Operators Titans E008: DUDE Wipes (with Sean Riley)

29:46And so it's very clear, like people are digging this brand. People are using this product. We just have to like spread it out more. So, you know, the confidence was there, even though maybe it shouldn't have been. But like that was just that delusional entrepreneurial spirit, like dude wipes is going to work. We're going to get on Shark Tank. Oh my God, we finally got on. But Shark Tank becomes this point where the rest of the world thinks it's going to work. Because it's like, oh, you did deal with Mark Cuban? You were on Shark Tank? You're legit, man. And retailers start taking meetings with you.

30:21Your friends start thinking you're running an actual business, not a bum, chasing some weird dream selling dude wipes. So it kind of changes other people's perception, which obviously helps your confidence as well. But, you know, we always believed in it because our customers enjoyed it and connected with it. And you're, I mean, it's so funny that Sean mentions like you're the hero of the story. I read your backstory and I thought like, look at this idiot. Like, look at this guy just stumbling. Like, this is amazing. Like, this is how great companies are built, right? It's just like straight up, I'm naive.

30:57I'm going to keep going. You ask, you know, at any point did like he think he had a real business? And just hearing Sean's story, I'm like, bro, he thought he had a real business when he was doing the Carter mixtapes. Right, right, right. For sure. That's a good point. It's blind confidence to walk door to door being like, you need a roof. And selling roofs every day. I love this guy, man. You're the protagonist. Sorry, man. Take it away. No, I think there's that. And then there is this other weird through line and everything, Sean, that you're, you're actually a big brand guy, you know, like right from day one.

31:35I'm like, it looks like you actually thought through, like, we actually need to build a real brand. Like it can't just be advertising. It can't just be like tactical. Like we actually have to have like this through line in this story. Cause eat right from like shark tank to then you did this like world series stunt, which I think is brilliant. Yeah. And you've always kind of had these things. So like, can you at least expand on that? The, you're not your typical consumer brand who just runs like Sean and I are just big advertising guys, right? You're not that kind of brand. Yeah. We're brand first, you know, uh, I compare it to like barstool, right?

32:12Like barstool just got started with a brand and like being loud and being themselves. And Hey, there was this gap in the market and like no one was reading it or caring in the early days, but that passion and that spirit was there. And then they figured it out and scaled the whole thing. Right. And so for us, it just, it wasn't even a question that brand wouldn't come first. Cause it was like, dude wipes needed to be fun. It needed to be funny. It needed to feel like us. It needed to talk to people like brands hadn't talked to people before. Like that was the creative like spirit in the day and what like we enjoyed spending so much time on.

32:53I don't think we realized how powerful that would be in the long run. It was just inherently like what got us jacked up, you know, like, what could we say that's funny? How could we make noise here? Oh, my God, like, Charmin does it like this way? How do we do it the total other way? Just kind of like being like troublemakers and like, having fun was part of our DNA. And then as we start becoming a legitimate company, we're like, oh, holy shit. This has such a polarity and pull into the consumers because all this other shit came out of a boardroom and it's so stale and it's almost laughable comparing Dude Wipes to Charmin or something like that.

33:35And so this came out of a bedroom, not a boardroom. And that's something we have to maintain as we grow and do become legitimate is, hey, the number one value at the company is the dudeness is the magic. And that value has been around since 2013. And so that's what we tell everybody. We cannot lose the dudeness. That's the magic. That's our moat around everybody else. Of course, we need to execute the advertising, the product, the X's and O's. But the one thing you can't take away from us is our internal creative spirit, our dudeness. And we just got to keep doubling down on that. I have to ask, would you give consumer founders today this advice that you should start and really think about brand early and how is this going to build over time?

34:28Yes. And that you don't need to spend any money on it. You're going to have to spend money on advertising, right? To like bring in customers, like that's going to be important early on, but your brand is essentially just your creativity and your idea and your why, and why do you matter to the world and why are you different? And like, if you don't start with that soul in a brand, it's going to be hard later on, you know, when you're competing with other people who did bring soul into it and who did bring emotional connections. Um, and so it's kind of the floofy artistic stuff that's hard to quantify but i think it's the most important uh and there's a balance between flipping units and doing the brand stuff but i think people think it's an either or and it's like no it's both dude yeah or almost it's like a negative signal if you have to pay for branding at the beginning because it's like what are you why are you doing a brand You haven't done something interesting enough.

35:30Yeah. To pivot slightly, this is off script. I always get this question at Ridge because Ridge is a very similar beginning to you. Daniel and his dad and his best friend started this business and they never had any other jobs. The dad was a special ed teacher for years, but the two other co-founders didn't have any jobs. And they've built a business with their friends the entire time. I joined slightly later. I've worked my way into the position I'm in. But that core group of friends has stayed there the entire time. And people always ask, is it hard to have a business with... There's six of us that own it and it's roughly equal ownership.

36:07And I always get asked, is that difficult? And it's actually been the easiest thing ever because all those people have a bunch of trust. But I'd love to hear your perspective. You have a large amount of co-founders. You've had to split equity with all these people. Was that hard throughout the years or has it just clicked and worked? You know, I think it's everything's hard throughout the years as you're growing, like all of these challenges. But to me, guys that you're friends with that you like already have trust and you can connect with outside of work like that makes it easier, you know, for me than some guy I met on Reddit and we're at a coffee shop and we like decide to like co-found together.

36:45Like I don't have any of that context of like that previous relationship. And so while that can, you know, put strain on like the business side, I'd rather be in the trenches with people I can trust and like have built those long term relationships with. So, yeah, that's shown me a lot. And now it's the same way when you're bringing on new people to the team, you know, new senior leaders and stuff like that. It's like you got at the end of the day, get to know them and trust them and, you know, become friendly with them, too, because that's what's going to get you guys all through like the harder time.

37:22So it's also you can create it with new people for sure. but when you're starting and you have that previous relationship like you know I don't know maybe we would have given up if we weren't able to like laugh and go have beers like the night after we were all working on dude wipes all day and then we just go out and fuck off with our friends and stuff like that like that became you know a good part of the business and getting through all those early times. Do you guys I'd be curious how both of you both your experiences here but do you think that's because the friendship piece automatically has like a, you clearly have shared values and like a shared way of thinking and link and living with these people.

38:02Like, is that why it works? It just runs so counter to common business advice. And I've met so many people in this scenario, like Sean Frank and you, like, there's just so many guys I know. They're like, no, no, they're business partners with their friends and it works really well. And yet I'm, I've spent like decades listening to people tell me you shouldn't do that. Right. And it seems to me that it's values driven. Like these are my friends for a reason. So the business is just going to work. Yeah. I think that's a really good point. You know, values is how you build the culture and, and having shared values.

38:35And if you've been friends with someone for a long time, it's because you guys have like vibed and connected and had similar values. So I think, I think that is it. And the warning of course is like, Hey, yeah, maybe, you know, your friend won't work out in the business. I think people are pointing to those like risks of the friendship and things like that. Um, as a business grows and all of these crazy things happen, but the benefit, yeah, is like, you're going to be aligned with people who have similar values, um, early on. And then is that, I guess, like, is that this idea, I guess that you say dude-ness, huh?

39:10Which I like, uh, which goes back to this, like you guys clearly all are very similar in like similar sense of humor. You took a lot of, I think a lot of that and injected into the brand. And even the way that you marketed the brand seems to come from that place, right? Like the world series thing, like, did you guys have to, how many, how many different things did you try? Like that world series with the signs, like that stunt that you're known for? How many of those did you guys attempt before finding that one that like really worked or like, I just wonder how many shots on gold you take like this.

39:48Yeah, I think we, a ton, you know, and then probably one in 50 go viral or something like that. Like our first one before the world series one was 2014 when we put dude wipes on a UFC fighters. ass. And that cost us 10 grand to do on a pay-per-view. And we literally had to borrow money to do it. But we thought it was like so on brand and so fun that we're like, we got to take that shot. You know, literally no idea if anyone would actually care or if this would be the worst 10 grand that we ever spent. Because 10 grand was a ton of money at that time. And the thing just lands and goes crazy on Twitter.

40:36We were the number three trend in the world on Twitter worldwide was the word dude wipes. It was like Cristiano Ronaldo dude wipes or whatever, the night of the fight. And, you know, 2014, we made 125 grand in sales, you know, like, so the brand like went viral in that moment. And that was what kind of enlightened us to like, we need to be always taking shots and putting this brand in front of people in like fun, weird ways. And some of them will land and go crazy. And now, even now when we have a big marketing budget and we're doing legitimate stuff, it's like, well, how can that work really hard?

41:20And does that have a chance to go viral if we're going to put money towards it? And then there's just guys on phones every day thinking of things that cost no money where this brand could get involved or we could send product over here because something happened you know this pitcher sharted on the mound and he just talked about it on a podcast like get him dude wipes get on his instagram like so yeah that's remained in our dna um and you've got to keep taking those shots so that's why i tell people like when they ask about that virality it's a lot of shots um but it's also like bring it back to that brand point have something interesting to say um because if you don't have a brand where you've developed something interesting to say, those shots, they don't really have any aim to them.

42:06And so it's first is that interest in that hook and then just go take a bunch of shots on it. It seems like the brand's always been bigger than the revenue, right? Now you guys have this massive, massive brand. Revenue has grown into it. You're starting to get recognition for it, right? What is the next step change in revenue? So you're on Shark Tank, you're doing stunts, you know you've talked to Kroger that year what is the next like okay now we're even how do you go one level up how do you start becoming a CPG darling that you are today yeah so that 2015 Shark Tank Kroger rollout year we go from 250 grand to 1.5 million so that's like a game-changing year essentially for us and it's because we get some real retail distribution and then we're on Shark Tank, we get all this awareness and this Amazon business starts accelerating like way past our expectations for that year.

43:05So that year is, you know, whatever that is, 5x year, like, you know, that year's huge. And then the next year is like 3 million. And then the next year is like 8 million. And like that just comes from like organic growth of the current customers. and then starting to find like customers like them, like, hey, we're in Kroger's toilet paper aisle. Target just put us in 300 stores. Okay, now we're in some Target toilet paper aisles. In the meantime, just keeping the gas on Amazon. And then 2017, we get an open call ticket into Walmart. So Walmart hosts a show once a year where entrepreneurs who manufacture things in the USA get to pitch to buyers at Walmart.

43:58So we got in that show. We got that meeting with the Walmart toilet paper buyer, and they did a small test in 2017. They said, yep, here's your golden ticket. I'm going to try dude wipes in the toilet paper aisle. So we get that small test in 2017. That goes well. And then 2018, we're a real Walmart customer. And that starts to, we're on the shelf, we're on the planogram. That starts to be, oh, now we got another really big customer and we start growing that. So that's 2018. So if you look at the first five years, that's how we kind of go from zero to eight million, 10 million, something like that.

44:43Dude, so much work to build this brand up. And then you're in all the big retailers and you get to eight or 10 million, right? And since then, you've 10X or whatever. Yeah, it's like it's the bamboo thing. Like they could have a good idea. It could be working with the customers. But that's a lot of shit to go through to get there. And that's where you really got to encourage people to keep believing in themselves, keep moving forward, keep pushing, especially if you know your product is good. Obviously, I don't want someone to work on a dog for five years. I'm not saying that, but I think more people are sitting on something that works and just needs time to develop and get into scale and have to give themselves that time.

45:28Yeah. I'm glad you said the word belief because it seems like you guys just had so much belief because it's a fun thing when you're 23, 24 working on it, right? 25 but then like to commit from 25 to 30 grinding this thing out and even if you guys are doing you know eight million dollars a year that you turn 30 i'm just making up your age uh you're probably making like 75 grand it's like there's not there's not that much money going around right for sure yeah yeah yeah uh and i think that the remarkable thing is that you've somehow maintained uh like you you managed to get into these retailers and still maintain like this really weird marketing momentum.

46:10Like you, you can't, I don't know how you guys keep this DNA actually. Like I'm, I'm just so fascinated by this, that even today you're still finding these moments as a team to like insert the brand and sort of like Jack culture and like find virality. Like it's just really rare to see, dude. Like I, like we don't see that much. Like these are not systems you build, you know, like we talk a lot in consumer about ad creative or, or email or SMS. And it's like, no, no, dude wipes is over here putting their logo on somebody's ass. I'm like, that's not, that's not what we hear often. Um, how are you keeping that?

46:46Those, those things are important, like traditional creative and ads and stuff like that. But the, the creativity end is what disrupts reality. I call it like we all see ads. we're all trying to be sold to all the time and we don't care for the most part like we want to go about our day and like do our thing and when you do something that disrupts reality like you get people's attention and so it's got to be like fun and different and i don't know that's just what like we're trained to look for um like we ran these board ads um for the nhl like all-star you know game and it was like protect the crease with dude wipes and like you know it was those led board ads and it was on you know nbc and like you know huge viewership but like our ads were just like loud enough that they end up going viral people are taking pictures of them sharing them and it's like the same ad unit that gatorade had bought before us on the led got nothing you know what I mean?

47:54But then dude wipes, the LED swaps, the dude wipes. And we're saying something that like the NHL said no to like the first five creatives that we submitted. You know what I mean? Like we are not going to put our ad up there if we don't think it has a chance of disrupting reality. We'll just say, guys, okay, go give it to somebody else. So that is like in the DNA and the process is like, it's got to work for us. Otherwise you guys know there's a million places to put your money as a brand, almost too many of them. Sean, it sounds like you're taking long shots with loaded dice, right? Like anybody can go buy NHL ads and it's not going to perform very well because like those ad units, they're not going to be direct response, but like your X factor, the loaded dice here is like, you're not doing an idea unless you think you can unlock, you know, arbitrage distribution, right?

48:47It's like the ability to go viral, the ability to go on Twitter. I remember Dude Wipes on that fighter's ass. I was 20, the perfect demo for that. I totally remember that going viral. But then it's crazy to think how many impressions you must have got. We're talking a billion impressions and then only doing$125 ,000. That's what I mean. This brand's always punched so much above its weight class up until now, right? Where you guys are actually, it takes 10 years of this journey to actually start getting the revenue you guys deserve. Well, the impressions and the distribution just wasn't there. You got a billion impressions, but he wasn't in thousands of Walmarts yet.

49:28But dude, I'll convert somebody now on an impression we made 10 years ago when they're ready to buy dude wipes. And I think that's one thing that's been statistically proven on branding messaging is that it doesn't have a near-term effect on week-over-week velocity. So trust me, we've gone viral tons of times. What happens is you create a memory in someone's brain, and the next time they're interested in entering that category, which could be six months from now, I'm bringing my son to college, and I got to load up on dude wipes like, oh, God, yeah, that NHL ad, like, of course, I'm grabbing them over this.

50:10So like you have to create memory structures in people's brains. And that's what we've been doing for over 10 years. I might make a sale this year off a shark tank in 2015 because somebody was finally ready to enter the category. And so that's what people don't understand on brand like, oh, you went viral. What does that do to your sales? I'm building memory, not sales if i run a cpc ad yes i have to track the sales on that like that's a direct response ad where people get tripped up on brand is they try and treat them the same and then you end up getting a bunch of quants involved who aren't happy with the performance who don't understand long-term memory structures and brand relevance and how that plays out way over time brand investments are basically capex at some point you got to start looking at it like no no different than you're building a factory.

50:58It's like, I'm going to get return on this over a long period of time. We're not allowed to financially do that though. Uh, that'd be nice. Um, fricking accountants. Um, that's, that's how you break it into the system of a company is like, you just dedicate a budget towards it and you guys leave the budget alone. It's there to build brand. You've given it to me. We've all agreed it's important. Um, and so that's how I encourage some people to just systematize it, like create a budget, do interesting things, but just say, guys, we've all agreed this is a budget to build a brand. And hopefully you should be talking to people smart enough who agree that building a brand is a good thing.

51:35But you pull the like, how do we track the efficacy bullshit out of it? And then you just loosen everybody up and like, let the playbook run. I have this visual of your brand team, basically just a bunch of guys sitting around watching sports and looking for like those moments that's like early days. Has that, has it, uh, is it changed a lot, um, with the scale that you're at now from like, you know, 2015, 2016, you're just a bunch of friends doing this to today. You, you have team, like you guys have real scale. Has that changed much like this, like what that team looks like, how they work, you know, the rhythms, the, what do you guys talk about every day?

52:14Has there, is there more disciplined now or is it still just like this is it's an organic thing that just happens yeah yeah team's bigger now you know so we got more thought partners so i'd say it's changed from like a text box to like a slack you know what i mean sort of situation but like anybody can throw anything in like we've had an accountant at our company name a new flavor of dude wipes you know be like hey we got this bubble gum dude wipes that were coming out for little dudes and it's going to be really fun. Examples are in the office, you know, and, uh, and she was like, why don't we call it bubble bum?

52:49Boom, done. You know what I mean? Great idea over there in accounting. So like we, uh, we're just throwing those ideas out there, trying to execute quick speed. You know, I think we've learned over the years that agencies don't work as well for us, um, because they lack like that speed and that context. Um, so we're doing more and more things internally. We've ebbed and flowed through like bringing in help and coming more internal and just kind of, yeah, the context that we have from doing this so long and the speed that we run with, we kind of really got to do it ourselves. Do you guys have a, is there a, one of these like moments that you tried to craft, like going for virality that you look back on and you're like, I really thought that would work.

53:34And it completely flopped. And then the second to that is like, how do you deal with when these things don't work internally? Like if you're taking that many shots and it's one in 50 that hits like how do people feel good about their job every day like you failed 49 times this year bro no we have a lot of them and i just think people have permission to fail like that's part of our culture and it's like encouraged um there's an old bezos story where the guy who launched the amazon phone you know the fire phone yeah was so devastated and he went to bezos because there was a hundred million dollars worth of inventory they had to liquidate.

54:12And Jeff Bezos was like, I don't want you to care about that for three seconds, like torch those phones. Like we took a shot, we went out on initiative, it was on strategy and it didn't work. Like who cares? And so we're never failing at any sort of a large revenue number like that. But yeah, some things might cost money that don't work, but you know, you make sure it's something that's not going to financially hurt you too much. So you balance it out like that. But I can remember one of the first things we did at a music festival, it was like a five grand table. And this is 2012. So this is really when we had no money.

54:51And we set up dude wipes there. We were right by the porta potties. It was a big EDM festival in Chicago. And we were ready to sell dude wipes. And nobody wanted to buy them. It was like, nobody really knew what they were. and they weren't going to spend 10 bucks on dude wipes or like nobody had cash. And, and so then we quickly realized, all right, we just got to like sit here and have fun and give these dude wipes away all weekend because we're not going to make our five grand back, you know? Um, but we kind of like flipped the script like halfway through the weekend. It was like, okay, this is just a giveaway event.

55:25This is just take pictures. This is just have fun. But we remember walking out of it being like, we can't do that again for a long time, you know, because like we can't show up somewhere for five grand and not walk out with five grand. That's where advertising, you know, starts to become important. Like if we're going to spend five grand in the early days, I got to see that that Amazon ad turned into 10, you know, like we don't have the budget to spend money on brand that like couldn't return. So you learn some like discipline and things like that too. Is there, do you guys have like one really expensive mistake in the company's history?

56:03We were like, we can never do that again. Like that sounds like a small one. I mean, it's all relative, right? Five grand when you're small is big, but you know, you guys are much larger now. So like the mistakes get bigger with scale. We talk about this a lot on the show. Like every time I screw up now, it's just like add a zero and like it looks really painful. Right. Is there one that you're like, oh God, yeah, we really screwed up. Like that was a, that was a monster. Yeah, I think we really screwed up line extending the brand way too early. And so, you know, in 2019, we came out with like dude deodorant and dude body sprays and dude soap.

56:40And everyone was like, well, everyone loves this dude brand so much. Like, why don't you guys become the next Axe and Old Spice? And I was like, great idea. Let's go make those products. Let's go sell those stuff. And I think particularly in e-commerce, you develop a little bit of an ego like I could sell anything, man. Like I know I know how to get reviews. I know how to make images look sexy. I know how to target ads. And you can't like, you know, we were actually like flipping those units a little bit and selling them. But it ended up being like a huge energy and focus mistake because now we weren't just fighting a war with Cottonelle and Charmin and stuff like that.

57:22We were also going against Axe and Old Spice. And we had no business doing all of these other things when the girl that brought us to the dance was still doing just fine and had a lot of room to grow. So yeah, we wasted a lot of time and energy and money doing those other things when we should have been focused on keeping the main thing the main thing. It's the opposite of you, Sean, Frank. Yeah, I was going to say, if I was involved in Dude Wipes back then, I would be screaming that we had to get into deodorant or whatever. Because I'm such a big... So I would have made that same mistake and it probably would have tanked your company, right?

58:03Because it's such an obvious mistake to make. I mean, at some point, I think the Dude brand will go into a bunch of things. It's so natural for it to go into these categories because you have strong brand and that's what sells in those aisles. But why is it a mistake that early, Sean? Like this is the thing because you're on the record saying that with Ridge, you didn't expand categories early enough, right? Like you kind of like you really tapped out the wallet before. So what's the difference between Ridge and Dude Wipes? Well, I think Sean Riley just said it that. On e-com, you can force something to work, right?

58:37But when you have to have people show up in the aisle and you have to get sales velocity or whatever, it's really hard to have double focus on that, to continue to sell the main wipes and also grow five other things inside of a Walmart. And you only get to make that entrance one time. Where on e-com, I have five different product lines now all doing eight figures. And it's because you control your own destiny, separate ad accounts, separate budgets, separate teams running it. It's just way harder to do when the endpoint sale is doors in Walmart. At least that's what I would guess, Sean. You live the experience, man.

59:16Yeah, I think consumables and hard goods are different too, right? I have someone returning for our product 30 days later because they need more and they're using it. So I think line extensions for a business like Ridge make a lot more sense where you're acquiring new accessories and new ways in their lifestyle because they might not buy another wallet from you for five years. You know, like guys make a high quality product, like someone, you know, may rock with it for a while where consumables in categories that are growing, you want to stay focused as long as that category is growing. Um, even if you think the brand can platform out, cause you're, you're going to dilute the brand and the effort and the capital and the attention.

1:00:07And you just don't want to do that too early because a consumable that's ramping is a super powerful thing. So it almost seems like the brand, you can capture so much value from the brand and that the wipes are the best possible value capture point for a long time. Right. So like that's, I'm, I'm, as I'm understanding, like dilute the brand is, that's kind of what you're saying is if there's like a dollar of value to capture from the brand wipes is still the best dollar to go get than deodorant. And at some point that won't be the best dollar to go get like on this journey of building the dude brand, right?

1:00:43Like there's going to be a point in the future where yes, it's going to be deodorant or something else. You can also have an opinion that a brand is inherently connected to the category that it's in. Um, and I would kind of be in that camp. Um, so when Coca-Cola launches an energy drink, it flops. When Red Bull launches a cola, it flops because Red Bull is an energy drink company and Coca-Cola is a Coke company. So all the money and distribution they can throw at that thing in the world, they can't change the consumer's mind frame of I associate this with this. That's interesting. It's like the comment you made earlier about building memory structures in people's minds, almost it does work against you, right?

1:01:27It's like, now I am known to be this. Wait, now dude is what? Is it the swiper? Is it the deodorant or? You're like, oh shit, I'm kind of confused. And if I'm confused for two seconds, I lose the sale. I lose the memory structure. So yeah, I'm a little maniacal about it. But the strategy is the strategy for what it is right now. and it's the focused category king strategy, screw everything else inch wide, mile deep. I'm always liable to change my mind. But yeah, that's where I'm at right now. Yeah. And maybe this is good advice for all the consumable founders out there. It's like, maybe you need to be more focused.

1:02:10You don't see Coors making condiments, right? It's like, they're very much going to stay in their category and they're going to dominate it forever. but i'm sure at some point somebody like me was like guys we've got to get coarse potato chips people are going to want them they drink beer they want chips and that would have been a flop coars uh coars hard seltzer lasted for eight months i believe in the market yeah totally yeah they tried and they tried to go really close to their category and they couldn't do it you're right because when i think hard seltzer who do you think of four loco four loco oh gee anthony's companies uh mike's hard uh in the 90s right and then white claw white claw that's same guy you don't you don't think you don't think bud light even though they sell seltzer and bud light just does it because it's a they got to get in the category it's a money grab they're chasing the quarterly revenue you know like there's somebody thinking near term at bud light of why they got to get into seltzer, not long-term 10 years brand building thinking.

1:03:13You guys had like crazy growth. Just going back to the, because I got a question on this, but crazy growth from like 2020 early pandemic, I think through 22, like you had some big jumps, right? Like 2019, I think I saw it was like, or 2018, you went from like 15 million to 40 in a year. And then another big jump to that to 60, 70, whatever it was. Did you guys have to change up marketing? Like how you guys do marketing to make those jumps? Or was that just open doors, continue doing what we're doing? It's just distribution driven. Okay. The pandemic must've been great for you guys. Toilet paper had a whole moment.

1:03:58Oh, yeah. That was like perfect. Yeah. So, yeah, we're one of those businesses when COVID hits, the world's out of toilet paper, essentially in one weekend. You know, our main competitor is out of stock. And essentially the retailers just say, how many dude wipes do you have? We'll take them all. So like our warehouse is empty, you know, and we're calling up our manufacturer the next day. We're moving super quick. We're growing the capacity and we're just ramping up. And so for about six months, it was just there would never be inventory on the warehouse floor. It would just come in, go out, come in, go out.

1:04:40And during that time, we ramped up our manufacturing, our distribution. We got all these new customers. I never tried dude wipes before, but they were the only thing available. And now, again, that reoccurring revenue thing we're talking about. Now they're into that repeat purchase rate. so a bunch of new customers a bunch of new trial and then that came with distribution too because now we're talking the retailer being like well we want three facings now and we got this new flavor and we want that out there so not only was it the one time sort of like sales blip because of the you know dynamics of the market at that point it was getting the shelf space and then it was the stickiness of the brand, where in 2021, you know, I'll be honest, I didn't know how much of that growth was going to stay.

1:05:27We grew way more in 2021 than we did in 2020. In 2022, we grew more, you know, and now we're coming off back-to-back years where we'll add$100 million a year to the Dude Wipes brand in 2024 and 2025. So, you know, what even looked big back then is small compared to the additional revenue we're adding today. And I think this is the beauty of the story, but the reason why we have to have you tell it is for five years, it seemed like you didn't have two pennies saved. It was such a challenge getting to where you were. And then because of the nature of the category, the stickiness of the product, if people try it, they love it, they're coming back for it.

1:06:14it's just time and market getting people to try it. And then unlike workout equipment, like also popped in 2020, everyone wanted to stay home and work out. There's no repeat there, right? The more customers try it, the bigger a business is going to get. And it's a flywheel that every single day you're doing years of your life back then. And just because you put that time and effort in, that's the beauty of the story. Yeah. It's like compound interest at the end of the day, that's what kind of running these businesses are. And as long as it's working at some point that flywheel takes off. Yeah.

1:06:47The 30 % growth looks tiny in the first three years compounded, but by 2024, 30 % is another a hundred million dollars if you can maintain it. Like the numbers get really big. Was there a, as you're describing these jumps, like, was there a stage of growth that you actually found particularly difficult? Whether that was like team growth, distribution, like things just break, right? Like whenever you double a business, people break, capital can break, systems can break. Was there one of these stages? Just I'm thinking there's so many people in consumables listening to this where you're like, that's hard.

1:07:23You got to watch for this one. Yeah, I would say bringing on people, you know, because we're doing like 30, 40 million with three people. and then it was like okay you know we gotta we gotta scale this thing we gotta bring on some people uh and build out this team and i didn't have experience doing that um so letting go of things becomes hard at that point you know like you're an entrepreneur and you got your hands on so many different little parts of the business and okay now i gotta bring in a guy who runs operations and warehouse and I'm you know no longer going to do that and like letting that stuff go the first couple are hard uh and then you start to get a little better at it and then you start to actually realize like you just have to keep doing more of it and it's like the strength you can bring to the business is when you know the founders just start letting go of different things trusting other people so we can elevate more into like thinking about strategy and growth and what are things we can do way into the future, because that's how we're going to have a lot of dividends.

1:08:30But yeah, when you're close to a lot of things like bootstrapping small team, that was a difficult moment for me. Have you guys been profitable the whole time? Yes. Wow. That in and of itself is pretty impressive. Although with three people, I guess you should have some profit,$30 million or$40 million in revenue. We never really had a choice, to be honest, but to be profitable. Can you give us a sense for size of team today? We got about 45 people today. Okay. Amazing. That's insane. Yeah. You're running the dream life right now. Small team, huge revenue, doing what you love every single day, delivering great products.

1:09:10But before we go to the last 10, I think that's where Matt was going to take us. I just want to talk about that failure point again. giving people permission to fail. It's one of those things people just say, but to actually do it, it's being okay with losing millions of dollars. And the way we do that at Ridge is I always tell the team, you're never going to fail harder than me. And I'll list out five things where I've wasted so much money in the company. The one story I'll tell that I would love to hear from you guys, additional stories. We had no money, right? Kind of like you, maybe a little bit more revenue.

1:09:45And we negotiated a deal with NPR to do a whole podcast buy, across every podcast, across all radio, their website, whatever. And I grinded them down. I got a dollar CPM for these podcasts, but it was like$150 ,000 buy. And I'm like, guys, it's going to be huge. We sold, no joke, two wallets. So the audience on NPR did not want to buy wallets from us at all, dude. We're talking a$55 ,000 CPA, just a massive mark on this business. So that was like, I'm like, you guys are never gonna have a worse CPA than me, no matter what you do. Right. So giving people the permission to fail. Um, yeah, super important.

1:10:27I, one, one tactical thing we do, uh, that I'd recommend. It's like January of every year during our monthly, uh, like all hands meeting, it's just, what were your biggest failures from last year? And what did we learn from them? And the message is we only learn from our failures. Every year we fuck up big at a couple different things and we make these huge turnarounds and fixes to the business because of it. But all the things that went according to plan, we almost learned nothing from. So it's, let's all talk about the failures and what we learned from them. So that just helps the culture understand like, oh, wow, all these failures happened last year and we got so much stronger because of that.

1:11:11As you guys have gotten bigger and professionalized, right? Because like when you get to this scale, like there's, there's real everything. You've got like finance people now and you probably have, well, I've seen your story. You definitely have lawyers involved. Uh, you know, is, is it hard to maintain the fun aspect? Like that part of the brand as you get bigger? Like, do you actually have to fight harder to keep this, like the, the dudeness, whatever you call alive? Yeah. Yeah, it's it's it doesn't happen as easy and organically as like five, 10 people, you know, as it does with 45. So you just have to be a little bit more intentional about it in terms of like company events or just culture or like, you know, the way that we talk and work with each other.

1:11:59So we keep it very clear. Like we have a culture deck, kind of like a Netflix deck, like and you get on boarded with it. And it's like these are all the things important to us. they're non-negotiables so if you're not fitting it if i'm not fitting it we're gone you know like so the culture and the fun is is a non-negotiable for us well the fun is part of the culture a lot of other things are part of the culture too um but we're just like super clear about that like i don't care if you're the highest performer at the company if you suck and you're toxic to work with like you're gone you know i don't care how many dude wipes you're selling or whatever and so So kind of being super clear about that is important.

1:12:42And then it's just got to work. Everyone has to contribute to it. And so your job as a leader just becomes to like prune anybody who's not fitting into it because that will upset people in the culture. Like, why is he letting this guy hang around who's, you know, doesn't fit? And then you just let everybody kind of like get along and vibe out. So then on that, have you had more success hiring people with a lot of experience into these roles as you've expanded? Or have you had more success hiring people with capacity who you grew into these roles? More with capacity and grew into these roles and people from like midsize companies has been what most of the successes.

1:13:25Yeah. We haven't like brought on too many people from big CPG or anything like that. So, but we do like people, you know, who had experience, but we loved like, like when we were starting to come up and our X bar was like dissolving from, um, you know, it's original culture in the Kellogg. We brought in some people from there in Chicago. They're looking to go to the next thing. But at that time they were coming from somebody who was two, three steps ahead of us. Um, so that, you know, really helped. So I like those opportunities, but if someone's worked at big CPG. for 20 years. I heard something recently.

1:14:06Don't bring them directly into your organization. Don't be the cleanse. If they've gone through a cleanse, then you could bring them in. So if they've gone from Pepsi to, you know, they were at Grunz for a couple years or something, like, okay, now you can bring them in, but like, you don't want to run that cleanse and be part of that transition kind of deal. I've never heard that before. Awesome. Yeah. Yeah. I met this CEO dude. He's like, I'll just, I'll only hire post cleanse, you know, from big go. There's going to be somebody out there who's going to build a hiring playbook where it's like, I'm going to refer you to this company.

1:14:43You go there for two years, get your head rewired and then come back to me. I guess the other thing I wanted to ask you is as, as you've grown, how, and maybe you don't know this, but this is kind of tactical. You said you have like, you budget the brand. I know some tactical stuff, Matt. This is great. I want to know that. Listen, I have to preface it because sometimes we talk to people like, dude, I don't know how we do that. So you budget brand, right? Like this is the investment we're going to make in it. Leave that alone. As a percentage of what you invest in like all over marketing. How much is brand?

1:15:24How much is like trade marketing performance, like investing in like the block and tackle of marketing shifted like over the years. So what I tell people is like early on, it's going to be heavy performance, low brand spend, but high brand energy, you know, but just low brand spend, like good brand energy, but be spending on performance because you need to butter your bread. You need to grow. You need to be profitable. But then as distribution grows and the brand grows, it does shift. And anyone will tell you that. Once you get to the point that we're at, you need to be spending more on brand than performance.

1:16:03So we've probably shifted into a 70-30 area or something like that right now. 70 % brand, 30 % trade or reverse? Yeah, 70 % brand awareness. artists. So I have another tactical question. How do you drive velocity in a Walmart or whatever else? If you had to increase velocity for whatever reason, are there any tips and tricks that work? You hear people doing out of home, you hear people doing the Walmart's own ad network or whatever, but is there anything that's actually good that you found that you're like, oh, if I need to drive velocity, this is what I'm doing? Or is it just build memories over a decade?

1:16:48Well, if you like cocaine, you can run coupons and ads because nothing will spike retail velocity more than a discount. But we don't really like that stuff. So we don't believe in those quick hits on the discounts. But the ad networks definitely work. Retail media is, I would think of it very similar to how you think of Amazon media. It works. You're getting in front of customers. You're driving clicks. They're very close to purchasing. They have this intent to purchase. So retail media is the number one place to invest dollars to move retail velocity. Do you think the disruption of grocery and retail is going to continue to happen in the way Instacart continues to eat the world or more click and shop?

1:17:37Or do you think there's always going to be a place where people are walking, you know, two, two million people every day, walking every Walmart or whatever the stat is. You think that's going to continue to, or are you thinking about a post physical retail future? Yeah, it's a good question. Yeah. A lot of people are on like the agentic shopping lists and stuff right now. Like, Hey, is, you know, my whole Walmart trip just going to turn into like a refresh on my phone of what me and my family like to buy on a week to week basis. Uh, and then I'm going to accelerate. And I was just with someone from big CPG and like, they're worried about it, right?

1:18:13Like the shopping isn't, isn't going to be the same. And if you think about it, like if you think about mom, she's busy, right? And so if the phone has curated the stuff that she buys every week, like she is so busy, she might just more and more start moving over to refresh my list. So brand will continue to be even more important because of that, because it's just going to turn into the big brand that I know for the thing. And I like to buy that. And it's going to be a little bit more sticky. And then giving people a reason to walk in a store. So more experience, end caps, innovation, just making that more fun is something we're going to be like concentrated on, you know, in the next leg of the journey.

1:19:02Um, but also going to be concentrated on digitally. How do I land on all those damn lists too? Cause I don't know which way it's going to go, but got to play both sides. I got to imagine people still like going to stores and like finding things. Um, but I don't know that for sure. You know, there's, there's a big difference. I mean, you gotta remember like we've been, uh, like commerce has been a part of human history for a long time, like from early days, like markets and just trading and bartering. There's a huge difference between products that you just simply want to transact on and then things that you want to shop for.

1:19:38Like shopping and transacting are wildly different activities in my view, right? Like there are so those things like this is the downside to consumable is a lot of consumables are things I just want to transact on. Like, I don't know what brand my garbage bags are in my kitchen and I don't care. Right. Like that's not something I care about. You guys are probably, uh, as a brand, a more interesting play, right? Cause like that investment in brand does pay off and that there is loyalty and affinity, you know, especially cause like you make people feel something with, with a product that maybe they, oh God, there's a joke there too.

1:20:15I don't know how you work in your company, dude. I really don't. I don't know how you get anything. We really make them feel something, you know? Yeah. Like, I just don't know. No, but I think that the whole AI thing, Sean, Frank, is like, we've talked about this. I still think people are going to want to shop. I think they're going to want to discover. I think they're going to want to explore. And then I think that the refresh thing is where AI kicks in. It's like, just get me the shit I like. Well, I think Sean Riley is probably right in the fact that it goes two ways, right? So he's going to benefit by being big, having brand, and already being on those shopping carts.

1:20:51Because the worse the in-person shopping experience is, the more it's going to get outsourced to either click and collect or delivery. And Target can't get away with not staffing people and locking everything up because less people want to go and experience that store. So there needs to be more of an investment in the store experience, making it nice, making it fun, making it clean, like making it to go discover and sample. Why does Costco continue to crush? People go to those stores. They want the dollar hot dogs. So I think it will go both directions. It's like if you have a mediocre store experience, you will just be abstracted away to what is the easiest way for me to get all my shit.

1:21:29And I think that's where dude wipes will actually win because they're already on the lists. You're doing hundreds of millions of dollars a year in those stores. you already have the consumers. It just makes it harder to be the new brand coming in and getting on those lists. I don't know how they're going to do it. Yeah. The bar is way higher. Um, Sean, you, uh, I think like one of the things we wanted to touch on is in June of this year, you like as a bootstrapper, you took on investment. So, and I'm sure there were opportunities all the way up to talk to investors, to take on cash. Why now? Like what, why at this stage did you guys bring in what I'm assuming is like growth equity, right?

1:22:06Like this is growth capital. Why do it now? Like why did you need it now? Not need it, but like, or want it now? Yeah. I think kind of like Sean was saying earlier, like we're, we're living the dream and we're having fun and didn't really want to get rid of this thing to anybody and think that we have a lot of potential to, to keep growing and running a much longer playbook. And so bringing somebody in kind of let us like level up, go chase some of these bigger aspirations and do these bigger things and kind of say, hey, we're not going anywhere for a little bit where like arguably the brand is like the size right now where I could have just, you know, sold it all and cleaned hands with it.

1:22:50And we weren't actually looking for that. But this partner actually approached us and they're like, we're not looking to buy your company. You know, we're looking to invest in your company, give you guys some resources and be like a growth partner. And so from a from a fit, they're really good people, really good vibes. And then from kind of a point in our journey in our lifetime, it's like, yeah, like, let's level up. Let's partner with somebody. And let's go run this like longer thesis and kind of remove some of that, you know, could this be gone soon sort of thing. So for me, it was like, it was a good way to play the game longer, but also, you know, give some returns to shareholders, give some investments in the business, you know, all of those things that are important when you've never done them.

1:23:35How many of the founding partners are still in the company operating? Three of us. You guys, three of you. And there was four to start? Yeah. Yeah. There was four in the beginning. Um, and it's super rare to see that at this stage, right? Most of us clock out because we can't grow fast enough with the company. The growth, I heard this recently too. People can grow linear easier than they can grow exponential. So Sean, you've been talking about our growth year over year and how are me and these other two guys running the C-suite, it's because the growth has been sustainable and it's allowed us to learn every step of the way where if like we brought in$50 million in 2019 and I had to hire 40 people in one year or something, it probably would have like broke me out of the mix.

1:24:33It might've been exponentially growing too much. But I think that's one thing I've learned with like the people and the growth, like the way we grew allowed us to also grow with it. That's huge, man. As a piece of advice that's so big, we've on the show talked a lot about there's a lot of downsides to growing too fast in consumer. Most of them have to do with too much inventory because that'll kill your ass. But the other one, which I don't think I've heard too many people talk about, is this idea that you probably can't grow with your company. You're not going to be developed enough. You're going to be a three-year-old trying to do 10-year-old things, you know, especially if you've never done it before.

1:25:12Yeah. Maybe totally second or third gig. It's like, oh yeah, I've done this, but yeah, everything we do, I've never done before. Um, and so, yeah, I think something like that could have, you know, obviously you see people like Mark Zuckerberg or whatever, who figured out exponential growth, you know, and being a first time. Yeah. Well, N of one, you know, yeah, yeah, exactly. I think that's the, uh, last I checked, there's only one of him. Um, you know, and like, there's a couple others, uh, now that you have the capital, um, how do you suspect things are going to change and how? No, honestly, we're running a similar playbook, uh, and we're also still running a profitability playbook.

1:25:52So we're not looking to like go negative or anything like that on this next stage. Um, we're looking to kind of run the sustainable, um, model, um, but a little bit more strategic on like investing in the supply chain and making sure that we can like serve, you know, this next level and like the org. So I will say like the same amount of change that comes with adding all the revenue that we're adding is a lot, you know, but like the partner and the investment hasn't, it wasn't one where we're like totally changing the thesis or like the way we go about it. But we know change is coming every year because of the growth.

1:26:31Do you have a, is there a question that other entrepreneurs ask you that you think completely misses the mark? Like now that you guys have the profile you do, you must talk to a lot of founders. I know we do. Um, what is, what is, what's something that you hear as a question, um, that you're often like, I don't understand why people continue to ask me this. I think, uh, like we were talking about earlier, like the going viral, uh, like how do you go viral? Like, you know, things people are looking for like the how, uh, and it's more about the why, you know, so they'll be like, well, what, what platform are you doing it on?

1:27:07Or what's your org structure there? Or it's like, no, we have a why, like we have a reason to do it. And it's the poop humor, dude wipes. And like, we stay in this lane and we run all of these shots. It's not about where we do it or how we do it or what we're doing. So people think it's that. and they're asking me and I look at their brand and there's like no why to the brand. I could give you$5 million and the best TikTok person in the world and they would struggle executing your proposition. So they really have to go back and look at themselves and say, why do I have something interesting to say?

1:27:48Not how do I do what Dude Wipes is doing? If that makes sense. Do you think then on that, do you think there's like, do you have a problem that you see in consumer CPG, all consumer at all, like industry wide, is there something that you can see from your vantage point that is worth talking about today? Like, like what is the biggest problem facing consumer today? I think it's too many people focused on like the money aspect of it, you know, and if you get people who are just like banker finance, like mindset, and they want to start a brand ever, like I hear some people, like, it's like the first thing they want to talk about to start a brand is like margin profiles and you know well what can i what can i get into that's got good margin and blah blah blah you know and it's like no what can you get into that you care about and that you can put like spirit and brand growth and like grind on it for 10 years like that's what's gonna win not reverse engineering a balance sheet and trying to find this area you want to compete in i just don't i just don't agree with that because like at the end of the day, you've got to resonate with your consumers and care about what you're selling.

1:29:00And you can't be someone who doesn't have a dog and wants to get in the dog food business because pet market is hot. And mostly because in consumer, successes take 10 years. It's like, are you going to be so committed to your vision and your product that you will wait tables for two and a half years while you wait for your thing to work? And usually the answer is no. So it's like you shouldn't be in consumer. It's like you don't care enough about the product because everyone wants to be the dude ones, right? Get investors, go on Shark Tank, go viral, do hundreds of millions of dollars in revenue.

1:29:39No one, and I repeat, nobody is willing to make no money for five years because it's just no one has the, it's like the ultimate marshmallow test. like not only will you not eat the marshmallow you're starve yourself for five years to get the big payday at the end because it's what you're passionate about okay so but like you can't be passionate about it so like what what's the what's the thing in your business then that like you were that kind of was like the big why the big mission like the this is the reason that we're doing this i always say when i stop having fun with it i'm done with it and so that doesn't matter if that was five years ago.

1:30:16That doesn't matter if that's today or in a couple of years, like that's, that's it. If, if I'm not having fun doing this, then I'll just move on and do something else. So that's what it's all about. Yeah. You and I are the same there. I tell my business part all the time. I'm like, I will quit when I stop having fun or I'll just tell you to fire my ass. It's, yeah, right. Right. Like I'm good.

1:30:40We do this segment at the end of every one of these episodes called the Titan 10. and these are the same questions we ask every founder because we're it's been so fun listening to the answers by the way so like it's really interesting to see how different everybody is um these are more tactical resource type questions so the way i want you to answer them i'm gonna i'm gonna hit them the way i want you to answer them is like as gut feel as possible so like whatever comes top of mind don't overthink it okay like they're meant to be like faster okay you already said you were tactical sometimes. So this is good.

1:31:14Uh, okay. So you get to a desert Island, you got to manage your business from a desert Island. You only get three numbers to take with you. What are those three numbers? Uh, butts wiped. Cause I want to know how many, how many butts I'm wiping. And, uh, last year we did over 3 billion. So that's my connection to the consumer, uh, household penetration. You know, I think that's a Holy grail in this game. How many households are we in where is the brand actually getting into and then uh impressions because it all comes from reach and memorability and and how many impressions are we driving to get in those households and wipe those asses do you know that so far i mean obviously butts wiped we've never heard that one before but the other two we've actually had nobody uh nobody say those either oh wow household pen man that's the grail dude i like now i'm curious i i just go get mine uh okay so you also get to bring a book resource something and it's just the only rule is it can't be about business what are you bringing i'm probably bringing like think and grow rich or um trans surfing realities another good one i've been uh reading but all just about like how we are in charge of creating our own realities and manifesting our own destinies and, uh, that there is all of these possibilities out there, but it's about what you think, what you believe, what you take action on can build it.

1:32:42Uh, and yeah, to me, that's the law of attraction, the law of creation. Those things are just as real as a, as gravity to me. Dude. Okay. So then on that point, then what's the, what's your one contrarian belief about business that like other founders, other CEOs think you're crazy for believing that? Well, I know Guy Raz hasn't had me on his show yet, but if he asked me that, if he asked me that luck question, I'd tell him luck is for leprechauns. Luck does not exist. It's actually something that we've made up as humans to process all the randomness that happens in the universe. This game is not about luck.

1:33:24It's about what you do. And of course, random things will happen. But what if I ran through this whole story and everything that went bad, I called bad luck. And everything that went good, I called good luck. It's just a fugazi. It's not a real thing. It's going to happen, good and bad. But what matters is that you're believing, you're manifesting, you're achieving. Well, dude, this is the knockoff how I built this. So you can move on to the next one. This is a consumer how I built this. You're totally good now. Our audience is going to care more too. I'm glad to come here first. You know what I'm saying?

1:33:59That's right, dude. Hell yeah. Okay. So then what's the single most important word in leadership for you? I would say trust. Yeah. If you don't have trust in each other and your people, everything else is going to fall apart. Single most important word in business. Most important word in business. Growth. I think, just because it doesn't need to be big. It just needs to be happening because it means you're doing something wrong if it's not happening. And so I don't mean kind of like grow at all costs, but like growth is just your indicator that you're serving the customer correctly and more of them want to come on board.

1:34:37What's the best meal of the day and why? I'll say breakfast. Yeah, I like my eggs in the morning. My breakfast is kind of standard. sets the tone for the day. And then on the weekends, I like going out with the kids and getting the pancakes and then doing the diner thing. But yeah, I love breakfast. Right on. When you look at consumer right now, what do you think the most overrated growth tactic is? Overrated growth tactic? It's different for everybody, but I just don't think, I'm not a big meta guy. So I think it's kind of overrated. I love it. You're looking at two big meta guys. That is so good.

1:35:23Okay. Then what's the most underrated? I mean, it's probably not a secret, but TikTok. If I was starting a new brand, I would just be TikTok and Amazon. And I wouldn't spend any money anywhere else until I got product market fit. and I would just be churning and burning there because I believe TikTok's setting the culture and now you can actually shop there so you're also getting a little QVC effect and then it'll bleed over to Amazon. Amazon's your Walmart of the internet. You got to be up on there to move units. Do you think organic TikTok? Like if you were doing a brand, it's organic videos on TikTok?

1:36:02Are you doing paid or affiliate? I think all. Organic social is sweet, right? If you can do it right and you've got to be trying. Then the other lever I like on TikTok is just affiliates right now because I think it's the democratization of the cost per click. So if I could pay millions of dollars to people all over the country to move my product instead of Mark Zuckerberg, I believe that that money will go farther and translate into word of mouth and more fans on Tik TOK than into Palo Alto or whatever. Um, so I just believe in that network effect of, of the affiliates right now. And so that's, that's why I say Tik TOK.

1:36:47Love it. Uh, dude, that, that's all we have. I, this has been a lot of fun. Uh, I think the people that listen to our show are going to love this. This is like, it's a very different episode. This was a blast guys. You guys make it, uh, easy and you have some good questions. So I appreciate it. Yeah, I'm a firm believer in right now is a great time to do organic. But Sean, you are the protagonist, man. I love to hear you winning. It's awesome. I think you deserve all the success. Believe in the manifestation as well. So you went through the darkness. I'm sure you guys do. That's why you're sitting there.

1:37:20That's right. Hell yeah, man. All right. I think that's the pod.