New Product Launch Playbook Behind 9-Figure Ecommerce Brands

20:05Katy Mimari:Right. is insane.

20:08Matt Bertulli:The bill of materials, there's hundreds of parts in Elomi. Mechanical, electrical, there's firmware, software. We didn't do a lot in PILA for three years. Now, this year, we're adding six or seven brand new categories. Straps was the first one. I saw the launch data. I've always had this view that products are either going to be acquisition products. You're going to acquire new customers with them as a primary. And then if they're a primary acquisition product, maybe they're a secondary lifetime value product. So people come back and buy more. The straps, our theory was like, this is straight up just attach rate and cart builder.

20:48Matt Bertulli:That proved to be true. Our new customer rate on straps was lower than a case customer. But then the average order value was like 22 % higher.

20:58Katy Mimari:For a new customer. But it brought back your current customers.

21:02Matt Bertulli:Totally. And it was nice to see more repeat revenue than we typically get. So I'm starting to get a taste for what you guys are talking about. Where like there is just make great products that people want, that your people want.

21:16Katy Mimari:Yes, but like with your straps, I bet you you're probably not going to run ads on Meta just for phone straps. Because the margin's not there. Or maybe the margin's there, but you're not trying to sell a strap by yourself.

21:29Matt Bertulli:The allowable CAC's not there, right? Because it's a lower AOV product. But we are running ads and they're bringing in case customers, which I think is really fun.

21:36Katy Mimari:And I think the combination of phone case plus strap. So that's how we look at new product types, too. A lot of our product types that we have, we don't even run ads for. Right. Like it's not there's no major like site traffic that we're driving to a certain collection for pacifier clips.

21:55Matt Bertulli:But yeah, I can see that on Curtis's site, too. Like there's clearly like, you're not running it for like a$21 leather key chain, right? Like that's a hard product to advertise just for people listening. I think that's like, Katie, that's a brilliant call out. It's like not everything. What Curtis was talking about of like marketing, leading the product development cycle. That doesn't mean that you're trying to pump everything into an ad machine. That's not what that means. It just means, look, our customer will probably buy this. We should make it right. It fits the brand. It fits everything.

22:29Matt Bertulli:I want to hit on this. And I don't know, Katie, if you do the same thing, but Curtis, you mentioned this Facebook group community thing that you have. That seems like a really valuable resource in getting what do people want data? it's not just that it is we had somebody that was at rothy's start a facebook group and they mentioned us and they off shot so we had a couple thousand people and they were called portland leather something i can't even remember and we're like well we want to stay away from we don't want to get involved it's our fans and finally i said screw it let's create the portland leather insiders we went to 2 000 3 000 5 000 10 000 i believe that they bring in between 30 and 15 million dollars

23:17Katy Mimari:a year just that group well yeah they're they're his biggest fans they're his right like the same with us yeah we can have a c-grade sale c-grade sales all the stuff we make that it's not good enough for premium it's not almost perfect but the leather's good and they want it and we'll put up 10, 20 ,000 bags and they'll sell out it in 10 minutes. And it's only available to people on that insider group. So they all line up and get there. And like you could just see the rocket ship on Shopify as it takes off. Curtis, do you ever purposely create product that's C grade just to be able to give them something that feels exclusive to them?

23:56We create unique bags that are A grade that we put in the C grade. So when people get up, They're like, I can't believe this is awesome, right? Because there's the hype. Yeah. So, yeah, no, we feed that machine. We'll sell 120 ,000 bags at that C-grade sale, and none of them will last more than 10 minutes on that site. And it's just a great way to bring in$6 million to$8 million extra, right? But a lot of the stuff that we're talking about is not crazy complex. Everybody overthinks business, right? You're like, hey, Matt, you had a strap that hooked your phone on there. that sold out i'm like the craziness of this i can't believe it i was listening to an audiobook of this guy and he took and skate i think he ran like kentucky fried chicken and burger king took it over like yum they were small he's like we did this big marketing thing we took 5 000 employees from uh from burger king and we had them go to mcdonald's for hours and sit there and see what they do.

24:58You want to know what we learned? They sold a lot of breakfast and they're open 24 hours a day. I'm like, dude, I could have known that by walking into any McDonald's that that's what was moving the marker, right? What did that do? It gave them the confidence to spend the money and the capital and the people and the resources and allocate what you have to do to open up more or to create new breakfast. So the reason that the products have to come from the top is it's not just, hey, I want to do this. Your employees will be too cautious. I'm aggressive. I'll say, no, no, no. Why do you have two people on that team right now?

25:37Why don't we have five? Because if it works, it's not the first sale. It's one year, two years, three years. That could be a$30 million category. Let's get more people, more money, more testing.

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26:29Matt Bertulli:So check out AfterSell and tell them that the operator sent you.

26:34Katy Mimari:Curtis, do you ever worry about, though, if you keep launching more new products? Like, let's say you expand from three launches to five launches a week. Do you worry about, like, bloating your inventory and not driving the key ones? Like, your body styles and your colors that you do high volume of, right? But all of a sudden you went from the collection page of circle purses, five pages to 10 pages. And you're having to kind of like, I don't know, like the volume is spreading out over more skews than maybe like choice paralysis for the customer.

27:10Matt Bertulli:Exactly.

27:11Katy Mimari:Like, do you ever worry about that or do you cut like we we do sale on sale basically four times a year. And our goal is to cut as many styles and SKUs each quarter that we launched that quarter so that we try to maintain the same level of product assortment, but we're constantly pushing fresh and new. Do you do the same thing or do you keep everything? Yeah, you can't be a hoarder like, oh, that's bringing in$10 ,000. I got to get that. No, no, no. You're losing efficiency on there because every click that someone does on your website is a better chance of going to leave. So you can run analysis to say, hey, we have 16 colors of this particular product.

27:52We launched these. What happens with us is there's browns and browns and blacks, right? You have a yellow one, and it just jumps off the page. So everyone clicks on it.

28:02Katy Mimari:Let's talk about merchandising. That's what you're saying. It's so mad. I didn't even think about this, but what Curtis is about to say is so important. you when you have a high catalog like a high skew count catalog right online and you do the same thing with your phone cases you sometimes need ugly trendy things to sell the things that people like don't know that they want anyways like if i the whole 80 20 right yeah so like kristin my cfo is constantly like we have too much stuff you quit launching things this is stressing me out in operations. And I'm like, shut up woman, because let me tell you, if I don't like, yes, green is our best selling color.

28:44Katy Mimari:I can't have a page where all I'm showing them is green. I need to bring them in with, with trends or maybe a color that's like, oh my God, I can't believe they did that. And all of a sudden makes our best selling product look even better. And so it's not about just having like variety, right? And you're trying to distribute volume over it no it's about having a certain like you want to surround your beauty products with like complementary things that make something else look even better like curtis i bet if i were to go to port and leather right now and click like your colors i bet you guys even merchandise colors next to each other that look well together right i'm glad it's you and i can say you said this is what Curtis is about to say and not at all.

29:34Not even close. Nothing like that was what I was going to say. If this was a regular guest, Katie, I would not even worry about it. But being you, wrong, wrong and wrong.

29:45Katy Mimari:Well, what are you going to say that's smarter than what I said? Because let me tell you, I guarantee if I go to your website, I could tell you which ones are your best sellers and which ones are in there just to make the other ones look better. But enlighten me, Curtis. Tell me how you do this. I was going to go a little to the data. The data is going to say this. If I have 16 colors in a bag or a product or a wallet, the browns are always going to be your new customers. They're going to be really solid sellers. But a yellow mixed in with all that is going to get attention and people are going to click on it.

30:16It can actually cost you on your product development page by people clicking on that because you can check the conversion rates of people choosing that color is compared to a nutmeg, a brown, all the browns and blacks, right? So you can also track, are they clicking on that and then leaving your site? So I spent money to get them there. They made it all the way to that page. The majority of them clicked on that stupid yellow and it closes at a much lower percent than some of the others. You need it off that page.

30:44Katy Mimari:Well, quit advertising your ugly yellow purse then, and then people won't click on it. Is that what you're saying? Is that you're just constantly watching to make sure that that what you're advertising is the highest it's a simple theory to say hey more product is not always better and just more because hey they have too many choices you know it's the great uh marketing choice uh sales thing of the shoot salesman was the best salesman they said what is your your key and he said if a woman comes and i show her a pair of shoes if she asked for a second I'll show her that. If she asks for a third, I'll say, great.

31:21Which one do you want me to put back? Right? Don't just give them too many choices because that gives them nothing. We can see that the data shows that more people click on it because it jumps out, but more people leave because of that. You have to weigh the decision. Is it better to have that or not? And that's a data decision. That's a marketing. That's a maverick having all these people looking at all of these in one by one saying, no, you've got to get rid of that color. You cannot do that when you've got to do that. Does that inform, uh, this is actually great.

31:55Matt Bertulli:Um, the whole merchandise thing is a great place to go. Does that inform then future product development? So do you close that loop internally, Curtis? So like if marketing is looking at performance on site, this ad gets the click, but maybe that product doesn't sell it actually just created getting a click. Uh, But we got to put the browns up because we will buy. When you guys go make product, are you making product in that lens of like, this is going to get attention, but it might not sell? Like, you know, make a leather bag that looks like a lobster because lobsters are super cool right now with all the open clocks.

32:29Matt Bertulli:But like, nobody's going to buy a damn lobster bag, like that kind of thing. Without a doubt, we do that. And what we do is we're watching the website and they like fun. They like excited. and we do all kinds of stuff for our we do that but if it's hurting a product page we'll take that and you know matt we talked to a lot of people on here you have the best podcast for people who are at nine figures because you can learn from other nine figures but a lot of people who watch you are one million two million five million they want to figure out how they're how they're going to get there and so what we do is it's the story of wendy's i don't know if you know wendy's everyone's they made their cheeseburgers square.

33:13That's what made them sick. It's not. They had it fresh when you walked in the store. So they would put it on there. And I remember as a child, I asked, like, what do they do if nobody walks in? They put the burgers out to make them fresh. Nobody comes in. Do you know, what do they do with those burgers? They chomp them up, and they push them off the edge into the chili.

33:34Katy Mimari:Ugh. I don't... This is a horrible plug for Wendy's. That's kind of gross. oh katie it's brilliant marketing if we have a product that's sitting up there and it's actually hurting our page you want to know what we do we move it into our c grade oh you move it okay so it will sell out immediately we'll still get okay margins but then the conversion on a thing will go or we have mystery boxes we'll put it in a mystery box or we'll do it as a screaming deals we'll get money out of it right away to clear it off there, but we make the page stronger over a long term. Because when you get a big company, and Matt and Katie, you know this, you'll make a decision and then you're like, oh, we'll keep looking at it on this and you'll forget about it.

34:21And eight months later, you're like, oh, we did that for a week and nobody changed it. We've been doing that forever. So this is a way to constantly clean up your website, move it off, get the cash back into the system and make room for the new things that are coming out to make people here happy or like Kristen we always want to make Kristen happy Katie we want to make her happy

34:44Matt Bertulli:that's right she's scary Katie do you ever on a like a very high like let's say you had a print or a pattern a design like a what I don't know what do you call like a different sort of style Is it a style? Like if I have one swimsuit that's one style versus another, then you have prints, right?

35:04Katy Mimari:So like there's a product type, which is like a actually different product, right? And then a product style, like you're saying, like a different kind of swimsuit and then prints too.

35:14Matt Bertulli:Okay. So when something is selling really well, do either of you increase the price?

35:20Katy Mimari:Oh gosh, I know where you're going with this because yeah.

35:24Matt Bertulli:I just want to know for the people, I want to try to help the people that Curtis is calling out. Like if you're starting out, what to make, how to price it and how to manage the inventory. That is the job. So like I want to I want to hit everything.

35:40Katy Mimari:The first thing we do when we launch a brand new product type, not necessarily styles like what you're saying with different swim styles, is that we price test it. We use intelligence. Actually, it's really easy. So we'll go in and say, does this product need to be$36 or$38 or$89 or$94 or whatever? And then we'll price test it. Sometimes, and this is only for products that are limited edition, which really is holiday. So when we launch Halloween or Thanksgiving or Christmas, we will increase the price if we see in the first week that we're going to have a sell through without risking, right? Because what you don't want to do is increase your price so much that you risk selling through or having to discount it later on.

36:28Katy Mimari:So it's a constant battle. But I think it would be very cool to have. And you told me this. Somebody's doing kind of a live. It's like when you go to buy a flight, right? And you go in to get an airline flight and it tells you one price. And then you go back that evening and all of a sudden the price is more expensive.

36:48Matt Bertulli:and yeah it's like they always show you like four like four seats remaining at this price this is a it's a hotly contested thing i think with the ftc yeah it is and and there's rules around it right like you yeah it has to be real you can't just be it can't be made up uh scarcity but i it doesn't yeah okay so like all of us sell things that are not what i would call like problem solution products and i've uh curtis i've talked to mccoy a whole bunch about this right he calls it like we all sell buy my products you know like this is it's like you see the picture

37:22Katy Mimari:you like it you buy it we don't have to explain what it does yeah i don't and a lot of uh dc

37:29Matt Bertulli:e-commerce content and advice has to do with like offers angles and like you know problem solution type selling none of us here sell those products like i i sometimes get away with it because like I'll go after toxin-free and healthy with our materials. But when you're in a category where it's an obvious product, like it's a leather bag, it makes no sense to me that everybody everywhere should pay the same price.

38:01Katy Mimari:Because you think maybe people in different states should have to pay different prices? Is that what you're saying? I don't know.

38:07Matt Bertulli:I think this is such an interesting thing. When it comes to making product, is this constantly, this for me is always a conversation internally, is like, if we're going to make it, how much are we selling it for? And that how much are we selling it for turns into a pretty real conversation.

38:24Katy Mimari:It's so risky though, Matt, because Curtis and I both have these VIP groups that are from people everywhere. And I think the second you break trust with your customer - I totally agree.

38:34Matt Bertulli:You don't want to do it in a shady way.

38:37Katy Mimari:like can you imagine curtis if if susan told kathy that like her price was four dollars more than somebody else's i i get what you're saying like is there opportunity right that maybe we're missing but i think you can constantly use curtis is dying to talk look at him i'm just gonna keep i'm not gonna take a breath like how you do and you can't get a word in ask me another

39:02Matt Bertulli:question hurry i guess okay so let me just let's just say this the you okay you said that when you launch a product you will split test the price to figure out the ideal selling price curtis when you you mentioned earlier that when you guys are developing product uh that like you said like mav is in town and you guys are talking about like everything that's coming and there is a price conversation uh can you expand on that a little bit like how do you decide how much to sell something for? Do you have margin targets? We're going to be all in cost to goods at a certain thing. Some need to be a little higher.

39:39A lot of them need to be a little bit lower. You've got to figure that out. It is a big conversation and we always fall on the same side and that is don't raise your price. Now, if you think that, let's go back to these people who are starting their company. We made every mistake in the book for the first five years. So, hey, we have a product that's not selling. Oh, let's put some ads behind it. Make it sell. Worst idea in the entire world. You only want your ads behind the best product. But we didn't know that. Oh, put it at the top of the page so people will buy it. No, only have your best sellers up there, right?

40:16So a best seller is one that is going to sell 300 ,000 bags, not 20 ,000 bags. So raising my price on something is only going to affect that in terms of the new customer acquisition. I love the$99 price for a leather bag because it should be$200. And the difference between$108 or$120 and$99 is huge for new customer acquisition. so i don't want to raise my prices if it's a hero product and we have eight hero products right all of our bags there's only eight products that we spend lots of money on a day-to-day basis right i don't want to touch those prices we've a b tested that we realize by gaining four dollars on the price of that we'll spend six dollars more getting a new customer so why would we do it right So marketing's always going to say, no, no, no, no, no.

41:13Make all your money by adding$1 or$2 on these other bags that don't have the ad sets. No one's going to think the difference between$18 or$19 or$22 and$24 or$32 and maybe even$38. That's where you get your margins, but don't do it on your hero product. Keep the cost. Make it a deal. The key to internet marketing is, is this deal too good? I'm going to buy it. I'm going to try it. My expectations are blown away. I'm going to give it five stars. I'm coming back.

41:46Matt Bertulli:I actually like, I'm going to take this away because this is great. Katie, do you do this? Like the products that you're actually like products are style. So in my case, it's like styles, prints, uh, that you're running ads against. So like, these are the products that people are coming in to buy. Are those your best offers? And then are you making up the margin on the stuff that are like, this is not an ads.

42:13Katy Mimari:What do you mean? Well, offers like, are you saying like the best price?

42:17Matt Bertulli:Yeah, it's the best deal.

42:19Katy Mimari:No, we don't even know. I mean, we like we'll run for our newborn customers, right? Which is our, our, our, just our most important customer to acquire as a new customer, because we have her the longest we all of our hero products that we're advertising not one of them lands on a pdp for that actual product and we have apps we may be tested this a thousand times my media buyer is constantly like we should do more pdp meta tells me that and i'm like no it doesn't work because what i'm doing is similar to what curse is saying i'm using my hero products right like the best colors and best styles to drive the traffic to my site.

43:01Katy Mimari:And then they're landing on a bestsellers page that doesn't just have that product type on it because I want her to explore, right, all the different products with it. And then I'm going to upsell her mat as she goes along the way. So it's not about offer. It's about, I mean, it's about cart value, right? Like I want her to land on the page and find three things that she wants not just one but my products aren't as expensive as Curtis's so he's really honing in on that like 99 or whatever right purse he's talking about which is important but for us like if they're coming in for a footie that they're gonna put their baby in our goal is to also sell her a personalized swaddle and a name sign and and something for mom to wear so merchandising back to like what Curtis was saying becomes so important and it's so important for any large catalog like high I mean I think we have 160 product types types so that's not styles like when like swim is one product type so it's and then there's maybe 20 styles under that.

44:13Katy Mimari:So what we constantly struggle with is, is optimizing our menu. That's the hardest part is keeping that many product types and having customers find what they're looking for when they see it in a commercial or an ad or whatever. Like how do we get them? What is the value? What's the value in driving them to the PDP for the one product that was in you know in the ad that they saw maybe on instagram or tiktok when i really need them to go find three other things with it it helps with an aov right it's all an aov play that's just a test too like you test what what's better for an ad are you going to a pdp are you doing this so that that's the marketing team so matt i wanted to just to mention something that it's very apparent uh when katie's here to help some of the business owners that are out there to understand.

45:05People have watched podcasts I've been on and some of my own customers say, this guy's an asshole. Okay. All he talks about is marketing, right? It's all about money. It's all about money. It's all about marketing, right? Well, I'm on a marketing podcast, you jerks. Put me on a customer experience podcast and let me talk about how often we think about what makes people happy, how it looks, how it feels, how it fits, and the lifetime thing. You can hear that when Katie's talking. She's talking marketing, but she's talking customer. You have to balance that in a business. It's not just, how do I get a new customer?

45:47How do I get my role? How do I get meta cranking? How do I get this working? It's not the game. The game is balancing the marketing and the customers and the experience and everything they have. And it's really apparent when Katie's here that you can hear underneath the marketing brilliance and the operation brilliance that there is a we care we know who our customers were giving them the right thing.

46:10Katy Mimari:Curtis you know what the biggest mistake is I made early on before I knew before I had any of you guys as a sounding board and before I knew anything is that we had we were known for a certain product, right? Like this newborn outfit. And it was a one size thing. And we grew to probably 30, almost 40 million just on what I would have called a hero product, right? Like it's all our brand was known for. And I was literally handing my customers off to my competitors because I wasn't evolving and changing with her. And when I figured out that I need to have things that I can continue to sell to her?

46:51Katy Mimari:Because she may carry your brown purse for years, right? And she doesn't need a new brown purse because your quality is so amazing. So she's not going to come back and buy another brown purse. What else can you sell to her that she keeps coming back over and over and over again? Because we're not a, you know, a CPG product. Like there's nothing that they're not eating my pajamas, right? Like it's, they're growing out of the sizes and I need to be able to accommodate that. But thinking about product expansion is also what else is she already buying and how do I do that? And it's not necessarily creating new products that don't exist.

47:28Katy Mimari:It's taking products that maybe already exist out there in the market and doing it just a little bit better or giving them the quality that they know and love.

47:37Matt Bertulli:You're doing it in your way. Like sometimes it's honestly the when you're in a non-consumable um it is often just like these are product categories that work i'm going to do it in our way like they don't it's it's it's better because it's just your brand's way like we make everything just more sustainable than everybody else like that's that's basically our shtick and people buy from us because like they trust us and there bingo

48:02Katy Mimari:that's exactly it and if one person happens to say well i heard in texas they get better pricing than in New York or California. I mean, at the end of the day, I think brand is just as important when you're 1 million versus 100 million and making sure that their experience, if they have a damaged product, what's the experience like? Like the customer relationship, which is what Curtis is saying and how they, like, I want her to come to my website and just shop it just to see what's new without the expectation of buying something.

48:40Matt Bertulli:Sean here to tell you about Saris Analytics and Saris Pulse. Ridge is profitable every single day, and we've taken that super seriously since we built this business. We track contribution margin by day. We look at the SKUs we sell every single day. And we have to do this manually up until Saris Analytics came out. We take all of our SKU-level data. We build it into the data warehouse. Everything that goes into making a true P &L, I get on a day-to-day basis. Saris Pulse gives you clarity so your COO and your CFO and your CMO start speaking the same language. Contribution margin shifts teams away from hoping profits survive the season to manning them in real time.

49:14Matt Bertulli:Book a walkthrough with the Saris Pulse team today. Click the link in the description and thank you, Saris, for bringing you this show. Do you guys ever think, like, do you guys ever feel that the product team should own customer service?

49:27Katy Mimari:No.

49:28Matt Bertulli:No. No?

49:30Katy Mimari:That was a horrible question, Matt. That was a great question to be wrong with, right? No, I know. like that's fine but so explain why no it's fantastic it's a great question because they're so attuned designers product people they not only create it they watch it really closely and not sales as much as so and so said this they put on instagram it got these like somebody said they want it like this well we have millions of customers just the fact that five of them said they want this doesn't mean we need to go into that right oh lots of people are saying maverick and I was saying, how many is lots of people?

50:08Yeah, and customer service.

50:10Katy Mimari:Yeah, customer service isn't, Matt, I think what you meant to say was should product.

50:17Matt Bertulli:I'm playing the dummy. I'm meaning to say what I'm, because you should, listen guys, like we get questions on this stuff, right?

50:22Katy Mimari:I have a, and I am, I have a little nugget to give. It's not customer service. The people that reach out to customer service are not the people that love your brand. They're not. They're the ones that want to know where their order is or they're the ones that had a problem or they're the ones that just want to complain to complain right yeah the people that love your brand are in social commenting engaging sharing in your vip groups my entire brand team looks and reads every single comment that's on all of our products we do sneak previews on launches we in our vip group we ask them color preferences sometimes when we do product development and we come let's say we're like launching a football print on a pajama we have two variations of football and we'll go to our VIP group and let them just vote on it and we get feedback from them like that that's where the value is your product team should be so intertwined with your marketing team that there's no differentiation like products should not not be communicating with social like who cares about I mean not who cares about customer service but there's no value maybe in what customer service is feeding back to product when we do our monthly reviews with like all of our director levels we do have the customer service team report on right like what are trends that they're seeing and we have to ask that question that you said like okay maybe 10 people complained about x y or z but what was the volume that we really sold on that one product and is 10 people feel like it's a problem or is it not does that make sense whereas we go to social for the what's working what are they asking for what's the feedback.

52:05Katy Mimari:So valuable. Matt, I think, you know, anything that provokes really good thought and you really helped me think of a couple of things. I want to tell you guys about a meeting we had one time. I was in Portland. It was like 60, 70 of the employees and customer service, who has a very hard job, has to deal with all the crap. The head of customer service got up and said, customer service knows more about our customer than anybody. And they're all like, yeah. Yeah. And Maverick and I sat there and went, we walked into the conference room afterward and closed the door. And I went, what that they do?

52:41They honestly believe they know our customer better than we do? No possible way. Do they know it better? Right. We let them believe that. But it leads me to think that nobody in your company, we talk to entrepreneurs. We talk to operators. We talk to people who run companies. And if you're one, you want to be to 10. If you're 50, you want to beat a 500 million, right? In order to do that, you have to take control of some of these situations. Design and product people can come up with ideas. The reason you, the operator, has to be involved is they're going to be too tentative. They don't understand the long-term goals.

53:20They're going to say, I think we should make 1 ,000 of these or let's do it in three colors. And I'm the one that comes in and says, no, I see the big picture. Let's do more. This. Here's the money. Because that takes time, money, capital, attention. And by putting attention here, you lose attention someplace else. You've got to balance that out. I believe new products are the most important thing. So we literally just slam that. I have them on the same floor right next to me. I can walk over and see the teams and see what they're working on every single day. So when I walk up the stairs, I can say, ah, what's that?

53:55What's that? When is that coming out?

53:56Katy Mimari:So, Curtis, what if, like, think of our friends that make one hero product. They're one hero product brands. And they wanted to lean into product expansion. How would you tell them, like, what's the first thing they need to do? I'd say they watch the Operators Podcast and listen to Sean and Mike talk about this all the time. And Sean say, I sell a wallet. And every wallet I sell means that person's out of the market for a wallet for the next seven years, right? Like, I have the worst thing in the world to sell. I need to go into this and this and this. He knows that his business is capped out.

54:37There's only so much money you can spend on meta. You have to have other categories for that incremental revenue. So listen to the operators more, and Sean will hit on that every single week and say—

54:49Katy Mimari:You don't have to kiss his ass. He's not here today. Like, you know, we can.

54:54Matt Bertulli:Look, category expansion. I think, Katie, the answer is like, we get this question a lot, right? So should you expand products, markets, or channels first? Today, we're obviously very deep on product. But often, if you're a single hero product, there's more channels to go into. And there's possibly even more markets where that product will work. adding i think this is like the question is the right one katie the way i look at this like if you're a smaller company the question is typically like when do you start investing in new product development right at what size are you like okay i'm definitely going to tap out the the addressable market here for my brand i get this all the time like i talk to a lot of operators we all do And it's...

55:44Katy Mimari:I think it's, isn't it just watching the... And it's also a little bit of watching the buying cycle of your customer. To Curtis's point with Sean, he saw that they're buying a wallet and they may not come back for two years and buy another one. And if you have a product and you've grown to a certain level, and that's the case, which is what I did at the very beginning, is I need another way to acquire new customers. and hopefully it's a way that I can acquire new customers and also bring back the customers I've already acquired through our first product, right?

56:20Matt Bertulli:It's at what size, Katie, did you start to have that conversation? Like it's you and a small team, like Curtis, same thing. Like you start off with a certain number of products and at some point you make the realization like, oh geez, like Curtis, you started this whole show with, like it's just about the product. Like everything we do is about the product.

56:38Katy Mimari:but I think it's about like also Matt like so many brands get stuck in well this is the product I'm known for like I've done this for 21 years the way Kate and Lane started and the products that we have today the products we started that we did the first 10 years don't even exist anymore in our brand and that's okay right like it's okay to evolve as a brand and with your customer and what their wants and needs are. And I think it's recognizing that if you had a product that maybe wrote a trend, right, and you see it plateauing, do you lean into something else? And what does that mean? Because that's kind of a scary thing for a small brand, right?

57:18Katy Mimari:Like I grew to five or 10 million and on this one product, and all of a sudden it's halted out. And I've tried these new marketing, you know, strategies and these new, I'm trying different customer cohorts and I'm expanding into omnichannel and going into wholesale, it's not working. And I think that you have to ask that really hard question to yourself of, okay, was I a trend? And now what can I do differently? Or how do I evolve my brand to the next step?

57:42Matt Bertulli:Okay. So Curtis, I got a good one for you on this. Katie, this is like perfect. Portland leather goods. Does leather limit you? would you ever make something not from leather we made three million last year on canvas inserts for our bags uh that we didn't make we outsourced to somebody else we did footwear and we sold 35 million in footwear it's going to be coming back next year we have a lot of things that are there now that comes down to a couple things it was so brilliant think about this and i'm not kissing operators uh i'm a i'm a hater everybody i like to go against the grain so everyone said that the operators podcast with hudson from comfort was awesome and i'm like i'm not gonna wait that's

58:29Katy Mimari:my friend you better be careful what you're gonna watch it just because you guys tell me i'm gonna like it and i'm not one of those people i finally watched and i'm like son of a bitch that was it was awesome oh he's a and he is an amazing human too which makes his story even better he said Hey, we made this. I'm going to call it a hoodie or a sweatshirt. Okay. Every product person came. Okay. Now do sweats. Now do t-shirts. Now do this. What is his number one seller right now? A blanket. No one was coming to him about blankets, right? So everyone says, Hey, leather's in the name. Oh, should you make men's wallets?

59:08Hey, have you ever thought about making men's wallets? How about making a wallet? Like, Oh, you guys are killing it, right? Those ideas are obvious and you build on success. We sell leather bags. You want to make more leather bags. Sometimes killing off some of those ideas of who you were is the only way to get to who you need to be. And every company, if you talk to a company in problems, somebody who's been running a D2C company for 10 years who's having trouble, they'll spend 95 % of their time telling you about a success they had five years ago. Right? Right. Oh, you don't understand. We were in Doordstrom's for six months.

59:46You're like, great. That was in 2012. You're bankrupt. Time to move on. I've moved on from ideas we had in January. Right. So absolutely. You got to cut some of that success and you got to stop listening to people who think they know your brand. You can create whatever brand you need to.

1:00:04Matt Bertulli:Yeah, listen, I asked the question, Curtis, even though it sounds like it's a silly question. I remember talking to Sean about this. Like they originally, so I have the very, one of the very first ever Ridge wallets. My wife bought it for me when they did their Kickstarter. Right. And when I met Sean and I'm like, great product, man. I've never bought another one because it's awesome. It lasts. Yeah. And they had to, eventually they dropped the wallet from Ridge and they became Ridge. we're known as uh pila case right like your portland leather you have no idea how many people get tripped up just by their name right like if the product category is in the name they're like i can't actually make anything else i don't know that that's true at all it's not like you're curtis like i don't think you're running out to change the domain from portland leather goods to portland things like you're not gonna do that right uh but business owners are people you know If you're running a nine-figure business or a 10-figure, it doesn't mean you're not a person with the same emotions, right?

1:01:08We've all had to, oh, my God, is Portland in the name a good thing or a bad thing? Oh, we have to hand-make everything in Portland because we're called Portland Leather Goods. Oh, we can't sell that because it has leather in the name, right? We can't do that because it's a name. We're a marketing company.

1:01:26Katy Mimari:Typical entrepreneur problem is you think everything is more important than it really is.

1:01:30Matt Bertulli:yeah yeah that's a great point but i and i guess kurt like what i'm also hearing um which i think is just a really good takeaway for people is like uh product is everything and you also have to be willing to to shoot your own kids like you got to be willing to just like flush them i don't think

1:01:47Katy Mimari:shoot your own kids was a good analogy but yeah whatever like well because like no no seriously

1:01:51Matt Bertulli:entrepreneurs we we treat like i know people who treat products like children katie and they

1:01:57Katy Mimari:shouldn't they're not actually my company is my child yes right yeah yeah and look there's lots

1:02:04Matt Bertulli:of examples in in uh founder stories of like founders who literally will burn their own company down to rebuild it in a way that it needs to it needs to Steve Jobs being the most famous one he showed up and just rebuilt the damn thing so I think Curtis you're making a good point it's like product is everything but then you can't be married to them in such a way that like it's not everything, right? It's both. You have to be able to move around. Every SaaS company says they are AI powered, but very few can explain what it actually does for the revenue of my brand. This is why PostScript's approach stood out to us.

1:02:41Matt Bertulli:They don't just build AI for demos or buzzwords. They built it to drive real incremental revenue. PostScript's AI called Shopper, it shows up inside of SMS at moments with real buyer intent when shoppers are likely asking questions, hesitating, maybe even about to drop off. Shopper can answer product questions instantly, answer questions about fit, availability, recommendations, order issues, the kinds of stuff that people usually bounce for. This means more conversions, higher A, less lost demand. So you are driving more revenue and doing it more efficiently. Check out Shopper from Postscript.

1:03:12Matt Bertulli:We use it at PILO, which is why I am telling you to check it out. the marriage of product is with marketing and growth it's not with oh we've created this and and this is what our company is right that's a good it's not the past that's right there's a great thing uh everyone's read rick rubin's book or you've heard rick rubin on something and he'll say you don't make for the public they don't know what they want yet you create something that makes them want that. I create great music and they like it because if I try to recreate what's already there, I'm already behind. So you have to be a little bit ahead of what's going on there.

1:03:52And we really try to do that. Nothing is sacred. My number one goal in the world is to add value to my company. That's it. Every decision I make is there to add value to my company. You're like, oh, Curtis is really unique. He's really complex. Not really. What can I do to make the company more valuable. And that is grow new product categories.

1:04:13Matt Bertulli:Can I ask you both this? You just made me think of this, Curtis. Katie, how much of your, like, if you look at all the types that you're in, the product categories that you're in, how many of those were like, just totally off the wall? I have a gut feel like we should make this product versus, oh, there's clearly demand in the market for this. I want to make something that already has demand.

1:04:41Katy Mimari:Yeah. First, I was going to say all of them. So your first part, then you said the second part and some of them have that. And I think it's, I have to ask myself, what am I creating this product to solve? Is it a new customer acquisition or is it a AOV LTV play? Right. And I think that the, is there a hole in the market? Right. Or because I love everything you just said, Curtis, But but actually, you don't have to constantly reinvent the wheel. Right. Like you can take something that's out there already on the marketplace and just do it better. Like there is a lot of opportunity in that, too. But most of it is, gosh, Matt, most of our new products is just.

1:05:27Matt Bertulli:But the bangers, like the ones that like do tens of millions of dollars. are they like oh there's just existing demand i'm going to make my version of it or did you actually hit something new okay so i'm going to give you examples of that there's two different

1:05:42Katy Mimari:ways when we look at it when we we launched swim as a category three years ago so people buy swins yes and they buy swinsuits and i saw a huge hole in our in the children's industry for just cute family matching swim. I knew there was opportunity there and I guess a TAM really, right, that I could get out of the gates. And so we went deep on it. And in the first year, we did like 7 million of swim. So it was a huge success out of the gates. Now, other, what did I say, like 30 product types, types is what we launched this last year. And not all of them were huge inventory buys at the beginning.

1:06:22Katy Mimari:And most of them, in fact, we sell out of and then we let people pre-order them because it's an inventory management thing and i'm constantly having to battle that voice in my head of like missed opportunity because maybe i should have ordered more and then i wouldn't be dealing with back orders or i would have sold more or whatever but what's worse is if you over buy right or you over expect performance from a product type and then it doesn't. And now you're forced to liquidate that cash, right? Like and move through that inventory. So I like to think of it as we launched so many new product types of year.

1:07:01Katy Mimari:We try to keep variety and personalization gives us that variety because we can take something that doesn't have an inventory right and give, we can test almost before we go deep on it. But we try to, we lean conservatively into launching new product types because I would rather have a new product type that grows at a healthy rate to be a large percentage, right? Of our, like I want a new product type. Yeah, you're not making massive

1:07:29Matt Bertulli:bets on every product. I am not making massive bets. That's not how you approach it.

1:07:33Katy Mimari:No, I would rather say, I think that this product type has large potential, but we're not going to go big on it.

1:07:42Matt Bertulli:We're going to try to walk into it, not sprint into it. Curtis, the circle bag, what made me think of is, I'm listening to you talk, and you launched a bag where there was no inherent demand. You were like, I just think somebody should make a circle one. It was literally the shreddies moment where they made the diamond shreddy. It's like they just turned the thing around. It's like, I'm just going to make a different shape. How many, same question to you, like your biggest and most successful products, were there signals that there was already demand and you were just satisfying it? So I'm making my own version of it and better or different, or are your biggest and most successful products like now we made something that nobody had seen yet?

1:08:20The circle wasn't, you know, the first year it was just an average seller and then it caught on and then MediCot, it took off. It did not tick off right away, right? It was solid because, but we couldn't run ad sets. And then we got to the place where you could run ad sets. Probably eight of our tests, our 10 best selling products of all time were created by me and Maverick.

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1:09:39Katy Mimari:this because we know mccoy so well too i just want to and don't correct me if i'm wrong but i just want to visualize both of you standing in front of a mirror trying on purses and being like and And McCoy's like, Curtis, that bag looks so good on you. And you're like, I know, it's a circle bag. The strap length is perfect. Yeah. I will not get involved in certain conversations. I always bring it back to the big things. But the strap length, I don't care. I don't want to, no, no, no, no. This buckle, no, no, no, no, no. I'll tell them what they like. I've got good fashion sense that I can do that.

1:10:12But the details of all this stuff, I want away from it. But it's directional. You push the team in the right direction. Then you give them the confidence. guys, I think we're going to sell immediately$3 ,000 the first day. It's going to be$20 ,000 the first two months, right? That's the confidence they need to say, wow, this is something where my work is going to show, right? And again, I'm going to tell everybody, if you have a lot of choices in product, get them physically, put them on a table, not on a computer screen, and say from left to right, which one will sell the best? Okay, you. Now you put them in order, okay?

1:10:50you put them in order okay everyone's saying these three are near the top yeah and they're

1:10:55Katy Mimari:not all wins like i think what you're like i imagine your product team or the section in your warehouse is very similar to in our headquarters which is just a hot mess because there's product everywhere like when we go into developing new product sometimes what we originally reach out to our manufacturer for to prototype or get samples of it completely changes by the time we take it to market. Right. And so we'll just have product everywhere and we were all in office. So it's easier for people to walk by and ask questions and make things like that.

1:11:27Matt Bertulli:I actually agree with that. I don't know how remote companies do product development in consumer.

1:11:33Katy Mimari:No.

1:11:34Matt Bertulli:It just seems slower because like we like my product team is sitting out in front of my office right now. I go out there and it's a hot mess, but I can see everything. I'm with Curtis. Like I can see all the samples. I know what's coming. Uh, last week I heard them testing, uh, a new product cause I had to hear it. And I'm like, that sounds terrible. Uh, and I was just like, I like the process. I'm just not as like deep in it as you guys are. Okay. I just want to be mindful of time and Curtis, uh, what you guys, Curtis and Katie, what you guys just said, I've got a couple questions I'd like to close on because I think they're important because we've been talking about how we make products.

1:12:15Matt Bertulli:The first one is, is there a product in your catalog right now that you're like, we should have launched that way sooner? Like, why the hell do we wait so long to get into this category? Or this, whatever it is. Curtis, you go first. And Katie, I want to know your answer. No. No. Not really. We launched so much. I mean, you see part of my factory behind me, but this is only a small part. We're 280 ,000 square foot. This is just one of the sewing rooms. We have the leather rooms and the cutting rooms and the matching rooms, the settees and the like, so this is a small part. We sell out of every bag that we make.

1:12:57So we're scaling production at the same time. So not really. Our top selling bag right now, I think kind of hit the fashion of the last couple of years right at the right time and is scaling up. I think you can't beat the market on that. I think that you get something that works. You're going to make your yearly goals. You're going to make your revenue. You're going to make your profit. Don't always be thinking, the next thing is going to solve my problem. Yeah, you're always working on the next products, but your business has to be running well to start with. Katie, is there a category you wish you'd gotten into sooner?

1:13:32Katy Mimari:Yeah, all of them.

1:13:35Matt Bertulli:Isn't it only the two opposite answers of each other?

1:13:39Katy Mimari:like i when curtis is talking i think you could see my face i was like that one and that one and all of them most recently uh we have been leaning into mommy and me matching we did these loungewear sets that where the mom can match the daughter and like i sleep in them they're so good i sleep in them every night and you know why we didn't do it before is because they're more expensive and we thought our customer was a little bit more price sensitive and so we tested them first i think at Christmas sold out of them like in a couple of days luckily got to place a reorder in time before the holidays come around because we launched Christmas in August which stresses y 'all out every year but it freaked me out at least yeah all of you guys yeah I'm like bring it bring it earlier bring it earlier but yeah that's not I really want to say this I'm sorry I've really got to say this if you're testing new product do it in uh April May okay why if it takes off you can read data in June, July, and you can get a big reorder in time for Christmas if you're ordering somewhere around the world, right?

1:14:43You don't launch it in August and say, oh my gosh, it took off, put a big order. Braid will be delivered on December 18th, right? So the earlier you're doing that, then the better you are in the reorder. Some people don't do that. They look for the launch to be it. You got to think about reorder number one and number two if you're doing that. So time that out accordingly.

1:15:04Katy Mimari:For Q4 products, for gifting products, for sure. Yeah.

1:15:08Matt Bertulli:Yeah. That's a great call out, Curtis. OK, final question for both of you. Is there a product you wish you'd killed faster?

1:15:14Katy Mimari:Yes.

1:15:15Matt Bertulli:Katie? Yes. Which one?

1:15:17Katy Mimari:Well, yeah. All kinds of them. Are you kidding? Like I should have.

1:15:21Matt Bertulli:No, but is there one that you're like, God, bloody hell, that was expensive.

1:15:24Katy Mimari:Yes. We did an entire collegiate collection, which because everyone was doing licensing and I had FOMO and I was like, I need to do licensing. and the it did well but the reason that we killed it is because it went against our theory have you guys heard of the um the kiss the philosophy keep it simple student yeah yeah that's everything we do like i'm like if it is gonna complicate our processes and operations and if it's gonna complicate it i don't want it and collegiate was a nightmare managing all the licensing fees and not even the fees, just all of it, right? Like getting the approvals and going, it was a pain in the ass and we cut it and we should have cut it sooner because it wasn't worth it.

1:16:10Katy Mimari:Even though it was profitable and the whole thing, it kept, it took away time from my company.

1:16:15Matt Bertulli:Yeah, licensing is brain damage. It's literally brain damage. We've done shows on licensing, man, is it brain damage. Like there's just, I have no better way to say that. Somebody's like, have you ever done licensing? I'm like, uh-huh, would you do it again? I'm like, no, like it sucks. Curtis, is there any product where you're like, we put a lot of time and effort into that, we should have killed it sooner? No. And I'm on the app here. Okay. So, Katie, let me explain. You can order from overseas. They can design, sample, and you have a big shipment coming in. I have a manufacturing behind me.

1:16:45So I can put a PO in and have a product in three to four weeks. So we make a test run. And then depending on where it is, we can make more. And we just, if it's not selling the right way, not heading in the right direction, you just don't put in the new POs and it drifts away.

1:17:00Katy Mimari:Well, gosh, Curtis, if I was as smart as you, I wouldn't have my problems. It is not. I have created up. Somebody asked me once, tell me about what's the key to running a manufacturing. I said, I would not do it. The only good thing about it is to give the right product at the right time. That's it. If I could just snap my fingers and have all that solved, then I wouldn't have this big manufacturing. I would do it. But we're more profitable. We're faster. We're leaner. And we can beat out the competition because we do it. So I will not give up that advantage. But would I rather just put a PO in?

1:17:38Damn straight. We do that.

1:17:41Katy Mimari:Own the process. I think Matt would agree. And Curtis, not everything we do comes from other factories. We make a lot of it ourselves, too. Yeah, all three of us actually make a lot of product.

1:17:50Matt Bertulli:Wow. Wow. That's because I need to come to San Antonio and see your amazing house that you built and see your facilities there, okay?

1:18:00Katy Mimari:You're more than welcome to come join. You're just right across the border from me, so come on over.

1:18:04Matt Bertulli:There's a direct flight? Well, look, I think we're at time, and I have to go. I've got a call coming. So this has been fun. I actually learned some stuff.

1:18:14Katy Mimari:I don't want to hear from y 'all anymore.

1:18:16Matt Bertulli:No, actually, I'm with Curtis. I think we could talk about product for like four hours. and there'll always be a thing to find and a string to pull on. This is such a big topic. That's why I think that every time we release an episode on product, it's never enough. Like people are like, yeah, but what about this? And what about that? And like, there's just so much here. So I appreciate both you guys coming on and sharing experience because I think it is valuable, Curtis, to every size of brand. Like it's just valuable to see how these machines work at all levels. So I think that was a lot of fun.

1:18:51Matt Bertulli:And you didn't kill each other, which was great. We're winning. Today is just about winning. Absolutely.

1:19:00Katy Mimari:I think Curtis insulted me like three times. Yeah, but I did it with a lot of love and very subtly.

1:19:06Matt Bertulli:All right. We talked product. Thank you, Katie. Thank you, Curtis. Thank you for making this a cordial conversation. That is the pod. Let's get out of here.