Operators Titans E001: Caden Lane (with CEO Katy Mimari)

20:45Katy Mimari:I think that's probably when I thought it was a brand. But still not anything like it is today. I had no idea what it could be, you know?

20:54Sean Frank:So you have a very famous story that I've heard on the podcast, and I'm sure the audience has heard, taking your baby, six weeks old, to Mexico to argue with manufacturers, right?

21:11Katy Mimari:In Spanish.

21:14Sean Frank:and then you know i think less than eight years later you're getting features in a ton of pr magazines because you're doing celebrity baby wardrobes right yeah that was all the first life of your business and is there any other like aha moments like you know walking up to people in the airport fighting with suppliers in spanish with a six-week-old baby and then you see you know visit the cover of magazines you're doing celebrity, you know, baby renovations. Any other aha moments that first life of the business?

21:46Katy Mimari:About it being a brand?

21:49Sean Frank:Or, yeah, or just, like, it's starting to feel bigger than you. Or maybe it's never felt bigger than you. Beyond a hobby, I guess, is, like, the way you framed it.

21:57Katy Mimari:Yeah. I don't... I mean, I don't think it ever felt bigger than me in its first life, right? Like, I kind of... I had excess... Like, I had success with it out of the gates. like you said Sean I took my right like I induced my pregnancy like I pissed off every natural birth person in the world because I had my baby like I made them cut it out of me I had a c-section and I told my doctor I said look I'm either going to take a three-week-old to New York or I'm taking a five-week-old like you pick and she's like okay I guess you're going to take a five-week-old because I wasn't going to miss out on it and I knew that I needed to go do this to grow my company but through those first that was 2004 2005 the hardest part of the company was for sure 2008 which I bring up every once in a while because right now the buzzword is like are we in a recession man nobody knows what a recession is like they don't this is not a recession you know 2008 2009 if you had a company was it was hard like it was really hard and so we were selling to just brick and mortar.

23:05Katy Mimari:So like Sean, imagine if like Best Buy all of a sudden closed down half their stores and you had no control over it. And they just, and they sent you an email and they're like, that's it. We're done. Right. Or, or Costco or whatever, like whatever mass merchant, um, that you were dependent on. And it was, it happened really fast and it lasted a whole year. And it was, uh, it was, it was for sure the hardest thing I'd ever done.

23:33Sean Frank:So doubling down on 2008, um, bring us to that moment. How many employees did you guys have? Like what, what was revenue pre and then post and like how sudden was that drop? Okay.

23:44Katy Mimari:So we were probably at that point where maybe, I don't know, five to 7 million, just under 10 million, um, in sales just to wholesalers. I had, I think, three employees and we were working with the 3PL and we were so Nordstrom was a big account. So it was Bye Bye Baby. And really, that was when we first started to see online accounts come in that were doing drop shipping. So we had a couple like really, you know, accounts that were just baby boutiques online, not their own brand, just drop shipping different brands. uh and i would i mean it was october of 2008 and it was just all of a sudden we credit cards stopped processing so back then there was no online processing like when we went to market we had to write the order on like carbon copy carbon copy papers so dating like we'd get orders faxed to us and i'm not that old um but we it was it just stopped sean like the best way to explain it is it felt like crickets overnight and we i had one girl that was basically in charge of like accounts you know signing up new accounts like she was just a wholesale manager probably was her title um and we were calling stores and these store owners were crying on the phone like that they couldn't pay their rent and right and they could they return the product to us because people weren't coming in the store and and they were having to close down and it was it just spiraled it spiraled really quickly um and then into 2009 like it was it was a good full year of just really tough times for everybody and so we weren't signing on new customers like right now everyone talks about oh like costa customer acquisition so hard but okay yeah but like our you know the the the ocean we get to dip in is massive right like we can find those customers We can still like optimize.

25:43Katy Mimari:Back then, it just wasn't like that. Like new stores weren't opening and stores were closing. And so our TAM, right, of wholesale was shrinking faster than we could keep up with it. And so I'd say our revenue more than cut in half in a year.

25:59Sean Frank:Did you have to lose any employees over that or was the team small enough you could?

26:03Katy Mimari:No, it was just three of us. So no, I didn't lose any employees. but I do remember having to be very frugal and I remember that$10 ,000 was the amount that I wanted in my bank account and I felt like if I could keep$10 ,000 in my bank account I could pay for our rent and our 3PL and I could pay payroll wasn't paying myself at all but that was like my magic number and if that number got below that then I was definitely having a bottle of wine in the bathtub that night. It was hard. Like, I mean, I can't even tell you, like now my CFO laughs with me because I write like have different anxiety levels.

26:46Katy Mimari:Like if our operating account gets below a certain cash level, I'm like, we need to transfer money and we need to do this. And, and, and it's very humbling to like, think back about when$10 ,000 was okay. We're good. Cause we can manage on$10 ,000 and all that.

27:03Sean Frank:Is it surreal that like now every hour, you do$10 ,000? Like, is it?

27:09Katy Mimari:Sean, yeah, no. But, boy, we're doing more than$10 ,000 in an hour, yes.

27:14Sean Frank:I'm just saying every hour, two in the morning, you know what I mean? Yeah. It's so surreal. Yeah.

27:21Katy Mimari:Yes, oh my god, that's the fun part of the story, is when we changed everything. Then it got really exciting. I want to go there. I want to know about this transition more. Because I think we've heard it, but I don't think, like, I have questions around how this actually happened.

27:38Sean Frank:Yeah, like, take us to the death of version one of Caden Lane. The death. Was it quiet? Like, was it like, I'm just going to take this company, like, this part of my business, like, we're going to take it out back one day and just put a bullet in it? Or, like, did you already have the new version up and running?

27:58Katy Mimari:Like, did I assassinate it or was it so painful? Or did I just poison it slowly in their drinks at night? how did i kill my company yeah uh no honestly it had nothing honestly it had nothing to do with my company it was i mean yes 2008 2009 were hard and then 10 11 12 stayed hard it got a little bit better and we you know trimmed the fat and optimized towards profit and like we did all the things the biggest thing we did was change our product assortment so pre-recession we were just diaper bags and crib bedding, which those AOVs were like$150 to$450. So they were very large purchases for the customers and for the stores.

28:43Katy Mimari:After the recession, I recognized that my stores were asking for just more gifty items. They wanted to, what people were coming in for was baby shower gifts and new things for their newborn. And I saw the opportunity to try to fill hole and so that was our first product expansion experience into like hooded towels and bibs and burps and blankets and some even some apparel items um which was really exciting for me because that's right like what i wanted to start with we actually had a brand for a hot minute called pity chance which is so embarrassing the best name it's so embarrassing because y 'all know what it stands for yeah no shot you know because you read the thing sean you want to guess what pity chance stands for it was a children's like layette line and i don't i don't know any of these words you need to have some days so it was it was just like i don't know what's the word an acronym for pants i'm so embarrassed that i even had a brand like that the logo was fabulous and let me tell everybody at market stopped and would laugh at it and then they would write an order.

29:55Katy Mimari:It did great. Like, we crushed it. Had I had Facebook ads at the time when that was the name of my brand, my engagement would have, like, been amazing. Why have you not revitalized a product called Pity Shand? Honestly, I forgot about it until I read y 'all's thing, and I was like, oh, that's embarrassing. Yeah. So maybe I should. But, uh, and the prints on it, I designed myself. So, like, I mean, I literally, literally taught myself how to do everything in this whole company and the whole business, every aspect of it. I just figured it out, uh, including print design. Um, but okay. So we expanded into accessories just to appease our wholesalers definitely had revenue pick back up.

30:37Katy Mimari:Um, but I wasn't happy, right? Like everyone gets like burnout, um, from their jobs. And especially I think entrepreneurs, because things can be very repetitive and we're all like, addicted to the growth and change and all the things. And so when you get kind of in this like lull of survival, it's very easy to be like, I don't want to do this anymore. Even though you do, you just want to get out of the hole. And I think I was tired too. Like I was tired of the old way of doing it. It was really frustrating to go to market or talk to our stores and have some junior buyer decide what was going to be the hottest new thing.

31:23Katy Mimari:And I'd be like, no, this is on trend. This is what moms want. I mean, remember I was my target audience. So I had my first baby. And then two years later I had my second, like I had, we had cribs in our booths at market and I literally put my babies down for the nap in the booth and people would come by and they'd be like, Oh my God, is that a real baby? Like it was brilliant marketing. It was brilliant. But, um, but it was, it was It was exhausting. Bad parenting. Brilliant marketing. Yeah. I was a terrible mother. I was terrible. And I just dragged him along.

31:56Sean Frank:Oh, sorry. I was gonna say, so, surviving 2009, 2009, dealing with the challenges of 10, 11, 12, and then that's when the rebirth happens. Yeah. They're gonna get into all these other products. So, product expansion first.

32:08Katy Mimari:Product expansion first. I was trying to revive it, what it was. And then at the same time, I was personally going through a divorce. and when I look back like because I get asked this question a lot right like well why did you do it and a little bit of it was what I was saying was really just I wanted to talk to my customer directly I felt like I knew her better than some of these buyers did and they weren't they weren't delivering the message like I wanted them to deliver um and then I I just wanted to find the fun and the joy in it again and it wasn't there because i had done it for 10 13 years um and i and i i right like i don't know i i don't think the job i don't think running a company has to be a job i think it can truly be a passion and something that like really fulfills you you're still good joy of that today katie like the customer relationship piece yeah the talking to your customers like knowing moms and yes yes hands down best thing i ever did was get rid of my first husband and change my company.

33:16Okay. So you've, you started product first, then you went and then you were like, I'm going to take product. We're going to go direct to consumer.

33:25Katy Mimari:Yeah. Can you like, and this is just to give everybody a timescale. We're talking like the 2015, 2015, 2015, 2016. Okay. What did that version of like, so this is the first version of the company that you have today. Yeah. What was your path to the customer at that time? How did you start finding them? How did you start talking to them? Because you clearly had to have some signal that keeping, like, this was the way forward and that the old thing did to go. Yeah. It was for sure when we added our first shopping cart. So, you know, it was not, really, we weren't permitted, like, with some of these large accounts to have shopping carts on our brand website.

34:06Katy Mimari:Websites were really meant to be catalogs at that point. Um, but we needed money. We needed cashflow. And so we were like, well, we're going to add a shopping cart. Like other people were starting to do it. And it was just kind of a Hail Mary. Right. Well, we added it. And remember at that time, I mean, our AOV was like over$400. It was amazing. I would die for that today. and so we added a shopping cart and people just were buying online like they were just coming and we weren't spending any money on advertising I didn't even know what a marketing budget was because before that our marketing budget was direct mail or running ads print ads in a magazine right like fit pregnancy or people magazine or whatever that's how we were advertising um but yeah so our our our first taste of it was just that natural like it was the brand it was that it was that really valuable word of mouth right like turns out moms really like to tell each other what to buy and I think that's what was really driving our sales online and so we got a little taste of it I probably early 2014 and then 15 we leaned into it more um and then I hired my first employee that had experience in basically what site we switched from i think it was either magento or big commerce to shopify and we spent about three months uh just building this shopify store and her name was kristen um that was this marketing girl that i hired that had experience actually i lied take that back i hired an agency to help us figure out seo and building the site and they were idiots but this one girl that worked for her I was like she's sharp and so we took her in with us and she helped us build the website December 31st 2016 we sent an email out to all I don't know maybe three four thousand stores and said thank you so much we really appreciate your business but we're going direct to consumer now and we closed it and it was like definitely a like a whole that's a bullet that's not a that's not a quiet that's like a full-on like i'm gonna put a bullet in it yeah and we knew it was coming like the and the build-up of it was intense and this was like there was already a black friday but it wasn't black friday like it is online and anyone in the baby world knows that like q1 is our like black friday basically um because it's just people don't have baby showers in q4 whatever um so we switched over from i think it was magento to uh shopify and we thought our revenue would stay the same and i mean it was under a million that we were doing just in website sales on our thing well it came to a screeching halt because apparently we broke every link that we had coming to our site like literally old school seo and it took us about three months to organically build it back up again and we had so many celebrity nurseries we had done.

37:10Katy Mimari:Like we had PR and press was something we leaned into hard for those first 13 and 14 years. And, um, but yeah, so that first year we ended up doing a million on our website. Uh, and I think it was towards the end of it that Kristen, the girl I hired, she was like, Hey, I really think we should run an ad on, on Facebook. And I was like, no, no. Yeah. And I was like, no, nobody's on Facebook. And I was like, they're on my space.

37:40Katy Mimari:And she was like, no, they're on Facebook. And I'm like, what is this Facebook thing you speak of? Like, and so I made my own account. Right. And, and she was like, let's just start it off low. And so, um, so that was it. So we got in and got an ads manager. We took our, I was still doing product photography at the time. And so we kind of took our best pictures and I love copywriting and I made my first few ads. I probably completely screwed up the campaign at the time. Like I, who knows what I did? I can't even remember. Um, but I think we started off at just maybe a hundred bucks. But the really cool part about back then was you could spend$500 and the next day your revenue was$2 ,000.

38:22Katy Mimari:And then you'd bump it like a hundred dollars. And the next day it'd be$2 ,500. Like it was, you could see this immediate like jump in revenue and uh and then we just started scaling as fast as we could when we were doing that we were actually manufacturing in the u.s so oh yeah i've manufactured in mexico the u.s china really those only in india a little bit but mostly just those three countries um and our it was when we started apparel and we started our knot gowns which is kind of like our original little hero product um and it was we were making it here in texas and a little so cut and sew factory uh and they couldn't keep up and so we switched over to china um at that time and then it was just a race of like scaling spend and keeping up with orders and um i think we went from a million the first year spending no money to to maybe three million the next year and 7 million.

39:26Katy Mimari:Then it went to like 1530. And then of course, COVID was in the middle of that. And it was like a slingshot.

39:35Sean Frank:So Katie, you went from a high of$10 million pre-recession in 2007 wholesale only business through the recession, a divorce, the business, you shut down wholesale completely you as low as a million dollars and you shot all the way back up at any point were you like i'm an idiot i gotta get out of this or you just the whole time you knew you were like

40:00Katy Mimari:we're for no yeah i still question my decisions yes no i didn't know what i was doing are you kidding i i absolutely was just closing my eyes and like pushing the button right like hope this works out um and we never raised any money either like i think that's kind of an important thing to touch on like when i started this company back in 2004 i sold my boat in college that i was so proud of but i needed money to start the company and we we never took on debt ever like all of it was just using the cash flow to run the business and grow it and when we started even when we were spending on meta because right now we've got to spend the money in marketing before we see the revenue um and what was really mind-blowing to me was how could we be doing that much revenue and all my money was going back into inventory and hiring people and like cash is this like magic thing that grows your company but you know there's so many people right out there they're like like we see the influencers online and they're like i'm i'm doing five and ten million dollars online in revenue but it takes money to get there too so i think it was a hot minute before i really started paying myself anything can you uh you said that this just makes me think of this i wanted to ask you this but you said that when you switched you did this like site re-platform thing i mean my first business was doing these things in the like mid-2000s right and it was great business because there was so much platform movement at that time um that sounded expensive can you think of like is there another mistake that you've made in this whole journey that was even more expensive than that we're like oh my god that was just ridiculous why did i do that yeah i mean yeah there's a lot of those my one that stands out um when i didn't realize that you could hit nexus in all 50 states and then you have a million dollar sales tax liability that i had to pay that was a really expensive one uh and i paid it and i had right because for so long i had this small company small i thought we were crushing it by the way literally when i thought we were doing 10 million i was like we're the biggest baby brand ever no we were no we were nobody yeah we were nothing um but my i had a cpa that was local knew nothing about e-commerce and i trusted him and um and yeah when we started to grow man it was we grew and it was another um Um, another guy that was in kind of the e-commerce business and he was like, well, what, how are you processing all your sales tax?

42:41Katy Mimari:And I was like, through Texas, that's where all our employees are. And that's where my, my building is. So I don't have to worry about that. There's dates. And he was like, but how much is your revenue? And I told him and he's like, no, you've, you've, have you looked into it? You probably hit Nexus in those states. And I think it was that night I went home and I Googled it and I was like, oh my God. And I realized that some states it's by transaction numbers and some states it's by total revenue i made a whole spreadsheet that was what state what numbers they are how i hit them what i did i thought i was going to just manage it myself thank the lord somebody told me about uh i think it's called a vda program that avalera actually ran for us and um they they told me i was the most organized person that had ever gone i know more about sales tax today but yeah i had it was over a million dollars in liability and that sucked because you know why i didn't collect it so that was just straight i had to pay it but you know sometimes when you scale and you get businesses that big lessons get really expensive do you know that like do you guys ever think of this the sales tax thing because i know we've talked about this in the other pod, John, the sales tax thing is one of those like collective e-com knowledge things that we now have.

44:01Katy Mimari:Yeah. That 10 years ago, we didn't have, like, I, I remember this, I like as a Canadian, I remember vividly the day that I found out that there's like 13 ,000 tax codes in the United States. And I'm looking at Canada, I'm like, well, we have 13. Why do you have so many? And I remember my, like, at the time my CFO was like, dude, we gotta, we, like this needs to be solved right like we're smoking everything in every county in every state yeah same thing i remember this moment there's no because there's no playbook like where were we gonna educate ourself on that right like nobody yeah it's definitely like it's better today we have like institutional knowledge as a community like i think i think shopify like kudos to them but that is largely like i think them driving it absolutely yeah for sure my second most expensive lesson which actually probably is even a more expensive lesson was um you know up until about 30 million in revenue we were really just a single kind of product company so we were known for creating like the outfit the swaddle and the name announcement that babies used in their announcement picture at the hospital.

45:16Katy Mimari:So it was kind of like when women buy their wedding dress. It's a big lifetime event, right? And the birth of your child is probably bigger than your wedding. And we had everything she needed to pack in her hospital bag and put in her bassinet. And I was like, we're crushing it. Like, we are freaking killing it. Everybody wants Caden Lane for their hospital newborn photo. My brand is big. Like, I'm doing all these things. And what I didn't recognize at the time was that I was literally like packaging up my customer and wrapping her in a bow and passing her off to my competitors because I didn't have any products to sell to her after her baby was born and now looking back like I was such an idiot because I could have I didn't even know you guys like what a KPI was at the time like I think I've told you all this story we went through a process at one point in 2021 and they were asking me what my KPIs were and I was like googling what a KPI was.

46:18Katy Mimari:I didn't know like and I didn't need to know because I didn't need to report it to anybody. I had my thumb on the business and I knew what I was doing. The P &L I created every month like I was reconciling our books. I was doing the marketing. I understood the company. It was me and maybe 10 hourly employees. And so I knew every aspect of it. I didn't need to know KPIs. I didn't need to know what an AOV was. I surely didn't know what an LTV was. And then I figured it out. So, and yeah, that's cost me what, like that. I mean, I just, I guess looking back, I could have probably gone bigger, faster, and harder had I understood that early on, but I didn't have the resources or, I don't know, I didn't have anyone to tell me that that's what I was supposed to be doing.

47:06How, uh, how do you stay in touch with your customer now? So like back then I'm imagining like you're talking, you're like reading everything, like every comment, like you're looking at reviews, you're a much bigger business today. We'll get to that. But how do you still do this? Like the, cause like a lot of product ideas and expansion still comes from you, as I understand it. Like you're still always thinking about how, how does that look? How did it look then? And has it changed at all? Or are you still kind of like same playbook?

47:37Katy Mimari:No, it's definitely changed. And I have a wonderful team and an amazing senior product designer who's actually my longest employee. Um, and she's a rock star, but yeah, back then it was all me, right? Like figuring out what we were going to do, how are we going to do it? We had a good community back then. Like social media has always been just this great platform for us to talk to our customer. But I really put a lot of value in, we had a brick and mortar store. So I had a second company in the middle of all the chaos of everything. I was like, I'm going to, you know, Katie likes, my life's not chaotic enough.

48:15Katy Mimari:I'm going to make one more company. And so I opened up a brick and mortar store in Texas. And I don't know i kind of i like to call it my focus group because it's like a never-ending study of what moms are coming in and shopping for and what are they talking about and why do they like one brand better than the other and what's selling and i i still to this day go to market with our manager of the store um because i just love seeing it right and like what what's evolving what's trending I think that understanding it and right to Matt, like I was my customer for so long. Now I'm her, not, I'm not her grandma, but I could be right.

48:58Like soon, but in all those growth years, I was

49:01Katy Mimari:her. Yeah. Okay. So you said, I mean, obviously things are very different today than where they were in 2015, 2016, 2017. Like even as you're getting into the, like the 20,$30 million range, I mean, the interesting thing to me is you started out with a Facebook ad and it's like, oh my God, I can spend money and get customers. Today, you're still like, you're very involved in that. Like you are a significant spender on Facebook. The marketing mix doesn't seem to have shifted that much. How much? Absolutely. Absolutely. Am I wrong in thinking that, that as you've grown, that the company and how you go to market, that hasn't actually shifted that much?

49:45Katy Mimari:No. In fact, we're still really, I would say, solely direct to consumer. We just launched Wholesale last Sunday. So full circle. And it's crushing it. It's doing really good. And I have a little bit of PTSD about it, too, but that's OK. It's exactly what I thought it was going to be. They need a lot of emotional support. Oh, yeah. It's a relationship business again, which, I mean, you're clearly built for. But, okay, so the other thing that you've touched on, which I think we've got to talk about, is you started a process to sell. Was that like you deciding, hey, I want to sell? Or did somebody come out of the woodwork and say, hey, you should sell this company.

50:24Like, you can make a lot.

50:25Katy Mimari:Oh, that's the perfect tee-up for my answer, Matt. Good job. I keep my job. Okay. Yes. So 2021, we were crushing it, right? Like COVID for sure was a slingshot. Although I hate when people say like, oh, well, COVID made your company big. No, we were scaling before that. What COVID did for us was it, it really honed in on my fear of the business crashing again and it not being non-existent. And so we leaned to spin. so we got big and um the short version is we were actually at a dinner party in austin and this guy that runs a brand out of la was there and talking to my fiance i think at the time and he was trying to talk about meta and like spend and he was like oh yeah well my brand does this and that and we spend this much on meta and as my husband didn't know about any kind of e-commerce and so i could see him like struggling through the conversation and i went up and i said um I said oh what do you do and he said jewelry and and he was like but we're pretty big like we spend you know a hundred thousand dollars a month on meta and I was like well that's cute and I said we spend that in a day right or whatever it was and immediately he shifted his attention and started asking me questions which you know was great like he was super interesting but in that moment he said oh my god do you know what your company is worth Well, he I think asked me a question about margins and the whole thing and I was spitting it out because I was so proud of myself because Back in the day I was like if my company could just do 10 million dollars I'm gonna sell it and oh my god I'd be so rich like I wouldn't have to work again and that was always my like goal and then and then I hit it and then I was like You know that sucks like let's make it bigger and then it was 20 million Then I hit it and I was like, okay Well this sucks.

52:20Katy Mimari:So I was still in that transition of like what's my next goal but then when he was like do you know what your company's worth and he you know was throwing out like massive numbers like you know you could sell this for like 75 100 million dollars and i was i stood there and i was like what like that's crazy and so we left the dinner party and that next morning we were sitting uh having breakfast at our hotel and i looked at my husband and i was like do you really think i could do that like that's that's crazy and he was like well we should chase after it like this guy said he'd connect us with these bankers and like do all these things So I chased it down.

52:55Katy Mimari:And still, we were just growing like crazy. And I didn't want to sell it. I wasn't done. I just was like, that's a lot of money, right? Like, well, who doesn't chase that? And so we hired a banker and we went through a whole process. And when I tell y 'all that, like, my divorce was hard, but going through a process, like a true process where you are from beginning to end, like interviewing the bankers and doing management meetings with these like PE firms out of New York and they're coming to Texas and they're wondering why there's horses in the field next to us and going through multiple like LOIs and like understanding the um the deal structures and what that means like I did the whole thing I was exhausting and it was definitely harder than getting divorced um yeah I've never heard that before but okay it was it was but that i mean you want me to expand on that kind of i've been through the process to sell and i'm like oh my god divorce is way easier but also i think that my company is somewhat of my child right and i have a lot of my identity in it And I didn't really recognize that until I went through this process.

54:16Katy Mimari:But yeah, like going through it, like once we had multiple offers and the whole thing. And I remember them asking me questions. And I was so proud that I had done all of this by myself. Like I thought, oh, my God, I'm going to blow their socks off because I am all the things. And we were doing our first financial audit that year in the middle of the process. And I was doing it. So I was going through a sales process. I also was engaged to be married the day before Black Friday. Who does that? Like, what kind of psycho person chooses, lives in the e-comm world, and is like, I'm going to travel to Hawaii and get married the day before Black Friday while I'm going through a sale process?

54:57Katy Mimari:Like, it is a miracle. I'm your punishment.

54:59Sean Frank:Katie, it's called Thanksgiving to normal people. It's not the day before Black Friday.

55:07What?

55:07Katy Mimari:I don't know what you're talking about. uh yeah so it was a whirlwind of a year for sure um but i would take these calls and they would be like well um we're looking through your you know your pnl and your balance sheet and we have a few questions can we talk to your cfo or your controller and i'd be like absolutely let me go get her on the phone and i'd take my chair and i'd go oh what i'm gonna pull the microphone out

55:40Katy Mimari:it's good is it okay it's okay okay visualize me like scooting my chair out of the zoom call and then i'd scoot myself back in and i was like it's me it was not as impressive to them as i thought it was gonna be immediately they're like you need a c-suite you need to have corporate structure do you know what process is and i was like what i have what i don't know what you're talking about? Like, look at my, look at my EBITDA. Look at these pretty numbers. Right. Whatever. I learned that was, it was like a crash course in getting my like MBA in business. And it was expensive to go through that whole thing.

56:19Katy Mimari:And it was extremely time consuming and, and it drained me. Um, but I remember going through it and asking him questions. Like I was like, what are you going to bring to the table? Right. Like, cause they come in like these big New York guys and we've done this brand and we've built it to this and that we've done all these things and we're gonna do the same thing to you and I'm like okay well but I think I can do that and so but what are you gonna bring and they're like well you need a c-suite and you need to hire and so we're gonna bring that in for you and I was like great do you know who like who are you bringing in who are these magic people and they're like oh no well we're just gonna get a headhunter and I was like well what can do that well what else are you gonna do and so then they'd say well, we're going to help you scale out your product development.

57:04Katy Mimari:I'm like, I just created a really badass deck for you showing you how my product development was going to scale. So what else are you going to do? And then they go through another thing and I'd be like, and they're, you know, challenging what our, you know, projections were. And I was like, they're like, are you sure you're going to hit this? I'm like, I'm doing it. Like I'm literally hitting it. Yes, I'm going to do it. But then my most valuable part was when we started to talk about like the deal structure and what it meant like i had to stay on right for so many years which was fine i didn't want to go anywhere um but the part that blew my mind was that they were gonna buy it was probably i think it was like 80 75 or 80 percent or something like that so it was a majority right that they were gonna buy and they sent me like the contract or whatever and i had my attorney looking over it over it with my cpa the better cpa not the one that screwed me on the tax thing i upgraded my cpa and he was like do you understand what debt means and i was like yes i hate debt and he was like no like they're actually going to put debt on your company and then this is the amount that they're going to write a check for and this is the amount that your company's actually going to finance to pay you and i'm like well that's kind of bull like and then i'm also expected to hit these numbers but then paying this massive debt off that right they're going to use to buy me out but I'm still there and I just my brain was very much like trying to absorb all that because you guys I and like I'm sure people listening are like she's an idiot I didn't know any of this stuff like there was no operators podcast to like educate you on like how this works right it was just me figuring it out um and so anyways it got to the very end of the year I pulled out they tried to retrade one time because I missed a number by like a fraction of a percent which pissed me off and they're like you missed it by two percent we're retrading you and I was like well bye immediately got calls from my bankers they're like you can't do that you can't just like call them and tell them you're not doing it anymore I'm like yes I can you're a realtor I don't need you to communicate for me like i can do this by myself uh and so they all talked me off the fence i stuck with it went to hawaii got married uh and actually it was my mother that i was just so distraught because i was like i don't i feel like i'm an idiot if i walk away from this like this is what people do this is why you build a company this is what you're supposed to do and how stupid am I if I'm like, I don't want to do this.

59:39Katy Mimari:And like, it doesn't mean anything to me. And, and she said, you know, she never sold her company. She still has it. She operates it from her houses, wherever she is. And she was like, you know, I think you need to think about what does it look like if you keep it? And, and I don't, I guess I don't really remember what exactly she said to me, but I knew in that moment that it wasn't the right thing. It was my gut instinct, right? Like, I just knew that it wasn't the right time. And it was scary to think that maybe I couldn't get it to the next level. Because I was at that point promising$100 million.

1:00:17Katy Mimari:$200 million, right? $300 million. I wanted to be Carter's. Billions is what I was telling him I could do. And so then I climb in bed with myself and my brain. And I'm like, how are you going to do that? You don't know how to do that. But I also thought, well, yes, I can. you know so uh we came back and at the beginning of the year i had a call with um one of the bankers and we just kind of came to a mutual like i was like i just it doesn't feel right and i mean y 'all when i tell you we got through everything like everything like we were supposed to close within days of this and you pulled it you pulled it like getting close to close that's insane said no i know But you know what?

1:01:00Katy Mimari:I hit every number I said I would. And I did exactly what I said I would. And it's 100 % mine still. And I don't have to answer to anybody. So I think I made the right decision. Now, will I do it again? I don't know. Right? Like, that's what everyone talks about all the time. And maybe I will. Some days I go to bed and I'm like, I quit.

1:01:22Sean Frank:I don't want to do this anymore.

1:01:23Katy Mimari:This is hard. Right? Like, everyone's pregnant. My staff's not kind of like that. I mean, y 'all can imagine how frequent people get pregnant when they work here. I have seven people on mat leave right now. Well, you need to put birth control in their water like I do. That's what I do. And I manage it that way. I feel that so deeply. Yeah. But like running, I mean, yes, it's so much fun to do what we do, but it's also really hard. One of y 'all's questions in the thing was like, what drives you crazy? when people say like oh you're so lucky to be an entrepreneur or something like that oh no no no no no i i can't stand that oh you're saying no yeah and i was like and it does drive me crazy because i'm like you have no idea like you have no idea they're like oh it must be so nice to take vacation whenever you want and i'm like oh that's nice what's vacation or when people are like well what's your hobby i'm like a what what i'm doing it like this is my hobby this is I tell my non-entrepreneur friends, I'm like, do you imagine if you had to live with the craziest person you've ever met?

1:02:31Katy Mimari:Yeah. Yeah, except it's you. Yeah. That's being an entrepreneur. And your brain doesn't turn off ever. So here, one thing that is very clear to me, and this is like a good thing. I think this is a great thing. Ignorance is like a genuine superpower of yours. It has been up until this point. Like, it is like you go into things, you're like, I'm just going to do it. you don't know very much about it and what you so number one you learn really quickly that's also abundantly clear um people always ask i think like as like the survivorship bias thing is like as you get more successful people like if you have to give advice to your younger self what would you give it i actually want to ask the reverse what advice would your younger self give to you today that you think like you need to hear now that you are like much further along what's the ignorant like that like naive Katie what would she tell you today that like you need to keep doing this she'd be like grab your balls and just do it for sure I'll give you a more PC version but that's great we can keep that she would say that to myself because like I yeah like I had all the balls right like I could do whatever I wanted because when I was that young I just thought everything is figureoutable.

1:03:48Katy Mimari:Like if I needed to be a brain surgeon, I could, whatever, like a couple of YouTube videos, I could figure it out. Um, I just didn't think anything was beyond what we could figure out how to do now today. Like as we lean into, you know, researching, opening up our own brick and mortar stores and going back into wholesale. And what does that look like? And do we want to distribute through Amazon? What is on a channel? How do we become the next carters it because i have had this is two ways i was going to say it's because i've had so much failure over the last few years i'm a little bit more cautious right and so my brain immediately goes to well this could happen and this could happen this could happen but then also the reason that we're so resilient is because we have the bed so many times and so i think i want my younger self like standing here next to me going what are you scared of like what's the worst thing that could happen.

1:04:42Katy Mimari:Just do it. Literally the worst thing that could happen is that we just keep doing exactly what we're doing, which isn't so bad. Right. And even like, I mean, it's hard. This year is hard in e-commerce. Last year was harder for us. This year is easier. I don't know why people are like, what are you doing? I don't know. I don't know. Maybe it's all the things we did last year to try to fix it when it was so hard or like trying finally paying off now. um but i want younger skinnier more and fit katie to be literally right here like talking to me and being like what are you so scared of just go do it i thought i want her to literally be like i thought you were going to do it why aren't you doing it and so then i can go right and do it because okay so you've you mentioned this earlier then on that like this caitan lane like 3.0 with Sean kind of teased this out.

1:05:34Like you're not done. You're clearly not done.

1:05:37Katy Mimari:No. What is that? Like, and like, where do you want this to go? Like you keep saying, like, I want to be Carter's. Is it, is that like, you're just modeling off of it or are you like, no, you have a completely different vision for it? Oh yeah. Completely different. I don't want to be them. No, I don't. It's just, to me, that's like the epitome of like the largest baby brand that's out there. Right. And so they're the strategic, right? Like that everyone maybe will be one day. And I just, I personally don't, I think they can do it better. And I think they can do it different. Your question sounds like something my CFO says.

1:06:15Katy Mimari:Like every time we do any kind of our planning, she's like, what are we going to do in the next year and five years? And my answer is like, I don't know. But you clearly do. I think that that's actually like, I don't think that's true. I think for you to even say, oh, no, no, there's a Caden Lane 3.0, and that's coming. I do, but I - You must have a sense of it. I do have a sense of it, but I don't think we plan it. When I hear you guys talking about how you plan, I'm like, wow, they're really planners. I think that, honestly, living a little bit in the moment and then also having this North Star to reach for has worked to our advantage.

1:06:54Katy Mimari:like sometimes when you plan things out so far you just get in this like pigeonhole of like this is what the plan is and we're sticking to it and then I think you can lose focus of maybe what's changing and happening around you um I think it's I think it's worked to our advantage Matt like to be fast to market and nimble and I feel like we operate like we're a small company but we're a large company. And process and automation has become my best friend. And I'm all here for that. But I don't, I don't, I really, if you truly were asking me what the next five years looks like, I don't, I don't think I can answer it.

1:07:34I don't think you, I think what I get from you, my sense from you, Katie, is that you couldn't answer it like brick by brick tactically, I think is what you're getting at. But my sense is that you've always had like, you've been directionally correct. You've always said, I know that I'm going over here. I don't know what it's going to look like exactly, but I know it's going to be over there at least.

1:07:55Katy Mimari:Yeah. And the visual part of that is like, I picture it as being like, we're going to try a whole bunch of different things and we're going to fail at most of them, but something's going to stick. And that's the one we're going to chase after. And so it feels like too much of a commitment for me to be like, we are going to do this and this is how we're going to scale. And this is we're going to get to 500 million because I don't think that we really know. Like, I think that I do think e-commerce is going to change. I think direct to consumer is going to change. I think consumer behavior is changing.

1:08:25Katy Mimari:And so I don't, I don't want to, I don't want to plan it too much, you know? You know, I, I love this because Sean has frequently, I think Sean, you've, you got me to really use this term like lottery tickets. And I've been doing this lately with Mike, with my team, what's like product development is like, you're buying lottery tickets. You know, you open up new markets or channels, you're buying lottery tickets. And I've been telling my team lately, like, I have no idea which one of these is going to work. I just know that if I buy enough of them, something will. And it sounds like you're in the same sort of like school of thought.

1:08:56You're like, we're going to do all these things and I'm pretty confident one of them is going to hit.

1:09:01Katy Mimari:Absolutely. With certainty on that. Yeah. But I don't know which one. So, I mean, yeah. So I, I'm not done. That's for sure.

1:09:12Sean Frank:Katie, you've had such a strong intuition about the business for so long at this point. I mean, you're the only person that I know who survived a 90 % revenue decline just to sum back 10 or 20x bigger than even your peak. I know. It's wild. Yeah. So it's like it's a fearless nature. And, you know, I think Matt said it. I wouldn't say it, but like an arrogance or an ignorance to it. It's ignorance. It's not even arrogance. ignorance is such a great like it's such a superpower yeah i don't worry sean i'm not

1:09:45Katy Mimari:going to forget that matt's calling me ignorant as a superpower and you're you're basically saying that's not what i would describe you as katie i would say that you're amazing but matt's but matt's word specifically was ignorant so let's go with his line and see how that pans out i think

1:10:02Sean Frank:it's a fearlessness where you're like look i'm gonna do this thing and hello i you're willing to burn down wholesale you're willing to burn down whatever just like you're gonna make the right decision every single time because you are like i agree sean like you are voracious there's no question there uh who or what is like an enemy that you wake up thinking about like do you do you think of like i'm fighting against this thing every day you can't say murder

1:10:34Katy Mimari:i was gonna say i hate children's after school sports that is the bane of my existence because i could be working and like growing this company even more but no i have to drive everybody to cheer and football and all their they do uh that is my evil that is why it keeps me up at night i love this it's such a great response for context for everybody who's going to watch this and listen sean and katie and i are in a text group and we've actually had i think you have sent us pictures with your laptop on your lap at like your kids cheer yeah it's working it's i know look multitasking is my superpower for sure uh but yeah for anyone that doesn't have kids yet and and are coming up on it driving them to their activities is exhausting and that is what kills me and crushes my soul a little bit every day and having to talk to the parents at those events that's also soul crushing um but it's so true to company it is so true because it's like it rallies all the people that have nothing else going on in their life but to live vicariously through their children and then there's me so there's a cut there's a good handful of them you get to meet.

1:11:51Katy Mimari:Do you want me to answer it for a company? No, it doesn't need to be. Honestly, I love the answer.

1:11:59Okay, we're going to get into the Titan 10. This is going to be a regular recurring segment of this series that we're doing. And Katie, what we want to do is we're going to rapid or sort of rapid fire tactical questions at you. We want you to just like give the things that come to mind immediately. I think that'll just provide for more. I mean, you're very instinct and gut based. I think this is going to be easy for you. All right. Here's the first one. Okay. You are on a desert island. You only get to look at three numbers. What are the three numbers that tell you how your business is doing?

1:12:32Katy Mimari:CAC, LTV, and margin. Because then I'll know what my EBITDA is. Oh. Right? I like that. All right. And Sean, as I go through these, I want to know if you agree or disagree or if you would change something. I think that would be a cool spin on it. Okay. you also, to this desert island, you get to take any book, but it can't be about business. Well, I'm going to take a bottle of wine. I don't want to take a book. If it's not about business, what? Why am I going to read? Yeah, that's cute.

1:13:10Sean Frank:You think I read? Okay. I would take How to Survive on a Desert Island. Stuff like that. Okay. All right. Third one. uh you actually might this might be a good one for you because i've i've heard you talk so much uh at these events that we go to what is a like a contrarian belief about business that you think everybody else is buying into and you're just like i don't like that oh corporate structure is

1:13:37Katy Mimari:it is you don't need like it's org charts too i hate org charts like everybody's is different titles is overrated. I think that, yeah, that's my answer. Love it. Single most important word in leadership. So how you lead, how would you use, what's the one word to describe how you lead? Compassion. Ooh. Sean, do you lead with compassion? Sean, I'll answer that for you. And he says, no.

1:14:10Sean Frank:Hey, look, I'm not, I'm not a Titan. Okay. So people should listen to Katie. No, you're a Viking. We've been over this before. Katie is incredibly compassionate. She always asks about me, my life, my wife, everything that's going on. And then the next sentence, she'll be like, anyway, for this. She always welcomes in a very warm embrace, but you'll hear exactly what's on her mind.

1:14:35Katy Mimari:I have to soften you up a little bit, and then I tell you exactly what I need. We do the same thing at work here. what why why the is it why the compassionate why did that come up i i would agree but why you know what because i right now i i love everything around leadership because it's such an interesting topic to me as i've grown my own leadership team here uh like from the bottom up right and i think that compassion makes a really great leader like i feel like people think about leaders being bosses you know like growing up like if i'm a leader it means i'm the boss i'm telling people what to do but i don't think that's it i think it's more that you're like a shepherd helping them understand what it means to be a great leader and i think that with that you have to have compassion for them because you've got to understand where they're coming from right like and yeah yeah i think there's a huge difference between like manager and leader those are two and we i think too many people interchange those words when they're describing the same function and I'm like, you are not describing leadership.

1:15:41That is not how it works. No, I like it. I think compassion is a great one. That's great. Okay, so then what is, if that's the single most important word, leadership for you, what is the single most important word in business?

1:15:52Katy Mimari:Profit. Well, don't act like that's not y 'all's word too. It is your word.

1:15:58Sean Frank:Not wrong. Yeah. I love what you're thinking because this is my first time hearing the Titan 10, which is happening every single episode. um my my word for running i guess my leadership is directness aaron who are is the chief creative officer by this has had to deal with me being very directed like what i want to do what i don't want to do and i was going to say results which i think it just comes down to profit right i think it's why else were your business that's great yeah okay uh what is what's the best meal of the day and why

1:16:30Katy Mimari:oh i know i'm gonna sound like an alcoholic

1:16:36Katy Mimari:uh well i'm trying to do really good at cutting out some like my glass of wine every day but i will say for the last 21 years that has gotten me through it because it brings down right like that level of energy so i can focus on my family i would even say rituals matter so like you know daily ritual of whatever it is like that's i'm all for it yeah just one i don't need like a whole bunch just one okay uh most overrated growth tactic right now uh god all of them read all of your twitter posts and everyone

1:17:16Katy Mimari:like sub tweeting sean yeah like all of y 'all and your shiny object syndrome that you chase after like whatever is the key word that's cool in marketing bro land that is what everyone chases after and i usually just sit back and go all right i'm gonna let these figure it out first and then and then they'll tell me what works and what doesn't uh okay and then i want the flip of that what do you think the most underrated tactic is um community i think that i think more brands should lean into really understanding their customers and using their community as really the best marketing channel

1:18:00you