How a $1.5B Pet Brand Wins at Ecommerce Marketing: Whisker’s CEO

26:38Matt Bertulli:thing we we had a video it was a founder video right where we like i scripted this thing out and it just smashed i think i think i spent on one video like this is rare when it comes to advertising. I think one video I may have spent 13, 14,$15 million on ad, like on one video, right? And I remember thinking the whole time, how the hell am I going to follow this up? Did you, when this thing hit in the way that it did, because I remember the ad and it's great. Like you had that, the, the poopery, the squatty potty, the, like you guys nailed the comedic ad. And at that time, there was one group of guys down in Utah that like they were basically the gold standard.

27:22Matt Bertulli:Right. And what they charged to do this was really high. Like. While that was happening, were you already working on like what's the follow up to this thing? Like, how the hell do we keep this machine going? Because, you know, a good marketer, you're going to be that you're going to sit there and say, like, it's going to burn out. We know what's going to burn out. We don't know when. Walk me through that. I would say our growth journey has been a combination of good product and great marketing and then good product and then great marketing. So we were getting ready to launch Litterobot 4 in 2022.

27:57So 2020, 2021, we got the benefit from that video. Going into 2022, we knew we were launching the new model, which design-wise, like industrial design, at the time it was the sexiest litter box ever seen.

28:10Matt Bertulli:and you never thought you'd say that would you like that come on there's no way you thought in life i'm gonna say those words it's my favorite line to use now because nobody thought i would ever hear that 2021 we were so focused on getting lr4 to market because we knew that one of the comments we always got was just the look of the lr3 it looked like a cement mixer we got death Star. We used to get Kenny from South Park. We've had every reference. There are over 10 ,000 names in the Whisker app. This was about a year and a half ago when I pulled this data. There was over 10 ,000 Star Wars references to the way that the letter robot looked to name their device.

28:54R2-D-Poo. Tons of them. We knew that the Gen 4 was just visually more appealing. It had a built-in scale, which was the first product to really weigh your cat in real time every time they go to the bathroom. So we added a much better health element to it. And in 2022, we really focused on that. It was a slower growth year because it just completely occupied us to get the new product to market. And then in 23, we had our biggest growth year we've ever had following that and we also launched an awesome ad with jenna fisher from the office that um right at the beginning of 23 we had built up demand or built up um supply chain to be able to keep up with demand and then we launched this jenna fisher ad and 23 was ended up being our biggest growth year not by percent but by absolute dollars one of the things that kind of lit low me up initially

29:53Matt Bertulli:was she bought one and the video that she posted on her Instagram account was her talking about how she promised her followers that she would never buy anything off Instagram again. And then she's like, but I caved and I bought a Lomi. And when we saw this video, my team was like, Pam from the office just posted this thing on Instagram saying that she didn't want to buy it, but she bought it. And it's funny as like one of my best friends plays hockey with her husband. And I'm like, I sent it to him and I'm like, dude, did you do this? He's like, not at all, man. He's like, that's real. She was like, I swear I didn't want to buy the damn thing.

30:32Matt Bertulli:So I remember you telling me this story that you guys got in there early. dude the the thing i want to dig into this because i don't what i don't get quite yet is like that how often you release generations of the product right so like you know you're 15 years in when the company's 15 years old when you join literal about three and then how many years later did it take to get to the four seven it took us a while uh so you're the ceo of this company now at what point did you did that become official because it sounds like you just sort of collected responsibilities as you went along. When did it become like more formal where you're like, oh, I'm running this place?

31:142020, I mean, during COVID was like, I mean, for me, I still think it's the most exciting time of my career. I don't think anything has topped that yet. I'm just like 100 % growth alongside scaling up manufacturing, opening up a new part of our plant, like figuring out the world. I was sending a weekly memo to our team. There's no training on that. And for me, that was kind of the moment where the founder made me president. And so in 2020, I became president. And in 2021, I became CEO. And I would say, but in 2020, I was running all the day-to-day. And Brad really had a deep hand in all of our engineering and finance.

31:58So I took on all of the operations for the company at that point. and he and I have built such a good partnership that we really don't step on each other's toes and I'm still very proud to work with the founder of the company. You know, 26 years into his journey, 11 years of us working together. We have a mutual respect for how each other work. He really, and you know, we were in How I Built This. I think what he said about me was I was the glue, which was something that he never really liked to do, which he didn't want to bring everyone together and align everybody on where they were going. And that's what I love doing.

32:39And I don't think I even realized that I was just doing it.

32:43Matt Bertulli:Which him as a founder, that's also quite rare to have that kind of self-awareness to say like, you know, these are the things I don't want to do. I've got this person who's like exceptionally great at these things. I'm willing to just like, okay, dude, Jacob, you're the CEO. You run it. That is typically like most founder stories do not go with like a hand raise when them doing it. Most founder stories are like, listen, bro, you're out. I gave you the single Instagram photo version of it. You know, going back to our conversation, right? There's a lot of bumps and bruises along the way where, you know, I think it wasn't formal that way.

33:24Like we never. We have had one real argument. We argue a lot, but we've had one real argument in 11 years, and it didn't have to do with work. And so, right, like we have always been able to work through things, our bickering and our pushing of one another and me challenging him saying, hey, we're going to come out with an ad. Here's what it's going to do. It's going to open with this thing that says there's cat shit all over your house. And he is very like traditional in his line of thinking for advertising. Or a couple of years later, I was like, all right, here's a new one. I'm going to have that same actress, Kizzy, who we had to do that ad.

34:02I'm going to have her squatting in a human-sized litter box in the middle of the living room as if she just finished her business saying, and starting the commercial. And just his uncomfort level was through the roof. And so I think what we've always done is we can bounce things off each other. and I gauge his level of either uncomfort or uncertainty and then we're evolving together to get to something. And he's like my go-to person that I want to bring something tough to because he'll give it to me real. And I think that that has been part of how we got to this point. But along the way, it's for sure been a journey.

34:48But I love it. I mean, it's a part of how we got here.

34:52Matt Bertulli:is your philosophy more to the i want to take big swings on creative on product or are you more incremental brick by brick lots of testing like where do you land on that spectrum because you're like very much a marketing first ceo like that's so obvious both so for our brand creative big swings for our ugc iterative right it's we gotta we're running so many, we're running so much advertising that we need a combination of both. I think we're about to take a big swing. I'm really excited about it. It's, and by the time this airs, so anybody listening, we'll see it out in the market at that time, but we're taking a really big swing on cats are better than dogs.

35:43And that's going to be our new campaign. And I think it's going to stir the pot. I think it's going to make people feel something. And I'm excited about that because my hope, a dog person looks at it and says, how dare you? A cat person looks at it and says, man, they're awesome. And I feel more empowered by this brand. And the mixed households that have a cat and a dog are like, oh, they got me. That's pretty good. And somewhere in between all of that. But I want people to have reaction. I want people to feel something because otherwise you're vanilla. and I think that on the UGC front, it's very iterative, right?

36:25Should we have a cat in the first frame? Should we have a person in the first frame? You know, right now we're about to run something with toxoplasmosis. You know, women can't scoop the litter box when they're pregnant and so we just did a shoot with a bunch of pregnant women that have a litter robot that they're able to tell their story about how a litter robot helps to automate the chore while they can't scoop, my wife being one of them and I think that we do a combination of both, but we take our big swings on the brand and creative.

36:55Matt Bertulli:Mike, I know we've talked about this on the show a whole bunch, but like when it comes to these larger swings, how are you underwriting these from a like risk reward? Like, have you taken some, let me ask this different way. Have you like taken some like real swings and they just not worked? Yeah, we did Never Scoop Again, which is, it's a really funny spot, but it didn't move the needle. Like it just was kind of a, I'm not going to say it was a dud. I think we used it. We spent, I don't know, a few million bucks on media. It worked, but it was nowhere near the success of some of our winning spots.

37:29We did another one, which was another big swing. We had kids. We shot a commercial with a bunch of kids talking about the little robot in kind of kid language about how the poop gets eaten by this robot. And it was really funny. It was a great spot. but what came out of it was one of the outtakes is actually the one that ended up crushing for us. It wasn't the spot itself. The spot was fine. It was kind of neutral relative to other things, but we ended up with one spot of, I forget the guy's name, but it was the uncle in the spot. And like, he's talking about how now he wants to get a cat so he can get a litter robot.

38:08And that ended up being the winning spot. And it was just an outtake we shot at the end of the production. so yeah we spent all this money and time on like this really cool spot it came out beautiful there's a great branded spot it did not hit the way we were hoping it would so like one of the

38:25Matt Bertulli:things i want to know is where you spend the majority of your time we're talking a lot about like marketing and marketing swings and and i know this is like another one of those things that we just we get asked a lot and we talk about it a lot and i am mike mike has like an insane team around him where like everybody is like he's got sort of like a general that is just like exceptional in every area but i still want to know jacob like where do you spend most of your week like if we just look like an average week how are you dividing time up right now i say year to date product is where i'm spending the majority of my time we're going through a software evolution in the company right now and we're really trying to get our app to just be a powerhouse product um we have you know 700 700 000 something mobile app users of the whisker app monthly active users um so it was a lot of people who rely on the whisker app for updates on their robot updates on their cat um and real-time insights about how their cat's bathroom habits are trending And so for me, that has become the face of the product.

39:34It's the thing that's truly a moat in our future state that we get copied on our hardware. People are going to try and solve the problem the way that we have. And what really is standout is how people use our app. So that's really a big focus for me this year. And then we also have several new hardware product lines that are, I'm going to call them category defining, in my opinion, on how we're approaching them. It requires a lot of time. It's a lot of the invention process and reinvention process for some of them where we've gotten one almost all the way there and then we pivoted because we realized there was a better way to do it that we thought would be better for the consumer.

40:19So we pivoted and I'm excited about it. Like it's a good pivot, but it's a lot of now more work ahead. So products, engineering, and then fortunately I hired a CMO in Q4 of last year. And I had an awesome team in place that he got to come and lead. So that's been really helpful. And then really developing our leadership team to be very capable of leading the company without my involvement so that I can focus on where we're going. I've never really had that spot. I've been very hands-on for a long time. And while I don't wish to change that, I need to evolve that so that the company can continue to thrive without my day-to-day or week-to-week involvement.

41:10Okay, I'd love to know more about the technology piece of this because I think, like you said, it is very unique to have so many people using an app that you produce. like really there's not that many companies in the world that that's true of. And so how do you use that to create lock-in? How do you use that to create moats? What are the challenges that come with that? I mean, that's a whole new kind of ball of wax and set of problems, I would guess, but also some new advantages and possibilities as well. My longer term goal would be that this is a clinical grade habit forming moat. I want something that truly understands the longitudinal health of your cat.

41:50So if you look at how you would measure Oura Ring or Whoop for humans, I know how I feel when I wake up. I know that I maybe didn't sleep well or I shouldn't have, you know, worked out so late or whatever it might have been. We can't get that same, you know, feedback from our cat because cats often hide when they don't feel well or when something's going wrong or they visit the litter box more frequently when they have a UTI or a problem. And they can't talk because they're a cat. And they can't talk yet because they're a cat. And we hope to bring that voice to them. And that's really our goal.

42:30So the app is designed to give you the intelligence that you've never had before. With a traditional litter box, there are very few good scoopers in the world, okay? So the general vet recommended rule would be scoop two times per day and have an N plus one litter boxes. Meaning if you have two cats, you have three litter boxes. So they always have a clean bed of litter. With the litter robot, they have a clean bed of litter every time, three, seven, or 15 minutes after they go to the bathroom. In our case, we're able to deliver that clean metal litter every time. We're able to deliver the intelligence that you would never get from a regular litter box because you're leaving it for a day, two days, multiple days, where ultimately you don't know which cat had the blood in its either feces or they weren't able to go and they were constipated or they went into the litter box 15 times that day, which is different than their standard four times.

43:36Just like humans, right? They build patterns, right? A cat's going to go to the bathroom at 7 a.m., 12, 5, and maybe midnight. If that changes, that can be indicative of a problem. For us, we want to bring that intelligence, that actionable intelligence to the pet parent, and that's really what we're focused on. So, you know, I'm weighing now 4.7 million cat weights per day. That means I know the duration of every visit, the weight of the cat, the trending weight of the cat, up, down, or neutral, the duration trends, the time of day trend. There's a lot of insight from the litter box, and the litter box is often the first line of understanding of a change in your cat's health.

44:25so we have a very unique opportunity to bring like a depth of understanding to that also based on millions of other pet parents that we're learning from their cats as well so if you have a seven-year-old Siberian cat there's three thousand other seven-year-old Siberian cats then I have five-year-old Siberian cats and nine-year-old Siberian cats so I can look at that trend all of that's what we're focused on with our software we also just launched weight uh we have a weight-based id algorithm we have i think as far as i'm aware the best facial identification for cats on the new lr5 platform we have a waste id platform so we're telling you number one versus number two so just like tracking your baby's output in a human you know uh parents will often track how many times a day they, you know, they went to the bathroom.

45:21We can now do that for your cat and then identify which one it was as well. So that's the layer we're trying to build. That's how we believe it will create value for the consumer. And we believe that that has a moat or an intelligence layer that the consumer won't be able to live without.

45:36Matt Bertulli:So it's like a lock-in. Basically, like the theory on the moat is like the experience gets so good and it's so valuable for the pet that the theory is that it locks it it just locks them into the platform right so like if they go from a little robot four to a liberal little robot five like they're going to stick with the brand and the product because all of this history is there and i actually like it because cats live a long time like you know compared to most pets like my cat lived like 21 years dude and they're saying that there's a new drug that could make them live 10 years longer that they were talking about.

46:11I mean, that's crazy. Wait, so do they pay for the monthly access, Jacob? So we have a freemium and a premium version. The premium just launched in light of the amount of data that we're processing now with respect to each household. So facial identification is not cheap. Streaming video is not cheap. On my unit right now, I've got some of our new beta features that are coming out with some of the exciting like globe camera feature and other products that will be released soon. Those are all part of the Whisker Plus experience because they all have a compute to them. And then we want to remain having a free version really with device insights.

47:00So, you know, where we're bringing intelligence for your cat, we believe that should be part of the paid platform. where we're giving you device insights. We believe that should be part of the freemium platform because we just believe that's kind of core to what the product is. And we have to deliver on the product experience before we can get you to want to buy into more.

47:22Matt Bertulli:Am I the only one sitting here thinking like, why doesn't my toilet weigh me every time I go? Like, why is my toilet not tracking me every time I go to the bathroom? Is the problem that I just don't want my picture taken? There's people working on stuff like that. I mean, I think there has to be, right? Yeah. And I think that there's just a trend in general towards less privacy and more knowledge that seems to be winning in the market. It's a weird place for less privacy. Yeah. I mean, that's the ultimate, right? But like, I do think in general, like, I mean, think about how normative it is now for us to upload our medical data to these models, you know, and say, hey, what do you think about blood work?

48:01And, you know, you think about HIPAA and how it's like basically you get, you know, like thrown in jail forever if you were to release somebody else's medical records. But we kind of like willingly like, you know, are pretty liberal with them is at least my experience. So I think there's probably something generationally. We just think about privacy differently with the amount of technology that's infused in our lives.

48:23Matt Bertulli:Yeah. I mean, there's definitely like tech in toilets for sure. Like just like all those Japanese companies working on that. I think to your second point there was like, do I really want that in my human bathroom? I think part of why I think people want it in their litter box is this. When you automated the chore, one of the things I used to hear from a lot of pet parents or cat parents was, well, how am I going to be able to track my cat's output then? Right? If we automate the chore, now we're making it easy for you. You know when you're struggling to go to the bathroom as a human. And I'm not saying you know why, but you know what's happening.

49:04And I think that's a big reason why people like the Whisker app is that the chore that they used to have to deal with gave them insights, which was, is there blood? Are they not going? Are they going too frequent? Or are their clumps a lot larger, which means they're urinating more? we're now able to bring a lot of that visibility to them through the whisker app and so what was

49:30Matt Bertulli:out of sight is no longer out of mind is it because of all this then jacob is this how you guys got the hsa spending approval like i i don't i that was actually kind of shocking to me when i read that i'm like how the hell does this work so give us a little bit of the story there i started to see the HSA and FSA banners popping up on a lot of different products and expanding from a mattress to wearables to you know percussion massage machines and I know those were all for humans they're a part of human health but one of the things that we often heard is that litter robot makes it able for somebody with a disability to get a cat and care for their cat and so we had people of you know all different backgrounds with different types of disabilities that have shared and raved about how the litter robot has enabled them to live a life with their cat that they didn't think they could live before and so we we realized that that was a an audience that needed a solution like the hsa fsa funding and that they would rather use it for a bigger purchase like the little robot and unlock a purchase that they've been maybe dreaming of, whether it be a companion animal or, you know, if I have a disability where I can't bend down a back problem or, you know, missing limbs or whatever it is that makes it so that I can't take care of my cat.

51:08That was really kind of the, oh, wait, we're already serving this audience. they love our brand because we solve a key problem in their home and so i think that's why it was able to get approved is that we're truly unlocking something that changes their life with their pet this kind of work is difficult in pet because you're and i mean i'm asking the question because

51:33Matt Bertulli:like a pet does not talk to you right like it's you're designing the experience like for you guys like you're thinking about the owner of the pet. But that to me, that strikes me that like category creation and innovation in pet feels hard because you've got no feedback from the user. No, we talk about how we have two customers. We have the cat and the cat parent because I want to buy a sexy litter box, right? We're looking at some awesome colors and we're looking at finishes that feel appliance grade that match the home. We chose to upgrade to ABS plastics. The cat does not care if we use ABS or polypropylene.

52:09I can tell you that for sure. But, you know, it looks sexier. It looks like an appliance. And when you're putting this in a studio apartment and you don't have many choices on where to put it, you either wanted to blend in or be a fashion statement. I've got, you know, a nice Dyson fan here. I've got, you know, various appliances around my home that I'm proud to put out, you know, out in the open. a robot vacuum and other products that like i'm very proud to have in my living room because they're beautiful appliances and that's the way that we're looking at the cat parent um and then for the cat noise i mean you know you've had a cat the last thing you want to do is introduce new noises to them um the openness of our product is is really a key element the design of of how we get the cat into the device, how we help cat parents teach their cat to use it.

53:08These are all for the cat. And we've learned quite a bit over 26 years and millions of cats on what to do and what to avoid in the future. So I think each version continues to get better. Our adoption rate goes up with each version. And I believe that is the direct result of listening to consumer feedback, but also having good, I'll call it proprietary intuition. 26 years of doing something, you'll learn a few things. And I think that we really take that to heart. And being direct to consumer, we get that immediate feedback.

53:45Matt Bertulli:I don't know if I told you this, Jacob, when we spoke, but one of the things that came out of left field when it came to customer feedback, when we were really scaling Loamy Up, was there was a portion of the internet that really did not like us. And I expected it to come from, well, we got like there was two portions. Like one was the climate people who were like, you know, don't plug anything in. It uses energy. Okay, I expected that. The cohort of people that I got that really hated us were people with chickens. And in their mind, they're like, why would you buy this loamy device when you could just have chickens?

54:25Matt Bertulli:Chickens eat everything. And we were looking at that. We're like, you realize that not everybody can have chickens, right? Like that to me, that was like the rational thing. I think of your product and I immediately have, I have to ask, man, are there people out there who are like anti litter robot? Like, is there, is there some subsect of like, is there a Reddit, like a subreddit of like, I love to scoop people? I love that question. we have a very, very passionate subreddit of people that love their little robot. There's 50 to 60 ,000 people on our subreddit now that are super active. I mean, really, really, really active.

55:07And I am very proudly cat poop man on Reddit. And I am also very active. and I've been part of the Reddit community for about four years. We had some challenges with our LR4 launch and I got right in the thick of it. And I was out front and center and I owned it. I wrote an apology to our customers. And it was a small subset of our customers, but I owned it. And I got so much love from the Reddit community of like, wow, you just owned it in front of all of us and then you're super engaged. And I really do. appreciate the community they give me very direct feedback um and unfiltered feedback so that's the love for our brand um passionate love for our brand on the hate for our brand um jackson galaxy if you remember the show my cat from hell it was on animal planet i believe for like 10 months.

56:07I missed that one. Oh, you got to catch up on it, Mike. Jackson Galaxy was a public spokesperson. He's got millions of followers everywhere. And he used to say, if you can't scoop the litter box, get a goldfish. He hated the litter robot for 10 years. And I remember joining the company and just thinking, why does someone have so much hate for this product? And years and years later, Jackson Galaxy in 2025 started to use a little robot. A friend of his said, you got to look at it with fresh eyes, who's also a friend of mine. Jackson and I had never met. And she's like, you got to talk to Jacob, their CEO.

56:54Just talk to him. Just be open minded. And he's got a really funny video on YouTube kind of telling the story now of how he flipped. and it wasn't until after he flipped and started to use it that we partnered with him and did an ad together but it was all about the fact that for 10 years and he pulled out all the clips of him saying like you know don't get a litter robot and if you can't scoop get a goldfish and you're lazy and all these different kind of fun things that he poked fun at people who got automatic glitter boxes and then he got one and he was like okay with the insights that i can track my cat's waste behaviors i feel like i'm doing the right cat parent thing now and i would say this is also representative of how we partner with any influencers creators or uh celebrities we only work with people that actually use our product as well because i i think it's it's got to have that authenticity um and and i don't want to i don't want to flip somebody who doesn't want to be

57:58Matt Bertulli:flipped i i i love all of this this is like i feel like i'm getting a window into like the world of cats there's always room for counter positioning against that crowd also you know whoever your detractors are it's like do you want to be like those crazy folks over there that the chicken people you know like anyway i think that like great marketers i mean it seems like that's actually one of the things you've done jacob is like you intentionally are picking angles that will be like kind of elicit emotion. It seems like that's been one of the strategies, which makes a lot of sense. I mean, it just makes your product stand out.

58:35Matt Bertulli:You guys know how on Instagram, there's like a common ad format, which is like, don't buy a blah if you whatever, right? Like Jacob, you know what I'm talking about. Mike, I don't know how much time you spend on Instagram. Don't buy a litter robot if you love the smell of cat poop, want to be elbow deep in cat dude. Yeah. Want to catch any communicable diseases from your cat? You know, like, these are, you should not buy this product. So I took, my genius idea and the way that we followed up that hero video was when I saw the chicken people on, like, Reddit and whatever and, like, YouTube just torching us, we made a video at the time, this is years ago, called Don't Buy a Lomi.

59:13Matt Bertulli:And it was like, I wrote this script. I'm like, don't buy a Lomi. You should get chickens instead. And it was, like, just me in a white background. we had like the editing was brilliant we had like a bunch of chickens uh and it freaking ripped man like people were like i love this this is great like because at the end of it we're like okay if you can't have chickens you should buy a lomi like that was basically our pitch yeti yeti did the same thing like that what's that mike yeti did the same thing don't don't get him a yeti it was like their their big brand campaign they ran over it they did all that was such a great spot and i I remember that vividly well.

59:51Matt Bertulli:Counter positioning is great. Yeah, yeah, it works. I just think there's so many lessons in it. Like people, I find like there's founders where I've met and I've talked to where like they just don't like reading the negative stuff, like the feedback. I'm like, number one, you learn about your product. That's great. About your experience. That's great. But number two, like you can counter position against so much of this. And Jacob, like what I love, one of the things I love about what you've done with this brand is like you've used humor in so many different ways over so many years. Like you guys have fun with it.

1:00:23Matt Bertulli:It's not like you're taking a, it's like, it's a fricking litter box, you know? And I don't know if I've ever told you this dude, but like what you're one of the companies I reference when people tell me that like not every category can have innovation in it. And I'm like, okay, listen, kid, let me tell you about my friend who makes a litter box. Like it's all possible. When I joined the company in 2015, I had a couple of buddies. and just people in my network were like, you're doing what? And I remember when we were getting ready to launch a Gen 4, I had a couple of buddies like, you guys are spending how much to get this product to market?

1:01:01And then on our Gen 5, we went to some really nice Class A tools to get just incredible finishes. You're like an automobile manufacturer, man. What does that mean? What does that 1400 press mean, Jacob? of how strong is that in one of our presses one of the bodies for like a three-wheel car comes off right next to ours it's yeah i mean they're they're big presses they're uh they're big machines that's crazy that's one of the fun things about manufacturing is just like when we built out a lot of our manufacturing you just i love the quote that everything you interact with throughout your day with someone else's passion project, but you see some of the machinery that humans have been able to invent and build over the centuries.

1:01:50And it really is just mind blowing that like somebody came up with this idea, like, and it probably wasn't one person. It's like, you know, building blocks upon building blocks upon building blocks. And then you see some of the tools that we have today. And I think this is probably the hard part with technology. You know, like digital technology is that it's harder to see that, right? To see all of the work. You see the magic, but you don't see all the work that went into it. But when you're physically making things, it's easier, I think, to just tangibly appreciate, man, like at one point, it was like everybody was just like farming and there was none of this.

1:02:25And then like we, as a species, have figured out how to make this press that can just like create immense pressure. Anyway, it's just amazing to me.

1:02:33Matt Bertulli:I liken it guys to, if you've never been in a factory, you've never made anything and you're in consumer you're effectively like running a restaurant without having having ever having stepped in the kitchen like you don't know what it's like to be the chef and i that's i love it i love making these like factories like i'd actually just come and tour your damn factory because i just want to see how it's made i just think it's so freaking cool that like we make stuff you know and you happen to do it in north america which is badass We have five motors in Wisconsin that we use to keep up with our volume.

1:03:11And it's cool watching how each of them, I mean, they're all similar, but yet they're also different in their process and how they do things and what their factory looks like. And it's cool because for us, we get to learn from all of these partners along the way and how we do things as well. You know, some of the semi-automation we've put in place, both internally and then watching our manufacturers in injection molding who have very automated facilities, pulling our parts off, placing them on a drying rack, putting them into a cooling fixture. It's incredible to watch, like, the automation that goes into place.

1:03:50And I remember the first time I, well, two things. The first time I set foot into our factory in 2015, I think it was in June, I went with the founder. And I remember we were doing batch manufacturing. So one person built the bottom half, one person built the top. And I remember saying to Brad, it was before we had an assembly line and a lot of our process in place, I said, so I've never been to the factory before, but I have to ask, is it normal to learn how to build the same part two different ways? because I had two different operators coming out of the way and the outcome was the same, but the wiring was different.

1:04:25And, you know, that's circa 2015. We're now much more regimented in how we approach it. Standardized, maybe, is the word. In rigor, yeah. But, and he starts laughing. He goes, that's a great observation. The answer is no. And then... This isn't, this is postmodern manufacturing. It's just however you feel like it should come together is how it's built well when your volumes are lower i guess you have a little more flexibility but um and then in i went to an injection motor later that later that year and ever since that time i can't look at any product anymore without thinking about how it's made and it just it was one of those moments where it clicks and i think back to like just as a kid I used to love the, what was it, how it's made, the candy show.

1:05:20And I used to love that stuff. And then one of my favorite shows is, you know, The Men Who Made America, The Machines Who Made America, The Food That Made America. And like seeing how things have evolved over time, to me it just gives you such a cool appreciation for how the world is made, how things are made. And now I look at anything and I'm just, I'm thinking about the manufacturing of it before I even think about how beautiful the product came to be. And then the other part of it too is the product management side, which I didn't have an appreciation for many, many years ago of like how many small decisions make a product good versus great versus just like a delightful end-to-end experience and all the little things that go into it from the packaging to what it sounds like when it turns on to what it feels like when you take it out of the box.

1:06:10Matt Bertulli:There's such a level of obsession. I mean, which this is like my favorite word these days is like when you see things done with excellence, that's typically a core ingredient. And you are obviously like you guys are a complicated product. There's hardware, there's firmware, there's software. Like there's a lot happening to make the litter robot work, right? So like tons of iteration and product management is a real thing. And I think there's somebody listening to this thinking like, that makes sense if you're making a litter robot. But I want to say like, I discovered this brand a year or two ago.

1:06:43Matt Bertulli:They make their clothing brand. Like they make basics. I think they're out of Sweden. They're called Asket, A-S-K-E-T. So shout out to those guys. I saw a video recently where like, they don't make a lot of things. So they don't actually, every year, they don't actually add more stuff. They just iterate on the things that they make. And I think I saw a video, guys, where just their t-shirt has gone through dozens of iterations over years. And I'm like, you would think, that's a t-shirt. That's not a complicated thing. Lots of people make t-shirts. But these freaking guys are just so obsessed with it.

1:07:19Matt Bertulli:They're like, no, we just continue to make small adjustments to make the product better and better. I know, Mike, you've done this with several of Simple Modern's products, like down to like how is the little straw going to connect this thing like what's the mechanism that level of product development is so core to so many great companies in consumer right and jacob like you're an example of like you're just like you live in consumer dude you want to know how the sausage is made i think we all do like this is part of why we do this damn show is like i just want to know i want to know how how big is the press like tell me that um so i forget i love it.

1:07:58Matt Bertulli:Yeah, go ahead. No, I was going to say, like, I want to, you mentioned earlier this, like, 4.1 million pounds or, or like you measure, this is another thing I'm curious about in your business. Like you have numbers that you throw out while you're talking to us that like, we probably don't think of. So what's the 4.1 million pounds? Like what, what are we talking about here? We are weighing. So if you think about stepping on a scale about between four and five million times per day, we have a cat stepping on the scale. So we're weighing four to five million cats every day, or four to, sorry, four to five million weigh-ins per day.

1:08:38That might be one cat weighing in three to four times.

1:08:41Matt Bertulli:So 700 ,000 monthly active users, you've sold millions of little robots at this point. You mentioned you make hundreds of thousands of these things every year. Um... So right now, how one of these nerdy questions I want to ask is, how just in time is your manufacturing to your D2C business? We're going to talk channels, but before we talk channels, I kind of want to know like supply chain a little more. Are you making a lot of inventory long in advance? Do you kind of make things as you sell them? Like, can you just give us a bit of context on how that works? Right now, we're starting to build up a bank for Q4.

1:09:23Our business is not over. seasonal we grow pretty consistently throughout the year and then of course like any consumer business in q4 we pick up an uptick but we start to build a bank i would say coming into the summer so that i'm adding however many units per day to that bank so that as i get into q4 or q3 end of and i start to load in retailers i already have inventory built or i build on my d2c volume i I can move those into our 3PL down the street where we're shipping, you know, maybe all of our finished goods to get things out of our facility because they take up a lot of space. So I'm able to move my DTC units over there and then I build maybe to order on retail.

1:10:08But at any given moment, I mean, we're we have a few weeks worth of, I would say, finished goods. and then that starts to ramp as we get into Q4 so that we're not pushing too hard into Q4 to keep up with demand because there's a correlation between ship time and conversion rate and we want to make sure that we can keep our ship times where they are.

1:10:32Matt Bertulli:Talking channels, you mentioned retail. How omni-channel are you guys at this point? We're still about 70-something percent DTC. Wow. Wow. So we've been able to remain really, well, our D2C marketing drives our retail sales. So as a direct to consumer native brand, my brain just indexes on like, what are we doing that would move the needle on D2C? Because it also moves the needle for retail. We're doing some retail marketing, but we're really focused on like, what is just great D2C marketing for our channels? And then in turn, that's helped really grow our retail business as well. um we are now in we're in every pet smart we're you know we've did a big costco rollout last year it was successful we'll continue to partner um we did a big best buy rollout we'll continue to partner there we've got some other uh international retailers that we we've picked up our international business.

1:11:39It's still smaller than we would like it to be, but growing. And then some other retailers that, you know, we're in online, Chewy, Walmart, Target, and a couple other retailers as well.

1:11:52Matt Bertulli:And as you guys have like gone from sort of D to C, so you started out like direct consumer, everything is owned. You've pushed into retail, which is like, for people listening, this is like the typical kind of arc, right? Like Mike, you're often the person I point to that the exception is like from Amazon to retail to DTC, literally Mike. I just think, I think it's about understanding, it's about understanding your product. And Jacob, you have a really good sense that like the best channel for your product, the prime channel is going to be DTC and that everything else is going to be secondary to that.

1:12:24And that this is what all of the best operators I know do. They kind of understand here's my core channel. And then there's a waterfall downward from that in terms of how I think about pricing, how I think about my marketing strategy and everything else. And typically you can harvest some money from your secondary, auxiliary, tertiary channels, but the business is gonna go as that prime channel goes. And so a lot of times on this show, we talk to people where DTC is the prime channel and I'm kind of like the black sheep where DTC is not my prime channel, but it's really no different. It's just about the way that you think about trade-offs and how you formulate the strategy looks a little bit different.

1:13:11But I can tell you, even when you're omnichannel like we are, you still get put in situations where you have to say, what is the prime channel? Because we have trade-offs and we have to choose between these different channels. So it makes a lot of sense that you have a very clear sense of that, Jacob, and that you always work backwards from like what's best for DTC. Two things on that. One, I think we have a destination product, meaning would you be willing to leave Amazon or your favorite retailer to go buy this product, right? We have tons of simple modern products in our home. I bought them all from Amazon because while there's a great D2C site to shop from, to me, it's not destination.

1:13:48I don't need to leave Amazon unless it's a limited drop. That I would leave Amazon for. If it's some specific SKU that's out on Amazon, I might go seek that elsewhere, or I might pick a different color. Whereas with Litter Robot, we didn't start selling on it. Well, we were selling on Amazon until 2017. I pulled us out of Amazon and said, I think we'd do this whole D2C. We had to add Amazon pay to our website and it kind of offset it, I think. And we were able to drive D2C until 2021. Then we started to see some of the foreign products show up on Amazon. They were capitalizing on our branded search.

1:14:26So we put a limited presence on there really as a defensive strategy. We kept that going until this year. So we were really just defensive only, and we've still been number one by revenue, not by volume of units because they sell for much cheaper. But we've been able to maintain a bundle strategy on Amazon that's worked well. Just recently, for the first time in our history, we just went prime. We've never been prime. We've been non-prime, two weeks shipping, and we just went prime. I bet that juice hit. I bet you felt it. Yeah, yeah. Yeah, that's like straight to the veins, man. It is. That's like getting on testosterone or something, man.

1:15:08It's like the moment it happens, like, ooh, I like this. But the cool part is, so if I go back in time, I'm a search geek. So I tracked our trend. And we have a really cool graph that shows search volume for automatic letterbox, search volume for self-cleaning letterbox, which are interchangeable. But Google does have a different search for both of them. and then search trend for robotic litter box so those three are kind of the three um and then against search trend for litter robot and our marketing spend and it is a beautiful seo dream graph for me we flew past the category awareness in 2017 after we started to do a lot of our branded marketing and we are a multiple grader for litter robot than the category all three words in the category and so what happened was people were searching for our brand not for the category not for water model but for simple modern and so for us i was like well they're gonna then seek us out they're gonna buy from us and so the demand capture on amazon or another channel at our price point five years ago on amazon you weren't necessarily buying a 500 600 product amazon's business has just grown so significantly during covid i buy all my tvs from there.

1:16:26I buy more premium goods, but I'm not going to buy my barbecue from there. The selection is different. The SKUs are different. I'm going to get a different selection off Amazon. So to me, that's a destination product. But for years, we didn't have to be there. Now, the category search volume on Amazon has grown, but the litter robot search volume has grown so significantly that if I'm not there and if I'm not trying to win there, like just being prime versus not prime, I'm now back to position one for all the organic searches for our brand we weren't i'm now able to command velocity you know trends and it's just it's a better it's better right there's no question about it you've been selling prime for years but i didn't think it would matter that much for our product and it it did and it does like i'm gonna get on my soapbox i don't i don't know how many times i've said this on this show but like listen if in the year of our lord 2026 you think it would be better to not have a presence on Amazon.

1:17:24You are almost for sure wrong. We've seen this with so many brands. It's like, oh, no, we're a unique snowflake. No, you're not. They are the biggest retailer in the world and they can drop things by drone to your house in 30 minutes now. Like, it's crazy. We had a buyer from another major retailer being like, we can no longer beat Amazon in same day sales. Like we think if a customer's like we want it today, they think they're going to Amazon. I mean, just think about that for a second. And the other part about Amazon that I'm really like clear about separating for people is that if you think about one, Amazon is one channel, you get it wrong.

1:18:02Amazon's two channels. It's a website. It's a website for your brand that happens to be hosted by Amazon. And it's a wholesaler that, you know, is like Target or Walmart that has their own kind of generic search. And when people don't delineate that, that's really what trips them up. Jacob, you functionally had a website that a bunch of people were showing up to every day, like looking for your stuff. And you were like, you know what? I'm just not gonna sell you stuff. I don't care. You went to the wrong place. I'm not gonna give you access to my product. And that's an insane point of view when you put it that way.

1:18:35But this is what a lot of brands do. And so like, you have to engage. You don't necessarily have to engage in a way. Like, so like with our business, we get a lot of sales on generic terms, like people search kids water bottle. And we get a lot of, probably more than 50 % of our sales come from terms that are like really people looking for simple modern, simple modern water bottle, simple modern, you know, Tumblr, whatever. And we could run the business where we just went after the branded search people, the people that are looking for simple modern, or we can run the business where we're trying to get new customers in the door also.

1:19:11But it would be the worst business strategy to not go and get all of the people like Jacob that are just looking for a product and want to get it via Prime. And your experience, it's actually funny, Jacob, because you encapsulated it really well. We, over 10 years of banging our head against the wall with D2C, have learned that everybody thinks the way that you just spoke it. That everybody wants to shop basically the way that you do. And so it's like, okay, well then we should provide product to people the way that Jacob wants to shop. I bought a hat last night and I found a hat, one of our data analysts on our marketing team.

1:19:53And the hat said, not now, sweetie. Mommy is turning unstructured data into actionable business insight. And I thought it was so good. I sent it to her. She loved it. She doesn't know this yet. She'll know by the time the pod comes out. But I ordered it for her. first thought I took the hat dropped it into google image search it came out with a bunch of weird like just blogs um so I went right to amazon use their image search couldn't find the hat typed in the text that said this kind of hat nothing came up then I went back and found a random site but it was shopify so I used shop pay and I bought it but my first like I was trying to find the Amazon listing through Google because I thought that maybe that search might be a little better for what I was trying to find with an image and then I used the Amazon one and it was like but my first instinct is go to Amazon which none of this is new and no one listening is like ah duh I think when you when you think about your big purchases though a grill a tv an appliance Amazon may not be the place that you're like I'm gonna go to Amazon and search for it you're probably going to look at like a business insider listicle or good housekeeping appliance institute or one of these like roundups that tells you here's what to consider they're going to link to abc or site but it's usually not amazon for larger goods a trampoline um and i think i had that mindset for so many years and then i just the data like beat us um the search volume started to catch up like i can't argue with that and then we tried prime and to your point it was like oh wow we're

1:21:40Matt Bertulli:we can't go back since we're talking channels like your you started out you said like you you actually avoided meta somehow in the early years so you guys were like heavy tv spenders right then you went heavy on meta i'm assuming that because you're omni channel you are back to spending pretty well on TV. Like you're, you're, you must like, if you're taking big creative swings, you must still be spending there. Maybe, um, Jacob, can you walk us through like demand mix over time? Like, where do you, where are you spending media dollars over time? And, and what does that look like today, I guess, and, and landed there.

1:22:19So going back to 15, just to kind of like the quick influencer, um, our media budget was a smaller it was search tv then meta in order um that carried through 16 as well 17 we started to spend a little bit more on meta but nothing like meaningful and tv was still i would say tv and meta were probably equal at the time search was still the biggest um but we were spending on influencer and we were still going pretty big on organic influencer before influencers had agents and you were really doing all the paid sponsorship for it. 18-19, we started to index more on TV because we shot a couple spots before the Don't Be a Scooper.

1:23:03Ramped up there. 20-21, TV. I'll bet you TV was 4-1 on Meta. And then 22, completely flipped. meta overnight meta on 22, 23, 24, 25. We flipped meta, Google, YouTube, TV, other. Pinterest, TikTok, everything else. Now that we're getting ready to ramp up with our new creative, we're going to probably go pretty big again on TV and YouTube. I'm actually I'm most excited about YouTube right now um because I think our new spot is really perfect for it um it grabs your attention I want to be able to retarget people very well and then we've got a Tatari for our tv partner for tvctv and um I think YouTube and tv will be a big part of how we launch this spot and then some fun activations around it as well um some fun press angles with, you know, how the spot's got a point of view.

1:24:17So I think it'll have its own built-in organic arm to it as well.

1:24:20Matt Bertulli:It is hilarious how similar our mix is on Lomi in those years, dude. Like in 21 and 22, we were spending three to one YouTube TV to meta. Like I was, I became like, I never thought I would become such a YouTube bull. And I was just like, oh my gosh, like this place is amazing. Then I had this, but what you just said is really important for people. Like we talk a lot about product market fit. There's actually creative channel fit, right? And that every piece of creative does have a place that it will, it's like it will feel more native. And some people go out to make creative for specific channels.

1:25:05Matt Bertulli:Dude, sometimes we've made creative where I'm like, no, that needs to be on TV. or like, no, that's absolutely a YouTube spot. Like you just, once you see the finished thing, you're like, that's not gonna work on meta. That's absolutely gonna work on YouTube. Funny, and again, I'm totally biased because my last few year pickleball addiction, but where I play, there's a TV on the other, there's a row of TVs for sports. And I'm watching most of my TV now every Saturday and Sunday for two hours while I play. And I'm only watching from 100 feet away or 75 feet away. and all I'm seeing is no audio commercials.

1:25:42And if you go out to a restaurant or a bar, you're watching the game, you can't really hear much. You're seeing the commercial. So the visual piece, so we have a lot, like our focus is with the text on screen to really win for TV, CTV. And then that also can work for YouTube. We've got some really great sound effects, but it's not a lot of, there's no voiceover for these. I mean, we'll add other versions for Meta and TikTok and when we cut them off we shot a ton of shorts out of it of you know people picking up dog poop and then we cut over to a cat majestically getting out of the litter robot and you know poking fun of those dog poop picker uppers in the rain um and like they're good short cuts they're very cutty we cut each spot to be intentional it was a three or four day production um also self-brag moment at um ideated wrote it produced it all in-house and no agencies we hired up freelance talent to help us with the production on set but did it all in-house and i think our incoming cmo was like dude wow like we built such a cool team that's able to do it all in-house we just hired a badass producer who's been like super fun to have on board and he produced the hell out of it so it was really uh kind of a self-brag moment that i had to take yeah i'm one of those people

1:27:08Matt Bertulli:i think creative is one of the most enjoyable parts of being a consumer is is just like that that piece that you're talking about we like to finish these shows with this segment called the titan 10 it's just a bunch of questions we're going to like kind of hit you with them. I want you to answer them as like gut feel, initial reaction as you can. You've gone from like 25 employees to I think like over 600 now. So I am so curious to hear your answers on these. So I'm just going to hit you with them and fire back, okay? First one is you get to a desert island. You have to manage the business from the desert island.

1:27:48You get nothing but a piece of paper every week

1:27:51Matt Bertulli:with three numbers on it to tell you how the business is doing what are the three numbers daily sales weekly traffic to the site conversion rate oh i love it dude you're such a dc guy you also get to bring a book resource something to read but it can't be about business what are you bringing cooking cook or um if it's digital cooking show. That's a special kind of torture, dude. You're on a desert island and you want to read about things you can't have. I like learning and I'm okay with that. My second hobby in life is cooking and so I consume a lot of content around it to try and improve. Very cool.

1:28:42Matt Bertulli:What's your one contrarian belief about business that other CEOs think you might be a little crazy for? I don't know if this is contrarian but follow your gut. While the data can tell you a story, I think your gut is informed by the data. And I think your gut over time learns the data over a period of time. And one data point can lead you in the wrong direction sometimes. And I think when you have a strong point of view based on your experience as an operator, I think sometimes you got to let your gut override that. I'm not saying don't listen to the data. I think my gut is all informed by data, but over 11 years, not one data point tomorrow.

1:29:17Matt Bertulli:Like that. What's the single most important word in leadership? Empowerment. What's the single most important word in business? Winning. Awesome. Just to say, I've come to really appreciate that. Andreessen has something about this, that it's like great leaders, the thing that they're able to do is just not have losing streaks that go on too long. And I think there's a lot to that. Like, it's so simplistic. It's like, yeah, you should just win, right? Like, that's good leadership. But it's like, I think there is something to that, that when you're struggling, like you've just got to turn it around and like find a way to create wins.

1:29:52Matt Bertulli:It's momentum, man. Like Mike, I couldn't agree more. It's like if you're struggling, just go find little wins and then just start stacking them up. And momentum loves friends and it will just continue to build. People remember the wins. The losses hurt, but people remember the wins enough to want another one. And if they believe that you can help them get there, I think that that's huge. And I think that that does overcome some of the challenges. and it's also why I care so much about who I'm doing it with because I want to win with people that I really enjoy winning with and when things aren't going as planned, I got to know who I'm in it with to get to the next win.

1:30:29This is also why the whole A players want to work with B players, B players, hire C players. There is something about that that just the best people are addicted to winning really and they want to surround themselves with other people that they feel like will help them win and they want to win with.

1:30:48Matt Bertulli:You love cooking. What's the best meal of the day and why? Anything kind of red meat. I just like enjoy, I enjoy, you know, steak, burgers, everything. But really, I just enjoy cooking proteins of all types. I don't eat fish. I love cooking fish for my family. So really all proteins I find to be the most fun. But personally, I don't eat fish. Have you gotten into like cooking with open fire? Like, is that a thing for you? I am like a diehard cast iron guy. I can do anything on a cast iron. And that is like my favorite. I like Open Fire. I got a Blackstone. I've got, you know, several of the people that have been on this show.

1:31:30I have all their products. Tons from Maiden, shout out. And like I love all the tools. give me a$30 cast iron that I've had for however long now, I can do with that forever. And I can also take that on the desert by myself.

1:31:50Matt Bertulli:Every time I'm with Panzer, I like to remind him that I still love cooking with cast iron. And he keeps telling, he's like, dude, that's a relic. And I'm like, yeah, I know, but I like my relic. It's like, I like my hex clad too. And I like my maiden, but I really like cast iron. You know, Jason or I did a trade. He is a litter robot user. And so we did a trade. I've got a nice set of hexade knives. And we did some pan giveaways for our team. But he is a proud robot user now. Very cool. Okay, so what is the most overrated growth tactic? Right now, I'm going to say just blanket stating creative.

1:32:29And by that, I mean, I think creative is, of course, the number one tool right now in the advent of AI. But the strategy that goes into your creative is really where it's at. Just saying creative, I think is a loose way of framing a growth tactic. I think it's the strategic work that goes into every piece of creative that you create to build the foundation on how you keep learning and how you find the next winner. But just blankly saying creative, I think is a weak answer.

1:32:56Matt Bertulli:Okay, cool. What's the most underrated tactic then? Now I want to change my other answer. Because now I want to say discounting for the other one. because I think it's a perpetual cycle and I'm not knocking discounting. I just think it's a tactic that's, I'm not going to call it the easy way out because I think a lot of brands have built great companies on that and that's just more fundamental to us. And then I would say, I think the most underrated tactic is great creative because I think it's really hard to do it. I think that it takes a ton of work. I think that we have been refining our engine for years and continue to reinvent it.

1:33:35What worked last year, what worked last week may not work tomorrow. And I think the ability to build that into a science and an art is really hard to do. And I think it's what separates some of the great brands that are crushing it right now in marketing. Freaking love it, man.

1:33:54Matt Bertulli:Big swings in creative. I am such a fan of that. Jacob, that's the pod, dude. You crushed it. This was a ton of fun. Like, this was great. It was just like nice to hear how you think about the business. Mike, anything you want to add or Jacob, anything you want to finish with? Because guys, I'm just like, I'm so happy with this. Awesome story. And Jacob, the way you came all the way from like coming into a business and have just exploded the potential of the business and risen in leadership, I think it's really inspirational. And there's just a ton of different paths. I think, you know, the more amazing people I talk to like you, the more that it's just like the cream does rise to the top and that exceptional people find a way.

1:34:34Like it's, it's really cool to see what you've done with your business. And, and it sounds like you're, you're still, uh, you have a lot of growth ahead of you. So thanks for sharing, man. Awesome story. Thank you. Yeah. I, um, I've been following the podcast. I love the newsletter and it's been, it's one of those, I crave this. I crave talking other operators in DTC or otherwise, but that understand growth, that understand how to build something and smaller, bigger, all over the map. It doesn't matter to me because I think there's little nuggets you can pick up from all of them. And, you know, it's why I fly out to every Ray dinner that he invites me to or, you know, other events where I'm like, look, if I can get one nugget out of it, that's a win.

1:35:18And being in Detroit, you know, my networking here isn't as strong as I would like. you