription brand again. We're not going to do durables. But also, here's how we want to build a team. Here's how we want to build a culture. That's what's fun. And then the other thing that's fun about it to me is like, I really feel like I'm the dumbest person in the room.

48:51And so I feel like we have so much to learn from each other. And I didn't feel like that. I felt like I was the smartest person in the room for a while. And so it's great to be like, hey, I actually think Mike is going to be a way better leader than me. Or Matt is going to be a way better leader for me. He's going to be better at that phase. And maybe I'm better for standing up a new website and getting into a meta ad account. So I think that's the other thing that's fun. but maybe that's a good segue for us figuring out what are our roles? How do we divide? Who's calling? I don't want to say calling the shots, but how are we thinking about that?

49:22Even good for people listening as well. Yeah. Actually, it's funny. We're already starting to see this, Cody. We have vendors. We have partners that we've brought on to help us build the company. And one of their first questions is like, okay, who approves things? I'm like, I don't want to saying me all the time. So like sometimes I'm basically like, no, Cody will do that. But yeah, no, I think the, I would say like less role and more like areas of accountability is how I would guide us to think about this. You know, like Mike has already hit on the Amazon thing. I'm not going to do that. Like that is absolutely going to be an accountability area for Mike.

50:01And Mike's probably also going to be sort of like taking lead and accountable for like all things modeling and financials, right? Because that's also like knowing Mike, that's like another zone of genius for him. That's how I want to help. I think that I want to be, and I'm happy to do some of like the organizing leadership stuff also, but I'm also happy, you know, like I trust, Matt, I trust your leading. I trust all you guys as leaders. So it's like, I'd happily follow any of you. And I'm kind of happy to serve in that. But yeah, like I love, I think the numbers really matter here. And I think that just like you, Cody, one of the things that is awesome so far is to watch how like you needed basically zero spin up time.

50:43You're like, I know exactly how I'm going to attack this. And you just started to attack it on the marketing end. And that's exactly how it'll be for me on the Amazon numbers modeling. And it's like, I'm ready to go, you know. And part of that is that we're all able to draw from the experience of things that we're, you know, building with our own companies or that we've built outside of this project. But it'll be a lot of fun. And that's what I think more than anything else, what I want to be able to do with the group is be able to say, here is what the numbers say. And based on that, how do we want to proceed?

51:15And I think that's so much of these businesses. Like, hey, if we want to do A, then just know that's going to mean B, C, and D. Or we could do this thing over here, and that comes with this other set of tradeoffs. And I think that being able to kind of not only plot out the numbers, but then qualitatively communicate what does that mean in terms of the decisions that we're making is probably the role that I'll be the best in. This episode is brought to you by Serol. You're practically renting attention on meta ads and rent only goes one direction, up. Influencer marketing done as one-off campaigns is just another form of rent.

51:53The Fix is a system. Seed products at scale, convert the winners into affiliates, put your best performers on long-term retainers. That's what Serol is built for, finding perfect fit creators with their AI, managing personalized outreach at scale, built-in product shipping, one-click payouts, and tracking posts and ROI of all your campaigns so that your team can run influencer marketing like a machine. We're using them for the new brand that Operators is launching. Check it out. at getsaral.com. That's G-E-T-S-A-R-A-L.com. Yeah. Yeah, I think, and then just taking it a little further because we should have this conversation.

52:37Like, I think, Curtis, you're clearly product, right? And sort of like, I would say product and then like key relationships with creators. You've got a lot of big ones there, just given your background, like in sports, particularly. And I also think Curtis, like face of brand, right? Like none of us can probably get on a podcast and talk with intelligence about sleep health and sleep hygiene and wellness in the way that you can. Like you've been in the space for so damn long. Like you are like a longevity guy. I'm not. I look when I have a question, I call you. Like literally that's my life. guys.

53:14Like I call Curtis for all this crap. So I think that's another clear area of accountability. Honestly, I think the blurriest lines are going to be between Cody, myself, and Sean, because it's like all things like marketing. All of us are probably deepest there. And I think right now, like Cody, you and I are trying to figure out like, okay, day to day, who's doing what, right? Like I'm taking most things copywriting. Cody, you'll take most things like building out the systems and I'll contribute to it. I've got a pretty good ad builder. I'll add that into Cody's code base. I think some of it's going to be pretty obvious, but then who takes sort of lead on, like for our creative teams, who is actually approving or looking at all of that stuff?

54:03Is that Cody? Is that me? Is that Sean? I think some of that still has to be sorted out. I think the other answer, Cody, is we're also not deep enough there yet to have hit a point where it's like, oh, somebody needs to actually own this. Yeah, no, I agree with you. Yeah, because no, one of the one agency we have that we brought on, they sent something the other day and they're like, Matt and Cody, take a look. And it was like a messaging thing. I'm like, I'm gonna let Matt get that. But I agree with that. It's like, and it's also like, I'm also totally cool. Like for me, it's like whoever's faster.

54:33Like we kind of almost can read each other's brain at this point. And like, I can hop in if whatever it's like, I also want us to move fast. So I don't want us to be like, oh, we need to go get approvals from this person or worry about stepping on toes, but also have the respect to be like, hey, like he's got more strength here. Yeah. You know, it's actually like, Mike, this is an interesting one, right? The usually in a business, there is actually like pretty clearly defined roles in a traditional business. Like you would have somebody who owns finance and somebody who owns supply chain and somebody who owns marketing.

55:02I think the interesting thing with how we're going to try to construct this company is this is a little more like a hedge fund, right? Like we're all pretty capable in most things. And I actually have like, it's not just trust and leadership. I actually just have trust. Like I'm pretty sure I could trust any one of you guys to make any of the calls. Like you've done this a long time. And, and I think that I'm saying that because what Cody hit on earlier of like, you know, building up a large company, I actually wonder if, if this is sort of like going to be a, if we're like directionally correct and that the future of business building is actually just like smaller, much higher capability teams working together.

55:43So like it might only be a 10 person company and it's just because you got 10 superstars that are just like max leveraged with tooling and outside partners and AI and whatever the hell else. Like that is a question for me as we're building is like, how far can we take this? Yeah. I think the, the general environment of a startup, all of us have been a part of several of these, is that everybody's a generalist to some extent. Because there's just whatever needs to be done has to get done and somebody's got to do it and you're at the beginning of a business. So who's an expert? Nobody's an expert at those things.

56:23Now, in this case, a lot of the things that need to be done, we are coming in as experts in them, but there'll be other things that we're not and we're going to have to learn. I think the single biggest threat to this model and this experiment is responsibility and having a single like authority on things where it's very clear this needs to get done and this person is doing it because everybody's task is kind of nobody's task. and we need to make sure that there's real clear accountability, not because we're worried about the follow through or the drive of any of the individual principles, but because it just might be ambiguous and you nailed it.

57:01It's like, oh, we really need to figure out which of these ways we're going with this aspect of our email marketing. And if it's kind of like, well, we've got three, we've got three awesome people kind of that, that are giving input here, but it's not really clear who's in charge of it or when we need to get this done, then it just doesn't get done. Or we're pulling in different directions. So that's probably to me what we're going to have to really work on. Like if you tell me, here's what I want from you, Mike, or whoever's job it is to kind of like, it's like, it'll get done and it'll get done the best I can.

57:34But also it's like, if it's not clear, if it's just kind of more general, like, yeah, Mike, you're in charge of the numbers, then it's very easy that there might be a deliverable or something that Cody needs that he doesn't get because it's just not clear to me that I need to execute on this thing and get it to them. So that's probably the piece that we'll have to work on the most. Well, I think the other one that's really important in addition to that is when we disagree, what do we do? Because I think we're all used to being able to call the shots and being CEO and we get final say and this is going to be really, I don't want to say challenging, but there's going to be times where it's hard for me.

58:11There's also times where I'm like, hey, this is not my, like it's actually nice not having the responsibility. Mike being like, hey, we should go on Amazon. I'm like, great. I have full trust in that. Thank you for making that decision. But we do have to at least figure that out of how we're going to make decisions when we don't all see eye to eye on something. You know what we should do is this is kind of how you get to culture. And I think culture always matters. Having a really clear understanding of what you want. The way I think about culture is culture is the norms of how you will operate, basically.

58:40The value structure and the norms of how we're going to work with each other. And this is a good example of why talking about culture early on can be really helpful. So one thing that I would propose for our cultural mindset is that we have a very data-driven approach to making decisions. And so one of the reasons why that's so great is that often we will be faced with decisions that we don't know the answer to, and we don't have the data to make the decision. And it will come down to, like you said, Cody, okay, we have different opinions. Whose opinion are we going to go with? But the thing that makes that easier to digest, especially for really talented people, like let's say you and I have a different perspective on how we should handle funnels or free gifts or subscriptions, whatever.

59:27Well, it's a much easier for me to say, all right, Cody, let's go with your thought process. If I know that we're going to be checking in on the numbers and making sure that the data validates that that was the right way to go and that you and I both know if that is not working out the way that we hoped in the numbers, then we're going to be willing to pivot and take another direction. What makes people dig in is where they feel like it's not really data-driven. And so I just have to fight tooth and nail for my way, or it's not going to happen, even if it is the best. So I think if we can create that kind of a culture early on of like low ego, we're going to be willing to do what the numbers say.

1:00:04And sometimes we're going to get these forks in a road where we don't know which is best. And we'll try one fork. And if it doesn't work out the way that we think it will in the data, then we're willing to go the other way. And the way that I think about it is mainly like that we're not finding identity in our ideas. So if I have an idea and the group uses it, great. That doesn't mean that I'm smarter or better than anybody else in the group. And if it doesn't get used, that's fine too. That's not a poor reflection on me either because I just want the group to win. So I think there's some things like that that we can spend some time defining.

1:00:36Or maybe those will just organically get defined over the first few weeks. But I am a big believer in culture and really clarity on culture among us is going to be part of what will make the venture successful. Yeah, we're going to figure it out. I think it's a great call, Mike. Because I think it's, I think Cody and myself, I know Curtis, like we're all very data-driven person people. And in the absence of data, step one is probably go get some. So like run some experiments, right? And in the absence of that, it's debate. And then we're all smart guys. So like, you know, having a culture of like, we don't care who's right.

1:01:10It's just about what's right. And how quickly can we actually get to what we feel is right in the absence of data? So I think that'll be an interesting challenge. Right? A culture of curiosity helps a ton with that. Oh man, totally. Because in a culture of curiosity, it's more about questions than answers. And so no matter what path we pick, it's not like, okay, we figured it out. it's more like, and the learning continues, you know, going down this path. And I love that. I love being around people that are curious and love asking questions. And one of the things that I've learned about myself is that when I'm in environments like that, is that I love being proven wrong.

1:01:48I love having a perspective and then through some kind of experiment or data, realizing that actually that wasn't the best way to view it. And so I would love it if in this process, I have lots of ideas that are proven wrong as we operate the company, because that just means I'm getting better at my understanding of people, markets, and processes. You're learning. Yeah, exactly. And maybe like I said that early on, and maybe that is really the principle is that we want to have a culture of learning. And learning requires curiosity and question asking and low ego. Most AI tools right now are all promise and no delivery.

1:02:25You know exactly what I am talking about. Super fancy launch videos. This is why I'm loving what Rich Panel is doing. They have AI and support smashed together, made it practical, made it useful, made it valuable to brands today, not on some future promise. And instead of asking you to spend weeks writing prompts and uploading help docs and babysitting, they flipped the whole script. Their AI builds your support team for you and everything it needs. I've watched it. It works. It's freaking amazing. RichPenal even guarantees 50 % of your support volume will be automated by AI within 30 days or your money back.

1:02:59I call that a no-brainer offer. If you are interested, go to richpanel.com slash demo, not for some generic demo, but to actually book a call and watch them build your actual support team. Do you guys think that, should we have a business plan? Like, do you need a business plan? Is that even something that we do anymore? Like, I know we've done a lot of planning and a lot of thinking on this, but like actual like business plan, I don't even know what the hell that is. But I think that's a question that people are going to ask. I was just about to ask because I feel this interesting tension and I was going to ask about this and do we do core values, things like that there's one side that's just like nothing matters if you don't have customers just like everything is PMF and you should only be focusing on the things that are going to actually grow the company and then another is like sometimes I feel a little arrogant if this does take off I have so many things where I feel like we didn't build the right way at Jones Road that I want to set those up from the beginning.

1:03:58I want to bring on a data warehouse from the beginning. I want to have this financial model. If you know where you're going, it is really nice. So I don't know. I'm not answering the question, but I think just more generally, it's like how much do we spend the time building those things now that don't even matter when you're small, but we just know it's going to be real. We might look back and be like, hey, it was really nice that we have this brand deck or we have this core value document because it gets everybody on the same page and ensures we build things correctly. That's a great point. Mike or Curtis, do you guys have a strong opinion on do you need a business plan?

1:04:31I think that at its core, what a business plan represents is a theory that you have about the market and about a problem the market has, a need the market has, and how you're going to address it. And I think the data really clearly shows that when you are first entering a market, your theory is almost always wrong. like almost always yes and this is why like there's a there's a famous like business plan competition that i think uh maybe it's mit or um wharton or like one of those you know really prestigious colleges holds and i looked at something where it was like out of the last 10 winners like nine of them had gone on to actually try something in market and like all but one had pivoted really significantly from the initial business plan or something.

1:05:25It was something crazy like that. And I think it just shows that your ability to create a very good theory with no data is going to be low. But I think, so like, do we have to have a business plan? Do you have to have like, do we have to print it off at Kinko's and put in everybody's desk? No, we probably don't need to do that. But do we need to have clarity around our kind of theory about the market and our proposed solution? Yes, because otherwise we're going to talk past each other. Like there does need to be a collective understanding of the idea behind the brand and how that idea is evolving.

1:06:04So in that respect, yes, we need to have like that theory. But I think a lot of the kind of traditional business plan stuff is like, and here's how we're going to handle supply chain. And here's how we're going to do this. And here's how we're going to do that. And the point that you're making, Cody, that I think is really relevant here is if your kind of fundamental central premise is wrong, then none of that matters, right? It's all irrelevant. Until you understand if your central premise of like what you're, the need you're addressing, how you're solving a problem for the market, until you get that right, nothing else basically matters.

1:06:38How do you answer a question of team when you don't know that? You can't. How do you answer the question of channels until you know that? You can't. How do you answer the question of how you're going to run your supply chain or whatever else? You just can't. So what we need to do as quickly as possible is find a central premise that works, and that's what product market fit is, and then it's so much easier to kind of start to flesh out all those other pieces. Yeah, it's funny. All that is true, Mike. And I think then for people listening, we still did the basics. When Curtis and I initially started talking about this product, we still looked at what do we think this thing's going to cost.

1:07:22We set up an LLC. We got all the paperwork done. We bought a domain. We went out, we figured out the name. We did all these basic things. So like there was no formal plan and that was maybe that's part of it. Like we just know what to do. I'll make another comment, which I've been finding very fun to watch is as we go through this process, everybody has like a natural place that they're strong in and that they default to that place. Like when I first, when we first brought this to the guys, Mike immediately went and was like, I got to figure out the model. Like, what could this possibly look at?

1:07:56Cause you can just know that like, that's Mike's happy place. Right. and Curtis's happy place is product like he's focused on you know like how do I make the best thing and what's the brand going to be and what are we trying to do and Cody is like coming at it AI first fully red pill well yeah I like knew because I had done I had done some like clawed research before when I was considering starting my own thing and I was like oh I know that's a growing category I like have been doing that and like here are the angles that could work for it that's what I did too I'm like I went after research and angle I'm like okay who's the customer?

1:08:28You know, like, what is everybody saying on Reddit? What's all the, who are all the existing players in the market? Which is getting at what you're saying, Mike, it's like, we, we did all of this work to kind of come up with a strong thesis on why we want to pursue this. So like, is that a business plan? No, but it is pre-work to doing. Yeah. Yeah. You gotta, you gotta do work. I just to be clear, not saying, I'm not saying that no business plan means no work. I just think, I think that I guess what I'm saying is that things are so fluid early on, and a business plan is more rigid, and that you just need to expect really high fluidity.

1:09:06Another thing that was really interesting about what you were saying is that one of the things I've learned is depending on your personality, what you tend to do is triangulate onto the all the things that need to be done based on your area that you're the most comfortable. So So I tend to start with numbers and kind of say like, what are the numbers that are required to get to this business? And then I work my way down into like, well, what does that mean for acquisition? What does that mean for product? What does that mean? You know, and whereas I think other people like Cody, like you just said, you start very high, like what is market?

1:09:38What are the demand patterns of the market? What are the marketing flows that would be required? All these different things. And I think that that's really interesting and just more indicative of our different skill sets of the way that we kind of gradually, you know, pull back the layers on the onion looks a little different depending on, you know, what you're best at. Yeah. Yeah. I think, I think the two, like, I don't care about business plan. You got to know two things. Like, is there a market for this? And so for me, how I would think about that is like, there's so many available trends data, right?

1:10:07Just look at Google search trends, look at like the brands that are doing well, is there existing demand and is it going to be growing? Right. And then if we are successful, Well, if we can then get product market fit, can it even be a viable business? And that's where then you have to go and model it and understand what your margins look like. Because there could be a great market for it, but if you're only going to be able to do it, if it's whatever it is, if you're trying to do a D2C beverage brand, that's never going to be a viable business. Yeah. Starting a brand is sort of like you pick your category.

1:10:40Can you make a product in it that's different, not just better? Who is the target market? market so like who are we actually going to go serve um what are the if you've got partners it's like okay how are each of us going to divide the company up and like have different roles areas of accountability responsibilities and then it's like the go-to-market it's like well what do we think step one two three is like where do you find your first customers we've already said like well we're going to go and just try to acquire them with the thing that we know how to use which is paid advertising um but these are all questions that like anybody starting a new brand today a new e-commerce business, this is what you have to answer.

1:11:16These are the basics of it. So is it a business plan? No. But it's the work you have to do. It doesn't mean it needs to be a formal document. So I was all in on AI at Jones Road, but it's really hard to get large teams of people to change. But on Winx, I don't have teams because we're trying to keep OPEX as lean as possible. So we're going all in on AI and Runneth is a big part of that. Runneth and Motion are a sponsor of the show and we've been partnering closely with them to help run Winx day to day. It is the AI brain for our whole team. We are shipping as much creative as we can, as many angles as we can.

1:11:54We have it plugged in to all of our accounts, our email account, Shopify, NorthBeam, all of our analytics. So it's got the whole thing. It is our AI creative strategist and much more than that. It's really our AI coworker. If we use it, HexCloud uses it, Jones Road uses it. It is the best AI brain for e-com brands on the planet. If you don't use things like this, I seriously think you're going to fall behind. I highly recommend it. So go to runnith.com and book a strategy session. Just mention the operator sent you and you'll get$1 ,000 in credits when you sign up. I think people, you know, what they didn't see is that we actually did a lot of research and batted ideas after ideas after ideas of figuring out what product, what category, where did we want to win, what was going to work, what wasn't going to work.

1:12:39Like the amount of conversations I had with Matt alone around thoughts and ideas before it came up with even a sleep product. You know, and, you know, then we built a to-do list, a to-do list to bring this to market. And you talk about speed. I mean, I think gone are the days when you put a, you know, a 30-page business plan together before you even know what you're building. Like, I think in today's world with how fast business moves, you know, look at AI, you know, and adapting to that, let alone, you know, the consumer market. You know, I think a business plan is really good for growth and keeping the train on the tracks.

1:13:15But to get there, you know, you have to cover the fundamentals like Matt, what you said, and Mike, like what you said, but 90 % of it might change the minute you bring it to market. So, you know, you have to be, you know, adaptable and resourceful enough to, you know, shift and change. And that's why I think it's, you know, we're lucky enough that we actually know what needed to get done. You know, need to get a business license, need to get a co-man, need to get a freaking, you know, formula i needed to do this type of stuff and it was more of a to-do list for us rather than a business plan um and i think we can you know further enhance what you would call a business plan once we get to market and have the data to actually create it to keep the train going in the direction we know we need to i think also business plans you know cody you talked about you know everything from culture and core values associated with that and what the brand looks like the identity, you name it.

1:14:07I think once we, you know, the five of us have a fairly good understanding of who we're going after and what that represents, the more that you scale from a resource and people like a headcount perspective, the more that that's important, right? Because, you know, you don't want the dilution of purpose, dilution of identity, dilution of you name it. Like when you start hiring marketing, you know, building a marketing team, you don't want other people's egos or experience or identities being reflected into the brand when the brand actually has its own. And so I think that's when it's also important.

1:14:43Yeah, totally. Picking your co-founders is such a huge part of starting a business. It is basically like getting married in a business sense. It's your work spouse. And one of the things that I have learned through my career so far is that if you're going to found something and you're going to have co-founders, you should be exceptionally picky about who those people should be. These should be people that you admire, people that you want to learn from, people you want to spend a lot of time around, people that you're willing to have some fights with, because that's what's going to come. And I think that I'm the most excited probably because I really love the co-founding group that I'm going to be doing this with.

1:15:19You guys are going to be a lot of fun to build with. And that was my first requirement of doing this is like, are these people that I want to be partners with at this level? And like you said, Matt, I think the experience doing operators has really taught us a lot about our enjoyment of working together. I think it's going to be great. And I think it's going to be one of the things that sets us up to be successful here. Okay. So we've covered what is an econ business? What is a brand? How are you building a brand in 2026? We've talked about do you need a business plan or not? We've talked about success criteria for winning for us.

1:15:52So like we're putting a decent chunk of change into this business. We need to know like, what does traction look like? And do we want to keep going? There is target audience. There's product. You guys know the category. It is sleep. Our domain is getwinks.com. That's it. It's simple, easy to spell W-I-N-K-S, Winks. And what I think as a listener watcher of this new series, you should expect from us is like, we're going to try to do as much work in public as possible. Like we want you guys to see the process. you can already see Cody is like literally just asking questions because he is the newest member of the team and he's not afraid to ask those questions and we're just going to beat them up uh and then we're going to try to show you everything that we're building in in in like as close to real time as possible I think to set the expectation every episode that gets dropped is probably a month maybe six weeks delayed from when it actually happened so you're going to hear this when we release it um and it's probably recorded about a month before we actually release it.

1:16:52So that's just expectation setting. The next sort of like number of episodes of this show, of this series, is going to be as close to the order in which we would do things if you were building a company. So this is like the very intro to how the hell do you start a business and what do you think about? And what's coming is going to be us getting into the weeds on every single topic from the product to the packaging to the go to market, the channel strategy, the how the hell resource and creative, all of that stuff for a brand new company, all of that is going to get covered. So I hope this was helpful and I hope you stick around and watch the rest of what we're now calling operators build as we build Winx, a freaking sleep supplement.

1:17:36And Mike, it's funny, Mike and I, Cody, were texting, I think last weekend, Mike's like, hey, we're co-founding a business together. I'm like, Mike, it's literally our second one. Like we already own one together, dude. So yes, we are, but it's number two now. Physical businesses feel a little different. They feel a little more real. They do. Yeah. This one feels more real. Yeah. All right, boys. Episode one in the tank, in the bank. That's the pod.