Operators Titans E007: Utopia Deals (With CEO Jabran Niaz)

30:28We have launched maybe more number of products than maybe any individual seller in a personal capacity because maybe I'm selling maybe 400 to 500 products today, but there are at least 1 ,000 products that I launched and I no longer sell them. Maybe different old models and old styles. So I personally have personally have experience of designing few thousand different types of products for Amazon and launching them over the last 15 years. Okay, really, really quick break from the app to talk about our sponsor for today, RichPanel. I moved Pili Case to RichPanel in the past year, and I want to share some numbers on how things are going.

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32:09Promise it will help you. That's it. Let's get back to the episode.

32:16i think this is one of the most amazing things about your story when the marketplace was new like you mentioned there there was not a lot of competition and this is actually how we got involved in the marketplace is we started looking at buying some amazon marketplace businesses and when we looked at them we realized like these guys are not amazing operators they just showed up you know like there's just kind of like an arbitrage opportunity here because amazon has a lot of volume and not many people have clued into it yet. But then there was this huge transition where it got way more competitive.

32:49I think this period we're talking about this like 2014 to 2017 period, it became very trendy to like recommend starting an Amazon business. And there was this huge inflow. And to me, this is what makes the utopia story so amazing is that you guys were one of the very early people in the marketplace, but then you have evolved into this absolute monster of a machine. And most of the people that were successful early on in the Amazon got flushed out when the real competition came. They came in and they just said, oh, this is great passive income. I don't really have to do much. I can just kind of make sure that the shipments get to Amazon and collect my money.

33:31Whereas you guys really took that early head start that you had and you built this machine that's turned into the most successful Amazon marketplace business. And I think there's, I'm really excited to hear about that transition because pretty much from my experience, none of the other early sellers really made that transition well. It was a difficult transition for sure. I guess let me ask you both this then Amazon over time like uh Gibran you referred to it as like the golden years so the golden age years of Amazon it's funny we all do this right it's like the there's always a decade in the past that was like the golden year doesn't matter what we're talking about business life we all have like nostalgia sometimes for decades we didn't even live it like my wife loves like the 30s and the 40s I'm like but you weren't alive like like how do you even like that so my question for both of you then is uh when you look at where things are today is amazon still a place that if you were starting something new would you go there or or do you look at it like this is now the land of like if you don't have real competitive cost advantage there's no point in being in this marketplace it's like i would love just to read on like philosophy around the marketplace right now before we go into like how you got here jabron so i'll probably go first so it's a tough question i mean i know so much about amazon that and i so i know probably very little about other markets uh d2c or tiktok uh i amazon is so natural for me that if i if i do anything i would probably do it on amazon but but we have seen people doing extremely well at TikTok and we have actually have read a lot of case studies.

35:20And, and, and I think if I, if, if I would do anything other than Amazon, I would try something on TikTok if I'm just starting today. And you, and you still today, like, I guess the bias for you is you know so much about Amazon. Mike, you're, I think you're probably similar in that. You're my Amazon guy, like in my network. I'm like, if I need to, if I have an Amazon question, it's like, I just, I literally sent him a video this morning. I'm like, Mike, can you watch this and tell me if I'm an idiot or not. It's like a screen recording of something on Amazon. Mike, would you agree with that? Like, do you think still today, Amazon, because the people listen to this, they want to know, is still a great place to build?

36:00I think it depends. I think that when Amazon, the marketplace was first really starting to get going, the ability to launch a new product. And if it was a well-priced, high-quality product to quickly climb up the rankings and quickly scale up your sales, there was just nothing like it. It was amazing. I mean, we had some things that we would launch and we would scale up to a thousand units a day within a month. And there's really, in human history, that's just not even been possible. my observation about amazon as a platform is that there is definitely shifting gears you know it's kind of like i think it's day two at amazon where there is a different type of focus like they are leaning into ai they are trying to do it with a lot less people but the primary way that i've seen this show up is that i think that amazon is slower to bring products up their algorithmic rankings And I think there's some good reasons for that, which are Amazon wants to see products prove themselves, improve their product quality.

37:12They want to see sellers vet themselves over a longer period, probably because they've been burned with new people creating a seller account, selling something that's not high quality, that has some chemicals in it, you know, in some way being a bad actor. And so the thing that made Amazon so amazing is it was this like land run, right? You could just show up and you could kind of stake out your claim. And today, I think Amazon saying, you know, we really have kind of enough sellers to run this very, very well. So in certain categories like supplements, you cannot get an Amazon account. They're not accepting new marketplace sellers.

37:49And so in general, I'm just seeing Amazon kind of lean more heavily on proven and established than they did in previous years. Whereas in previous years, they really wanted to grow their selection and they wanted to increase competition. Now, I think they want to lean more heavily on the sellers that have proven themselves. With that said, there's always emerging categories, and that's always a great opportunity to get your foot in the door. And I think you said it, Matt, that you just have to be able to say, what's the competitive advantage I'm bringing to the table? And there was no natural reason why Utopia or Gibran would be as dominant as they are, but it's because of the competitive advantage they have when it comes to sourcing and pricing and launching products.

38:36And so if you're really gifted, there's always going to be room for you to be able to get in there and compete. I just think there was a period where you didn't have to be very particularly gifted. You didn't have to really have a competitive advantage. You just kind of had to show up. And that era is long past. Jabron, would you agree with that? Do you have you as you guys have built your company over time? It sounds like you've had to reinvent the business and like the part like how you source supply chain like you were. I mean, you guys have just gone like incredibly deep operationally. As you look forward, do you expect to have to reinvent yourselves again?

39:11Like, do you have to continue to find new competitive advantages or new ways to build? Almost every day, you have to do that. I mean, imagine the competition you have, 10 million sellers and you have the best brains. and every time a new seller comes in, a new big supplier or someone with a big investment comes in and they either put their products at a very competitive price or something for a long time they're bleeding money in your category or you're finding someone who's coming up with a very innovative product design. So you have to keep disrupting products in your own categories. You have to keep coming up with new product designs.

39:55the disruption is going to keep happening. In fact, in our growth strategy, we put 5 % drop in revenue just that we know that the 5 % revenue we will lose because a new competition in one of our categories will come and take away some of our products, some of our sales. So you have to, in order to grow 20 % on Amazon, you have to actually plan for 25 % growth to actually cover that competition, that innovation that comes. But I still think that innovation is not happening. There is still a huge, huge gap in product design side. Imagine someone designed iPhone and it is such a big company and someone can design a better phone still today.

40:48And that's just one product category. And there are categories and every category people are able to pay 2x, 3x of the normal selling price of that product if they find something slightly better even for the same product. And Amazon have provided that opportunity for sellers. And there was, I think, the kind of innovation and product design that is done in the last 10 years at Amazon. If you compare with all the innovation done in physical retail for the last 100 years, I think Amazon have done more innovation in the last 10 years. But I still think that a lot of that innovation was done overseas where people do not actually understand the customers very well.

41:33And I believe there is a big room for a lot of product design companies led by people in USA who can actually come up with much better design in many new categories. A lot of new concepts can still be done in many categories. I see that even with the minor difference in products, people are able to offer their products for 2x and 3x. in USA, you can sell at those prices. Yeah, I think that's the value thing. We are doing a lot of product design, but that is not even like 0.1 % of the entire space. There's still a huge scope for innovation at Amazon. And I think the innovation is the only way if you want to do something good on Amazon.

42:12I mean, you can't just copy another product that's out there and succeed today. It's too hard. The analogy I would use with Amazon, we'll use basketball there are probably tens of millions of people that play basketball in the world at the in the nba you've got 15 people on a team you've got 30 teams maybe you have 450 people that make an nba roster and and the difference between being on an nba roster and a minor league roster is the difference between making like a hundred thousand dollars a year and like millions of dollars a year so you functionally have to be in that top you know 0.0000 whatever percent.

42:50And the marketplace is just kind of like that. It's like anybody in the world can show up and compete, but the rewards, if you can successfully compete are just enormous and unbelievable, but you've got to love competition, I think. And I think that this is the thing that I really have tried to impress upon our team. And I bet, Jabron, if I came and just watched how your team worked. You've done a great job of impressing this. You just have to love competing because every day somebody's coming, somebody ambitious from some part of the world is coming for your thing. And, and that's kind of a feature, not a bug.

43:31And that's what drives this crazy innovation is that things constantly have to be getting better, cheaper, adding more features, whatever. And so it's probably been a huge win for like society and for consumers that it is so competitive i did think the if did i hear you right that you were saying we anticipate all of our lines that we have to decrease next year and that we're going to have to supply all the growth through bringing new products to market is that what you were saying absolutely yeah sorry that's very similar sean has sent the same thing on the ops podcast no i know but i guess this is a big i think this is such a fascinating topic guys it really for me the word that comes up is brand and how important is then brand on Amazon, right?

44:17Because Gibran, what you're talking about is like an investment in product design and making the product better in some way or different, right, which allows you to charge more. That is sort of the whole point of brand is that eventually you're like, look, we just have a brand that is known for a certain thing, right? So if you're planning on, let's just go back to this. Like if you look at, I don't know if this is Gibran, if this is just productive paranoia or if it actually is true. But if you're looking at all your current categories, your products, and you guys are thinking there's gonna be more competition.

44:52So like our share of pie is gonna go down. So we have to launch new products. Then how does the business grow then over time? I feel like with the surface area you have now that the reduction of 5 % in a large number is a lot bigger than what you can add in a new product. If I'm making sense, like, and how does brand come into this, man? Like that, you guys are breaking my brain here. Like I'm a brand guy. How does, does Amazon evolve to a marketplace of like real brands over time? Because that's the competitive advantage. So I believe brand is overrated, especially in context of certain categories.

45:32So I asked my daughter, like, how many apparel brand you can name? And she can probably name 50 to 100 apparel brands in a minute. And I said, okay, can you list 10 bedding brands? Can you list 10 maybe grocery brands? And she's like, what about that? That's not a brand. So she can't even name as many. So the brand varies a lot from what exactly you're selling. Like maybe an athletic wear brand, people can more resonate. Something that you can carry every day, something you show versus something that is on your bed or in your closet or something that is not very visible or something that where you don't care, the brand is not as impactful.

46:20And in some cases, if the product is very innovative, if you have like a remote control truck and it's just state of the art, right? I mean, you wouldn't just, you wouldn't even like focus on the brand. You would just, what an amazing product it is just because of its pure design aspect of it. So, and what is the recall of people, of a brand, right? You need to see a brand at least 50 to 60 times a year to develop a recall for that brand. And even if we sell one product to a customer, one in five customers in USA, maybe one out of 10 buys it, maybe two people see our product in a year, we have to grow at least 20x to develop a brand recall for our art and we are probably like top five seller on amazon so unless you are in a very specific niche category where people can associate the product where you are sending something that you can hold in your hand wear something that you actually symbolize something where the brand you can remember but in in 80 to 90 percent of the commerce, it's hard for people to memorize the brand.

47:35Something, it's on a kitchen counter, you can see every day. Maybe you can remember the brand, but we are over-emphasizing on brands, on categories where it does not matter as much. You know, it's such a great point, Gibran. The attributes of the product category probably, they have a lot more to do with it. Can you build a brand than anything else? Right? Like if something you mentioned is something visible in a person's life. Mike, I'm thinking of drinkware. Like, do they buy a lot of it and they carry it around and it comes with them? It's like part of every carry. If you're selling underwear, you know, if you're selling hangers, it's going to be tough.

48:11It's going to be really hard. Yeah. Like those are more transactional products. You know, and even drinkware, it's a pretty commoditized category. It's a tough category. Like we've just been fortunate that for a category that in some ways is a highly commoditized category, brand has mattered more recently, but I think I've shared this before for us, 50 % plus of our volume on Amazon comes from people searching for simple modern branded terms. And we have seen a very consistent over the last 10 years, the generic key terms get tougher and tougher. And increasingly, like if you search under certain things like water bottle, it's just, you just basically have two categories.

48:51You have brands and like in water bottles, maybe they're charging$25 to$35. And then you have factories that are charging$12 to$15. And there's really no middle class. It's kind of like either you've established a brand in the consumer's mind and you can charge a premium or you don't have a brand and you're just selling a commodity. And I look at the prices that some of these people are charging and I'm like, I don't know how you make any money. at those numbers. But also it's worth remembering that they have different economic structures. Like a factory has a very different set of economic incentives and structures than we do as an American company.

49:35And so success for them might look different. Yeah. And Gibran, how do you, I guess then on that, because you're both, right? You are the e-commerce company and you have the manufacturing, the production side, which gives you just incredible competitive advantage in, I'm assuming both. When you're looking at product development now, I love that you talked about this, by the way, like that, you know, you're doing a lot of product design, product development, like how do you make something better? Are you, could you give us a sense for how much of your product design and development is around driving cost down to charge lower versus trying to get more pricing power and like more and raise prices on products?

50:19Like, can I charge two to three times more for the same thing? Because now I've made a better one. Like, where do you sit there? So when you start designing your product, you don't worry about too much about being competitive in price. You just focus on entirely on how do you want to differentiate and how your product is going to be better. And there's already a lot of work done in many categories. So sometimes you don't find any room to make improvements. That is the hard part. But let's say you find a category, a product where you find a room that, okay, I can make something better than maybe you.

50:55That is one of the reasons why we pick a product today that we find a gap that this product is done like this, but only a couple of sellers are actually doing it in a more premium way. But these are not very good operators. So maybe we can do a similar approach and we can do probably better than them. So understanding of that category. So when you start that, you're not focusing on your economics. Your core focus is product design. But after you finish your product design, there's no harm making your ecosystem more profitable for you because every penny you squeeze in your sale price will actually increase your margins.

51:35So your core focus at the product design is purely on product superiority. But once you finish designing your product, then you optimize it on FBA fees. you optimize on materials, you optimize on quality and other aspects where you can maximize your profits. So it's a combination of both. And it seems like you've done that the whole way up. You were about six years in when you hit sort of about, I think,$100 million in revenue in the e-commerce business. And it seems that it was around that where you started to look at starting like what is now known as Utopia Industries, right? Could you give us maybe like the decision or the thinking?

52:21Like, why did you not just stay as like a pure e-commerce business? Why did you go build a whole other company? Like, as we talked about, like a whole other entity. Now we're going to manufacture. We're going to have thousands of employees. We're going to be a huge exporter, like all the things. What made you do that? I think the biggest motivation was for a product design company. You design something, in some cases it takes you six months, in some cases it takes you a year to design a product. And let's say it's a textile product, you start with a GSM that was available in the market, you fine-tuned it, it is a waterproof product, you use a different combination of waterproofing, and you fix all the problems that exist in the market.

53:04And after one year of research, you develop a product and now you launch on Amazon and And now you crush that category in waterproof bedding. And the next year you go to Canton Fair. All your 10 suppliers are carrying entire product catalog you have on their shelves. And whatever research you did with different materials over a period of last one year, now it is available for all of your competition for free. So all the hard work you put in for your packaging designs, to make a compact packing, to make the best packaging, to make the best materials, to make a product that actually solves a lot of problems that was not solved before, it is not available for everyone without doing all the research.

53:47and this is not something you can potentially patent. So that was the biggest motivator that every time we design a new product and all of a sudden within six months, there are like 10 new sellers selling identical product from the same suppliers. And it is easy because when the same supplier is making 100 ,000 pieces for me, it is easy for him to make 3 ,000 units for a new order at the same price because that's what they love. And they actually like go, willingly go to your competition and offer your product to them oh by the way we make it for utopia we can give you the exact same product that utopia was working with us for last six months to develop so so when we see that happening again and again and we realize that that this need to stop and manufacturing was one way to stop that uh that so so manufacturing was way so if someone want to copy this product maybe they have to go through three or four attempts of redesign the product to achieve that.

54:45Maybe they have to order small quantities so their price will go up to make that product. And that way when they try to get into a market and compete with us, it will not be as easy as it was before. And it worked very well for us in that aspect. Did it stop it or did it just delay it? I guess. In many cases, it slowed down by like at least 5x or 10x. We stopped to see the same level of competition because when a Chinese supplier or any supplier says that, oh, Utopia is buying from me, it's very easy to see and for my competition to just, without any research, just lay them in order because they know exactly what kind of reviews they will get and what kind of product they will get, right?

55:31Yeah. But when they don't have that information, now they are going to six different suppliers, developing six different products, unable to match the prices. they are supposed to match. They run into different challenges and that sometimes make it very difficult for them to make that decision. When you guys were thinking about starting Utopia Industries, did you have anybody in your life that was telling you that this is a bad idea? Every single person I know told us not to do this, including my immediate family, my friends. Hundreds of people, if not thousands, told me like this is a terrible idea because in that country, for example, going from my father's experience and then also many people who have lost their fortune in manufacturing and doing it, I mean, running an e-commerce company, small or far size, maybe at that time we had about 100 people, was tough, but it was manageable because as a software developer, you work with people in different locations and they work remotely with you.

56:34That was a very common experience for us. And Amazon was doing all the operations, so it was very natural to be remote for an e-commerce business. But to be remote for a manufacturing business is probably never heard of. Maybe this is the only company that reached to this kind of revenue and number of employees and being completely managed remotely, maybe in a history. that someone just built a manufacturing company with 15 ,000 workers entirely remotely, never been there, don't meet anybody and just created this. Wait, wait, wait. You don't, you've never actually been there? Only been there for four days in ever.

57:14Okay, so in five years, so Utopia Industries is five years old right now? And it has 15 ,000 employees? Yes. And like millions of square feet of production facilities? And you've been only there for four days. I'm dying. That's so good. So it's all when we think remote, like I think people listen to this right now, like probably would agree with me when I say that when we think remote companies, we're thinking like information work, you know, people that sit at desks. you're a remote company and you are running like a legit at scale manufacturing operation that and like you as the operator don't actually have to go which i mean that must speak i think that speaks volumes probably how you think about teams and building teams which i want to get to but i want to first go to like these early i guess like the early days of building utopia industries, you have a thesis on how it can stop or slow down competition.

58:21Yes. Right? Were there things that surprised you in building out your own manufacturing that surprised you to the upside? Obviously, there was stuff that you were like, this is really hard. But were there other benefits that you got from having your own manufacturing that you didn't think of initially? I think the biggest advantage even today, I believe, is the supply chain. I go to any Chinese supplier, like I'm working with 10 years and I'm like, I'm running out of stock and I need this now. And they say 60 days, 70 days. They come at 60 days, they ship in 70, 75 days. If I pick up my phone today and call one of my guys and I'm like, I don't care what does it take.

59:05I need this in a week. And they can make it happen in a week. The same thing. and there is no way for me to work with any of my Chinese supplier to reduce that 60-day to maybe even 45 days. So that's the power you have on a supply chain. And it is very important in an e-commerce business because your product sales can scale up quickly. You're selling 1 ,000 units a day, and next day you're doing 3 ,000 units, and now you thought you have 60 days of inventory. Now you only have 20 days of inventory. And now you're going out of stock. And now you need that item. With that supply chain, it helped us to respond very quickly for any increase in demand.

59:52And that helped us get those quantities very quickly. It was very difficult to get the same thing or anything, even impossible to get something similar to that from Chinese suppliers. So you get agility is what I'm hearing. So like you can move quickly, but my understanding of Amazon is you actually then by owning your own supply chain, you aligned with a key incentive that Amazon has put on the marketplace, which is to never stock out of something. Like they actually have like negative incentives. Yeah, you can fold down the algorithm if you run out of supply. So by owning your own factory, it sounds like, Gibran, you actually now are more aligned with how Amazon works to keep your ASINs, to keep these products highly ranked because you control the supply.

1:00:45You can decide if you're going to run out or not. I guess you have a lot more control if you're going to run out or not. A lot more control because the margins in e-commerce are way higher than the margins in manufacturing. so you can actually make your manufacturing a little bit more expensive for yourself and get stuff faster way faster you can provide incentive for manufacturing to actually get more stuff more quickly for yourself yeah i mean i've talked about it on the show a whole bunch but when we built our own factory for the pili case business that was like the game changer in the business now we've got like no we have negative working capital inventory we can make things as we need it we don't sell on amazon we sell ddc but we can flex with trends um it just it allows for a speed and i guess like lateral movement in the marketplace that we just could never do if i was relying on traditional supply chains and how long they take my balance sheet would have been a mess like there's just so many things that i think you get from building sort of vertical uh vertical supply chain now i'm not recommending anybody does it um you know i think it's it's a very difficult thing to do like you you mastered demand before you went and built supply right like going into manufacturing is is a very difficult thing um like one of the things in our company gibran that we're telling people all the time is we don't really need to be cost competitive with china like the benefits we get from owning manufacturing outweigh whether i'm like 30 cents or 50 cents a unit more or less than a chinese competitor like it just doesn't matter to us and optimizing and manufacturing has much lower i guess like much i guess much smaller impact on our business than just optimizing on pricing or customer value like the dollars you play with up the funnel is just way better than way down in the supply chain so it's very cool that you're doing that at massive scale if you so like i know it's only been five years but five years and at the scale that you're at probably feels like 50 yes uh with that many employees and that much of an operation so if you were to go back like the dog years 50 years or five years for you like and wanted to give yourself some advice or your brother some advice like what would you be telling yourself on this on the manufacturing piece like what's something that you've learned that you think is like really valuable to have known five years ago.

1:03:19So in five years, I probably made five million mistakes. so one of the biggest mistake i did was i had to build each team at least three to four times from scratch and that happened because i was initially very casual in building human resource so you hire someone to run maybe manufacture maybe a plastic product and that guy was a bit junior you were just trying to save some money in in cost uh you could have hired someone way better at twice as the cost of that person. You probably didn't go, did enough interviews to actually find the right candidate. We didn't even have the right human resource department to find those people or recruitment agencies to help find the right resource.

1:04:09And it was very painful, like build a team, do something, then they screw up stuff and then build another team. And in some cases, it took two attempts. In some cases, it takes as many as four attempts to develop the right team. And we were in almost 30 to 40 different manufacturing verticals. And manufacturing is just one team. Of course, you have tech teams and you have engineering teams and you have another 10, 15, 20 important departments. So about 40 manufacturing departments and 20 to 30 other big departments. And you have to build each department, start over the entire team. And if I had done the human resource right the first time, It could have saved me millions in all those five years.

1:04:54There were so many incentives by the government. I didn't have the right guy. They didn't told me all the incentives and I lost millions there. There were like some schemes for exporters. Similarly, there were incentives for electricity usage. Similarly, there were engineering techniques I was using the completely wrong way by having people who didn't know what they were doing in my team. So there were a lot of lesson learned. And I think the biggest lesson learned was that all your buildings, all your machines, they're not very important. Like who actually runs that infrastructure is the core of your business.

1:05:31And I knew that to some extent, but I think to the level I can appreciate that today was never before. So that was the probably, if you talk about a single lesson learned, that was the biggest lesson learned for me. If I would go to myself five years back, I would just tell myself, put all your effort in human resource. It will solve maybe more than half of my problems.

1:05:59So I have a question follow up here. It seems to me that one of the advantages with manufacturing is that it helps you to understand all of the cost inputs and kind of in the universe of possibilities between features and materials and quality and cost, it helps you to understand a much fuller picture of what's possible. I'm curious, as you've started to manufacture more products, how has that actually impacted your product design? And has that led to you adding features, changing materials, changing cost structures, now that you have a more robust understanding of what's possible? So it definitely influenced our product research.

1:06:42For example, we are getting very aggressively in apparel. And the good part about the apparel is that there are the same knitting machines and there are same processing machines. And there's same cut to pack floors that can make any wide variety of products for you. So if you are selling athletic wear and now you are like shorts and T-shirts and hoodies and now you build one expertise. Now you can repurpose that expertise in a very wide variety of products versus if you are making a metal product, if you're making like knives, you can't use that infrastructure to make another metal product. It is entirely different technology you need to adopt.

1:07:21So when you're picking different categories and you're training your team or building infrastructure to design products in that category, you're also keeping in mind what kind of manufacturing technology you will need to back that up. Also, some of the manufacturing have lower capex. For example, you can make mattresses in manufacturing set up with a very low investment. Similarly, for luggages, you can make hundreds of millions of dollars of luggages from a plant that may cost less than$2 million over a year. So there are certain things that become part of your product design, decisions where you can see, okay, you can make furniture with very small subset of machinery as compared to a textile product where you have to have looms and you have sizing machines and you need like dine and processing and ETP and then the cut to pack.

1:08:19So you make those things in your consideration that after three years, five years, if you want to make these products in-house, how difficult that will be. And that helps you prioritize one product versus another.

1:08:38Mike, you and I have chatted about this, but we're expanding a lot of product categories next year. And one of the variables we think about is how easy is it to in-house this? So can I plug this into the factories that I already own? You know, like how far from our capabilities am I going? Well, one of the ways I think about it is that the role of your company is to express judgment on behalf of the customer, that the customer doesn't understand the 6 ,000 different combinations of material and quality and price that are possible with towels. that curation and that judgment really falls on your company and we're constantly asking the question of and in fact we're going through a process right now where we added some things to a bottle and it increased cost in retails but i don't think the customer is experiencing that value when they use the product and so it's like it's got to come out you know that's our responsibility is to drive value to the customer by understanding what is the optimal combination of quality and features and affordable price.

1:09:47And so there's really no replacement for that judgment. And I think to your point, Matt, we're constantly evolving. And Gibran, you said this earlier, but I think this is where it's worth saying is that it's just a very dynamic marketplace. And on Amazon in particular, you feel the dynamic nature of things and the shifting. And you just have to be willing to disrupt yourself. You have to be willing to more vertically integrate. For us, like we've done some manufacturing domestically, but that vertical integration has also looked like we just have to understand the processes, even when we do outsource the manufacturing at a deeper level, or we can't serve customers the way that we want to.

1:10:30Yeah, that's like a thousand percent agreed. Jabron, when I'm looking at all the categories you're in, one of the questions I have, which is just a fun one. What is the most expensive type of manufacturing facility to stand up? Is it apparel? Is it like, is it cut and sew? Or is it something else that just didn't surprise you when you found out? Making glass is tough. I mean, if you seek glass containers, the tempered glass containers, you need to spend tens of millions of dollars to build a plant that make those tempered glass containers. No way. So we wanted to make those and we realized that not too expensive.

1:11:13We looked at Pyrex. Pyrex was part of an entity that went bankrupt as a part of the COVID fallout. And so another fairly prominent Amazon seller contacted me and said, hey, maybe we should take a look at this entity and making a bid because they were accepting bids out of bankruptcy. And then I looked at what it actually takes to make Pyrex. And it was like, oh, my gosh. No, no, thank you. There is an incredible level of complexity to actually produce that product. So great product and a great brand name, but not for me. And then I guess then the follow-up to that, Gibran, would be, is there something that you've done that at the time you thought was just absolutely impossible in your industry in any one of these categories?

1:12:04I mean, we have designed products from scratch. Like there is an acrylic knife block, two-sided. we used to have those wooden knife blocks just come up with acrylic knife blocks and then that created hundreds of millions of dollars of market in acrylic knife blocks similarly we we did i designed a black height remover it used to be a single piece and we developed a kit by just putting five different type of blemish removers and that becomes that did that product did hundreds of not for us just the entire category and that time i was very new so we didn't patented any of those things in the early days but but we designed some very unique and incredible products very similar to these we designed dozens of similar products and for example uh we were like the big seller in patient gowns and we self-disrupted and we designed uh beautiful uh patient gowns for for women and then we designed solid color men patient gowns and you go to hospital and they give you those used and those really bad prints and you're already sick and you don't want to look at yourself in those patient gowns.

1:13:12And that becomes a huge thing. We have sold hundreds of thousands of those very beautiful looking patient gowns for men and women. And I don't know who buys them, but definitely it's better than what you get in the hospital. So you do a lot of innovation, especially I love all the innovation that was done for the very first time. A completely new concept that is not inspired, it's just of your own. And it doesn't matter how much revenue you get from those concepts, but those are close to my heart that up your innovation, not done before you. I think everybody who gets into consumer, there's lots of entry, there's lots of ways to win, right?

1:13:51And consumer, there's lots of ways to get into it. You could drop ship, you can start on Amazon, you can private, like there's so many ways. I think if you like it, you're going to get to a place where you're like, you just want to make something that's unique. And that is like, is yours. You have to be differentiated. Yeah. You have to be differentiated and then you have to do one of the core fundamentals at an elite level is kind of what I'm convinced of. You have some, we've mentioned several of them on this. Sometimes it's product design. Sometimes it's just operational efficiency. One that gets talked about on the operator's pod a lot, but not as much on the Amazon side as marketing, being exceptional at marketing.

1:14:31Although, as Jabron mentioned, one of the shifts in the marketplace has been people driving traffic to Amazon from off Amazon sources in order to help juice their rankings and to be more competitive. So I just think that everybody listening to this, you just need to understand that the stakes have never been higher. Like when we started selling on the marketplace in 2016, I think Amazon has something like 4X or 5X to its revenue since we started selling. So we're talking about like, Hey, it was much less competitive, but also the size of the prize is just so much bigger than it's ever been before.

1:15:08But so is the level of competition. And so you just got to be ready to bring it. And you have to have an area where you're like, I can compete with the best in the world. And I can still be a top 1%, top 5 % type seller. Gibran, when you look at your companies today, looking forward what are you like most excited about what's lighting you up right now i mean i have devoted five years of my life to manufacturing and that kind of slowed down my e-commerce growth i could have been at least two to three x bigger company in e-commerce if would not have invested so much in in manufacturing and especially both time and money but now that is built to the same scale of our e-commerce i think i'm now getting back putting on my e-commerce head back full time and then trying to expand and uh and now we are doing a lot of new initiatives i mean at least few dozen of them we are doing our pick and pack operation we are doing about 15 000 packages pick and pack operation and i have a lot of interest in robotics uh and uh And I have seen Amazon pick and pack warehouses and any other companies.

1:16:25And I think that we are doing a very terrible job as an industry in pick and pack operation. This can be so much easily automated in so much more efficient way. And I think we are paying more money in logistics than the cost of the product in most cases. And the logistic is so messed up. And it's going to get so much better. I think this is such a great point that customer service was one of those areas where the AI, the GPT models, the AI that you can enable was just going to gut customer service almost immediately because it was in many ways so inefficient. And in the physical world, I think you're right.

1:17:08I think the pick and pack logistics piece of e-commerce is just robotics is going to take it by storm over the next couple of years. And when Gibran and I have talked about this, I'm not convinced that Amazon is actually that far ahead of everybody else here because they were investing in robotics over the last 10 or 15 years. But the robotics has grown in its abilities at just like an unbelievable rate. And so if you're getting in today, you're getting in with much more advanced stuff than even the people that were on the cutting edge were putting in five years ago. So I call large companies as elephant and startups as like, you know, birds, they can fly.

1:17:47So Amazon is such a big bureaucracy and such a big business. And if you see their warehouses, as someone who understands automation and robotics and who have seen all those videos of advanced robots who are doing pick and pack operation, and if you compare, I'm just seeing Amazon as an example, but if the same applies for TikTok and everyone else who are in the industry, I mean we have developed auto industry like even the robots are making a very complex car with very little humans and in one industry we are at a level that it is very hard for me to even look at those videos and imagine if these are real.

1:18:29and on the logistic industry when you see our pick and pack operation it is so inefficient it's so inefficient and the money we are losing in logistics is insane i think we can actually reduce it to half the entire logistic cost and make it a far more efficient so i have in my personal goal since running a manufacturing company with 15 000 people i have 500 engineers engineers, industrial engineers in my, or electrical engineers and mechanical engineers in my team that I've worked for many years. So I'm building some specialized teams to actually take a stab on this pick and pack operation. And we are trying to go from like step by step.

1:19:11So we first build our pick and pack. We are doing 15 ,000 packages a day. So we want to get to the same level as everyone else. The advanced pick and pack operation, which are using software in the traditional way. And the next step is in parallel, we are building, learning all the different technologies that exist in the industry. And our focus is that instead of making reports that can do a pick and pack of every difficult product, why don't you pack every product in a very standard way that a cheap robot can actually handle that product? So you design your products. So you divide your products into different categories, like small, medium, based on how robots can handle them.

1:19:54And you build your different types of warehouses where each warehouse can only handle a different type of different, maybe a small, medium, large. But some may be handle hard goods and some may be able to have more like apparel. But once you divide, the robotics job will become so much easier. And this can just make the entire industry so efficient. This will take, I mean, four to five years for if whoever does it first will go there. but it will be the biggest disruption in e-commerce after AI or anything. It's such a good point, though. So much of our cost is in the logistics and the supply, literally just moving the product around.

1:20:33It's more than the actual cost of the product at this point. So Gibran, that's a brilliant point. Here's where I'm stuck with you, if I'm being completely honest. You're into robotics. You're tackling this logistics thing. I've read that you're also getting into dairy manufacturing and then you're doing pallet manufacturing. That's a pet project. That's not one of my core business ideas. Okay. But then there's like, I saw biomass and agricultural waste. How are you deciding what you work on? So if I have something that is close to my heart, I don't want to go too away from my actual core industry but but uh pakistan have a unique problem some of the cities have fog because they the the farmers run burn the crop once they're done with them and that creates like the fog in the winter and and then you can't see anything uh when you're traveling for for for a month or so so the we find a way which is financially viable that you can convert that agriculture waste crush them compress them and then convert them into a coal-like structure and then instead of industry using coal as a fuel, they can use those biomass pallets as a fuel and it is fully financially viable, which means that it doesn't need any subsidy to run it.

1:21:54So we run a pallet project, we make it successful and now we are offering it as a joint venture. Anyone can just, we can just set it up for anybody and they can start using it. But that is not for, I'm not doing it entirely for profit. That is just something I want to do that because it just creates so much pollution and that's one way I can contribute. But I want to drill down on that, Jabron, because you're at a point where you've had a level of success where you now get to choose what you work on. And in the early days of starting a company, and you kind of mentioned this, it's more dictated to you.

1:22:33What do I have to do? What does the business need me to do in order to make money for this thing to be viable? And now, obviously, you're at a totally different level. And the reason why you're doing this isn't financial and it's not so the business will survive. It's because you're obviously passionate about it. I'm curious, how do you think about how you use your time and why are you still so engaged at this scale? you obviously are still very involved in operating your business and have a real passion for it so how do you think about using your time and why do you still allocate so much of your time to the business i mean if i have nothing to do on saturday i just get very upset with myself that what i'm gonna do for next couple of hours i can't i don't like i stop enjoying stuff outside of business.

1:23:23I just keep doing it. And now we go to a beautiful place in Switzerland and we are looking at it after like 30 minutes. I'm like, okay, it is good, but why I'm not enjoying it. What's wrong with me? I used to be a kid who used to go to the Northern areas of Pakistan, which is very similar to Switzerland. And I used to do, I have done like a trip of 30 days and a trip of 16 days. And I used to love it. Like that was the best time I had in my teenage. And now I'm going to like watching to a nice party to a nice event meeting like really nice people i'm not enjoying that and i don't know what's wrong with me and how to fix that uh but but but somehow just doing more and innovative stuff just keep me going uh i stopped uh so so so i want to start new things i want to probably like want to uh my brother was very upset i was like i want to make a car, right?

1:24:19And he's like, you can't do that. I mean, you will just have 50 different projects you just started and this is insane. And I'm like, no, I just, we did on chat GBT, I'm going to need probably a 10 million and that's much money I'm going to raise from the bank and I'm going to just get an old, acquire an old auto plant and I will just set up a team. And I have done projects like we build a loom, a water jet loom, 500 RPM, which is only either made in Japan and Korea, but we made it in-house. So it's like I have done projects, like not the same level, but to very comparable. But it's very hard to stop you when you have like so much energy and so much opportunities.

1:24:57I think the only thing I'm trying to do is just now restrict myself to stay within my industry and like work on the verticals of like manufacturing or e-commerce or logistics or pick and pack operation or branding side, not go beyond that, at least for now. It seems like one of the things that you've done, Gibran, is that there's almost perfect overlap between things I like to do for fun slash hobbies and my work, which I think that's actually one of the things that I've noticed about all the most successful people I know is that none of them are mercenaries. They do it because they would do it for no money.

1:25:37They do it because they really enjoy doing it. And it just so happens that they provide all this value to society. And so society compensates them really well to do it. And I just want to remark that one of the things that I think is so inspirational about your story, you've created literally 15 ,000 plus jobs in Pakistan. Is that right? Yes. and that is making a material impact on the economy and the well-being of Pakistan, which it's got to make you really proud that the country you grew up in, you've made a real meaningful difference in the lives of a lot of people there through your hard work and through creating this company.

1:26:19So I always say that I'm not doing, those 15 ,000 people are feeding me, not the other way around. but but five years ago i stopped doing the traditional charity because when i see the value that when you create jobs the like you put 100 bucks for creating jobs versus you put 100 bucks in charity and if you do the maths like if you start a business that create jobs the impact is like 10x and it is forever so five years ago i mean we built four schools and we did other things But when we start to see the impact on people's life and how much difference it makes in a poor country where people can't afford stuff or people get into the crimes when they don't have those opportunities, it just makes you feel so good about it.

1:27:06I think it's just like your top of mind, whatever supercharges you for that, I guess. Yeah, it's such a good point that like we are engaged in giving with our company, but we are trending to put more and more of our giving towards nonprofits that are focused on using market solutions like clean drinking water. The way that you really attack clean drinking water is actually through creating businesses that sell water. It's not just by paying for wells. And I love the point that you made because through all of the philanthropy I've been involved in, I've become even more convinced that the number one way that you make societies more healthy and thrive and more prosperous is you create economic activity and you teach people how to do things that create value.

1:27:57And that's what you're obviously doing. And, and so like, ultimately, I think you hope when you get to the stage of business that all of us are at, that you're actually making a positive impact in the world. And like you said, you're making a huge positive impact through all the value you've created and all the people you've trained to do really meaningful things.

1:28:19jabron we like to finish these um these recordings by asking we call it the titan dead these are like 10 questions that are we ask every single guest um i want to focus on the e commerce part of your business you've got so much that i like there's just so many ways that we could do this but i'd like you to try to answer them as like off the cuff you know gut gut reaction as possible. And I think with the scope of your company, I'm really interested to hear how you answer these relative to everybody else that we've had on the show. And I'm just going to rattle them off and you go as fast as you can.

1:28:55Okay. Awesome. Okay. So you just spoke of Switzerland, but let's just say you got to, you're going to get to a desert Island. You're on your own. You only get one piece of paper. And on that piece of paper, there are three numbers that tell you exactly how your business is doing. What are those three numbers?

1:29:18Revenue, margin, and my team. Like a team health? Yeah. I love that. How would you measure that? What would be a metric you would use to measure team? Your retention rate. I like that. Yeah, I guess at your scale, that would be a... Yeah, when you have 15 ,000 people, percentage points matter, right? Yeah. Okay. You also get to take a book, any book, but it can't be about business. What's the book you bring? I don't read many books, by the way, but I want to read about human behavior. Okay. What is, we'll call it a contrarian belief. So something that you believe that you think most other founders would call you crazy for believing.

1:30:12so i i believe the biggest myth i have faced over and over again is that people believe that stuff can only be done in china and it is the cheapest place to get it done and they don't realize that the salaries of china is probably higher than 60 of the world population so china have the ecosystem but that's not the cheapest place to get things done if you can develop the same ecosystem in probably 60 % of the world. Oh, I love that. Also, it's only an advantage if the only thing you care about is cost. Like there's so many other ways to get competitive advantage in business, which we've covered today.

1:30:53Okay. So then what is the single most important word in leadership for you? Lead by example. Okay. What's the single most important word in business? Bottom line. what's your favorite meal of the day and why dinner because that's the most important meal because that's where i screw up my calories okay how do you do it what's your preferred way to screw up your calories if you're having a cheat day what are you eating i mean i'm so good at my breakfast and lunch and i have like a daily workout middle of the day but when it comes to dinner, I just screw up big time. So, so it's like burgers or fried stuff or whatever, because you're like so exhausted by that time, your brain stopped working and you're just making bad decisions, I guess.

1:31:51That's so good. I've never heard it quite put that way. And I completely agree. If I'm going to mess up, it's going to be a dinner time. Okay. So Gibran, let's think just like Amazon right now, since you know it so well, and I'm going to use this as a selfish education for myself right now in the world of amazon what do you think the most overrated growth tactic is ppc okay and then reverse that what is the most underrated growth tactic that's a tough one but i would say uh

1:32:29your images product images okay i gotta i gotta dig on this because like i'm really curious Why is PPC an overrated growth tactic in your mind? Because everyone is looking at PPC as an only driver to rank and grow products. And everyone is looking at it in isolation. The PPC have no real value or working on PPC have no real advantage. If it is not a combination of your brand positioning, your category positioning, your images, your title, your video ads, and doing a very big variety of A-B testing on all of these different things in different combinations. So you're testing different pricing, you're testing different images, you're testing different ad campaigns, you're trying different strategies like high price versus low price versus marketing on all variation versus marketing on your pattern.

1:33:26So looking at PPC just in isolation is probably like 90 % people make this mistake that they just focus on they just have like specialists doing ppc but uh but the ppc is a is a is a 360 approach where you have to understand every aspect of your business that works with that ppc because your your ppc is not in isolation with your competition ppc and uh when what days you're putting your deals in and what was your price how how good your offer was on the page when on which keyword when it was displayed. So you're just looking your PPC in whole isolation and you're ignoring so many other aspects of your listing when you're looking into PPC.

1:34:12So you're saying it's the cherry on top of the sundae and unless you're really intentional about all the other things, building your listing and excellence, then the PPC is not going to help at all. It only helps when you're really good at those other areas and you stack it on top of that. Yeah, it's a whole approach. If you're just looking at PPC, which most people look at in isolation, it's not going to fix your problems. I got one final question. And Mike, I don't know what else you have. Do you have like a overarching mission that kind of drives you in all of this stuff?

1:34:53probably not i mean i'm i'm just when i keep doing it just enjoy keep doing the same thing every day uh learning new stuff i don't have like a big big vision or thing that i want to do i want to build a big company eventually uh like maybe grow from 5x 10x from where i am right now over time but i don't have like any any hidden thing or any any big uh spiritual thing that that leads me do i honestly though like to be fair i i think that that in and of itself is actually pretty amazing like you're you're doing things for the joy of it and curiosity and like you're scratching an itch i mean that that's like i don't know that there is a better you know a better way to do this so like that is kind of the answer man this is just straight up joy uh which is so fun to see like observing it yeah okay i'll get us out of here on one last question you built a huge company in terms of revenue and people what are you most proud of about utopia I think we created a company that actually impacts many lives, especially in a country where things are not as good.

1:36:11So I think that's something that I'm really proud of doing. That makes me happy every day that it's doing amazing. That's something worth being proud of, for sure. Love it, man. Gibran, dude, this has been so fun. Really appreciate you coming on. I learned a ton today. I imagine the people that are going to listen to this and watch this are also going to learn a ton. I'm going to actually need to like sit down and take some notes now after this. Me too. It's like my favorite part of doing these is like I walk away. I'm like, oh man, now I have work to do, you know, in a good way. So yeah, dude, really appreciate it.

1:36:46This has just been a riot. I'm happy you might connect to this. No, no, it was really lovely catching up with Mike and you. And I had a wonderful time. Thank you so much for having me.

1:36:59Thank you.