#1260 Billion Dollar Companies Reveal Their Marketing Secrets

The following episode is a panel discussion from the BUILD Summit in New York led by Nik Sharma, the CEO of Sharma Brands. He is joined by Ryan Babenzien, the CEO & co-founder of Jolie, Ali Moiz, the founder of Native, and Juhi Pikale, the VP of Performance Marketing at Fabletics. Topics include how to build CPG brands, how to market, how to scale your company, and how to actually have a product people want. ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://trustandwill.com/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Get Better Crypto Data: Do you want faster, easier crypto data? Sign up for Velo Data, a new product that we have been working on to solve this problem: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠velowaitlist.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. The following episode is a panel discussion from the Build Summit. There were 700 founders that came together in New York City, and this panel was led by Nik Sharma. He's the CEO of Sharma Brands and is the mastermind behind many of the great CPG brands that you probably

• 0:44Anthony Pompliano?

  know of. On the panel, he is joined by Ryan Babineson. He's the CEO and co-founder of Jolie, Ali Moyes, the founder of Native, and Ju Pecali, the VP of Performance Marketing at Fabletics. This panel is full of all kinds of knowledge, just gem after gem after gem being dropped. They talk about how to build CPG brands, how to market, how to scale your company, and what it means to actually have a product that people want. I think that you'll find this incredibly valuable, so grab your notes and get ready to learn. Here is the panel with Nick, Ryan, Ju, and Ali. Enjoy.

• 1:21Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:44Anthony Pompliano?

  Today's episode is brought to you by Trust and Will. I've gone through a number of different changes in my life over the last few years. I got married, I had a kid, and I had to start thinking about how could I ensure that my wife and my child would be okay if anything ever happened to me? That's where trust, wills, and estate planning come into play. Now, most people, what they do is they get introduced to a friend, an uncle, or someone in their local community. It tends to be someone who's really expensive, a lawyer, an accountant. Or somebody who does estate planning and they just simply are using a one size fits all template and just telling you pay me thousands of dollars and I'll use the same thing for you as the guy down the street. But that's not what Trust and Will does. They have a trusted online estate planning product that starts as low as $159, which

• 2:27Anthony Pompliano?

  allows you to now protect your legacy from the comfort of your own home. Get the leverage, their excellent customer support, available via phone, email or chat. They have thousands of five star reviews and a rating of excellent on TrustPilot. It takes most people 20 to 30 minutes to complete their estate plan with Trust and Will. And not only that, but if you go to trustandwill.com/pomp, you'll get 10% off, plus you'll get free shipping of all your estate planning documents. So go to trustandwill.com/pomp and make sure you get an estate plan in place. Whether it's for you or one of your loved ones, having a trust and/or a will can literally be the difference between someone being taken care of and someone not. Go check them out today at trustandwill.com/pomp.

• 3:12Anthony Pompliano?

  Before we get into this episode, I also want to tell you about a brand new product called Velo. Velo is faster, easier crypto data. Everyone in the industry is always looking for, what's the price? What's going on on the exchanges? Where are assets flowing or not flowing? How is things like open interest and derivatives actually playing out in the market? Well, that's where Velo comes in. It's faster and easier crypto data. You can go to velowaitlist.com today. Myself and a couple of friends, we invested in the business, we're advising the founder, and we think it's pretty cool. This one is something that keeps me informed on a daily basis, so you should check them out at velowaitlist.com. That's V E L O waitlist.com.

• 3:55Anthony Pompliano?

  This next conversation, you guys don't have to listen to me. Nik Sharma is going to be moderating. Nick is the CEO of Sharma Brands. He's an investor and advisor. Many brands that he's worked with or helped create, you all probably be very familiar with. He's going to introduce each one of the speakers. These are some of the best CPG founders in the country. If you don't have a CPG product, don't go to sleep. You probably could learn more from them around marketing, branding, sales, et cetera, than you can from other software founders. So Nick, it's your turn. Ready? All right, here's Nik Sharma.

• 4:36Speaker 02

  Okay, well, I got the kids meal chair over here. So, um, Pomp first asked me to do this on Twitter like a week ago. And I thought, uh, let me actually just bring some experts. So I've got three people here. Their names and pictures are all here. But, uh, these are three people that I talk to pretty regularly. I share a podcast with one. Um, and is this, is it just me? Or is there something wrong with this audio? Check, check. Is this normal? Okay. Sounds weird to me. Um, so anyways, I want to bring these three people up on stage. Uh, we got Moiz Ali, who founded Native Deodorant, or Native. You've probably seen Native Deodorants, the number one selling deodorant in most, uh, stores.

• 5:20Speaker 02

  Now, um, yeah, yeah, just come up now. Yeah. You are not the father. Then we've got, uh, Juhi Pikale, who's the VP of Performance Marketing at Fathetics, which is obviously a massive company. And then we've got Ryan Babenzin, who, uh, previously founded Greats and is now the founder and CEO of Jolie, which is a showerhead company. All right, we can sit now. So, um, all right, so I've already announced who you are. Uh, in my opinion, Juhi is, the reason I brought these people here, Juhi is a cutthroat performance marketer.

• 6:02Speaker 02

  Uh, Moiz understands operational efficiency better than anybody I know. And he might even yell at you if he sees some fat that can be trimmed in your business. And Ryan understands customer psychology better than anybody I've ever seen before. So, uh, guys, if you were about to be introduced to Bob Iger, how would you introduce yourself? That's what I want you to do in a minute or less. So brag as much as you can in the intro. I'll give you an example. My name is Nik Sharma. I started my career doing social media for celebrities when I was bored in high school. Then I joined an ad tech company and I started spending about a hundred thousand dollars a day, uh, to slideshow, slideshows on websites, doing display ad arbitrage.

• 6:44Speaker 02

  After that, I joined a beverage company and that scaled to 40 million a year in revenue just on D to C. And then from there, I started a business called Sharma Brands, which is where we work with brands like Jolie and Feastables, all the way to Bacardi and Crocs. So that is my Bob Iger introduction. Mois, why don't you go first?

• 7:03Speaker 03

  Sure, Bob, that's a great question. I've got a great response, which is if you're shooting another Aladdin, I should be your Prince Ali.

• 7:14Speaker 03

  I would say to Bob Iger that I was an attorney for a couple of years, realized that wasn't for me, started an alcohol business based in New York City for a couple of years and sold that to a family office and then started a deodorant business, where we were a direct, we were a direct-to-consumer deodorant business for a few years and sold that to Procter & Gamble. We were P&G's first acquisition in a decade and the only one that has met, you know, forecast, acquisition forecast in 30 years. And that's what I tell them.

• 7:48Speaker 02

  Let's go.

• 7:48Speaker 04

  You're hired.

• 7:52Speaker 02

  Juhi?

• 7:53Speaker 05

  So usually when I introduce myself, I say, hi, I'm Juhi, and I spend a lot of this company's money.

• 7:59Speaker 05

  But then I get a look and I'm like, but I will actually make you a lot of money.

• 8:04Speaker 05

  I've been in performance marketing last 10 years, mostly focused in celebrity fashion. I think spent up almost a billion dollars in advertising at this point.

• 8:14Speaker 03

  Did you say a billion?

• 8:15Speaker 05

  Close to a billion, yeah.

• 8:16Speaker 02

  Wow.

• 8:16Speaker 05

  Over, over years, but yeah, yeah, yeah.

• 8:18Speaker 04

  That is a lot of money.

• 8:20Speaker 05

  But yeah, definitely like grown, grown these companies significantly as well, utilizing paid, paid ads and CRO and things like that. So, yeah.

• 8:29Speaker 02

  Ryan?

• 8:30Speaker 04

  Hey, Bob. I started my career at ICM. I became an agent representing actors for about 10 years. And then I got tired of babysitting very wealthy actors. So I went and became a brand marketer for a small sneaker company called Puma, where we leveraged a lot of entertainment and content to grow the business. And then I got tired of giving all my good ideas away to a company that didn't appreciate them. And I started my own company called Greets, which I sold to Steve Madden in 2019. And then thought the most natural progression from footwear was into the beauty space and started Jolie, a beauty wellness company that purifies your water for better skin and hair.

• 9:16Speaker 02

  How many people here, raise your hand, use a Jolie showerhead?

• 9:20Speaker 04

  Zero.

• 9:21Speaker 02

  No wonder you guys are so ugly.

• 9:22Speaker 05

  One.

• 9:23Speaker 04

  We are failing so bad. It's all men here.

• 9:26Speaker 03

  You gotta look at it the other way, which is you can get all of the other customers.

• 9:29Speaker 02

  This is opportunity.

• 9:29Speaker 04

  Who raised their hand? It's a woman? There's a dude right there? Three. Okay. I gotta go. I seriously, this is a horrible.

• 9:36Speaker 05

  I'm definitely gonna buy one after this conference, so.

• 9:39Speaker 02

  Amazing. Alright, so the idea here, we've got, I think about thirty or forty minutes. It'll be conversational. So I'm gonna ask you guys each questions, but if you wanna jump in or counter a point or add to a point, feel free to. So, boys, we'll start with you. In 2017, you were running your own Facebook ads. Your revenues were tens of millions, and your marketing team consisted of pretty much yourself and maybe one other person. You clearly had an understanding of what people needed to see in order to make a purchasing decision. How has that evolved today, and what advice would you give the brands you advise?

• 10:14Speaker 03

  Um, that's, all of that's true. Our marketing department was one person, we were dependent, you know, a lot on social media advertising, and it was incredible. And people are always like, "You started native during the heyday of Facebook ads." And I remember talking to, they were like 25 to 2017, anybody could run Facebook ads and make a fortune. And I remember during the, like, you know, when we were growing our business, I talked to the guys who started Harry's, and they were like, "Yeah, in 2013, when we were running Facebook ads, we saw four-dollar cacks." And that was the heyday of running Facebook ads. Then it was 2015, you know, I know brands who were spending a million dollars a day in 2020. I know brands who were spending $500,000 a day, and Joey might be spending $500,000

• 10:59Speaker 03

  a day in 2023. And so I think there isn't a heyday. Like, everything still works. You just have to be better at it than you were five years ago. Like, you know, there's a great line in The Wire, which is one of my favorite shows, which is, "The game is still the game, it's just gotten more fierce." And that's what advertising is like. And if I were to talk to brands today, or brands that I'm advising, I'd say, "Hey, you really have to look at this as a more complete picture today than you did five years ago." You can't just, you can't just- Run on Facebook and expect your business to blow up. I bet Ryan does a bunch of stuff where he gets influencers to talk about his product. I bet he's got a bunch of people to do YouTube videos about his product. Because what happens is somebody who finds a product on Google

• 11:44Speaker 03

  or through a Facebook ad is going to go to YouTube and look for real people who are using it. And they're going to want a video review of it. And that's something that really wasn't possible or something you didn't think about in 2015 or 2016 or 2017. So I think the game has changed and you have to be more adaptable. And you have to think about a lot more channels than you did five or 10 years ago. But it's just more fierce. It's still the same game.

• 12:10Speaker 02

  On that note, Ryan, when you were running Grates and even till today, every time we talk, you say Facebook ads are a scam. Don't trust Facebook ads. They're a scam.

• 12:19Speaker 03

  Wow, you say that?

• 12:20Speaker 02

  No way.

• 12:20Speaker 04

  Mois and I disagree on Facebook so hard, it's not even funny.

• 12:25Speaker 02

  So, wait, hold on. So this year, according to LinkedIn, your own post, you'll do $30 million. The business launched in 2021. You have one full-time employee outside of the two founders. Oh, now two?

• 12:38Speaker 04

  No, including Argent. Yeah, three in total.

• 12:40Speaker 02

  All right, three people in total. You have 10,000 pieces of content that have been created just this year.

• 12:48Speaker 02

  And you only have 31 ads that are live in Facebook. So where?

• 12:51Speaker 04

  We actually have 31 ads?

• 12:52Speaker 02

  You do, yeah.

• 12:53Speaker 04

  As of when?

• 12:54Speaker 02

  This morning.

• 12:55Speaker 04

  So we had turned off Facebook altogether 100%, zero Facebook in June. And I just allowed the marketing team to put them back up, cost capped.

• 13:05Speaker 03

  Who's the marketing team? There's three people.

• 13:07Speaker 04

  We outsourced that part of the business.

• 13:09Speaker 03

  Okay.

• 13:10Speaker 04

  So it just went live yesterday.

• 13:12Speaker 02

  So, okay, so then where and how are you building this business to do 30 million this year?

• 13:18Speaker 04

  We really believe that people influence people, not digital ads, particularly those on Meta. We proved that Meta is highly inefficient, although not zero. And there are just better channels. The challenge is they're not measurable. So because we have 10,000 pieces of content this year created by actual customers, last year was about 5,000. That really was the spark that got the word of mouth flowing. And word of mouth is not new. It's been going on forever in marketing. It used to be done differently. Like, some kid in high school was cool. He wore a certain thing. Everybody wanted that thing. That's word of mouth marketing.

• 14:01Speaker 04

  That's not scalable, but the effect layers in a starting point for us to then spend money. We were focused on profit. Our business, like Nick said, launched last year. We were profitable in the first five months or in the fifth month of business. And have always operated the business to a first person purchase profitability. We could not figure, we couldn't make Facebook do that. So we, we let users do our marketing for us, which we still feel is the most powerful, although admittedly the least measurable. And then that allowed us to spend efficiently across a variety of channels.

• 14:43Speaker 03

  How do you generate 10,000 pieces of content a year? So you're letting your users do your marketing for you. What does that look like? Tell us the.

• 14:51Speaker 04

  It's a mix of just customers creating content because they're so excited about what it's doing to their skin, their hair and their health, that they just want to share.

• 14:59Speaker 03

  Are they incentivized to do it?

• 15:01Speaker 04

  Not at all, no. But then there's the other part of that, which is just content creators. We, we will send a Jolie to anybody that asks for one that has a legitimate account, whether they have 100 followers or a million followers. And we, we are very fortunate in that for every 10 units we send, seven get created, seven pieces of content will get created. So that's a pretty big hit rate. And we don't think that would happen in eyewear or yoga pants or sneakers. But for us, as a category creator, providing the value proposition that we do, we have that hit rate. So it's, it's worked really well.

• 15:39Speaker 02

  Juhi, on the other hand, you know, Fabletics did 700 plus million in revenue last year. The collective of companies is probably top five advertiser in the world in terms of deploying media dollars. Where do you see the biggest opportunities or growth levers without seeing a decline in performance?

• 16:00Speaker 05

  Yeah, I mean, so we're fashion, so it's very trend-heavy as well. So I think it really helps that we have new collections coming every month. So that keeps things exciting. And I also think, you know, like, Fabulous has just done such a phenomenal job with celebrity partnerships. That's kept things really interesting as well. So we recently did a collaboration with Khloe Kardashian and, you know, people loved it. So I think outside of just paid ads, you have to have some of that excitement and differentiator. Because otherwise, you're just gonna find 20 different Amazon dupes of yourself out there, so.

• 16:34Speaker 02

  With the celebrity partnerships, you know, you've done Khloe Kardashian. You have ads that constantly run with Kevin Hart. You have the brand that launched with Rihanna, Savage x Fenty. What did the celebrity partnerships do for the brands that would have otherwise costed tons of money? Like, did it save you money? Did it get you in the right... Did it open the door for the right opportunities? Like, what did having a celebrity do for you as a performance marketer to grow the brand?

• 17:00Speaker 05

  Yeah, I mean, the halo effect is always there, right? Because they also have their own audience, which is pretty large. And then it also gives you legitimacy. It gives you some of that influence and stuff that they have. So that definitely helps. It makes you cool. So it's been, it's been really great to have that.

• 17:20Speaker 03

  Is it primarily an upfront cost working with celebrities like that? Or is it primarily a residual cost?

• 17:26Speaker 05

  Yeah, so I mean, there's different deal types. And I just, I don't speak for just Fabulous. It's like, everything in general. I mean, you have the flat fee cost, which you can work on. You have the flat fee plus equity, which is new. Now people have realized the value of equity. And then the third one would probably be flat fee plus a percent of unit sales. So there's various options that you can work with them on.

• 17:47Speaker 03

  Which one do you guys do the most?

• 17:50Speaker 05

  I actually don't.

• 17:51Speaker 04

  Should I do that?

• 17:53Speaker 05

  I don't have the full details of that, so yeah.

• 17:56Speaker 02

  Ryan, when you were managing celebrities back in the day, which one would you have chosen?

• 18:01Speaker 04

  Which celebrity that I represented?

• 18:03Speaker 02

  Uh, yeah, like which deal type would they choose? Is it cash only, cash and rev share?

• 18:08Speaker 04

  Yeah, no, it would be more performance based, less, at least cash, more performance. And unfortunately, you know, in, in the creator world, that is an uncommon, uh, structure, which sort of tells you how valuable they feel they are, right? You can, you should structure it where you can make a ton more money if you sell more product. Most content creators won't want to take that deal, and I think that's a part of the problem with the industry.

• 18:33Speaker 02

  So if we look at, like, everybody here has a Liquid Death can of water. Liquid Death aspires to be anywhere where, where people are feeling happy, entertained, or, uh, you know, basically wherever the party is. Companies like Hims and Roman, you know, they've done a great job in the early days, taking over, you know, the, the area behind home plate, or subways, or a plane that, you know, basically says, we sell dick pills. How important do you think picking a lane for distribution is and staying within that? I feel like with Jolie, you guys have really picked your lane as your, you know, your everyday customer versus going in, like, Jolie's big enough to be spending almost anywhere, but you've pretty much focused on customers. How important is that? And why have you chosen that one lane?

• 19:17Speaker 04

  In terms of where we spend money, or how we are perceived as a brand?

• 19:21Speaker 02

  Both.

• 19:22Speaker 04

  As a beauty wellness company, we wanted to make sure we showed up in that lane. So we, we wanted to make sure that we were not perceived as a piece of hardware that pushes out water, which is what a shower head does. We provide a utility that improves your quality of your skin and your hair. Beauty wellness hardware, not shower hardware. So we had to differentiate that way, and that was going to be in terms of how we showed up, where we showed up. You know, one of our biggest accounts is Air One. I was telling you this earlier. We went live in all doors of Air One in May. They've reordered every single day since they went live. That is not an overstatement. They have no room for storage, so they can put 10 units per store and every day they buy another 10 units.

• 20:05Speaker 04

  We've never seen any performance thing like that at any retailer. So showing up in the right place was really critical, especially in the early years. Now we can start to expand out a little bit. But we're still currently to this day, you know, we're on Revolve, we're on Blue Mercury, we're on Nordstrom's and Saks, but we're in the beauty section and we're going to retain that for the rest of the year and then we'll go a little bit wider. In terms of how we market, 70% of our audience is women, which frankly, personally, I was surprised. I didn't think we'd get 30% men. So that early data point sort of changed the way we marketed because it's not just women that are buying Jolie. And we see a world where it's going to be 50/50.

• 20:50Speaker 04

  Men shower every day, or at least you should. And they appreciate the benefit, they appreciate that benefit. It's a really convenient way to improve your skin and hair regimen without doing anything different. You're going to shower anywhere, you might as well make the water better.

• 21:06Speaker 02

  Mois, Ryan talks about getting into Air One. You held off on all retail until post P&G acquisition, which was probably one of the many reasons they bought the business. If you were to relaunch today, would you still hold off on retail that long?

• 21:22Speaker 03

  Great question. We held off on retail for a couple of reasons. One was we were trying to do a just-in-time inventory. You know, when we started the business, we were ordering 500 units of deodorant a week and within 18 months, we were doing about 21,000 units a day. And so we had a hard time keeping up with production that we needed for our own website. And that was one of the reasons that we held off on retail. I think today, you know, I would lean into it much, much sooner because I think that like the path for an omnichannel brand in 2015 really hadn't been paved. Only Harry's had done it before. And today, Harry's has done it, Quip has done it, Native has done it, Manscaped, so many

• 22:06Speaker 03

  brands have sort of walked that path where you know what to expect, you know what the retailer is going to want, you understand the exclusivity they're going to want, you understand what the terms are going to be like. You're not a pioneer and I think it's always... A little bit scary and a little bit profitable to be a pioneer. And I think that we did it at the right time for us. Today, I'd be like, you know what? I know a little bit more of what to expect and how to handle this. And I have a little bit more belief in my business. And we've got a lot more cash to be able to invest in inventory. And so I probably would have done it sooner. I'm curious to hear when Jolie will be available in Home Depot then in your head. Will it be 2025 or is it too soon because it's a beauty and not a?

• 22:48Speaker 04

  I think we've proven that we're a beauty wellness tool. So we and and we did that without Ulta and Sephora, which originally I thought we would need.

• 22:56Speaker 03

  I think you've proven as well. I'm just curious, when do you see Home Depot as being like, we've got to unlock this?

• 23:01Speaker 04

  2025 would probably be the earliest. But I can see myself showing up in Costco sooner. Because if we look at the customer profile, moms are going to Costco and they're spending a lot of money. They spend a lot of money every single week. And there's 300 million showers, residential showers in the U.S. That's a lot of showers. We can capture a lot of that audience in Costco. The challenge with Costco, as you mentioned on your last pod, was they're just really good. Their membership program is means that you're giving it to them for less. Full stop, that's it. We've done the math. The business is profitable day one if we go to Costco and the reach is massive.

• 23:44Speaker 04

  It just the size of their business is so enormous. It would dwarf the best year we could possibly do at Sephora and Ulta together in one year. So as a profitable business that we have that sort of luxury now to sort of pick and choose where we should go. And we might as well go for the most profitable scale channel out there.

• 24:05Speaker 02

  Juhi, today, Fabletics has 95 of its own retail doors around the country.

• 24:11Speaker 02

  Opening those retail doors as a brand that's doing hundreds of millions of dollars, what did that do for the brand in terms of allowing you to expand on marketing, or building the brand, or bringing new people into the ecosystem?

• 24:23Speaker 05

  Yeah, it's a good question. So I think some of the advantages of starting first as digitally native is you know where your customers are, you have all these other extra data points. So that really helped also with like where exactly to start opening stores and things like that. I also think like just, you know, it tremendously helped from a omni-channel point of view because like we're a subscription model. And so it's pretty easy for our members to go in and do returns, exchanges, things like that, and then like touch and feel the product. And they can still buy the product at their membership prices. So it just gave them an extra touch point, which really helped as well. And then I think also from a brand awareness standpoint, it was tremendous because when you actually see a brick and mortar storefront like that,

• 25:05Speaker 05

  it's like, well, this is legit, not just like an online brand. And then they can touch and feel the product, which I think is massive. So.

• 25:12Speaker 02

  Mois, I'm only 27, but my grandchildren,

• 25:18Speaker 02

  my grandchildren are gonna know about Native because it's still gonna be in the store and it's still gonna be selling at high velocity, just like a Tide or Old Spice will at that time, too. What do you think are the characteristics of a brand that lasts 100 years?

• 25:32Speaker 03

  That is a really good question. You know, I didn't, I wasn't a good CEO in terms of like being a good boss to the people that worked with me. But I still remember the, like, we'd have these quarterly meetings and I would say Tide was launched in like 1946, and in 1952, became the number one selling laundry detergent in the United States, and it has never lost that mantle. And when people think about Tide, they think about their mothers doing their laundry when they're kids and like playing in the yard, and their mothers pampering them and treating them well, and, you know, putting their clothes away in their dressers. And I was like Tide isn't

• 26:13Speaker 03

  a laundry detergent, it's a family brand. And that's what Native has to be. It has to be this thing that when you use it, you think about your Family and health and wellness and not just smelling bad. In fact, like you have to think about what this means and what it represents for your health. And you know, you're you're investing in your body. And I really tried to convince. When we were marketing, I was like, that's how we're trying to sell this product. We're not selling you a product that's going to make you smell better. We're letting you invest in your health in a way that's going to affect you and your family for the next 50 years. And so that's what we were trying to do. The other thing I would tell our customer service team in particular is I was like, look.

• 26:56Speaker 03

  One time there was a British prime minister named Margaret Thatcher, who somebody this like Irish terrorist group tried to assassinate her. And they blew up a bridge and they missed. And they called up the prime minister's office and they're like, you were lucky this time we missed. You have to be lucky every time. We only have to be lucky once. And then we're going to get your prime minister. And I was like, we we are like the British prime minister. We have to be lucky every single time you interact with consumers. You've got to think that you're representing this brand and you've got to realize that, you know, thousands of hours of work have gone into this brand, both by me, but also by your colleagues here. And so every time you talk to a customer, you've got to think about how important the, you know,

• 27:39Speaker 03

  how important your colleagues are to you and how important this brand is. And so you can't be mad at somebody and talk to talk about the brand. You've got to represent it and treasure it in a way that, you know, will last 100 years.

• 27:53Speaker 02

  Ryan, with with Jolie, which is essentially a hardware showerhead. Showerhead plus a filter. You position this as a beauty tool versus something that sits in Home Depot or Lowe's. What was the reason behind that?

• 28:07Speaker 04

  Multiples?

• 28:10Speaker 04

  Not not entirely, but.

• 28:13Speaker 04

  Partly. You know, we really, if you think about the bottled water business, and you mentioned Liquid Death, 40 years ago, there may have been two or three bottled waters on the shelf. Today, you go into a store, there's hundreds. It became the norm to drink bottled or filtered water. We believe that everybody in the US is going to filter their shower water at some point in the future. I don't know if it's five, 10, 20 years. We're the market creator of that. That is not just a piece of hardware. That is an essential beauty wellness tool. We call it step zero. No matter what product you're using for your hair and your skin, if your water is contaminated, and sadly, all of it is, then you're starting at a negative.

• 28:56Speaker 04

  We want to bring that negative to zero, and we're going to be the first to do it. And then there'll be many, many other competitors. And that 300 million showers in the US will be, hopefully, number one, Jolie, and then a bunch of other players in the space, which you would expect. It's a really big market. But that's how, that's why we positioned it that way. If, you know, we do a post-purchase survey. The number one shower brand in the world is Kohler. They're a $11 billion privately owned company. Kohler is the dominant player. When we survey post-purchase, we ask, what brand of shower are you replacing with Jolie? 40% don't know. They don't even know the brand of showerhead they have, which is an amazing opportunity for

• 29:39Speaker 04

  us. It means we can brand the space where 40% of those 300 million don't even know. The other 40% are Kohler. And to disrupt 150-year-old privately owned family business in a year and a half is pretty powerful. So we feel, we have a long way to go, obviously, but I think we're on the right path on how to build a legacy brand.

• 30:02Speaker 02

  With Jolie's marketing, whether it was intentional or not, there's basically this formula that I see, which is, if you use Jolie, your hair, skin, and nails will become beautiful, stronger, healthier. If you stop subscribing, you'll get ugly. This, I think, has contributed to your churn of 0.6%.

• 30:23Speaker 04

  No, no, no, no, I have to correct that.

• 30:24Speaker 02

  Okay.

• 30:25Speaker 04

  It's 3%.

• 30:26Speaker 02

  3%?

• 30:27Speaker 04

  Yes.

• 30:27Speaker 02

  Okay, 3%, which in comparison to Netflix, which is, you know, the world's greatest churn system is at 2.5%. How do you think your, you know, how have you built subscription in a way that it is competing with Netflix in a year and a half? And is that formula a reason as to why it does so well?

• 30:47Speaker 04

  I don't think it's the formula of the content. I think it's the efficacy of the product. It really does that. We have, like I said, thousands and thousands of customers that create content of what it does. So this is what my hair looked like before I used Jolie. This is what it looked like the next day. That's a really powerful statement. So when somebody sees an improvement in their skin and their hair, which is, you know, vanity is a major driver for all of us as humans and then consumers. And when you can, when you can add value to that, to vanity, you have a really powerful product. It's why beauty is so strong. So back to the, you know, the multiple thing. The reason beauty companies get bigger multiples is because of that.

• 31:32Speaker 04

  And we think the beauty industry at large has overlooked the number one source of many of the problems that they've been prescriptive about. You have dry skin, use this lotion. You have frizzy hair, use this treatment. You have eczema, put this on. So many of those literally start with the water you shower in every single day from the time you're seven till you die. And we just couldn't believe that the entire industry ignored it. And that's where Jolie plays.

• 32:01Speaker 02

  Juhi, the founding team at Fabletics has a ton of brands. Savage Fenty, Fabletics, FabFitFun, Just Fab, Shoe Dazzle, Yidi, et cetera. The, the subscription model is so common across all of them. Do you think that that's a model that can be replicated across other industries? And if so, how?

• 32:23Speaker 05

  Yeah. Okay. First of all, they don't, uh, FabFitFun is not part of it, but, um, Yeah, I think, I mean, I think it's pretty incredible what they've done with the innovative membership model and how much it's scaled with an apparel. I definitely think, yes, it can be across other industries too, especially CPG instead of nutrition and things where you actually need it. I think the most valuable thing that they've done is just how they've made the membership very valuable over time. So like, you know, like Fabletics, for example, just continue to introduce new categories and things. So now you have more to shop for and you have more access. So, you know, we initially started with the women's line, then introduced the men's line, started the shapewear line, and then this year even have Fabletic scrubs.

• 33:08Speaker 05

  So we're trying to be like your house for everything, you know? And then it's like, I like how our co-founder describes it because he's like, it's like walking into your favorite store and having 20, 30% off at any given time. So that's a special perk. You get early access to drops, things like that. So just trying to create more value for the membership over time.

• 33:28Speaker 03

  How does the membership work with an in-store model, actually? So like, do you have to be, if you're a member and you can only walk into the store if you're a member, or you get a bigger discount if you walk? Like, how does that work?

• 33:39Speaker 05

  No, you can shop as a retail guest as well, like as an on-member or two, but you would be buying at the MSR, be the full price. And if they were doing any discount during a sale period, you would get that on the sale price. So, no, you're not limited to that. But if you are a member and you go in, you still get access to your membership special pricing and things, which you can claim in the store. You can also do your returns, exchanges and things online and then go to the store as well. So it helps.

• 34:07Speaker 02

  Ryan, you've never discounted with Jolie. Why?

• 34:10Speaker 04

  No discounts. Well, in the time we launched Jolie, there was no funding happening for D to C anything. So you were gonna have to figure out how to get profitable really, really quickly. One of the worst best practices, in my opinion, and I've started, this is my second one. So the first one sold, did native discount on first purchase? Probably, it's a best practice.

• 34:35Speaker 03

  Uh, if you, we bundled.

• 34:36Speaker 04

  Yeah, you bundled it, exactly. You want a bigger card size. And these are, these are what we all did. Greats do the same thing. If you just use 20%, you're giving back 20% of your AOV before this customer even starts with your brand, and that is not a good practice. It is not a good practice in brand building. So with Jolie, we just took a hard line that we were never going to do that. So to this day, we have never discounted, not on Black Friday, Cyber Monday, not any holiday, Labor Day. Could I have grown the business faster? Probably. Could we do things that would spike top line but negatively impact bottom line? Yeah, but that's not a great business.

• 35:17Speaker 04

  So we wanted to build a great business and not one that was venture focused. Because venture, are there any venture capitalists here? Raise your hand. Come up here. I'm going to hit you. No, I'm kidding. Venture just has a different agenda, right? Their agenda is very different than building a very profitable, sound business. And after the second, after the first business, as a second time founder, you learn a lot. And our focus was to get profitable and not discounting is one of the, if we gave 20% on $150, that's $30 per purchase that we're literally torching into the air. It's a lot. We have over 100,000 customers, so you can do the math.

• 36:00Speaker 02

  Mois, if you're thinking about future-proofing a business after you've scaled it from zero to selling for $100 million, how would you advise yourself to future-proof your business when you're at $10 million so that at that $100 million level, you know, the things that you wish were done had been done?

• 36:20Speaker 03

  Great question. I think that I did a very poor job of this, but I would say it's hiring really great people. I think the way you future-proof your business is to make yourself not obsolete, because I don't think that's possible or a good thing, but you want to hire people who can run a business in case you get hit by a truck and who understand the brand ethos really well. And I think all of the founders who sort of have stepped down and found another great CEO to run their business is someone who lives and breathes that person, like, you know, that founder's vision. And understands it really well. And it's not like, you know, when Walt Disney died, the Disney board would always be like, what would Walt have done? And that was a big mistake because that ran them into a bunch of trouble.

• 37:04Speaker 03

  And I think it was in Steve Jobs' biography by Walter Isaacson. He's like, don't ever ask that question. Don't ever ask, what would Steve Jobs do? Do what you think is right. I've trained you in a way where your judgment is going to be the right judgment. And I think that's really important is just hiring leaders of an organization that you can trust, that understand your vision, but also understand when to depart from it because there's a unique opportunity or a unique, it's a unique moment in time. And I think I did a mediocre job of that at best. And Ryan, I'm not sure if you only got one employee, how you're doing so far.

• 37:40Speaker 04

  I'm actually doing really well. It was easy. I won higher. It was super easy.

• 37:44Speaker 03

  I think that is really important is to future-proof your business. You should train a generation of leaders that can go after you and do a really good job and execute at a high level.

• 37:53Speaker 02

  Juhi, right now, as of last month, American credit card debt has passed a trillion dollars. How do you think about making sure that you are not slowing down in terms of bringing new customers into the ecosystem? And what are the things you think about in order to prevent that from happening?

• 38:12Speaker 05

  I think with Fabletics is, you know, like, the company was founded with the notion that leggings shouldn't cost a hundred bucks, you know? So we wanted to give a lot of options and variety and fashion colors and things like that without breaking the bank. So I think that gives a little bit of advantage because it's, you know, affordable. And the membership too, you know, like the first purchase that you make, to try the membership, you get a great deal to try it out. So it's like two leggings for $24 when you sign up for the first time. And I think with that, it's just an additional value prop too, right? Especially in times like this. So, yeah.

• 38:52Speaker 02

  All right. Pom gave me the couple-minute countdown here. And so I want to wrap it up with this. For each of you guys, what is one thing that you're doing or you're looking at today that you intrinsically feel is a secret weapon that other people are not doing? So what is one thing you do on a day-to-day basis? Or what is one data set you look at that you believe other founders or other marketers are not looking at that they should be? It could be an unlock for them. Yeah.

• 39:22Speaker 03

  I look at the Facebook ad accounts of probably 10 different businesses on a daily basis totaling a million dollars in spend on every day to have an understanding of like, you know, what does CAC look like? How is direct to consumer doing in general? And I feel like that is a superpower because you're just like, I understand what business, I understand how people are going to feel today because I know what their CAC was yesterday. And maybe I don't know how Ryan's going to feel, he's probably smiling at that, but otherwise, I feel like that's my superpower.

• 39:54Speaker 05

  For me, I think conversion rate is really important, like keeping an eye on it and constantly rating on it because if you're spending thousands and thousands of dollars but your site is like a broken car, then you're just losing all of that money. So just constantly making sure the conversion rate stays up.

• 40:10Speaker 04

  It's probably more what we're not doing because we just don't do a lot of the best practices in the industry. Discounting is one of them. We don't even collect emails in an email pop-up anymore. We turned that off about a year ago. And we saw, you know, my co-founder was like, hey, but everybody else does this. And I'm like, hey, we're not in the email capture business. We're in the sell Jolie business. So let's test this, see what one works better, this one worked better. So there's just, I mean, you know, every different, every business is different, but it's what works for us. But one little hack that I'll sort of just put out, it's not even a hack, it's a, it's a tool. Nostr.ai is probably the most important plugin I've ever used in my entire career. It just, all

• 40:55Speaker 04

  it does is make your page load speed faster, which we all know is valuable. We don't know how valuable until you really see it. We turned it on about four weeks ago. I, I've, again, never seen anything in my life with that kind of value in terms of what it does to page speed and then conversion. And then, of course, the, the longer effect will be CAC, which continues to drop.

• 41:18Speaker 02

  All right. Well, that is all the time we have. Feel free to hit us up on social media, LinkedIn, email, whatever it be. And thank you for the time today.