Unconventional Brand Growth: Lessons from DTC Operators

Introduction: The Importance of Customer Feedback

0:00here's the thing the customers will give you the feedback the problem is listening too much to your return customers what do you mean say we have these insiders who we can put something out and get 10,000 people who tell us what they want but a returning customer who has bought five or six or 10 of our bags wants something different than our new customer so Maverick will actually tell me hey our new customers want this and this and this they will buy this first they will buy this second and after they love us then they want all of this but our people will overread the new bags and the new colors rather than the old ones that work gentlemen will you join me on stage

Panel Introduction and 2024 Overview

0:42let's get into our 2024 has been H it's been a year is what I like to call it [Music] all right thank you [Music] Nick all right who who am I blessed to have up here on stage just go into to out real quick I'm Curtis I'm the founder and owner of Portland leather goods yeah we like that I'm Isaac a founder of mini Katana and another brand called compai Foods love that yes Pap very hey everyone Brian Kano I'm the VP marketing at nude and I'll actually be transitioning to v head of marketing at true classic effective next Monday congratulations I'm Dylan Jones the CMO for Podium nutrition and found ER of Buddy's gum we're pre- rev my whole life savings is disappearing quickly but we'll go to market in December let so cross the Gambit I think there's there's a a good group of different channels different Revenue sources starting out more established and that's honestly the the beauty about how this is structured and so a lot of the

2:18questions I have it's going to go across very conversational but it's going to start out with a very specific question overall so these ones are very intentional for everyone to kind of go towards I'll be throwing it back and forth none of them have seen any of these questions they have no idea what they're about to come their way but nothing's too spicy to where we're going to have to like cut anything out when we send these recordings first I just want to know just I'm going to start down on the podium what does current marketing mix

Marketing Strategies and Channel Mix

2:45look like and is this going to change coming into Q4 yeah great question had meetings about it this morning so this year is a big retail expansion for us what that means is relying on fundamentals of Market marketing storytelling getting away from meta as a business model so our marketing mix has shifted largely into athlete first when we think athletes we're not thinking like direct response kind of affiliate Army we're talking like who is the Kobe in the space of CrossFit we started in CrossFit that's where we're kind of born and bred and expanding into other kind of sports there so we have a really unique kind of spend there we invest heavily into into the actual athletes what they're doing and telling that story and then wherever it's cheapest to our most targeted consumer is where I'm spending the money right now because we're still operating off of a lock we haven't raised interesting yeah it's for a Q4 is it going to change like any of the allocation yeah we'll do

3:39some performance stuff just to help clear out of inventory with the retail expansion we have some SKS that we're like okay we bought a little bit too much here like let's start peeling that stuff in so we're doing like a lot of direct mail actually with post-pilot post-pilot we're seeing good numbers on right now we're going to invest heavily into that in Q4 heavy into app pushes and app sends and and app promos stuff like that yeah beautiful I and then Brian what does Channel mix look like for you Channel mix for us is pretty relying on meta as as it is for a larger a lot of Brands we've had a lot of success success with Tik Tok as well and we are starting to really amplify and invest a lot into influencer Partnerships that then are turning into Whit listing for augmenting our content engine so I think that's kind of where we're seeing a lot of alpha is just authentic reviews we're literally not giving any scripts it's just here's

4:32the product we're going to compensate you for your time please tell us what you think about this product and as simple as that we're getting some serious storytelling that is being portrayed in a very authentic way and that's helping us scale and find some new opportunities as well and then in terms of new activities we're just starting to think about activations and thinking about ways that we can bring the digital presence of the brand into a real life experience especially as we EXP expand in Target and in retail thank you do you mean Tik Tok shop or like Tik Tok ads Tik Tok ads however in the past like 60 days the ad side has actually been really struggling so we're looking at our creators our influencers and then getting them enrolled into Tik Tok shop we are seeing a lot more success with shop it's I feel like there's an issue or some sort of policy error every other day that we got to like course correct and fix but it does feel like

5:28Tik Tok as a plat is investing and putting more Less ad load on ads and putting more Impressions on the shops true classic is probably the only one that doesn't do like a lot of like founder Le type of content you guys have a lot of like core athlete they're not necessarily founder area but they are pushing that area yeah that's something I'm actively trying to work against actually it's like to get away from it yeah 100% so you know CrossFit total total Market of crossfits very small but it's a very dedicated Niche and so if we keep telling the story of like we're the only the Matt Fraser brand Who Matt Fraser one five times raise your hand if you know what CrossFit is yeah okay amazing you don't speak about CrossFit unless High household income people who can usually afford to work out at noon like that's the CrossFit market right you guys are not normal people though right normal people don't come to San Diego to listen to marketing talks so the the Market's actually pretty small

6:16so we're going more towards diversifying outside of that and away from just this founder Le message yeah do you have any founder Le message I'm not on any videos our marketing makes organic so it's like 60% YouTube 10% Tik Tok 10% Instagram and then the rest is SEO do you have to choose the type of person in the content that matches most to who is potentially buying it or you kind of like I just want a good Creator and a good actor no I mean we're we look for talent like there and on camera being good on camera is part of that Talent right but being able to make a good video as a core skill set I think I will say our creators happen to fit our demographic like they're young dudes right for the sword business that's all the entire customer base is young men yeah for the candy business

Community Building and Customer Engagement

7:05it's also all organic which is like again again YouTube Instagram we're actually ignoring Tik Tok for the Kandy business interesting I think for the on the Portland side of Le is it a lot of founder work is a lot of product Le like how do you mix the two of the story cuz a lot of like where you're made is important you know we started with me making a leather journal in my garage and I thought I was so cool I just like showed it to I I think my neighbor owns it cuz I like sold it to her and so when we started the first year it was all about artisan and founder like we're so great we're going to take this leather and make your product for you and that kind of wore out after a couple years in scalability like we wanted to go 50 million 100 million 200 million on the on that story no no when we capped out of about 20 million on that and then we kind of realized that we had to ship

7:56that and our clients were going to be the heroes rather than we're [ __ ] cool because we make your product you're cool because you own our product and changing the story that you're talking about to the people who are buying it allowed us to create one of the most vibrant online communities the the plg Insiders it has hundreds of thousands of people who are just rabidly buying our stuff cuz that's about them they tell the story better than we do we're cocky if we think we can tell that story as well as our customers our millions of customers who are buying our stuff that was really the trade-off there that we were able to shift that I don't know if we intentionally did it I like to look back and think that I did but really we just kind of felt that the artist thing was running out and our people just had better stories than we did so if you if you're going to have two men or two women go shopping it's the woman next to

8:49them that convinces their then to buy the product 100% so they go out they're like I don't know if I want to buy this so now we created this community where people say do you think I should buy this and a thousand people say yes my my husband doesn't want me to buy it oh you need to buy that and they're like thank you for giving me the okay boom so they buy that so us getting back from that story and letting them take the front that was really the key this has been the scariest part of like wanting to build a community cuz if you build a community you have to manage the community and if the community gets too big then you have to try and steer the community which as you moving away from the CrossFit the true classic is that's built on men feeling this is this is a p this is not what you told me this is what my perception is is like men feeling more confident in this shirt I'm

9:34going to go do and attack this like that's a community around it I think you're the mini Katana Community everybody you love that Niche you're in that Niche you against that Niche when it's so big do you steer it so do you steer with product we took our insiders from something called the groupies there's like 5,000 people who were doing this and we're like do we but we didn't have anything to do with it we like do we kind of steal that and create our own thing and we debate about it we set it up and so we're like well here's our side of the story and they just took off we have six full-time people that are working on that and they are 7 days a week 12 hours a day commenting on everything and it is staggeringly big and we couldn't have predicted that but once it grows you throw gas on it and let it run wild yeah you yeah why are you y yeah because you're hitting on a point it I think we obsess over the hook

10:29like what right now it's Tik Tok shop right everyone's talking about Tik Tok shop 3 years ago is like meta and what you're talking about like pouring gas on it is that's a strategy that's a framework for going this is working pour gas on it now but that doesn't mean it's the whole strategy right like how do you win a boxing has anyone in here boxed or played okay how do you want a boxing match it's the jab you're constantly pressuring you're constantly this is fundamental marketing right and when something works and you realize oh every time I do this he drops his guard a little bit and then you throw the hook that pouring gas on the fire knowing when to do it and resourcing for it is the most important decision but you it's not the only decision right yes but it's not a strategy for me it's a personality thing I like to try [ __ ] when it works I just want to do more of that like I've got that behavior of like I want more of

11:14that and the first question you asked that I didn't get an answer it's like what type of marketing do you do we're a marketing company people say what do you own I own a marketing company not a leather goods company right the thing is I brought on my staff and if you've met Scott if you've met McCoy if you've met Matt you know they're [ __ ] good at what they do what we do is if we want to make $200 million I give them a 20% M I said here you guys go here's $40 million hit your goal and they never miss their goal so I said great let's do $ 150 million here you go you got $30 million to sell and they're going to spend 90 plus% on meta they're going to and Google that's it now they're going to play around with other things but when it's working that well they're like why are we playing around with these other ones let's let's just keep turning it up that's true and

12:01I think at that size like a lot of people the smaller you are the more channels you chase to see if you can get the outbreak that you need to get more dollars to reinvest in the channels that everybody like us are talking about is go to meta go to Google go to these other places so I think that the smaller areas are trying their hardest I had a conversation yesterday about Amazon the guy's like dude if I wasn't in Amazon already I wouldn't be in Amazon now they're just saying that they're not looking at their Channel mix of D Toc and Amazon as wholes s so I have a question for all three or all four of you guys is when you look at the traditional channels that we're thinking about meta Google Tik Tok how do you think wholesale or marketplaces play into that is that is that factored into how you're doing go to market at all guys I'm good at awareness marketing which means retail is the best possible channel for a product for me to launch

12:52into right like we have tried ads and intuitively doesn't click with my team because we built such an organic team like they don't understand why would we throw money on meta when we can get another Creator on payroll and rev up a new organic Channel like the team just doesn't get it so when you're doing kind of mass awareness marketing like that impulse retail really shines for you because all you need to do is be more recognizable than your competitors yeah do you try to control that through digital sorry are you can you control that through digital go buy here yeah I mean we can say what stores we're in but like like ourg goal is like every young person in the US will know what the candy brand looks like they know what the panda looks like that's why it's so distinct and then when they go to a Target or Walmart they're eventually going to be like Mom I know what this is I want it that's how we win right that's the way I'm thinking

13:50about marketing for the Kenny brand I think if you're like if you're in a in a niche or like a smaller T not a mass temp category you have to get more strategic in that but that's why like candy has worked so well for us because we can just Spam viewership and awareness and it works really well this is a little bit of a pivot

Innovating for 2024 and Beyond

14:09into like where we think Could Happen 2024 2025 of like being an innovator in your guys' respective space it's how do you think about new products coming in especially as like the way we're buying has continued to change so I'm going to go two three Ryan four so our space is ruled like Sports Nutrition is ruled by rtds right and it's a blood bath like it drink bever RTD is ready to drink ready to drink energy drink Monster Rain Etc it's a blood bath it takes a lot of cash and it like liquid deson series XYZ right now whatever right like it just it takes a lot of cash to do that well and so our thought is like well it it's also the biggest driver of brand in hand so we're talking about distribution of attention we're talking about distribution of brand how fast can we get a logo recognizable that's the heartbeat of marketing right can I make this recognizable at any given time in any given Market that that's the win and

14:59so we've started innovating towards that so we just launched like a cookie for instance so we used operations as our mechanism for marketing and going okay well instead of putting a tub in your pantry of protein at 30 servings or whatever can we actually have you spend less dollars and Tack it onto baskets that matter more for us to be affiliated with so please go buy ghost but also have this Podium cookie in your basket too at GNC at vitamin shop at Target at wherever that's super important for us so I think like innovating on the product to distribute brand is an Arbitrage that not a lot of people talk about and that's one thing that we're focused on this year an idea my team had this was like last week is I hate Tik Tok shop like personally I think it's not a sustainable Channel you know Congress passed the bill like I'm not looking at that channel but if we were to launch on Tik Tok shop we would make the product free and sell small packs

15:46because now you're just doing sampling to the masses right and like you're getting a ton of views in exchange for that as well so it becomes like this really cheap Mass awareness Channel because a Tik Tok shop algorithm is actually it's tuned to get you to purchase stuff so it's measuring convergence it's not the same algorithm as like a YouTube short where it's like about retention you know swipe away rate and the overall quality of the video they're actually looking at how much people are buying off the video so if you can do like a mass sampling campaign from that that just converts because it's literally free boom well I really lucked out when I started I actually went on to Alibaba to like find a Le journal to buy and my girlfriend said you'll hate that you will hate selling something that someone else has made for you true so I made my first one and everyone said is this your passion I'm like well I like what I do I mean it's amazing running this company

16:38but we started producing in then in Portland then we went to Leon wanat Mexico and now we have the largest leather bag Manufacturing in North America it's 240,000 Square ft of facility and we'll next year we'll be making 100,000 bags a week just for our brand so what that does no that's good what that allows us to do is it allows this guy who's the head of my marketing his name is McCoy Merkley is's going to be talking later that dude is calling me up six times a day saying this aspect Works our best sellers have two sizes our best advertis means have the ability to sell something at $88 or $99 so don't get me a $150 bag I want to have an ad that's do it at 99 and we work together so we're a marketing company so I literally create what we're going to make I have one of those Willy Wonka offices where I stand up and I can look out and see this huge manufacturing and I put the lines near me that are the

17:36most important for our marketing and Matt will call me up and saying when is that Meadow Metro bag coming and I'm like dude I do I see it in the line that means it will be in Dallas Texas in 8 days so we can actually take that because when you're marketing really successfully on meta you'll have an ad that just takes off right and so all of your prediction and your models are wrong oh we're going to sell 80,000 of these oh no we're not we're going to sell 20,000 a month well you need to pick up production really fast and if you're ordering that from China or Philippines or Myanmar you're getting that at 8 months yeah and they are like no no we cannot that adset cannot be turned down that is the valuable real estate so what we did non-traditionally is we locked out by creating our own manufacturing and then getting better at it and it just works really well with what we're doing he said go to the fundamentals what is

18:32more fundamental than manufacturing yeah well you said yesterday you're like I accidentally had to build this too like would you if you would to did you mean you're like I know I need to build the biggest facility because of that speed or you kind of like [ __ ] this is the opportunity no one can do it as well as we can it's just like everything in your business you care more than they do yeah yeah yeah yeah there's a tariff there's a they want to make profit I don't want our manufacturing to make profit I want to get our cost of goods so low that no one else in the world can compete against us that's a good point no it's and I think that's kind of why you did it too right like I and and you can kind of keep some of the stuff proprietary you don't want to give up how you're doing your things so for the candy we manufacture all our freeze red candy in La Mars sidebar why is free why is it

19:18taking off right now why it's a new category for in confectionary like everyone's like what is the last great candy brand everyone thinks about it's like they're all from the'80s s7s like the 20th century like there's been nothing within the 21st century that's like a technological innovation that offers a significant change in like texture flavor profile freeze drying does that so that's why people are freaking out about it because it tastes really good and it's Unique but Mars rle just announced their freeze right Skittle like they're they're releasing one and we actually beat them on the cost profile because we have our Skittles on yeah because they're co- manufacturing it right so that's a massive like that makes my business durable like even Mars Wrigley can't just come in and launch the skew and out you know out price us like that and we're on a smaller scale than you guys we only have 15,000 ft but I'm hoping I'm hoping to get to this level where we're the number one in the North

20:14America that's sick and I think that's the like the ultimate fundamental is manufacturing Brian I don't know how close you are to understanding like the new products that are being launched right now do you have any insight into like how you guys approach it yeah I mean at nude we've been putting a lot of time investing into customer surveys finding out where the Whit space is I think that a function of just product marketing and growth when we think about growth we're always thinking about like new channels advertising marketing but thinking about growth in the sense of where's the whites space in the industry and and getting really tuned into what trends are what trends are happening in your industry are super important so for us we've been we actually just this month launched what we are calling the shave collection we're Reinventing the way we think about shaving coming out with a serum that helps slow down Hair G growth and makes your hair grow half as often or half as fast it's an

21:05incredible way to just increase our tan because nude has been primarily focused on IPO which unfortunately is not effective for everyone you have to have the right makeup of skin tone and hair color for it to really work for you and so this nude Serum is a way for us to double our T bring bring to Market a solution that we can work for everybody and isn't trying to reh shape or sort of replace a daily habit so for us this was really just built around some fundamentals of how do we create a product that is built around daily use how do we build a product that it has a sort of a subscription built into it that's going to bring increase our LTV and I think that's something that when we look at Brands like ag1 have done extremely well it's a product that people are using on a on a daily basis it becomes sort of this routine and and a a ritual and all of that just builds that repetitive behavior that

21:59maintains loyalty and it gets people just hooked on your product so I think moving into like the connection to the customer and how valuable it is if they were to be a part of the the product development we just launched a new skew that we've never done before actually we just launched a reformulation and we did tactically everybody that was like a VIP customer with us we sent them the product first and then the literally right after we're like hey these are the questions we have how did this feel how did it taste and we're starting to to educate them our best that love us the most and they nobody else can get a hold of this stuff and then now as we go live tomorrow on our new launch we have all this initial feedback and data to help develop the product now that's a part of our product launch or product reformulation process do you guys have a way of like seeding or releasing new products to those that are kind of like our ride or dies I see

22:50you nodding I'm going to come to you I'm always nodding true so here's the thing the customers will give you the feedback the problem is listening too much to your return customers what do you mean we as I say we have these insiders who we can put something out and get 10,000 people who tell us what they want but a returning customer who has bought five or six or 10 of our bags wants something different than our new customer so Maverick will actually tell me hey our new customers want this and this and this they will buy this first they will buy this second and after they love us then they want all of this but our people will overread the new bags and the new colors rather than the old ones that work it's almost like don't listen fully that's run general population surveys so still survey your insiders but also partner up with Survey Monkey or sentiment or some of these other tools where you can get a survey of your

23:47general population ask the question have you heard of nude before and then from there you can start to segment out from the people that have heard about you the people that have bought and understand how those questions those those responses might change based on different segments and that's where you can find Alpha cuz like you're spot on you get kind of this confirmation bias where you just sort of drill down and get tunnel vision into this is what we need to build but then you just miss out on all this opportunity all this white space in the market building to just what you've acquired so far this has probably been the biggest roadblock we've had where like okay we need to keep going this non-alcoholic Direction and we send a feedback like dude we love it because the first product has changed their behavior cuz they were drinking alcohol and they were drinking a certain thing and then we keep sending it to those guys and just like send me whatever a I want free product B I want

24:34to just Contin to do this and get this feeling so I think this is a I didn't think about going very broad or public to get cuz we might be in a very small bubble of people that appreciate this non-al kind of approach to it or freeze dried candy or Lether Goods or the types of nutrition so that's that's something very interesting any any

Q&A Session: Insights and Advice

24:53questions from the audience I want to kind of go back and forth on yet can I get the box from the back sorry I didn't bring it up with me for me oh [ __ ] dude it's cold up here it is chilly the [Music] wind hey guys so one thing that we say a lot is like we don't like to just listen to our customers we like to watch them and we think their behavior tells us a more accurate picture than what they'll tell us do you kind of have a gauge of like like how much are you listening versus how much you're just trusting the data it it's interesting cuz he went like ask him and get data yeah there's something in you that kind of knows as you watch in patterns and I always tell my people it's like the show The Matrix they'll like watch the screens and you see all the symbols coming down and they'll say Johnny's running up the back steps your mind is supposed to say they can see a pattern

25:55where there is no pattern that's kind of how we do this it is a little bit of my internal feelings and guts about what are they really saying cuz you can put way too much on that I love the data I love my numbers but I also like to say I feel that something is going this way and I'm going to tell you that saved our ass a lot because numbers if you just make the rational decision every time you will water down everything that you do everyone would be making the exact same decisions if everyone would make rational decisions so I like to be irrational well I don't like to be irrational I just [ __ ] am irrational and so that little bit of juice that little bit of spark is something that we do a little bit differently so that's great hey Maverick will tell me this is what a new customer wants but what's return what gets them excited what keeps that going that is my gut and I'm going to tell you my team has told me we trust

26:48you just go with your gut and make the decision you've done it so far let's just do that yeah right here yeah go just for I mean if I could ask a question to every single one of you I don't know yeah no go ahead BR what's the number one piece of advice that you guys would offer for a company that's you know low eight figures that's trying to grow to potentially you know mid to to nine figures cuz I think context really matters in asking these kind of questions so like we're obviously facing struggles at our size what's the number one piece of advice you guys could give us in general anything marketing Logistics whatever the last part of that is the most important part in general right you it business is more than just the silo of marketing it's operations it's understanding how you're fulfilling all these products it's understanding your customers it's understanding fut your customers I think whoever quits last wins first so like I've used this analogy a couple times over here but if

27:46you grow up playing sports if you are the least tired and you're executing you will always win and it's just don't quit it just don't quit right and there's some products that suck like you don't not everybody wants a vegan tofu hairspray whatever right like that sorry that crucify me or whatever that product sounds like it sucks but if it's a good product and you're showing velocity and buyers at retail are interested and you know like okay you're seeing the patterns some people are naturally creative some people are more leaning towards like the data science of things just the last one to quit wins you have to just keep going and and once you lose the desire to actually run the business still once you lose that you're already dead you you might you offload the business but if you really have a heart behind it just don't stop that's that's what gets you to the next level I the last brand I worked with was Mary Ruth Organics that was their VP of

28:36digital they started out an apartment and now they're crushing it's insane they're everywhere I mean they're just completely viral and they just don't stop that's that's my answer don't stop okay my side I'll say solve big problems I think that to your point earlier about the the tofu product example you can grow a business that way but if you do want to scale and meaningfully grow a a business to a size you can take that same product but find all the different ways that that business that product solves a different challenge or influences or improves the quality of life for someone so solve big solve big problems find different ways that you can reposition change up your communication find a way that that product can solve a challenge for cohort a versus cohort B and just think about it as a as different funnels and with that is counter advice don't get shiny object syndrome think that it's very easy to try to find scale or growth by activating a bunch of different channels

29:35or launching a bunch of different products that's just going to stretch yourself too thin so get super disciplined if you see momentum and you on a single tactic or strategy Double Down triple down on it and when you start to see that sort of taper off in the missionary turn then launch that next new thing and that can be set across paid products channels etc etc that was so thorough but I'll use a real life example recently when we launched compin to the first retailer it was like a little test you know it was like it was like a Hot Topic and SL boox launch was our first retailer and the sell through was amazing I was like double down now all my time is dedicated to this I after that I didn't really spend any time on the other brand at all because like that was the thing that was such a big thing that works so well if I pour all my energy and time into that like

30:32occasionally you just find such huge moments of Leverage in your life where if you double triple down them fast enough like they pay off for decades and when I saw the sell through from our first little retailer even though it was a smaller chain I knew immediately holy [ __ ] if I launch this into a large retailer I'm going to get the same thing yeah great question I want to break it down and I don't read a lot of business books all the way through because most of them suck and they're really boring but I know a lot of titles and one of the titles I really like is what got me here won't get me there so I think there's three things getting to a million's easy be really really narrow sell pink polka dot shirts to Pilots right that's not going to get you to 10 million because there's not enough people that want that and if you're selling something that's going to be a hundred million company you've got to

31:22widen up so what some people do is they sell one thing and they're look I made a million bucks every everybody wants this that's not going to get you to 100 and20 million you've now got to widen that out what you're selling you got to sell the more people you've got to expand that out so starting be narrow that's great but don't let the success you had be narrow dictate what you're going to do in the future you've got to go wider cuz you got to sell to a lot more people [Applause] [Music]