Help an Operator Out: 8-Figure Dog Brand That Needs a New Growth

22:28Garrett Yamasaki:The way that I would frame this, Garrett, is that I think the position that you're in is a superpower if you allow it to be in that you have real scarcity. And I think scarcity can force us to focus and to develop the superpower of discernment. I think what you probably need to do, it sounds like in part, is you need to make some kind of small investments in some things and prove the concept and then chase the most promising vector with your capital. because I think part of the point you're saying, I guess I'll take a step back. We talk about this in kind of our chat groups. Sean's posted a couple of things about this online.

23:12Garrett Yamasaki:But if you listen to this podcast, it is so counterintuitive. You think that, hey, if I've got a 10-figure brand, I am crushing it. But from a cashflow perspective, it's actually quite shocking how little money can come out of a 10-figure brand that's growing because you have to pay taxes. Inventory doesn't get written off. against your taxes. Your employees are getting paid no matter what. At this point, Garrett, you have to be drawing a salary from things. And so you've got a fairly high bar of how much money you have to kind of make just to cover your overhead expenses and any investment. And so there's just not, there's not a lot of like distribution money, especially if you want to grow.

23:53Garrett Yamasaki:And so like, I think the best motivation for growing out of the stage you're at, which It's like, hey, an eight figure business that pays your salary is awesome. We should never, never look down on that. But the downside is that your flexibility is really kind of constrained when you're at the place that you're at. And getting, you know, to twice your size, three times your size probably starts to open up the world in terms of the investments that you can look at and in terms of the cash flow that can maybe come out of the company. So I think it's the right goal that you have, but you are constrained and it's going to cause you to have to focus.

24:29Garrett Yamasaki:I've always loved the bullets and cannonballs analogy that I think they use in good to great or built to last, which is just in the 1700s, these ships that you had these big naval kind of conflicts and the ships had a certain number of cannonballs. They were very heavy and they were very expensive. And so like when you got into conflict with another ship, you couldn't just immediately load the cannons and fire at it because you could very easily, these cannons were not very accurate. And you could just very easily like, you know, kind of shoot all your cannonballs and be a sitting duck early on.

25:02Garrett Yamasaki:And so what they learned is that you kind of aim the cannons, you put a gun on top of the cannon and you shoot. And if you hit the other ship with your bullet, then you load the cannon and then you shoot the cannon. And I think that that exact same thought process is what you're going to have to do. You're going to have to aim at some things and then shoot bullets at them to try and kind of figure out where you want to really use. You probably have the capital to really make a push at one thing. So you could be right that going more general towards all dogs is just it's better. There's more there's more potential customers.

25:36Garrett Yamasaki:It's a larger TAM. or you could find that the position that you are in doodles and just selling more things to doodle orders especially things on subscription is the better path i i don't even i can't even presume to know but i think you are probably going to have to pick a path and you're probably going to need to experiment to figure out which path is the right path for you call me nerd all you want

25:59Operators Hosts:but one of my favorite things is when one of my existing software partners in this case north beam adds something that I historically would have had to pay separately for. Incrementality was broken and NorthBeam fixed it. So let's face it. Most incrementality tests are slow. They're manual. One mistake can invalidate an entire test and waste thousands of dollars. If you've done it, you know. Not anymore. So only NorthBeam incrementality automates your incrementality test design and monitoring, letting you focus on insights and not logistics. They're the only ones who build the test for you using your MTA data.

26:32Operators Hosts:I love this. NorthBeam continuously monitors your test in the background, making sure everything runs smoothly and maintains stat sig. Once your test is complete, NorthBeam then gives you actionable and precise results fed into your NorthBeam MTA dashboards. Finally, go to NorthBeam.io and request a demo today. You know, Garrett, you have three things that are really, really strong right now. And I think the most important one is you said you love to run businesses, right? So number one, you love this stuff. And guess what? That is your best lead right there. That's your strength. That is a superpower.

27:10Operators Hosts:Number two, you've already done it. You know exactly what makes you successful. You don't know everything. You just know, I did these things and it got me to 10 million. That's awesome. You don't know all the things. But I think number three, you don't have to go all the way into dogs. I would say, what about testing just the retrievers one, right? Like stick with the name. I love, it already worked once, right? Why don't you do the same thing in the same way into the retrievers, right? You're not going all the way broad. You're just hitting one little category and you're going to find out what happens on that.

27:44Operators Hosts:Maybe what Mike says is correct. Maybe doodles need extra care, better LTV, or maybe retrievers does the same thing. And maybe you're going to learn something. But I'll tell you this, when your bootstraps, which I bootstrapped my company, right? It was all me and my credit cards, kiddo. It is how can you test something as quickly as possible for the least amount of money to learn something? That's the game. Can I ask a little more on that, Curtis? Because what's running through my head for Garrett is, is the next best move, and this might be a, but also, Mike, I'd love to hear you weigh in this, is the next best move for someone like Garrett to think, what's the thing that I can do that will take me to$20 million?

28:26Operators Hosts:Like, how do I add an incremental$10 million to the business? or is the next best thing, what's got the longest term, highest amount, like the highest ceiling? So where's the most ham? Like, I'd love to hear just like Curtis and Mike, maybe Curtis start, like how do you guys think about that? Because I think that's part of what Garrett's up to, like up against. That's why I asked, you know, what do you want, right? Hey, would you be good at 15? Would you be good at 20? Would you be good at 30? Would you be good at 40? And that's an always moving target, right? But I think that you have three leads and you're sitting back and saying, which one do I like the most?

29:04Operators Hosts:Do I go into something smaller like the retrievers? Do I go into all pet brands or do I go into this supplement brand, which is similar to what I have? Those are the three things you have. Hey, let's add number four, something outside of pets. Now you're a business owner. Now you're realizing that eventually in the next couple of years, you're going to come up with another idea. And maybe you're the type of operator who could run two or three companies, right? So you're looking, you're sitting back and say, which one is the best answer? We don't know what the best answer is. We can give you lots of insights.

29:36Operators Hosts:How do you test one of these as quickly as possible with the least amount of money to give you some more information? What actions can you take to get you some type of feedback along with what your goals are and where you want to go? Is it$20 million? You could probably do that with doodles and retrievers. Is it$100 million? you better go all into pets or you better go into two different areas here's the first thing

30:00Garrett Yamasaki:this is super unintuitive when people are successful with a thing they totally take it for granted and they just see all of the warts and they don't see all of the the benefits so you see the things about your brand name that you hate you see the things about your category which aren't ideal i mean it's interesting you've listened to nine ops a lot curtis i mean And Garrett, like, it's basically just each of us bitching about how our business model sucks. You know, like, it's just the way that it goes. And I think that there's, it's kind of like the backup quarterback is always like, you know, your favorite player on the team because you know all the things your current quarterback can't do.

30:43Garrett Yamasaki:And this is the nature of business. So here's the very first thing I'd say is like, Garrett, you have a great business and you're not going to be able to effectively grow from here unless you first understand what you've built is awesome. And like protecting that and maximizing that is going to be the most important thing to fumble this away, the success that you have. Step one is to take for granted what you've already built and to neglect it or in your pursuit of better things to not maintain it. And I think that you're feeling this sense of I might be bumping up against the ceiling of what's possible with this thing.

31:26Garrett Yamasaki:And listen, every business has a ceiling, every business. Some are just higher than others. And part of wisdom is kind of understanding what that ceiling is. So it may be that for you to experience more growth and kind of the revenue that your businesses are doing, that you have to launch additional businesses, you have to get into additional product lines. But certainly, number one is, man, you've got 40 % maybe market share in like your category and hanging on to that and moding that. When you think about public companies and how they're valued, it's a discounted future cash flows. And you've got a business that actually seems to have a really predictable future cash flows, which those are hard to come by.

32:07Garrett Yamasaki:And so like there's real enterprise value there. Never take that for granted. That's step one. Never take that for granted. what i've done personally in you know the first 10 years was like really just building simple modern and what i'm going to do over the next 10 years is i'm going to learn from the things that i experienced building simple modern and then i'm going to use that to be i would say more deliberate about only engaging in games where i like the rules and i like how the board is tilted in my favor. And so some of that is knowing yourself. Do you understand your unique, you have some unique skills, I think, that other people don't have.

32:47Garrett Yamasaki:Obviously, we talked about some of them already. But what are your unique skills? What are things you're passionate about? What are some categories or some ways to sell things that are weighted towards your advantages and where the LTVs look good or, you know, you have a particularly good understanding of how you can acquire customers profitably, whatever that is, and then choose to engage in those games. So for me, that looked like, okay, I really have done the hard goods thing. And now I understand that the internet is really more favorable to consumable products in general. Now, like on this pod, you've got Sean, you've got Curtis, you've got Matt, you've got Jason, none of them are really doing consumables.

33:31Garrett Yamasaki:So it's like, you can build great businesses and hard goods. I just personally was like, I want to build a business where like I can have a customer buy from me. I mean, like I sell a water bottle right now and I'm sure you feel this with your brushes. I sell a water bottle and if I sell a good water bottle, you can use this for 10 years. I mean, shoot, you can use this. They could be finding these in the fallout style apocalyptic, you know, future, like these things last forever. And so I might sell you one thing and then you're just like super happy and you're a happy customer, but that's all you buy from me for the next five years.

34:03Garrett Yamasaki:So I wanted to get into consumables. And that's going to be the thrust of the things that we do going forward. But I also think what I ran into was a realization of like, here's what's possible in Simple Modern. And I spent two or three years where I tried to pour too much money into that entity. And we had a whole episode about this. Like my big mistake was I was like, I'm going to grow this entity because that's what I've been doing for 10 years. And that's what I do. And it got to a point where I realized, like, I'm trying to force feed capital into this thing that doesn't want it. And I'm actually running the business worse because I'm trying to do that.

34:38Garrett Yamasaki:And so I'm going to deploy that capital in new ventures and other things. And so it's worked for us, I think, so far. So the very first best thing is dance with Hubronia. And if you can intelligently invest capital there, you're always going to do that first and never take that for granted. And if you can't, then you can look at playing games that are weighted in your favor where you can put that capital to use. But like you said, right now you're in a period where you don't have a lot of capital. And so there should be five to ten ways that you can think of that you might invest capital. And you can run little micro experiments.

35:15Garrett Yamasaki:And, I mean, there's just no way you're not going to be able to find one of those vectors, which is a good investment of the amount of capital you have right now. That game gets harder as you get bigger because you have more capital.

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36:03Operators Hosts:Claude plus BigQuery isn't enough. It needs your context. Get it at the Lincoln Show Notes or go to saracenalytics.com to learn more. Listen, I mean, it's like Mike and Curtis are 100 % right with everything they're saying. Where I am stuck is that if there's 10 million doodles in the U.S., like let's say 10 % of all dogs. And you have a supplement that you can give to just doodles. So like we have, we literally, you own, welovedoodles.com and you can get 50 ,000 doodles at 40 bucks a month. That's$24 million a year. Incremental to what you already have. Like the numbers don't actually need to be, like you don't need millions of customers to generate like massive revenue.

36:50Operators Hosts:it's just what mike is hitting on it's like literally just category so my my first reaction when i saw everything was like i i where i get stuck is like just sell it's like more it's a product category issue it's not a dog breed issue that's my first like you know if i'm gonna fire a bullet it's product category issue i have all the freaking doodles we talk to them like we got we 40 market share i'm just selling them the wrong damn thing i'm selling them a durable instead of a consumable. I think the second thing for me, like multi-brand is really freaking hard. So like as somebody who's done it, I don't recommend this path.

37:29Operators Hosts:It's very, very hard. You do lose a bit of leverage when you go multi-brand. So like, yes, you're selling to dogs. You still understand dogs, but I am sure there's a lot of nuance with doodles that like doesn't actually transfer over to all dogs, right? And you're not running the same playbook again. So like you're not going to have an SEO advantage in every other breed, right? Like that was a 2000 move. It's 2026. We don't even know if SEO is a thing anymore. Like that's seriously questionable with AI. So like going wide feels to me very risky in terms of brand. And that's just as somebody who like, I probably won't do that again And unless what Mike is saying is true, where like there's two or three things that if I can just rinse and repeat those, I can probably do that in any category I go into.

38:20Operators Hosts:And I then have cash. So like Mike has capital. He has resources. He has capital. He has very deep bench strength in people that work in his favor and incredible relationships with retailers. So like his omni-channel abilities, we've talked about on the show, like those three things that Mike has going for him, you might not have. So to do what Mike does to go wide in brand, you do need to say like, well, do the things I have allow me to do that easily?

38:52Garrett Yamasaki:Well, and to your point, Matt, just to interrupt, to your point, we're going wide in one sense, but we're being a one note in two or three other senses. And that's kind of the key is it's like when we have like a real playbook at this point of like we are going to be Amazon channel first. We are going to do consumables and we are going to do it exactly like this. We're going to have this price point and this price point, and this is the strategy. And so like really when you're thinking about expansion, any good expansion is going to be a repetition of something you're already good at in two or three areas.

39:27Garrett Yamasaki:And so that's actually the primary question. It'll be novel in three or four ways, and it'll be the exact same thing you've always done in your two or three core strengths. So it's just worth – really the question is just like what are those going to be? What are your like most core strengths that don't change? And then the other things around that can't change.

39:45Operators Hosts:You know, it's funny, like we, the core of all this, Mike, everything we do in consumer comes down to products, markets, and channels. Right. And, and, uh, brands is like going into a whole new market, you know, like, or not even like it's a whole new category. You're not even expanding inside the things you have. so like to me it's it's you have to sort of stack rank garrett in which of those is like easy so you've clearly done a lot of product you've got a small team you've got 100 products 20 to do most of the lifting all endurables like and you've got some consumables that's great if you look at curtis like curtis your business you went super wide and deep and like product first then it's like tick tock shops you've been talking about that on the show the last few months like you add this channel and you added owned retail and all that is getting bigger.

40:34Operators Hosts:Curtis didn't go and say, man, I got a problem. Leather. I'm running out of shit to do with leather. He didn't go that wide out. He's just been going - I did and I messed it up. I went into shoes too quickly, right? I went into shoes too quickly because I'm like, uh-oh, what about the leather bags? I want to say three things, Garrett, that are very important. Number one, Matt said that Matt and I were 100 % right. That's we have never been more than about 70 % right in all the things we say. Number. Yes. Number two, you are the perfect and the worst person for us to talk to because you're a smart listener.

41:15Operators Hosts:And if you have like, if you go like, don't talk a lot, Mike and Matt and I are just going to tell you everything that's in our brain. But what I've learned in this process of us all talking is this. I am starting to come back to the thing that you have to own doodles. You have to own it even bigger. You have to own it 20x on TikTok. You have to own it on YouTube channels. You have to own it with interviews and videos of every celebrity who owns a doodle, to every artist who does, to every family of every lost doodle that was found by a young six-year-old and it saved their family parents and now everybody loves it.

41:57Operators Hosts:Like you should be the doodle king. I love that idea. And then what Matt said is sell something on a more of a subscription, more of a long-term basis where you can get your costs down and expand out. So that income, when you get to 20 and 30 million, you're not just paying the Amazon fees. you're not just paying the advertising you have to do on Amazon to try to keep that gumming you literally become doodles that's it I absolutely love it I agree with what Mike is saying Garrett in that uh category matters and everything has a ceiling right like the Tam and Sam like those are real things like we talk about it a lot on the show where I'm just like I don't know that I'm able to move is like with doodles you couldn't have a very big business uh just in doodles like there's a lot of them people spend a lot of money on their dogs there's a lot of channels there's a lot of markets there's like so many places to sell things you you start you know it's funny dude you started out as a media company you became an e-commerce company and media companies are amazing Like, and Mike, you know, what's hilarious is like, we're talking about breadth versus depth here.

43:11Operators Hosts:And Garrett, we do our management call every morning on Wednesdays. Right before this, we had our thing. And what were we talking about on how to grow our business? It was like, should we go wider or should we go deeper? And ultimately, we were like, no, deeper. Even though, Garrett, think about it, dude. We serve like what? A hundred thousand people who own e-commerce stores? you know like our actual quantity of humans who listen to us and bought and like are valuable to our sponsors and the things is very small and we all sat around and we're like now we could get a lot bigger if we just go really deep in this in this little market we have it's easy to want to

43:54Garrett Yamasaki:expand into areas you know nothing about because you don't know why they're hard yet you know it's like it's very intuitive. I don't know all the reasons that this other thing sucks or why I'm going to hate that industry, you know? But it's like, you'll learn them. I promise if you expand into them, you will learn them. Like there's no easy money anywhere. It's basically like once you kind of wrap your head around that idea, like that to make money, you have to work hard and you have to be smart no matter what industry you're in, because there's entrepreneurial people everywhere. And they get into those industries when there is kind of like easy money to make, and then it's no longer easy to be made.

44:34Garrett Yamasaki:So what you're really asking, the question that you really should be asking yourself is what do you want to be doing? And not where do you think you can make the easiest money? Because what you're really doing is you're trading your time to make money. And so I would do that in an area where you're going to enjoy it. If you're a mercenary and you just chase where you think the easiest dollars are, you're going to find yourself to be very unhappy. So for me, one of the ways that I did this, Garrett, is I actually have kind of, I think, a triumvirate of like requirements. One is I need to earn, I need to earn money.

45:05Garrett Yamasaki:I need to earn an economic return on my time. One is it has to be an interesting puzzle to me. If it is just me redoing something I've already done, unfortunately, at this point in my career, it doesn't matter if I can make money doing it. I'm not really interested because I'm not mentally stimulated by it and I don't get that enjoyment out of it. And then the third one is I have to do it with people I really enjoy. There are so many things that I see where I'm like, I could make money in that, but it does not fit the other two criteria of either this would be really interesting problem to solve or the people that I'd work with would be really enjoyable to work with.

45:39Garrett Yamasaki:And so if it's not, I don't do that thing. So I would just say there are some non-economic things that you should layer on top of this. This is how you like stand over your life and actually take high agency, in my opinion, is that like, to me, the saddest people in the world are the people who are just chasing dollars. It's like, what a terrible way to live your life. I'm just trying to maximize my income. I'm a mercenary. I'm going to sign up for whatever I think pays me the most, like terrible way to live. Don't do it. Anybody listening to this, reject that idea. The most satisfied people I know don't have the biggest bank accounts.

46:13Garrett Yamasaki:They're the ones that are the most intentional about their purpose and how they spend their time. Ultimately, what you're doing is you're exchanging your time for economic output and for experiences. And you wanna look at the holistic return on that and say, that is something that I feel great about the holistic return. And you do that, you're gonna be successful. I think that's my biggest message to anybody running a business at your stage. And like, I'll just tell you another secret. You will not be happier at nine figures. You just won't. I'll just go ahead and tell everybody listening, there is not a point where it's like, oh, now I've made it to X revenue goal and now I feel different.

46:51Garrett Yamasaki:And I tell people this all the time, that the biggest gift that I feel like God gave me with Simple Modern and its financial success is that I don't live my life now in the illusion that there is some kind of carrot out there that if I got it, I would actually be satisfied. And that's really powerful.

47:08Operators Hosts:Garrett, he's absolutely right. You will not be happier at nine figures, but 10 maybe that's the key check back Curtis will let us know most AI tools and software don't give you direct ROI every month but Postscript does I run two Postscript AI products at Ridge both show up on our P &L Infinity testing runs continuous A-B tests on our SMS automations completely in the background it's driven$446 ,000 in incremental revenue, not just attributed, incremental. That's a 32X incremental ROAS with click-through rates up 43%. Then there's Shopper, an AI sales agent that answers every inbound text in under 40 seconds.

47:49Operators Hosts:We're running 23X ROI on messaging costs alone. If you want SMS software that gives a proven ROI, go to postscript.io and book a free demo. You know, everybody looks back at past decades as the golden years. You know, it's like, I think they made a midnight in Paris. Did you guys ever see this where like Owen, well, I think it was Owen Wilson. He's like, I think that's the character. And, uh, he's looking at like the 1920s, every decade he would go back to, it was like, man, I wish I would have lived in the thirties. Those were the best years. Or I wish I would have lived in the twenties. That's the same thing with like business size or wealth.

48:25Operators Hosts:It's always like, there's always another level or category. There's always something better. Uh, and what I've actually noticed lately, Garrett, in a lot of my friends who have very large companies, like some are actually in the 10 figures, like they're up over a billion. Man, they look back at the time when they were like$50 million. So like life was simpler. I wish I could go back to that time. Like, dude, we all do that. We all do this. Everybody does this. Like there's always another siren song in this game. I think it's actually, you can't, it's the thing that comes with being a founder is you actually can't be an entrepreneur without having that.

49:02Operators Hosts:It's the double-edged sword that we all have. And that's why for me, when I look at your problem set, I just come back to, I don't know, dude, I think there's a lot of doodles. I think you could sell them a lot more. And I think you could have like, and it sounds more simple. And I think all of us would probably agree with this, that simple is far better to do than complex. Like adding complexity to your life on any dimension is typically a bad idea.

49:31Garrett Yamasaki:Well, and I guess what I would say is, to kind of hop on that idea, Matt, is to take on additional complexity, I would require a much additional, a much higher return. So like the fundamental idea of finance is simply that like risk and reward are inextricably linked, right? That if you want to get more reward, you have to take on more risk. And so I would think about it the exact same way that it's like, if I'm going to have to take on more risk, I must I require a much higher return on invested capital to do that thing. So it's not just like, hey, can I get a 15 or 20 percent return on invested capital to get into a new category?

50:10Garrett Yamasaki:I need it to be like 150 percent because of the amount of risk that comes from doing this totally new thing. And this is the muscle that you have the opportunity to build. Capital allocation is kind of the game when you get to the point that you're at. I think that's really what this episode is about is how should you allocate your scarce capital going forward? And the discomfort that you're feeling is that's actually a hard muscle to build, but it's actually the most powerful muscle to build once you have it, because it will really serve you for the rest of your life. But I would point you back to thinking in terms of risk versus reward, and it'll be a helpful guide.

50:46Operators Hosts:Like, no, Garrett, I actually think that what you, you, in the document you sent over, you sort of hit on this really well. Cause you actually asked, like, you know, you're talking about retail, like there's going into retail that helps revenue, but that the margin feels low. Right. Is that, I think what you said, uh, and Mike's kind of saying the same thing that you put in your document. It's like, maybe that isn't the next best move because the return on invested capital isn't there. Right. Um, so I, I'm with Mike. I think that trying to put a capital allocation hat on is probably not a bad idea.

51:21Operators Hosts:Curtis, I don't know if you ever did this. I feel like, I don't know if you were thinking allocation of capital with PLG, or if you were just more, this feels right. I'm still trying to get a read on you. If you're a gut feel, I think this is directionally correct, or if you're much more calculated. You know, I went through different phases, and what I know works is my gut and my instincts. and Maverick said that to me once. He's like, dude, you have everybody talking to you. Your instincts got us here. Don't doubt them now, right? Like just continue to go with that. And I'm a big believer in exactly that.

52:00Operators Hosts:But I'm also somebody and Garrett and everybody out there that's listening. When you know your gut says this is not working with this employee or this product or this thing, chomp that thing done. Okay, wow, hey, that was a great learning experience. That's awesome. We learned that when you shut it down, you don't let it creep and creep and creep. I absolutely go with capital allocation with my gut. I put it out there. I don't call it risk. I just call it action. When you take actions, you can learn from actions. You can get feedback. Even here, Garrett, you've been able to listen to the three of us talk, you know, and you've quietly listened to all of this stuff that we're saying here.

52:44Operators Hosts:I tell my people all the time, you come into a meeting with me and you ask questions, you expect me to answer that. I don't know the answers. But if we talk about this for a half hour, we'll all leave with a better understanding. I always say, this is the meeting. Let's not have meetings. This is the meeting. We're going to talk this out and we're going to come up with something. And through what I'm hearing with everybody else, my instincts are saying, I have a feeling what to do with your business. What have you heard that's hit that we've said that gives you a little bit of a sense of what you want to do?

53:18Operators Hosts:What have you heard? From my perspective, I think it's stay niche. And I think Mike hits on a good point of thinking about return on investment if we're going to make a capital allocation. And I think, you know, I've always been very similarly aligned just from operator podcasts that I listen to with Mike. So, you know, what he says resonates with me a lot.

53:43Garrett Yamasaki:I really like Garrett, by the way. I just want to interject here to say I really like Garrett. Yeah, yeah. Mike just needs anybody to pump his tires.

53:50Operators Hosts:Go ahead, Garrett. Tell Mike how awesome he is. I mean, stop, Garrett. Stop. I do have a question, though, for you guys. And it's kind of been bothering me a lot. When we talk about scaling off of Amazon, and I know Mike did this with Simple Modern, You know, he went to retail, he did a bunch of other things. A lot of D2C companies, you know, we've been trying to crack meta for about a year and a half, right? And it's kind of like, when do we call it quits? And, you know, if we're going to operate it at, you know, essentially a break even, we don't really want to do that. And the challenges that we've had is we have a relatively low AOV on our products, right?

54:33Operators Hosts:The bottle of shampoo is like 15 bucks. The tangler is 16 bucks. A brush is like maybe 20, 30 bucks, right? In order to make the unit economics work, we really have to go to bundling our products together, right? And it's just kind of like to get the AOV up. And it's been tough. And I don't know when to call it quits, but every kind of D2C company that we work with that's been successful has made meta work in some capacity.

55:00Garrett Yamasaki:I feel like we're really not there. I think that you're probably just right. It's probably just not the right channel for you. And this is something that I've had to come to accept with my business is that every business is predisposed to be successful in some channels and not others. And, you know, we a couple episodes ago, we talked to Sean and he was talking about what's going on with Ridge. And they're doing great with rings, for example, like they're selling like 14 percent of the engagement rings sold them in. But there's no way they can ever take that to wholesale. Nobody is wanting to sell Ridge rings in wholesale.

55:32Garrett Yamasaki:So they have to do it through D2C. And kind of conversely, D2C is not good for selling$30 water bottles. It's just not. It's great for wholesale. It's just not great for D2C. and I think that when you're banging your head against the wall, like I've started to think about it this way. You know, there's the famous axiom that, you know, past results are not indicative of future performance. But I've kind of taken that and flipped it on its head. The best predictor of what's going to happen in the future is what's happening today, right? I mean, it just has to be. Like what you're experiencing today has to be the single best predictor of what's likely to happen tomorrow or next year.

56:12Garrett Yamasaki:and your experience on meta has been, we are banging our head against the wall. And it's not so much, like you said, you're probably running it around breakeven. So it's probably not that you're destroying capital in an obvious way, but you're sucking up a bunch of your mind share, trying to pursue something that's not bearing a return. I would definitely say, hey, pivot to trying through the physical world to grow your distribution, right? Is there a way by going through groomers and doggy daycares and veterinarians to grow, you know, the brand footprint? Is there a way with wholesale accounts like PetSmart, you know, or Walmart to grow the footprint that customer acquisition is the name of the game.

56:58Garrett Yamasaki:And I think to continue to grow your brand, you have to grow customer acquisition. And you've tried meta for long enough that I think you have a pretty clear, now there will be people that'll be like, Mike doesn't get it. I could do it for you. But like, if you haven't, you're a very smart guy. You grew the business on content. If you haven't figured it out up until now, it's most likely because your product is just not well suited for that type of distribution. What you should do is say, like, here's another way of thinking about it. Product market fit is when it's easy, right? So like when I'm trying, when I'm having to push really hard to get something to work, you know what that tells me?

57:36Garrett Yamasaki:I don't have really good product market fit here? And when the market seems to be pulling it out of me, that means I do have product market fit and that's where I should lean in. An easy way to think about growing your business is where is the place where the market is the most pulling product out of you and lean in there?

57:52Operators Hosts:That's product channel fit, Mike, like what you're hitting on, which I think is really important.

57:56Garrett Yamasaki:I guess that's right. Product channel. I'm using product market. It's really important. Same idea, right? That like that there are certain channels that are just going to be easy and there There are certain channels that are going to be like squeezing blood out of a turnip. And I also the other thing that I'm probably the most omni channel of the sellers on on the show. And what I have learned is there's really a push and pull that when you optimize for one channel, you make it very difficult for yourself and other channels. So, for example, we were at a place at the beginning of this year, especially with tariffs, where it's like, do we really lean into higher price points and shrink our business at Walmart and target and potentially some of our Amazon business?

58:36Garrett Yamasaki:Or do we lower prices, up our velocities in those channels, but make it just about impossible with our adult products to acquire people D to C? And when we looked at the numbers of our business, it was like very clear. But like it is trade-offs, right? Like each of these channels require different strengths to be very effective in that channel. I have yet to see the product that is perfect for every channel. I guess I would say it that way. It doesn't like, you know, like all the wholesale accounts want to get hex clad, but hex clad doesn't want to be in those wholesale accounts because it would require them to make compromises that would undermine their D2C business or their Amazon business or whatever their Costco roadshows.

59:17Garrett Yamasaki:So that's probably my general channel advice is that like you should look at what you have a track record of working for you channel wise. And then I would focus my efforts on saying, again, it's like, don't try and go wider. It's a siren call to be like, I just need more channels. It's a much easier to say, how do I drive more throughput with the channels that already work for me? If you're scaling an e-commerce brand today, ads alone aren't enough. After Sell focuses on the one moment that every brand already owns after checkout and turns the post-purchase moment into more profit. Monetize every order with post-purchase offers and thank you page experiences without disrupting checkout or hurting conversion.

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1:00:22Operators Hosts:I think, Curtis, you and I are meta-heavy people. And I could argue with Mike, but where I would agree with Mike, I think Connor McDonald actually posted about this recently. He said it really well, Garrett. Meta is trench warfare. And the people, there's a lot of loud voices that will praise meta. Sean's one of them. I'm one of them. Curtis is one of them. Like a lot of us have built big businesses on meta. But the reality is we are weirdly obsessive about it. Like we don't think about anything else. Like we just obsess over ad creative, that channel, how to make it work. And if you actually look at like any one of our businesses, if you could just sit and listen and watch some of our group chats, we suck at a lot of other things too, right?

1:01:10Operators Hosts:Like we're watching this past week, Sean posted in one of our groups like to Hudson from Comfort. He's like, hey, Hudson, I'm just like you. And he had like his best TikTok shops month ever. And Garrett, it was like a laughably small number for John, right? And like, they're amazing at what they do. So Mike is, I'm going to go with Mike. Like, I think, you know, meta is a game where like certain categories don't work there for sure. But I also think it's more of an entrepreneur and a team thing where it is trench warfare. You really need to be obsessive to make meta work. Like it requires a level of effort that is insane.

1:01:48Garrett Yamasaki:So one of my favorite kind of ideas is that the time that it takes you to disrupt an industry is directly proportional to the amount of time you could be disrupted in. Right. And so we all want fast growth. But by definition, what fast growth means is that we could be quickly disrupted. And if you can be quickly disrupted, how much enterprise value do you have? Right. So, like, think about this. The reason why meta is so attractive is you can scale really quickly and you can grow really quickly. But what is the inverse of that? That it can go away really quickly. And what Matt is saying is not a bug.

1:02:26Garrett Yamasaki:It's a feature. Like if you are going to depend on digital marketing in the meta marketplace to drive your brand, you are signing up for every week. You have to be completely on the ball of the trends or you are cooked and you are disrupted. And this is the reason, by the way, that VC is generally like, I'm staying the heck away from this category, that it is very rare. You'll see so many brands that have these meteoric rises and falls because they catch a current on digital that works for them. like they have a particular kind of strategy with influence or whatever and it works until it doesn't it works until everybody copies it and the arbitrage is gone and so like with your brand you actually have i would i would call it a superpower of like listen if you can get in a bunch of bet offices and they're pushing your product bro that is so much harder to disrupt than meta that is so much better like from a like an enterprise value mate i'd take that you know seven days a week yeah boring and slow but super moted like really hard to rip out this is why you know they say there's riches and niches because of the fact that you're able to build this kind of distribution layer that is going to be very hard for somebody to disrupt because like are doodles going away no are vets going away no are people going to spend money on their dogs Yes.

1:03:50Garrett Yamasaki:Are there going to be major improvements to dog brushes in the next 20 years that are going to change the way you brush a dog? Not very likely. And so it's literally like you can get in and just be the choice for the next couple of decades. Don't take that for granted again.

1:04:07Operators Hosts:Curtis, what say you on this particular topic? Who says riches and niches? I've never heard that before, but I actually wrote it down and I think I'm going to start saying it, even though I don't know what the heck that thing means. Here's what I'm just, this is so, when you get a bunch of people talking something through, you just come up with new things you've never thought about before. And what I'm thinking is this, I love meta because meta allows you to go from here to here really, really fast. And that's what all these D2C guys want. Mariana and I were in Miami meeting with all of these people around this big table, probably 30 entrepreneurs.

1:04:44Operators Hosts:Every single one, I'm like, what do you sell? Supplements. What do you sell? Supplements. Bro, I sell supplements. Like the entire thing, right? Why? Because they got it. They thought they could get a low cost of good, high average, and they could slam it with meta. That was their whole game. They were in there for money. You own doodles. You started writing a blog. You started with a media company and it took off. That's your deep. That's the pool you want to wade in. That's just, I'm just getting, the more we talk, the stronger I get. Mike's right. Choose the channels that work. Yeah, you don't have time at 10 million to deal with the channels that aren't.

1:05:21Operators Hosts:Keep getting the best channels that work. Get back to the media company more and more and more. I'm not talking 2x. I'm not talking 5x. I'm talking 10x the media that you're doing. from blogs to substacks to TikTok to YouTube to YouTube to YouTube. Babies and dogs, babies and dogs. I have on my algorithm three things popping up right now, okay? Three things. I'm so scared. I'm terrified of what people's feeds look like. One of them is the Ukraine war about how drone warfare is taking over and everything. It's stunning how the Ukrainians have done such an amazing job over four years, okay? One of them are the sad puppies that are lost along the side of the road, and they're all dirty, and they take it, and they clean it up, and they go to the vet, and then they show it six months later, and it's happy.

1:06:14Operators Hosts:Literally, that is half of my feed, and I can't look at that and not do it. Kids and dogs, kids and dogs, YouTube. Now, it's not your natural channel, perhaps, Garrett, but I'm telling you, become that media. Become all things doodle. Then when you're actually in there and you're talking to that, they're like, we know you. You're the I love doodles.

1:06:36Garrett Yamasaki:The point you're making, Curtis, about top of funnel is interesting because top of funnel is very different, Garrett, than bottom of funnel and demand capture. And it's interesting also because like you started the business with basically a top of funnel awareness building mechanism with the blog. So it's an interesting idea that could you intelligently invest some money in top of funnel awareness in some ways? Potentially. And like – but the thing that we've learned is if you're going – that makes the most sense when you're omni-channel, right? When you are in a bunch of physical retail in addition to your D2C because you just have more ways.

1:07:20Garrett Yamasaki:It's like rain is like what top of funnel is. it's like if if bottom of funnel is like a fire hose and the top of the funnel is like rain and so you just need a lot of surface area to catch the demand if you're going to do it that

1:07:32Operators Hosts:way and he's got it he's on walmart he's on tiktok shop he's on chewy he's he's on all of these things he's on amazon a lot of capture places yeah you're right karius he is like yeah gary you are in like all of the best capture points from a from a digital channel perspective so i think mike's got a good point. I'm not going to talk philosophy. I'm going to talk something that actually happened in our business that I'm incredibly excited about. Okay. I have some video people. One of them is called Skater Boy. One of them called Emilio. One of them Nancy. And they make these videos and they take pictures that are down here in Mexico.

1:08:04Operators Hosts:And I said, guys, I mean, not always be here. You need to create some income for yourself. I said, why don't you try this TikTok, TikTok live? Okay. Just start shooting. Just start shooting. Just start shooting. I said, it's going to take you longer than you think. Took them one week, two weeks, three weeks, four weeks, five weeks, six weeks. Didn't see any gain. Yesterday, I sat down with them. All of a sudden, last 24 hours,$5 ,000,$6 ,000 they brought in on TikTok Live. Now they're excited. Now they're going from little two hours to four hours. Now they're getting other people to come on, and they're starting to do them.

1:08:39Operators Hosts:They think they can do a million dollars this year on it, just off of 24-hour feedback on what they're doing. And I believe it. the numbers play out. Why? Because this type of funnel, this stuff can take some time, but you want to become all things doodle. What's your strengths? Get into that deeper, deeper, deeper, deeper. That's what Matt said. I'm getting excited, man. I don't even like doodles and I'm getting excited about this.

1:09:04Garrett Yamasaki:The one other thing we haven't talked about, Garrett, just worth mentioning since we're kind of coming to the end, is that the other advantage of being in a niche area and kind of moding is that you should be able to drive higher margins. You should be able to drive some operational efficiency. Even if the growth isn't there, if you can produce the same amount of revenue with less OPEX, then you grow the business that way. And this is like, when we think about growth, it's so easy to be like top line, top line, top line, top line. But it's like, you know what pays, you know what produces distributions?

1:09:40Garrett Yamasaki:It's bottom line. And so if you can find a way to do the same business with half the OPEX, boom, you just, you know, dramatic. I don't know what that would do to your EBITDA, but it probably would increase it appreciably. So that's another thing to think about. And it's the other reason why like moded distribution and owning an area can be really valuable because your margin profile can be quite a bit superior.

1:10:04Operators Hosts:superior i was just gonna say last year uh yeah we we did look at everything and i think one of the biggest points for more profitability was lowering our cogs um pretty much across the board especially for our liquid products so i feel like we're pretty not let's say 80 90 optimized there but that that is a really good point i think last year all of our distribution is basically

1:10:27Garrett Yamasaki:yeah and it's it's just a point like example is every year you're trying to say what's the part of my business that's the easiest to grow. And some years it really isn't top line. It's like looking actually at your internal cost structures. And I've always, I mean, like I've loved the idea that you want to focus on an area where you have the most agency and control. And the place where you have the most agency and control is what do you pay to your suppliers? What do you pay to your people? You know, these things you get to basically decide those things. And so anyway, like I, It went in doubt.

1:11:00Garrett Yamasaki:You can always look at that. We had a similar thing with Simple Modern where I at the end of last year, I was just like, man, we've just got to negotiate a new world with our supplier. And we have to go to them and say, we need these numbers. But and we can't do A or B, but we can do literally anything else you need to get to these numbers. And we were able to probably add millions of dollars to the, you know, to cash flow by working collaboratively with our supplier. So I would recommend that to everybody that like you, you can't necessarily control the market and the demand piece. You can just kind of go out there and try and compete for it, but you definitely control, you have complete control over what happens within your company.

1:11:38Operators Hosts:So Garrett, this is a new thing that we're doing where we, somebody comes on and they say, hey, here's my business. What do you three think about this thing? So we need to have something in about a year from now where you come back and you say, hey, that Mike nailed it. Matt was pretty good. And Curtis was the down. Something like there, like a one, two, three. You kind of got to give us that because we're throwing a bunch at you. Here's the thing that I know with every business owner. You've spent years doing this. Every decision you made, you can justify. You can say, I did that because of this.

1:12:14Operators Hosts:Of course you did. So we all make rational or what we think are rational decisions. In order to break into something new, we have to hear different ideas. We have to become comfortable with it over time. We have to take small actions and feel comfortable until we feel comfortable enough to take that risk. Because that's what you do. You ask people, you get information, you weigh and you balance it. And so where does giving you lots of different thoughts for you to say, what do I feel comfortable taking some type of action, getting some feedback until I go more into that. So hopefully some of this stuff that we're throwing out there is helping you because I'm excited and it's helping me.

1:12:57Operators Hosts:Garrett, any final words, man, anything you want to ask or talk about? Are you good to go on your way and tell Curtis he's an idiot in a year? I'm good to go. Thanks, guys. I really appreciate it. It's a lot of food for thought. I took a bunch of notes and I'll have to replay the episode as well too.

1:13:15Garrett Yamasaki:Yeah, this is great, Garrett. And I think you're right where a lot of the people that listen to the pod are. And so congrats on what you built. We do too little congratulating, like, it's awesome to start anything. It's incredible what you've done. And not just because business is more than just making money. It's like you are serving, you know, just like millions of dog owners. And like that's awesome that's like