EP 483: Velocity Wins: How Curtis Matsko Scaled Portland Leather Goods to 9 Figures by Moving Faster Than Everyone Else

Summary

DTC Podcast Episode Summary: EP 483

Title: Velocity Wins: How Curtis Matzko Scaled Portland Leather Goods to 9 Figures by Moving Faster Than Everyone Else
Host: Eric Dick
Guest: Curtis Matzko, CEO of Portland Leather Goods
Release Date: February 17, 2025

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1. Introduction

In Episode 483 of the DTC Podcast, host Eric Dick engages in a profound conversation with Curtis Matzko, the dynamic CEO behind Portland Leather Goods. The discussion delves into Curtis's journey from a garage startup to scaling a leather goods empire worth nine figures, emphasizing the critical role of velocity and adaptability in direct-to-consumer (DTC) businesses.

2. Curtis’s Entrepreneurial Journey

Curtis recounts the humble beginnings of Portland Leather Goods, which started in the garage of his Portland home. Driven by a passion for quality leather and inspired by childhood experiences, Curtis and his girlfriend launched their first product—a leather journal intended to emulate the authenticity missing in mass-produced alternatives.

Curtis Matzko [00:00]: "Business is jumping off the cliff and constructing the plan on the way down."

The initial sales were driven through art festivals and platforms like Etsy, where they quickly became a top seller within a year and a half. This rapid success laid the foundation for transitioning to a full-fledged e-commerce platform on Shopify.

3. Product Market Fit and Differentiation

A pivotal factor in Portland Leather Goods' success is their unwavering commitment to genuine leather. Curtis emphasizes the importance of authentic materials in building trust and loyalty among customers.

Curtis Matzko [04:19]: "People actually picked it up and said, wow, it looks like leather, it feels like leather. Holy shit, it smells like leather."

By differentiating themselves from competitors who often use synthetic materials masked as leather, Portland Leather Goods positioned themselves as a premium, authentic brand. This focus on quality ensured a strong product-market fit, resonating deeply with their target audience.

4. Scaling the Business

Curtis illustrates the strategic moves that facilitated exponential growth. One significant milestone was the vertical integration of their manufacturing process by establishing a facility in León, Mexico—one of North America's heartlands for tannery and leather craftsmanship.

Curtis Matzko [12:16]: "I'm really, really working. My goals on the company are this. We now have... the heart of the company comes back to me in the house in Sellwood, in Portland, and my girlfriend sitting on the couch with her MacBook writing long messages on Etsy back to somebody."

During the COVID-19 pandemic, Curtis navigated challenges by mobilizing skilled artisans from Mexico, ensuring continuity in production despite global disruptions. This move not only maintained their production capacity but also expanded their workforce to around 1,200 employees.

5. Leadership and Company Culture

Curtis attributes much of his company's resilience and success to a culture that embraces speed, agility, and accountability. He emphasizes the importance of being "unabashedly unafraid to make a mistake" and fostering an environment where mistakes are quickly identified and rectified.

Curtis Matzko [25:34]: "Business is jumping off the cliff and constructing the plan on the way down."

Adopting a hands-on leadership style, Curtis ensures that he addresses immediate challenges across various departments, embodying the principle that "absolute speed wins." This approach allows the company to swiftly adapt to changing market conditions and internal dynamics.

6. The 3-6-9 Hiring and Training Philosophy

A standout element of Curtis's leadership is the 3-6-9 theory applied to hiring and internal training. This strategy involves categorizing employees based on their performance and potential:

• Nines: Top performers who are indispensable.
• Sixes: Mid-level performers who need development.
• Threes: Underperformers who may need to transition out.

Curtis Matzko [25:54]: "If you're listening on a radio or something like that... I have to break through three or four ceilings a year to get to the next level."

This method ensures that the team continuously evolves, fostering a high-performance culture that aligns with the company's ambitious growth targets.

7. Marketing Strategies: Balancing Efficiency and Innovation

Portland Leather Goods allocates a substantial portion of their marketing budget—92%—to proven platforms like Meta and Google, ensuring maximum ROI through targeted advertising.

Curtis Matzko [30:18]: "We spend 92% of our marketing budget on Meta and Google. [...] It works."

Despite this heavy reliance, Curtis remains cognizant of the need to diversify marketing efforts to mitigate risks associated with platform changes. He expresses a desire to explore new avenues but maintains confidence in their current strategies due to their consistent performance.

8. Customer Experience and Growth Model

A cornerstone of Curtis's growth strategy is exceptional customer service, which drives word-of-mouth referrals. He highlights the importance of treating customers well, ensuring repeat business, and leveraging satisfied customers to attract new ones.

Curtis Matzko [36:22]: "If someone's D2C and you're smaller and you're figuring this out, here's the real key. We can buy customers at a profit, [...] and once we own our own makers ability, we get those margins. Then we can give better value, better customer service, and scale."

This customer-centric approach not only enhances brand loyalty but also organically fuels the company's expansion through positive referrals.

9. Personal Insights and Teamwork: The Role of Mariana

Curtis attributes a significant portion of his personal and professional balance to his partner, Mariana. She plays a crucial role in managing day-to-day operations, allowing Curtis to focus on high-level strategic decisions.

Curtis Matzko [41:44]: "If it wasn't for my girlfriend, I couldn't have started the company. [...] She keeps me at least going forward without going in the gutter."

Their collaborative dynamic ensures that the company remains grounded while pursuing aggressive growth targets, highlighting the importance of strong personal relationships in entrepreneurial success.

10. Future Plans and Goals

Looking ahead, Curtis is committed to sustained growth, with plans to expand continuously year over year without a long-term cap. His strategy involves focusing on immediate and short-term goals, ensuring the company remains agile and responsive.

Curtis Matzko [12:46]: "My goals kind of go with three ways. What am I doing today, what am I doing next week, and then next year."

Additionally, Portland Leather Goods is poised to participate in major trade shows like Grow LA and ShopTalk in Vegas, aiming to further elevate their brand presence and industry influence.

11. Notable Quotes

• Curtis Matzko [00:00]: "Business is jumping off the cliff and constructing the plan on the way down."
• Curtis Matzko [25:34]: "Business is jumping off the cliff and constructing the plan on the way down."
• Curtis Matzko [36:22]: "If someone's D2C and you're smaller and you're figuring this out, here's the real key. We can buy customers at a profit, [...] and once we own our own makers ability, we get those margins. Then we can give better value, better customer service, and scale."

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Conclusion

Curtis Matzko's journey with Portland Leather Goods is a testament to the power of velocity, quality, and unwavering commitment to customer satisfaction in the DTC landscape. By prioritizing authentic materials, embracing rapid decision-making, and fostering a culture of continuous improvement, Curtis has successfully scaled his business to impressive heights. His insights offer valuable lessons for entrepreneurs aiming to navigate the complexities of scaling a DTC brand in an ever-evolving market.

Transcript

[Curtis Matzko]

You have to change because the world is changing whether you think it is or not. I will remember this and it's one of those five moments you look back in a company, say this was it and it was. I am unabashedly unafraid to make a mistake and say that was me. Business is jumping off the cliff and constructing the plan on the way down. We spend 92% of our marketing budget on when you realize that treating the customer well and they come back to you is really the key in D2C, it all comes together. And here's the key. If someone's D2C and you're smaller and you're figuring this out, here's the real key.

[Eric Dick]

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[Curtis Matzko]

You know, the world treats me pretty well.

[Eric Dick]

I got that sense in our pre interview. I think I was just kicking myself after my pre after our last pre interview because it was such an electric conversation. You have a really infectious energy about you probably get people telling you that.

[Curtis Matzko]

I hear that all the time. And I also hear that the pre interview often goes much better than the actual podcast. I. I hear that a lot too. That was a great conversation. We were killing it.

[Eric Dick]

Yeah, I really enjoyed it. Had to tweet. Had to send a big long tweet thread after just to capture some of your your pearls of wisdom. But I hate to make you repeat yourself, but why don't you give our audiences who might not be familiar a little bit of Your hero's journey with your business.

[Curtis Matzko]

You know, I started this up when I was living in Portland and basically my girlfriend had a really bad job at the time. And I said, quit your job. What we're going to do is we're going to set up a company. And she was dumb enough to quit her job. And then she said, what are we going to do? And I said, well, I haven't really thought of that yet, but how about. And I went down to my garage, I made a leather jerk, and I said that we're going to sell this leather journal and make $100 million. And she's like, oh shit, like I'm dead. I'm just in so much trouble. And she stuck with it. And we went out to art festivals and we really learned how to deal with people. I think that was the really important thing, that we really learned how to see what people wanted, talk to people, have them pick it up, turn it around right there in front of you while you're sitting in a lawn chair and saying, yes, I like this, or this is what I don't like. And we started setting records. We started doing 10, 20,000, 30, $40,000 on some weekends in art festivals. Went onto Etsy, and within about a year and a half we became a top 10 all time seller on Etsy, Moved on to Shopify and built up portlandleathergoods.com and you know, we weren't. When we were doing art festivals, we were just Curtis and Caitlin selling stuff at an art. We didn't even have a name right. So went on, we found the name Portland Leather Goods owned by an Australian company and we paid about $1,000 for it. We're living in Portland. We bought it off them and it just took off and we doubled every year. And now we're the largest leather bag manufacturing in North America.

[Eric Dick]

Why do you think it had such amazing product market fit versus other bags that are out there?

[Curtis Matzko]

The market fit is why I started the company. When I was in fifth grade, I had a teacher and he read me the Lord of the Rings. Did we talk about that?

[Eric Dick]

No, we didn't. No. I love this.

[Curtis Matzko]

Oh my gosh. I went in and this guy was Mr. Schroeder's amazing, smoked a pipe, had a tweed jacket, these big black Michael Caine from the 60s glasses. And he said, I'm gonna read you these books. And he read us about the Hobbit, the Fellowship, the two Towers. I'm like, oh my God, this is amazing. And that whole thing was like, wow. I wanted A leather journal. And I asked my parents, can you get me a leather journal for Christmas? Because Bilbo wrote everything for the Lord of the Rings in there. And they gave me. I opened it up, I was so excited. I knew my parents wouldn't let me down. I opened it up and I swear to God, it was a pink plastic diary. I know it was a diary and not a journal because it had diary written on the front cover. Had a little lock and key, you know. And so I opened it up and it wasn't refillable. So I started writing. It was dumb. And then my brother took something and broke it open so he could see what I was writing in my diary. And I said, mom, dad, Bilbo did not write the Red Book of Westmarch in a pink diary. He wrote it in a leather beautiful journal. And I always thought about that. And when I became older and I wanted to use things, I kept looking. I'd go to Barnes and Noble, I'd go to stores. I'd like, yeah, I'd like a leather journal. And you'd pick it up and you'd say, is this leather? Like, is this actually leather? Like, I have a book right here. This may or may not be leather. Right? Like, it's just sitting on here as a gift that somebody gave me. I don't know, but that's what they meant. And I really wanted this. So I went into a little store, bought this piece of leather. Eric, I gotta tell you, I was so scared. It was probably two foot by two foot, this piece of leather. And it took me a week to get the guts to cut it. It was so precious to me. Right?

[Eric Dick]

Yeah.

[Curtis Matzko]

Oh, my gosh. And I made this journal. I was so proud. And I walked up and I handed it to my girlfriend. I said, see, this is gonna make us a bunch of money. And she's like, oh, we are in so much trouble. We are in so much trouble. But we learned and we learned and we got obsessive and we got obsessive and we learned what we're doing and we grew. And the product market fit hits. This way. Leather is recyclable. Okay? There are. You may not know this, Eric, in Brazil, they're throwing out 20 million hides of cowhides.

[Eric Dick]

Did not know that.

[Curtis Matzko]

Use it because everyone uses plastic. Or as you may know, vegan leather. Right?

[Eric Dick]

Yeah.

[Curtis Matzko]

Because now the reason that they marketed it vegan leather and they love using plastic is because it's cheap, it's easy to cut. You can put it on a large machine A CNC machine, it will cut every single one identical. Now when you have a piece of leather, it has a weird shape to it and it takes hands, it takes people to look at every hide mark where you don't want check it out, put the cutting everywhere. It takes a lot of time. It's very artisan. No matter how you do it, if you use real leather. And so people just don't want to do it. So when people actually picked it up and said, wow, it looks like leather, it feels like leather. Holy shit, it smells like leather. Like we have photos of people like just putting their heads inside of the bag saying, I have leather, but I've never been able to smell it before. Why? Because they got something. This is actually. Oh, I'm sorry, I don't want to. I will turn what company this is, it says it's a very fancy brand from New York. It said this is leather. Dude, that is not leather. That has leather hide underneath. And then they covered it with plastic and they stamped it to look like leather. This is pergo. This is vinyl floors compared to wood floors is exactly what that is. But it all looks alike. So it's easy to make purses out of. Right.

[Eric Dick]

Because it, it's uniform, it doesn't have the natural grain. It's predictable. It's exactly, it's. And it's funny, I've gone down that rabbit hole of the guy who cuts bags apart and he's constantly finding these really high end brand name bags are actually just veneers, leather veneers. And they get inside and it's like that isn't real. But I imagine when they cut your open, they, they have good things to say.

[Curtis Matzko]

Yeah. That hey, wow, this is actually real leather. It's actually really good leather. You know, our hardest thing is finding enough of the, the right leather, the beautiful leather that just looks and feels. And that's why, that's why we put our, our maker art, which we call the studio in Leon, Mexico, because this is the heart of tanneries in North America. All the US hides, I'll come down here. And they're made into all the leather boots that, you know, a lot of those fancy leather boots that people wear around that, you know, those are made right here, a few blocks away from. So that's why we moved it down here. It's funny I didn't mention the Lord of the Rings because Joseph Campbell wrote this book about the hero's journey, about the 12th step being pulled out of where you are and going through all of these Steps. And it is very similar to what I read in fifth grade with the hobbit Bilbo sitting there. And Gandalf says, hey, let's go on this adventure. And the first thing he says is, yeah, no, he doesn't want to go, right? He hides away, they all leave, and then he ends up running out. Then you go through adventure. Then you go all the way to the end and you face the dragon. And what happens at the end? You come back home and you are a different person. That is what a hero's journey is. And that's a lot of the things I have when I say that I have followed the hero's journey. I have followed the journey of having to change who I am to get better, to be able to do the things that you want to do. I'm the perfect person to have a garage company with my girlfriend, right? Because she's just patient enough that I can go down there and listen to music and make a bunch of leather goods and go up and she'll say, oh, you're a good boy. Now go back down and make some more. Right? That works really well for me. Getting out of that and going to art festivals and putting everything well, that's the first step going on Etsy. That's the next step. Doing manufacturing in Portland. That's a big step. Coming to Mexico in the middle of COVID and setting this up right? All of the things that we do, each one of those is breaking through a glass ceiling. And that is really what it's about. I have to break through three or four ceilings a year to get to the next level level of the company that we have. And the reason I do that is because we now have a million customers who expect us to make really beautiful leather bags and deliver it to them on time with new designs. And it ceased being about me and my garage. And that's the fricking pressure right now. The pressure is people are out there waiting for that leather and that new one and saying, what are we going to do? It's Christmas. I want to give that gift. Because, Eric, I found this out. If you give a gift to somebody and it's made out of real leather, it's important. No one has. I'll buy something. I'll buy a leather journal. Buy a leather bag for my friend. I just get rid of them. No, it's always for an anniversary. It's always for my sis. It's always something important so we can't screw it up. So that pressure from the garage where there was no pressure to just gaining and gaining and having employees and having customers and having people rely on you. Those are a lot of things. I'm the youngest of four boys. Deep down, I'm just a spoiled brat. All youngest kids are really spoiled brats. Right. But all of a sudden, the company grew to where I get to take care of not only my employees, but my customers. And that's time to step up and really use your integrity and figure out what you're doing and take care of business so that we can keep running, keep growing.

[Eric Dick]

Interesting dichotomy of sort of that idea of burning the boats, being willing to make these big, fast changes all the while, while you're aiming for trying to build a legacy brand, you're trying to build a brand. The products are going to be heirlooms, as you mentioned, but you're also trying to build a brand that lasts 100, 500 years, potentially. Right? So it's an interesting dichotomy of always moving fast, always, you know, being willing to maybe give up what you were before to become what you want to be. Describe what your goals are with this. With this bad boy.

[Curtis Matzko]

Wow. No. I'm gonna go back to your first part of that, and then, yeah, okay. You have to change, because the world is changing, whether you think it is or not. Okay? You're sitting in your apartment or in your house or in your condo or your. Wherever you are, the world has changed around you. You walk outside the same streets. It's changing. I just bought a friend's book. He's a guy who wrote a book. And I said, I want that book. And I bought the book. They delivered it to my house in Mexico, and. Fun. I picked it up, and I looked at the back page, and it said, made in Dallas, Texas, January 10th. So they literally printed that book. When I ordered it on Amazon, the order came in and the book got printed, and then it went through custom, and I received it four days later. That's crazy. That's something you wouldn't have thought about 10 years ago. So, yes, leather seems like a legacy artisan. It's leather. It's this old. It's the same old stuff. But we better get the right leather, make the right bag, get it there on time at the right price, make sure all of those things work, because we're in a much different world now. So I'm creating that type of thing up. So I'm really, really working. My goals on the company are this. We now have if. If. If you're listening on a radio or something like that. You can't see this if you're actually on a YouTube. You can actually see some people walking around behind me. Actually these are called stitching and they're actually stitching our products right there. Now over in other buildings they're doing that. Like people are looking inch by inch and marking them and cutting them and matching them and bringing them into the stitching lines. Now that we have this, we can now grow at a very efficient way, meaning we can get our costs down by making more efficiently. That means we can give more to our, our people that work for us. That means we can give more to our customers. That means we can do new designs and spread into other things. And, and Eric, we've talked already and you know, I have a little bit of energy. I get really bored. So part of my goals is I plan to grow this next year and the next year and the next year and the next year. And I can't see past three years. I'm going to tell you right now, because if you are there, hey, YouTube folks, take a look at this. This did not exist five months ago. It didn't exist where I am. This was just concrete and that was concrete and like there were still no walls up here. Right. Like we were having this built, so we moved. So three years from now, I had no idea where we're going to be. So my goals kind of go with three ways. What am I doing today, what am I doing next week and then next year? How do we like pull that? How do we pull this together? What are all the things that we need to do?

[Eric Dick]

And now that you're vertically integrated with this amazing facility, I'm just curious to talk about your decision making process to double down or triple down or whatever you had to do from where you were before you were vertically integrated to be like, okay, I'm going to spend another 10 million or whatever it cost to bring all of this in house. What was that decision making process like?

[Curtis Matzko]

It was always in house. So it was always in house.

[Eric Dick]

Okay.

[Curtis Matzko]

Yeah. I started in my garage and it was a, it was a concrete floor. So I went to the Salvation army and bought some old rugs. The good note would not salvation the Goodwill. Goodwill and bought some old rugs, put them on the floor of my garage and I would sit on the rugs and hand cut things and hand cut each piece that we're actually doing. Then we moved into a 2,000 square foot facility which was actually, this is Portland, Oregon. So it was actually a pole dancing studio. It was all purple. Every wall was covered with mirrors. And there were literally poles when we moved in. Right. So I'm going to tell you, here's your. I know your answer. There's an old lollipop commercial that says, how many licks does it takes to get to the center of a Tootsie Pop? How many white layers of white paint you need to go over purple? 7. You need seven layers to cover all of that bright purple and get this beautiful thing. But we moved into 2,000 square foot. Then we knocked out walls and went to 4,000. Then we went to the 24,000. And then we made everything. In Portland, we have a build a big white building, and we made everything there. So it's funny, I have pictures in the same room is customer service, shipping design, the sewing machines, the clicker presses, all in, like, a small room where we're like, in the boxes and you're moving it over and pushing it through. We did it all there. But then something called Covid hit, and we were in Oregon, and Oregon was very tight. So basically, they said, congratulations, you're out of business. You have no products because you can't make the products, right? And I said, well, that really sucks, because we really were starting to do something, you know, gosh, we really had something. And I will remember this. And it's one of the biggest. One of those five moments, you look back in a company and say, this was it. And it was. My marketing guy said, books will be written about people who got scared and people who took the big steps to become successful. He said, don't have the book that says you were scared so your company got shut down. I said, ah, shit, he's right. So I put on masks, and I couldn't fly to Leon, Mexico, because there were no flights even at the time, right? So I flew to Guadalajara, had somebody pick me up. And we. We had fortunately been buying leather from some danneries down here. So I came into town, had some people pick me up. You couldn't start a bank account. You couldn't start a company because all the businesses are shut down, right? But there was one thing that was there. There were 50,000 leather artisans who were out of work. So we started with five sewing machines shoved up against a wall and said, hey, does anybody who knows how to sew leather want to come and make this stuff? And we had a line of Loch Lock. And all of a sudden we said, wow, if you treat these folks well, they are, you know, it's not just that they're amazing stitchers. And artisans. Their dad was. And their uncle is. And their grandfather did. Right. You know, and they're very proud. The stitchers are like, people who are, like, they are very proud of what they do. And all of a sudden we're like, oh, my gosh. We thought we knew what we were doing in Portland. Our bags sucked, truthfully. Hey, I. I stitched some of our first bags. There's, like, I still know people that have them, and, oh, man, that is not. The leather's great, but the quality of how we put that together sure wasn't, I'll tell you that.

[Eric Dick]

How big is your team in total now?

[Curtis Matzko]

About 1,200. I'd say 1200.

[Eric Dick]

Quite an enterprise. That's pretty cool. I see you on. On LinkedIn quite a bit these days. I think you're getting more active on Twitter, the DTC Twitter sphere. And you're one of those fully integrated entrepreneurs who you're, you know, you're. You're so in your first leather bags, but you're also intimately involved in the growth side of the business. And talking about that, what do you credit as being them? Besides the amazing product market fit, the amazing product, what's been your main engine for growth? To scale this up to where you have Mariana. Hey, Mariana.

[Curtis Matzko]

No, absolutely not. I mean, she's wonderful. This is my assistant. I have a lot of energy, but I am here and here and here. I jump around a lot. And one of the things that that does is I don't set a goal and take the 10 steps to get there. I go wherever it takes in the 38 departments that I have in my company, and wherever the problem is, I go there. I'm like one of those fire jumpers goes in. You jump in and say, I can work on this today. Let's fix it today. People are like, yeah, let's set up a meeting for tomorrow. I'm like, no, we don't do it tomorrow. This is the meeting. Let's talk about it. Let's figure it out. Let's do it today. So if you're always taking your weakest spot and you're correcting that, then all of a sudden you just naturally get stronger. And when you do that very, very quickly, because we work off of velocity, which is just absolute speed wins in this, right? Because you're going, no matter how much you think it through, you're still going to mess up. So why not mess up real fast and say, oh, that's me, right? Like, I made that mistake. We can't do that. And we have to go on to the next step. I am unabashedly unafraid to make a mistake and say, that was me. Like, yeah, I messed that one up. Because I know that we're getting to that next step. And I know if you're on LinkedIn, like, people write, don't be afraid to take the step. And bullshit, bullshit, bullshit. All the people writing that don't do it. But business is one of the best quotes. It is jumping off the cliff and constructing the plan on the way down. I absolutely believe that that's what we do. So when we came to Mexico and said, we're going to create this, not only did we not know how to start a company, you couldn't start a company because the government was shut down. And you say, oh, what are you going to do for your taxes in a year? Because, well, we just, we will figure it out, right? We will go forward and that's the way that the world is and we're going to make this work. So I'm going to tell you, no matter how much we grow, the DNA and the growth of our company comes back to me in the house in Sellwood, in Portland, and my girlfriend sitting on the couch with her MacBook writing long messages on Etsy back to somebody, right? Somebody would say, hey, does this leather. Do you have this in a blue leather? And my girlfriend would go, and she would write like a two page long, beautiful message to this person. I'm like, they just want to know if we have it right. And she's like, no, no, no, no, no. And all of a sudden she has a friend, like, right? I mean, and we set that. And guess who taught our first customer service? She did. And so we started hiring writers. Like, literally one of the people we hired to work at our customer service won the National Book Award the year before in Australia for her novel. Like, we really did hire writers who were like, I am going to write a beautiful message to this person, right? That's DNA of who we were is still who we are. We opened up a store in Austin and Mariana and I flew up there and we're like, when does this store open up? It was like a grand opening. So it was like let's say 12 o'clock. We got there two hours ahead of time and we had to park five blocks away. And we're walking up and everybody is recognizing us and like, oh my gosh, Curtis and Mariana. And it's like we're walking through these crowds of people who. Here's the funny thing. It's two sided. They felt like they knew us and we felt like we knew them. I stopped while they were getting ready and I just walked down the line giving everybody talking, giving them a hug and they would ask me questions. And it was just like being at an art festival, except the thousand or two thousand people were all coming into our store when the doors opened up. Right. You know, it's. You got to start on a strong basis, you got to start fast, but you still have to have a product and you have to be around good people and you have to treat people well. Now that doesn't mean you're not going to make mistakes. I'm going to tell you, Eric, I think we talked about this. When you are a leader, you will make decisions that hurt people that you love. Because I now have to take care of an entire ecosystem of entire customers, entire clients. So one person here that says, I think this and this, but don't you know me? And I'm just like, yes, I know you. I love you. You will be better working someplace else because we need this right now. Does that make sense? You will hurt people that you love because I am in charge of this. And what we found out is, yeah, they end up better off when they're doing that. Right. Sometimes I make a decision because we're so big that, nope, I can't explain why I made that decision. I have information that not everybody has, but it was a very rational decision that was taking care of them. But when I make it, they're like, what? And I don't have the ability to get on a loudspeaker and say, this is why I did this. Deep down, it's because I care. It's not because I am selfish. And that's growth. And I was a lazy, you know, youngest child. I needed to grow in order to run this company, let's put it that way.

[Eric Dick]

Describe your three you mentioned. I think it was probably, I think it was. You credited someone else with the rubric, but it was the 3, 6, 9 theory of, of hiring and internal training. Because this was something else that you. That stood out to me in our pre interviews. You're talking about saying to employees like you're, you're not where you, you need to be to get us to that next plateau, but I'm going to help you get there kind of thing.

[Curtis Matzko]

I'm going to call you out on this, Eric. Okay, I did mention something like that. But you read my LinkedIn in the last.

[Eric Dick]

Oh yeah, I just. Yep.

[Curtis Matzko]

So you kind of mixed them up. There, number one on this side is, I tell all of my managers, you are not good enough for who we will be in one year. They're just not, because we're going to increase by this much. And if you're. If you have a software company, you're like, oh, pay a little bit more to shove some more coding to somebody. That's one thing. No, we have to increase the amount of leather that we order, the amount of tanneries that we do. The people who look through them, that. The chomping, the matching, the stitching, the quality control, the shipping, the customer. Does that make sense? In order to grow by 50 or a double, you are literally growing at this huge rate. So I tell my people, I tell the head of market, I tell the head of retail stores, I tell everybody, you are not good enough. You will be, and we're going to work together, and you have to be better next year. Because what that does is it lets them live up to the challenge. Okay? It's. Think about a. Think about a college freshman football player. They were just the big stud in their high school. They're bigger, faster, stronger, and they go in and all of a sudden they're getting their ass kicked by bigger, stronger people. And you say, you're not good enough right now as a freshman, but you will be, right? And all of a sudden, in the software, they're seeing the field a little bit more as a junior. They're starting as a senior. They're an all American. You know what I mean? There. That's what you have to do as a company. You're going to get better now in order to do that. Not everyone's going to do that. So the 369 is really important. I used to ask my HR who are the best two people in this division or here or here. And it's always the same people. You know who they are, right? And then I would say, who's the one that. If we had to let one or two people go, who would you let go? And they're like, oh, no, they're all really good. And what they really want is to know of a bad employee that they can say, but you have to go through the spiel. It's like negotiating in old cultures. Like, you have to haggle. I'm like, oh, no, you can do it. Well, if I had to, Eric, that guy is a jerk. And we don't. You know what I mean? They really want somebody. But the difference is when you don't have someone who stands out bad, you just have Some mediocre folks, right? So three, six, nine fixes that. You take everyone in the division, you say, who's a three, who's a six, and who's a nine? Because they always want to see people are a seven or an eight, right? So they're like, okay, here's your nines. Nine means you never want to lose that person. If they came to you and they wanted to quit, you would cry, right? Like, you keep that person, you treat them well. Threes, you got to be looking at making sure that they go somewhere else in the world because they're not meant to be for your company, right? If there are six, you make an action plan that week of how to get them to a nine. Because if you leave a six alone long enough and don't give them the support, they'll become a three, and then they'll be gone. And you owe it to them to give them the chance to say, you can be a nine, you can be a superstar, you can be better. So you hear and see a lot of coach in me, and I literally would have loved to have been a coach. If I was a little bit better athlete and could have proven myself a little bit more there, I probably would have went the coaching route. I'm really glad that I didn't. But you can kind of hear that from time to time in the way that I approach people.

[Eric Dick]

Yeah, that's interesting. One of the things I'm talking about with people on the podcast all the time right now is this idea that for many years we had meta. And meta was this all in one direct marketing platform that we were bringing new customers in and converting them. But there's this sort of feeling that I'm hearing from a lot of brands now that a lot of. A lot of brands are kind of thinking about moving budget away from super saturating the bottom of their funnel and moving it into higher funnel activities, into things that really bring new awareness, new eyeball. And I'm wondering if that's a mindset that you have at your business's scale and what you're doing at that, like, top of funnel to grow brand awareness.

[Curtis Matzko]

Oh, Eric, you just want to start a fight, don't you? Huh?

[Eric Dick]

I want clips.

[Curtis Matzko]

I want clips.

[Eric Dick]

Hot takes.

[Curtis Matzko]

We spend 92% of our marketing budget on Meta and Google. Okay? And we are very efficient. It works really, really well. If anyone else had a business like ours that was working as well as ours and they had our numbers, they would spend 92 to 94% of their money in Meta. And Google, because it works. And my people are like, why would I spend a dollar over here when I can do that? And that's the debate, right? But me says, because stuff happens. Because last you know, we're talking in 2025, but last February, March in Meta, that was a hell world out there, right? That was like their line manager's like, here, come talk to our people. And they are lying to your face about what they're doing with the algorithm, right? My people who are smarter than them are just like, oh come on. Look, this is like they were lying, but it didn't matter. All of a sudden you're screwed and we're just burning money. So what happens when that day comes? So that's part of that, right? So as the CEO who's in charge of taking care of everybody, I'm like, What about the 20% that we're spending to build brand, to find other areas? And all of these things that are out there now because we're D2C. Do we use Applov? And yes, okay, now we'll spend forty hundred thousand dollars a day. I think this year the math was we will average $112,000 in marketing online. Okay, Pinterest. Pinterest will work between 800 and $900 a day. It will not work for a cent over. You cannot scale that thing over a thousand. But it's efficient at 800, so that's not going to scale a company. So we're always kind of testing this, but my people are very wary because they know what we do works. But I'm like, well, why aren't we doing something else? But. But I like the dollars that we get now because I'm not wasting anything. So you are. Literally. You said I have high energy, Eric. I didn't sleep last night worrying about the same damn thing you just brought up right now.

[Eric Dick]

Why am I not funny?

[Curtis Matzko]

Why do I not have this? Affiliates and influencers? And why aren't I on this and why am I not doing this? There's so many different things out there and because I thought right now we don't have to. Yeah, it's working my side of that, but I. Anyone here could get on and you could tell me the argument the other way and you would probably win the debate.

[Eric Dick]

As someone who shop for a lot of leather goods, part of me wonders if it's just like a form factor, like your Google Shopping must be banging from people that will like side scroll a Google Shopping link and see your product. And even if they're not I think a lot of people are aware of the brand, but just like the form factor and the look of your product might be enough to still bring in a lot of top of funnel traffic from these platforms. I don't know.

[Curtis Matzko]

You know, it's so funny because we're D2C folks, so we know. I know everybody and you know everybody and they all know the guy stuff, right. 98% of our stuff is women's. Right. So people like Portland Leather Goods. I think I heard about you from Triple Whale. Or this or this. I'm like, you like, here's Ridge wallet or here's TrueClass. If it's a guy thing that they could shove in their pocket or they can wear, they're like, oh, yeah, that's the brand. Right? But we're big. But we are focused. Bam. Right there in on those women, directly to them on their phone. And we're like, we're digital stalkers.

[Eric Dick]

Like, if you make.

[Curtis Matzko]

I warn people, I just say, hey, they're like, what's your company? They'll have their phone out. And I'm like, don't. If you go to our website, I will track you around the world for the next three months. Having you buy Leather Bay. You'll like. As you're getting another three boxes, you'll be saying, why did I meet that Curtis guy on a plane?

[Eric Dick]

And that's why Applovin probably is working so well for you too, because that's probably a very heavy female audience. I'm blown away by that as it's one of the more like having been in this space for a long time, I've never seen a traffic platform move into the space with such a buzz and with such an ability to scale, as you mentioned. Right. Very few can reach that. Those, those levels. Like TikTok doesn't get that big for you, I imagine even I've never.

[Curtis Matzko]

We've never done TikTok.

[Eric Dick]

Never done TikTok. Interesting. Why not? Just one of those things.

[Curtis Matzko]

Yeah, I told you I was up online, buddy. That's like. I mean, we test around at little things, but we're just like, you know, if you're going to do any type of marketing, even if you're a big company and a proven company like we are, you're going to spend a lot more money at start to get the momentum to figure out what works before you can scale. And right now we've already done that. We already know what works. We already have it. Let's go back to the true classic thing. Okay, let's Go back there. Okay. Their front page is identical to what it was four years ago. Identical. They haven't changed that thing. And people are like, well, you need to update that. I'm sure Ben is just saying screw you. Like, that thing is proven. We a B. Tested that thing 100 times. That works. Why would I screw around and do something else? New is not better. New is not better. So applovin comes out. My guys were applovin and I basically did this. I'm like, yeah, you know, a little bit. Test it. Now here's a fun story. Eric, you might appreciate this. They were only taking big accounts, so they took us there. And so we started, like in August. It worked great. September, October, November. We're killing it, Right? They were sending the invoices to the wrong email and it never went to our account. So finally the end of the year comes and says, you owe beep, beep, beep, beep, beep. This enormous number. And I'm like, guys, when you sign up for expensive software, please make sure it goes to the accountant so we don't get a million dollar bill.

[Eric Dick]

Not loving that. Not loving that app.

[Curtis Matzko]

You know what? Hey, it all circles out. It all comes back. You know you spent. You know you got your race on. You know you got it. And here's the key. If someone's D2C and you're smaller and you're figuring this out, here's the real key. We can buy customers at a profit, right? We buy customers at a profit. I don't care if it's a penny, but we get more than that. But the second time they buy, their gross margins are huge.

[Eric Dick]

Yeah.

[Curtis Matzko]

And right. And then once we owned our own makers ability, then I can gain a few cents here and a few cents here and a few cents that other people can't. So then we get those margins. So then we can give better value, Then we can give better customer service, then we can scale. Then we don't have to take out loans. Then we can do all of these things come together. You know, when you realize that treating the customer well and they come back to you is really the key in D2C. You're not focused here. You're not focused. You have to look at the entire journey, the entire digital hero's journey that we kind of talked about. When you realize that it all comes together. And if we go back to the art festivals, I started with I'm a sucker. So when we. When you have leather journals and leather bags at an art festival, you will have wealthy Middle of the road, people and broke people coming to your tent. And it's usually a college student who's really awesome or really smart, and they pick something up and they say, this is amazing. I love this. You know, they can't afford it because I was broke in college, right? I used to have to scrape up $0.26 for a Mountain Dew refill. $0.25 plus 1 in sales tax, right? You know, I'm like, where do I find $0.26 so I can get myself a refill? And I would feel so sorry for these people. I'd like, hey, you can have that. Or after they said, here's the money, I would turn around and give them half the money back after they purchased. I would do that. Not before. Not a trick. The next year, they would bring their family and their cousins and everyone else. So as much money as we spend on Met and Google, the number one way people hear about us is friends or family. It's word of mouth. It's someone saying, look at this. Here's the bank. And that's the growth model that you want. Now, I would like to say that when I was trying to impress this girl, which it all starts with, I would like to say that I had all that all in mind. I was just trying to impress the girl. But we lucked out, and we got a great product, and we got a product that could scale, and we were able to change enough with it to make it work. It didn't work that way for a lot of. When we started, there were a lot of handmade leather companies around. There was a lot. It was a big artisan era. And I picked out five and said, I want to be like these five. Bankrupt, Bankrupt, bankrupt. Not bankrupt, but I don't know how they're staying in business. Yeah, I really, really don't. And the other one is calling me every day saying, can you loan me money or can you buy my business? All five gone or nearby.

[Eric Dick]

Is that because they didn't reinvent in the same way? They didn't have the momentum, they didn't have the velocity that you've architected here. There's lots of reasons for it, but can you think of a blanket for why they didn't make it the way you had?

[Curtis Matzko]

We're going to go sports again here, Eric. They're like the 8th grader who was bigger than everybody else who did this in football, and he thought he could use that same move for the rest of his career. And he'd say, I have this one move where I just Run over somebody, right? Or I do this and it doesn't work. What they did is I would talk to them before they would go bankrupt. I usually they'd call me six months before bankruptcy, right? Because they already have the debts. They already know the short term loans are reeling around like that. You know, they've taken off all those shopify loans where they start taking out your money. They're in trouble, right? They call me up and say, we have a great business, we have a great business model. We're proven. The problem was what they thought their success was, was. Was holding them back. They're like, we do this and this. And I'm like, yes, that's your problem. We make a bunch of money on personalization, right? Because they get at we dick. And I'm like, okay, so you have to have exact SKU in stock. You have to get it, you have to take it from there, handwrite or come up with that order. You have to have a person make sure they can, you know, everything correct, put it together one by one and send it out. You think that that is wonderful. You make extra money on it, you got an extra customer. The problem is you literally just slowed your thing down by eight times by trying to do that. And they thought it was their strength. They didn't move on. They said in 2008, this worked. In 2016, this worked. In 2018, it worked. I'm like, come on, guys. It's a little past that time.

[Eric Dick]

Well, the last question I wanted to ask you was just about you mentioned Mary. When I asked what your secret of your growth factor was. You turn the camera over to Mariana and I see her in a lot of your content. I want to, for someone like you, that. That moves as quickly as you do and goes into so many areas. How important is it to have someone like a Mariana to help pick up the pieces and help kind of order the chaos a little bit?

[Curtis Matzko]

Pick up the pieces in order. That man, he gives you a lot of credit there. I like that he knows what he's talking about, I think. So this is her right here. And then I'm going to turn back and actually answer this question because I'll be very sincere on what this was for me. If it wasn't for my girlfriend, I couldn't have started the company. Well, I still could have made the product. But she said, when you start the company, what do I do? I promise. This is the quote. I told her, I will promise people things, but I'll never do it. You have to follow me up and do the promises that I make people, I will tell people, oh, I will refund that money. I'm going to forget. I'm not trying to be tricky. I just forgot she has to do that. I will email you. I'm not. Here's your business card. Okay, I'll keep that and I'll contact you. I'm going to lose that thing. Right. So it started with my girlfriend, and then it started with another young lady that we had named Anna. And she worked and did everything. We built this up. Then we went on to Erica, and Erica's awesome, and she helped me. Then I came to Mexico and it was Adriana, but they had full time jobs while they're doing it. And then some genius said, hey, I got it for something. What if someone has a full time job just making sure that Curtis does the shit he's supposed to do? And oh my gosh, here's the good news. It works and it's amazing. Here's the bad news. When she's not around, I am absolutely helpless. I've lost all semblance of being able to take care of myself. She has to call me up on a Saturday afternoon saying, did you eat? Are you drinking things? Did you take your vitamins? Did you go for your walk today? Like, literally has to take care of me because I'm a go go guy and she has to guide me. Somebody one time described her as, you know, bowling alley. And everybody goes bowling when kids go. The little kids go. They have the bumpers that come so they can. Bumpers go back and forth, but it's not going to roll off. That's what she does. She keeps me at least going forward without going in the gutter. And it's essential and I absolutely love it.

[Eric Dick]

Yeah, I like that she's in your content too. I think that's. I think that's good for your. Good for your content to have, you know, someone, someone else there.

[Curtis Matzko]

I know, I know we went along, but I have to tell you how that worked. We hired some people to shoot the very first content and they had fancy cameras and lights. And we're going to be at this house and it was just this stupid, stupid, stupid setup, right? And we had people talking and all this stuff. We probably did three hours and it was all crap. But one of the guys got up to. He was drinking while we were doing, went to go to the bathroom and Mariana just sat down in the chair next to me and we just like, she's like pretended like we're talking. And at the End when they sent us all the footage of the three hours, the only three minutes that were any good was me and her talking. So I literally took my MacBook, which I do everything on. We have no equipment. I set it down on my table at my house. She sits in the window and I. And here's the truth about our content, Eric. You'll notice it next time. I don't know what I'm going to talk about. And I hit the button and it goes 3, 2, 1. And in that three seconds, I have to come up with something. So she absolutely does not know what we're going to talk about. About. And so if you want to talk authentic, those looks on her face looking like she is stunned that I'm saying something, are absolutely genuine.

[Eric Dick]

That's hilarious. Well, Mariana, next podcast, you'll have to be in frame even more.

[Curtis Matzko]

I will definitely get some makeup, hair. Oh, yeah.

[Eric Dick]

Oh, you're great. Oh, you're.

[Curtis Matzko]

Oh, my gosh. Why did you like for today? And look at you.

[Eric Dick]

I know.

[Curtis Matzko]

Can edit. He's got all kinds of socks.

[Eric Dick]

That's right. We'll put on the Tik Tok filter, make us look 10 years younger. Curtis, thanks so much for coming on today. I'm gonna everyone out there. If you want either men or women, amazing bags, go to portland leathergoods.com Also, I'm going to throw in your profiles for both LinkedIn and Twitter because you're a heck of a follow. And I like, you're. You're always, you're in the threads, you're. You're helping people out. You're a big part. You're a big part of that big voice in that D2C Twitter space, which I always enjoy.

[Curtis Matzko]

Really, the LinkedIn is really where I've been able to connect with some really awesome people. And you just type in Curtis Matzko on LinkedIn. We now have a little thing we just started where Mariana has her own and I have mine, and we create our own content. And in the morning when she comes in, we talk a little bit about what we're going to do. We sit down at the kitchen table, we both post our thing right then. And we take the next 15, 20 minutes, half hour depending. And what we're going to do. And we literally, that's us talking. We're sitting there and we're answering those folks in the morning. And what it does is it creates boundaries on what we're going to do. Like that's the time we're going to do. We can't just go on all the time, but it also makes us authentic in what we're doing, and we're fine. We love LinkedIn. We really do.

[Eric Dick]

Nice. I can see it develop. I could see you on Shark Tank in the future. I could. I could just see you as a. I don't know, as a shark on one of those shows. I could see you got such a great personality for that kind of thing. I'm going to tell you a fun.

[Curtis Matzko]

Story that I'm really proud of. I'm really, really proud of this. You know what I'm going to say? We did a podcast today. A producer called me from another country, said, oh, my God, you're. You're it. I love this. I want to do a podcast. I'm like, I'm kind of busy doing my own company and everything. Like, huh. Then I was just thinking, well, if I just did, like, I want to do it, if I'm going to do it, I'm going to go in big, right? I'm going to. I'm going to go to that. I'm going to really go in big. Big guess and this. And I'm going to really go. And I said, well, maybe I need some big sponsors for that. So I got a call from this CEO of a pretty big company, and he was going to Washington, talk about the NAFTA and the new administration and the problems. And he was meeting with congressmen. They're going to their meeting, like, with all the people. He wanted to talk to me first. And I said, hey. He said, I think you make, you. You make me laugh on LinkedIn. I said, well, why don't you sponsor? Instead of going to Washington and doing all. Spending all this money, why don't you sponsor my podcast? He said, yes. I'm like, no, let me tell you what I'm doing. He's like, yes, yes, yes, yes, yes, of course we will. So I don't know if I'm actually going to do something on that, Eric, but he really said, we would love to sponsor you, and it's literally a company that I work with that I love, so maybe you're going to. And then he said, here's the sticker point. He said, if I do it, Mariana has to do it with me because I'm not a good enough draw on my own.

[Eric Dick]

Need a sidekick. Last question. I know we're over here. Are you going to go to any trade shows this year? We're planning out some trade shows we're going to attend. I don't know if you have time for Such things.

[Curtis Matzko]

I went to my very first kind of thing like that. We won a bunch of awards at Triple Whale a couple years ago. And so I ended up going to that I happened to be close. I went to a geek out and then you meet everybody and I spoke at E Commerce Roundtable and I'm asked for things. But Eric, where do I go? Tell me what I'm supposed to do this year. We actually have. Everybody's got this, but let's do this right here. Here's my big ass calendar right there. Oh, there you go. I gotta figure out where I'm going and. And Mariana keeps saying, like, I need to book our events. Where are we going? So Eric, you tell me, where are we going this year?

[Eric Dick]

Well, the first two that we're gonna do, I think we're gonna do grow la, we're gonna do shop talk in Vegas. I've heard the biggest, the biggest, baddest one of them all. I've heard it's a bit. It's. It's a little overgrown maybe, but we want to go check it out. We're gonna do some man on the street style interviews there as well as grow la. So in March, February and March. At the end of February, March, those are the two we're going to be hitting up. And then beyond that, I'm not sure, but it should be good. I love Vegas more than I should and I haven't been to LA in many, many years, so seems like a good time to visit now.

[Curtis Matzko]

Where are you physically sitting at now? And I apologize.

[Eric Dick]

I'm in Victoria, British Columbia. So I'm in the Hawaii of Canada, we like to call it.

[Curtis Matzko]

I've been to there and it's absolutely beautiful and it's a little more rural than I love and it is gorgeous.

[Eric Dick]

Yeah.

[Curtis Matzko]

But I have never heard the Hawaii of Canada, but that's spectacular.

[Eric Dick]

I'm trying to make it stick. Well, thanks so much for your time, Curtis. It's great to hang out with you again. I look forward to catching up with you again in the future.

[Curtis Matzko]

Of course, my friend. Thank you so much.

[Eric Dick]

Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at Direct to Consumer. All one word co. I'm Eric Dick and this has been the D to C podcast. We'll see you next time.