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- [00:00]
Andy
I tried to raise capital. I shipped the Rower down to San Francisco, drove through pitching to various investors, sent out hundreds of emails, made hundreds of calls, didn't get anywhere. And it wasn't until I got into y Combinator yc. They don't let many non B2B SaaS companies in. I think they let us in because because the sales cycle is so long, we have to tap into the customer at different stages of the journey. So they may learn about us from a CTV ad meta or Google. They then want to research this on YouTube. They may go to Instagram reels and search us. So we tap into our customers through a lot of different channels. It is a tough year so there's going to be a ton of consolidation. What we're doing differently to try to combat this.
- [00:52]
Eric Dick
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- [02:12]
Andy
I don't know. I don't know if you knew, but I flew in on a red eye from Taiwan so I was, you know.
- [02:19]
Eric Dick
Oh, I didn't know that. Wow.
- [02:20]
Andy
I was in asia on a 12 hour time difference so I was kind of tired to be honest. Well, good.
- [02:25]
Eric Dick
You needed the reset then.
- [02:27]
Andy
Yeah, so it was good. But yeah, it was, it's. It was other than me being tired it was amazing. A lot of great humans there, you know, can't complain when you're. When you're surrounded by all these killers.
- [02:36]
Eric Dick
I was great learning your story when we met before or in 2024. I'm great. I'm glad to reconnect. I wanted to just start with why. Why did you build Avron?
- [02:46]
Andy
I tell people there are two reasons why you should start a business, and I, I've taken on one of them. I think the two reasons you should start a business are, one, you're trying to solve a problem that's like, impacting yourself or your family, let say, like, someone has an illness and you want to kind of like, solve that problem. And the other one is you. You have a passion for it. And that's kind of where my story comes from. I've always had a passion for fitness, had a passion for playing video games. When Peloton came out, I thought it was a great idea. I bought the bike. You know, you can work it at home whenever you want. You don't have to, like, drive and book an appointment at, like, a studio. So all these great benefits of working at home, but the experience didn't resonate with me. So following an instructor, I'm someone that's more competitive. You know, I grew up playing sports, grew up playing video games. So I decided to kind of merge the two together and bring in Connected Fitness with, with gaming.
- [03:42]
Eric Dick
It's, you know, I talked to a lot of people that, you know, make a soap or they. They make a skin lotion and, you know, no, no shade in any way. But it's always interesting when I talk to more tech entrepreneurs who are thinking about things like across dimensions. Right. You're thinking about a product, you're thinking about software, you're thinking about subscription. What was. What was Mark 1 or like, what was, what were. How did you build out? How did you eat the elephant, aside from one bite at a time?
- [04:08]
Andy
Yeah, the, the key to eating the elephant is you got to be naive or you're going to be like, yeah, this is, this is going to be. You know, it's not going to be that hard when reality. It was extremely difficult. Especially, you know, coming from that retreat is good example. You know, we have all these amazing founders. You know, they're all building profitable businesses. They have, like 20 employees and they're doing like a ton of revenue for us. It's like virtually impossible to operate in the same way. Like, 60% of my team is development and most of these, you know, direct to consumer brands. Don't really have a development arm. You know, we have over 50 engineers that are working on the actual product. So a huge amount of work and much more complex. And the key is, you know, starting out one step at a time and not knowing how challenging it was going to be. But that's why it took us a lot longer to start generating revenue and it took us a lot longer to find product market fit.
- [05:04]
Eric Dick
When did you start?
- [05:05]
Andy
I officially, I remember starting in like April or May of 2016. That's when I, that's when I read the article on Peloton. I was like, this is great, this is a good idea. Like this is when they're like doing 50 million in revenue. And I hired my first engineers in June of 2016, launched the first iteration of the product at the end of 2018. And it was, it was a completely different product. Obviously like pretty not, not a great product at that time, but it took us like a couple years to get there.
- [05:33]
Eric Dick
Did you take investment early on or where has investment played a role? I imagine with a moonshot like this, that's gotta be part of the picture.
- [05:39]
Andy
No, it was all bootstrapped until 2021.
- [05:42]
Eric Dick
Okay, well don't jump me up to 2021 just yet. So how. So walk me through like first rollout product market fit, like finding, you know, even, even if it's not the product you wanted to end up with you, you've probably had a lot of positive feedback from your, your customers.
- [05:57]
Andy
Yeah. So baby steps, you know, started designing the software, hire some engineers to, to build the software for me, who's my CTO now. So, you know, we had to hire some backend front end engineers, some graphics designers, doing it all with my own own money. So I had, you know, a ton of savings. You know, I started it when I was like 28 years old. So I had a, I had a property and it probably doubled in value. And then I used that as leverage to get a home equity line of credit of a few hundred thousand. So I dumped that all into the business and started building the software. During that time, I'm cold calling cold emailing people on Ali Baba pretty much to look for suppliers that can make fitness equipment. Found one that I really, really liked and I was like, this is great. Like this is exactly what I want. It was a connected rowing machine, except they didn't want to meet with us. Right. They're just like, you know, I don't really have a company, I'm just, I'm just a guy and so had to Fly over there with the translator knocking on their door to give us an opportunity. That's kind of how it all started.
- [07:03]
Eric Dick
So then talk to me about how you rolled out the product to start. What was your go to market like initially?
- [07:08]
Andy
All B2B. Because that's what I knew. That's, that's like My background is B2B. I was in a. I'm not a direct to consumer founder. So me going out and calling resellers that sell gym equipment to hotels and whatnot, and then driving across the country, driving across the US with, with a rower in my, in the trunk of my Subaru and pitching for the first couple of years, that was it. And then Covid hit. That's really when we pivoted to direct to consumer because, you know, we were selling to hotels and gyms and hotels and gyms got annihilated. So it was a blessing. I mean it was a, it was, we almost went bankrupt, but it was also a blessing.
- [07:47]
Eric Dick
And so it was around that time you're like, to take a real shot at this, I'm going to need some investment.
- [07:51]
Andy
No, it was, I'm always trying to get investment, but it's very difficult to raise capital. It was so difficult, I pretty much gave up. And I was like, I was like, screw. This is like I'm just going to build like a nice bootstrap business and you know, hopefully reach 10, 20 million in revenue or something like that. The key to, and let me, let me back up. Like, I tried to raise capital. I shipped the rower down to San Francisco, drove through, you know, SF pitching to various investors, sent out hundreds of emails, made hundreds of calls, didn't get anywhere, you know, got some meetings with some associates. That's like as far as I got. And it was until I got into Y Combinator. We're a YC company and YC opened up the door. But to get into the ecosystem as a Canadian, it's very hard. And it's even harder if you are doing hardware, if you're doing consumer. Those two are like things investors hate for the most part, yeah.
- [08:53]
Eric Dick
Why? Because it's less guaranteed. It's more of risk.
- [08:57]
Andy
I mean, in hindsight. So if you look at the Canadian ecosystem, most VCs are not interested in direct consumer or hardware. It's just if the risk to reward isn't there, you know, they're looking for B2B SaaS type products like the Shopify and whatnot. It's really the American side that I think takes bigger risks and likes to invest in these types of companies. But if you're not an American who's like, in the ecosystem, who lives in San Francisco or New York, has a network, it's really difficult to break in because you really need to know people. That's a huge part of it. And getting to yc, that's how I got to know the right people.
- [09:35]
Eric Dick
And so your pitch landed with yc, Was it really? Or was there a lot of hustle involved in getting into YC as well?
- [09:42]
Andy
I spent 20 to 30 minutes on the application. I didn't give a about it, to be honest, because I kind of gave like, right when I applied to YC was like two months after I kind of gave up on like, fundraising because I spent so much time and money. Um, and YC, they don't let many non B2B SaaS companies in. That's like, if you look at their entire portfolio of everything from like stripe to zapier, like whatever it is, like they're. They sell a lot Ubers like that. That's the kind of investments they like to make. So we're pretty. Pretty odd investment because we're hardware, because we're a consumer, and because I'm a solo founder. That's not technical. But they let. I think they let us in because I grinded to about a million and a half in revenue before I applied. That was why.
- [10:31]
Eric Dick
And they were enamored by the peloton case study as well, probably. Right. Like that. That there is an upside for that because you're merging these two fields together. There is a big upside.
- [10:40]
Andy
Yes and no. I think it's like there is an upside, but the downside is I wasn't, I wasn't. You know, I think for the most part, most investors, they like to invest in number one, and number two, they don't want to invest in number five or six or 10. And at that point, you know, Peloton had already. Peloton pretty much raised a billion dollars by the time I got into yc.
- [11:02]
Eric Dick
Yeah, that's fair.
- [11:03]
Andy
So, you know, they don't really want to invest in, you know, a company that's not going to be number one or number two. They want to invest in like the top. So, yes, the gaming side definitely helped. But at the same time, they're like, you're kind of late to the game.
- [11:16]
Eric Dick
And so your first million sales were B2B. That first million in quarter there, that was from hustling B2B gym owners, hotels, things like Covid hits. That industry changes forever. And then describe Your, yeah, your go to market on the D2C side.
- [11:32]
Andy
So 2020 Covid hits in January. So sales and we, we were in January of 2020. I remember we had like 100k a month and I was like sick. Like the business is starting to get places. We did 100k. This is amazing. And then February, March or wherever it was, we went down to like sub $2,000. I sold one machine kind of thing. And so I knew the business was like at risk. We were already in the hole for a ton of money. So we had to pivot to Direct to Consumer. It took us, I would say four to five months to build out the product so that it could be Direct to consumer ready. So you know, having memberships, it was funny because we were charging for memberships but we didn't have a way to actually like handle memberships. We just pretended like you would pay us and we would just give you the membership. So it took months to get that up and running. And then I learned Direct to consumer from speaking with other founders, from getting advisors joining networks. And then by the time, I think it was July 2020, that's when we launched into the direct to consumer space. We saw month over month growth until December and we got into YC that December or that January.
- [12:41]
Eric Dick
Oh, super exciting. What would you say is your biggest takeaway from the YC experience? Is it really about the network or were there a ton of actual learnings as well?
- [12:49]
Andy
Just imagine, I mean it will make sense to you because you went to Ecom north. So just imagine Ecom north But for like three months and with like 100 more companies and much brighter minds, like the biggest and the best, that's essentially what you're getting from it. So it's hard to say what was the biggest takeaway. I can tell you like moments in it, but like you think about the ecosystem that Ecom north has in that two day retreat with like 30 people. Imagine that times like 2000 people and for three months.
- [13:22]
Eric Dick
So you, you've, you've shown a little bit of DTC track record. You get this investment. Just talk about was that investment because of Y Combinator easier to come by than you thought it would be or was it, was it also a grind?
- [13:33]
Andy
No, it was, I mean it was, it was definitely a grind, but it was. And the best example I can give is, you know, we had one investor, I cold emailed them, he gave me a shot like in a meeting I pitched to him. You know, they all say they like you, but it doesn't really matter until like they sign a check. So you know, they like the pitch but they weren't that interested. And then we got into YC and right when we got into yc, those, some of those same investors, including that one, was like, hey, we'd love to like participate and invest. And I'm like, you pretty much said no two weeks ago and now you kind of want to invest.
- [14:05]
Eric Dick
Yeah.
- [14:07]
Andy
So you know, at that point in time we were just trying to scale. Like that was peak, peak Covid. We had customers waiting 120 days for a product. That's how long the lead times were. Like we, we were selling out before we even placed like the order with the manufacturer. And they were so busy. Right. So it was, it was wild at that time. And that's really what the capital was used for was to, to scale the business, Buy, buy inventory, you know, advertising budget, bringing on people. Unit economics were super strong. Really low acquisition costs, really high retention. It was just about getting money so we could feel the, feel the growth.
- [14:44]
Eric Dick
And then as you build out the account structure, the membership structure, that also gives you ltv because there's a monthly subscription aspect to it.
- [14:50]
Andy
Yep, exactly. But it wasn't that much at that time. You know, we were pretty small. I think in our first in 2020 we did like a million and a half. 2021, we did seven and a half million US dollars. Next year, 2022, we did like 19 million. In the year after we did 25 million. So we just kept growing and growing.
- [15:08]
Eric Dick
Yeah, that's wild. So you didn't see because there's that huge, you know, Covid boost that everyone experienced and I'm sure at home fitness maybe saw some of the biggest fever pitch buying for people just being like, I've got to have something in my home that that's going to work. But your track record shows that you kind of kept scaling through that even like I bet you saw. Did it get harder?
- [15:26]
Andy
Yeah, and it's hard. It's hard right now. So we definitely missed the wave because we didn't launch direct to consumer and we didn't spend any money on advertising or anything until like 21. So like, okay, we missed an entire year and by the time 21 around, everybody was ahead of us like they were spending. You look at our closest competitor today would be Hydro. You know, they raised $280 million. You know, we've raised it. We raised a nice chunk of cash, but we raised like 20 million. They raised 250, like 10 excess. So we were in a good spot because of COVID but. But it didn't really help us as much as it helped other people.
- [16:03]
Eric Dick
One of the things that we talk about on the podcast, like every single episode this year so far, is this idea of generating more mass awareness for your product essentially through means maybe other than Facebook. But. But I was just chatting with Taylor Holiday yesterday was like really sort of cautioning against that way of thinking. With a product of yours that is sort of like high concept. How are you thinking about top of funnel marketing? Or is it still mainly performance marketing, direct marketing on channels like Facebook?
- [16:31]
Andy
It's. So I'll explain our product and it's a very complex sales cycle because it's so expensive. It's so expensive.
- [16:37]
Eric Dick
It's.
- [16:38]
Andy
It's over $2,000. So the phase is extremely long for our product. And because it's so long, people are. They spend a lot more time thinking about the product, but also researching the product. So you can't take an approach like just selling on meta and Google because attribution is what, like seven or 21, whatever days it is.
- [17:00]
Eric Dick
Seven days. Yeah.
- [17:00]
Andy
No one buys our product in seven days. You don't, you don't look at a $2,000 machine with a membership and go, I'm going to buy this in seven days.
- [17:06]
Eric Dick
Yeah.
- [17:06]
Andy
The first problem is we have no true way of tracking attribution. And so when we spend, we're spend. So it's hard to track attribution. And then because the sales cycle is so long, we have to tap into the customer at different stages of the journey. So they may learn about us from a CTV ad or a meta or meta or Google. They may then want to research us on YouTube. They may go to Instagram reels and search us and see other influencers using it. So, so we tap into our customers through a lot of different channels. Direct mail, ctv, meta, Google. Truly omnichannel pr wrong ton of listicles. Like you have to do everything with our type of product and then I can't even tell you which one's working well because attribution isn't accurate enough for me to have confidence and say this is the reason why we're successful. Yeah, super difficult. Yeah, Very, very hard.
- [18:03]
Eric Dick
And so it's pretty bad. So it's pretty balanced in spend between all these different pieces.
- [18:08]
Andy
No, there's like waiting like, like meta and Google will take up most of it still because it's just, that's just how the, how the beast works. Right? Like, like you can't spend that like, we spend a ton on influencer marketing and we do sponsorships and we do a lot of, like, affiliates, but you can't spend a million dollars on that a month like you can on Meta and Google.
- [18:33]
Eric Dick
I can see influencers being hugely important. Do you have streamers? Do you have people that, like, stream themselves doing it at all or tapped into that live source yet?
- [18:41]
Andy
No. Most of our customers are like 35 and over, typically 45 years old, so they're a little bit older. Think of our games as the same people that play Candy Crush.
- [18:54]
Eric Dick
Yeah.
- [18:55]
Andy
Love playing the.
- [18:56]
Eric Dick
Totally. Yeah.
- [18:57]
Andy
We have, like, it's not super hardcore gaming, it is mobile gaming that distracts you. The, you know, the bejeweled Candy Crush type of experience.
- [19:10]
Eric Dick
Totally.
- [19:10]
Andy
So not many people want to, like, watch you while you're streaming.
- [19:13]
Eric Dick
You'd be surprised.
- [19:15]
Andy
Maybe I'm wrong.
- [19:16]
Eric Dick
Maybe I'm wrong. Who knows? I think people will. There's. I'm always amazed at some of the audiences I can find out there. But. But, yeah, no, I could see influencers just in general being a big part of people's consideration cycle. Seeing how much they're using it, seeing if they're liking it. Like, yeah, that makes sense. How. What's your process like for finding those influencers that are going to work?
- [19:35]
Andy
The shitty answer is I don't really know because I'm not. I'm too far removed from the business. We have over 90 employees now. I have no idea, like, how.
- [19:42]
Eric Dick
That's wild.
- [19:43]
Andy
The interests work. Yeah.
- [19:46]
Eric Dick
Do you guys use agencies or do you do it all internally with team? With marketing, for instance?
- [19:50]
Andy
Yeah, they're both. Yeah. Yeah. Like, the marketing team is probably 10 or 12 people deep. Everything from growth to creative. So we do a lot of creative in house, but we also use like, no growth as an example for creative with James from Ecom North. So, you know, we do some in house. It depends. You know, we try to do most things in house because it's more cost effective. But, you know, there are risks of doing it in house. Like, you have to hire somebody. If they don't work out, you have to fire them. Like, it takes time to recruit. You have an agency, you can bring them on right away. They have experience, they know what to do. But there's downsides that usually cost more. So it's usually a mix of both.
- [20:29]
Eric Dick
Nice. So what's your roadmap look like for 20, 25 and beyond? Is it just. Is it a continually. You know, just to scale it with. With the right kind of marketing? What do you. What are you planning?
- [20:39]
Andy
It's a tough, it's a tough year for, for everyone in the connected fitness space. I'd say it's, it's not as tough for us because we bootstrapped the business in the beginning. So we have, I'd say, a slightly stronger fundamentals. You know, when you start a business in Covid and CAC is super low and salaries are super high. It's, it's, it can be challenging to, to build a business. So I think we have that on, on our side. But it is a tough year. So there's going to be a ton of consolidation. What we're doing differently to try to combat this toughness. And by toughness I just really mean people aren't buying $2,000, you know, rowing machines and $3,000 treadmills like they did two years ago. You know, you can see from, from our website for those of you that follow. You know, last year we only had one product which is a rowing machine. Now we have a rowing machine, we have a bike and we have a treadmill. So I think it's important for us to expand beyond being a gamified rowing machine company to a gamified connected fitness company. So that's on. The roadmap is launching a ton of great new products, software and hardware.
- [21:47]
Eric Dick
Super smart. How's the. And you're seeing more products other than the three you've already launched?
- [21:51]
Andy
Yeah, more products and products at different price points. So if you think about how our ads work, let's say Meta serves ads like the more products you have at different price points and different modalities. It's just going to drive down cat because you're giving more optionality to people. Maybe they see a bike ad, but they're not interested in a bike. But they want a treadmill. And now if you had a treadmill at their price point, you're gonna sell. So that's kind of the idea. The logic.
- [22:16]
Eric Dick
How have the run and the ride done relative to the row? Have they, have they outpaced them at all?
- [22:22]
Andy
No. So the rower is like our bread and butter. But that's because we built that business since, you know, 2018, 2019. The bike just started shipping I think in like October, so super recent. And the treadmill starts shipping next week.
- [22:37]
Eric Dick
Oh, nice.
- [22:38]
Andy
So they're all brand brand new, but so far it's been, it's been good.
- [22:42]
Eric Dick
Super exciting. You've mentioned a few of your competitors. Describe the sort of competitive landscape and how you see yourself positioned.
- [22:49]
Andy
Yeah, there's a lot of competitors. But connective fitness is synonymous with instructor led classes. When you think connected fitness, you just think like Peloton.
- [22:58]
Eric Dick
Yes.
- [22:59]
Andy
And that's where we're different. We use gamification and games to, to motivate you and encourage you. So I think we have a strong differentiation out there, but it takes a lot of time to like educate people and. But there's a ton of competitors like Peloton to. There's, you know, a list of a hundred competitors across different modalities and it's pretty brutal out there because everybody's trying to survive. So it's like a cost. You know, everyone's cutting their cost, selling it for cheaper. They're always on promo stuff like that.
- [23:30]
Eric Dick
And then how much of the software are you? Like, how much? Like in terms of growth and roadmap plans, I guess you obviously have to create things that are custom built for the other platforms. I guess there's. Is there a lot of crossover that you can have between each three of the exercise platforms?
- [23:44]
Andy
Yeah. So since day one, we built the software to work across all modalities. So the games that we build on a rower work on the bike and they work on the treadmill as well. And in some games you can interplay so you can be on a treadmill and also play as someone on a bike. So it's pretty neat. But yeah, you're right and I didn't mention that enough, but software is our bread and butter. That's what makes us really, really special. Everything else is kind of a commodity. And we're coming out with new games and new updates pretty much every four to six weeks. It's super intensive because gaming requires artists, people that do sound effects. You need game designers, you need game developers, you need back end developers to handle the server side. That's why we have such a big team.
- [24:33]
Eric Dick
I think you should do a bitcoin miner game where you actually, the energy you generate actually helps solve video card problems and you actually mine bitcoin. Can you do that?
- [24:44]
Andy
I would love that. Honestly. I'm into crypto, except I'm down a ton for the past. Like, oh my goodness, I'm getting freaking torched right now.
- [24:52]
Eric Dick
Let's just change this into a crypto podcast. I'm, I like, I like bitcoin and xrp. I feel like that straddles the two sort of like risk profiles. Well, but we'll see, who knows?
- [25:02]
Andy
I mean I'm, I'm in way more risky stuff. I'm in like a lot of risky Stuff.
- [25:06]
Eric Dick
It's. I was talking with my friend about all these coins that I was enjoying and I was like, Solana. And he's like, oh yeah, my meme coins are built on Solana. He's like, I just made 1000 bucks on pregnant Sonic the Hedgehog coin. And I'm like, oh God.
- [25:16]
Andy
God. Yeah. I mean, I mean some, some wild, some wild meme coins, but my meme coins are not making me a thousand. They're like negative 90%. Right now.
- [25:24]
Eric Dick
Yeah. Oh, right now it's. It's not good. But I think you just hold. I think you just got a hodl. While we're off topic of D2C a little bit. Like, I guess tariffs are something because I was looking at your Meta ads. Looks like you guys are really focused on the US market, obviously. So you're probably a little. Have tariffs affected the business already? Like the ones with China at all?
- [25:43]
Andy
No. I mean, yes and no. So I think a lot of DTC companies you probably talk to, like they ship through Canada and take advantage of. What's the term? Like de minimis. Is that.
- [25:56]
Eric Dick
Yeah, de minimis.
- [25:57]
Andy
Yeah, the $800 limit. So we are big enough where we have three warehouses in the US because it doesn't make sense to ship a 300 pound treadmill and it costs way more than 800 bucks. So we've always shipped directly from Asia into the US So it's not going to affect us the same way as a lot of other DTC companies. But if it does affect us, it's going to affect every other supplier. So it's not like there are suppliers that are making stuff in the U.S. it's all coming from Southeast Asia, 100% of it.
- [26:30]
Eric Dick
What's been the most, like. I know, I guess you can't say. I was going to ask you your most effective growth channel, but you really can't say because it's so convoluted. There's so many different touch points on someone's customer journey. But if you had to pick one besides like Meta and Google, what would be the. What would be the one that you've seen the most from?
- [26:48]
Andy
I would say, I'll tell you what an interesting one that people don't think enough, which is direct mail.
- [26:55]
Eric Dick
Who'd you do direct mail with?
- [26:57]
Andy
We did it with Boulardi.
- [26:59]
Eric Dick
Okay.
- [27:00]
Andy
Have you heard of them? They're probably the biggest. They're probably the biggest direct mail, like partner out there. Direct mail is interesting because it's, you know, attribution is 100% accurate with direct mail. That's like the great thing with like. Yeah, so that's the only one where we're like, sure, we know if it's like providing a strong ROI and it's something that people literally have to pick up and throw in the garbage. So I, I would say it's also good because it allows you to tell a story and a lot of channels don't allow you to tell a story because if you're gonna advertise on Google or meta, you have like five seconds to get someone's attention. And it's hard to tell people your differentiation. But in direct mail, you're sending them a pamphlet with, you know, a lot more than just what you can do on meta. And I think that's the interesting about direct mail is it's, it lets you tell a story. People physically have to hold it in their hands. They trust it more and attribution 100%.
- [27:59]
Eric Dick
Yeah, I love that. As you're explaining this, I'm like, you've got to try Applovin.
- [28:04]
Andy
Oh, we're on Applovin?
- [28:06]
Eric Dick
Yeah. Are you on Applovin?
- [28:07]
Andy
Yeah, we're on Applovin.
- [28:08]
Eric Dick
How's that going? It's too early to tell.
- [28:11]
Andy
It's not that it's too early. It's the same problem. So we just started working with a company called Haus. Have you heard of them? H A U S Incrementality testing. So, you know, we're going through app level right now. But it's hard because in platform everything says it works. You can't really trust North Beam or Triple Whale because your attribution window is too long. So the data is not gonna be accurate. So we need to start doing incrementality testing, which is essentially like serving your app love and ads to one region and not to another region. That's what House was like.
- [28:48]
Eric Dick
Holdouts kind of holdouts.
- [28:49]
Andy
Yeah. So, yeah, it's working. But like, do I know if it's better than meta? Like, I know.
- [28:56]
Eric Dick
I think it will because it's the same audience. Right. It's the, it's the Candy crush bejeweled audience and it's women, 35 plus. Right. Like, I think, I think you'll see a lot. And, and you can storytell, right? Because you have to a little bit because. And I've just gone to your website. I see that like incredible, like high production video that you created. What, what is your approach on Applovin? Do you use that like high production value thing or is it more like influencers? Or UGC stuff because it's all like vertical as well.
- [29:22]
Andy
It's pretty much. We pretty much repurpose our best Meta ads and put it over Applovin.
- [29:28]
Eric Dick
Nice.
- [29:30]
Andy
But yeah, Applovin's super early still and Applovin, just like every other platform needs a certain amount of spend for it to be accurate enough for the algorithm to work. So the problem with us is our product's really expensive and our CAC super high, so you have to invest a ton of money. And so it's kind of risky to spend like 100k, 200k a month on Applo without seeing the results. So yeah, we're taking it, we're taking it a bit slower. Have you seen their stock?
- [29:56]
Eric Dick
Yeah, I just saw, I just saw a report on that actually. We're going to do something in the newsletter about it.
- [30:01]
Andy
Yeah. Crushing.
- [30:03]
Eric Dick
It's just so crazy to me because it's like my. And my buddy works for fungal actually and so we messaged up, I messaged him and I'm like, why aren't you guys doing this? Like, I come from like the mobile world and like mobile display was not sexy for a long time. Right. It's also kind of famous for pixel spamming or not really, you know, getting its cookie on everything. Right. Because it's on so many different devices. And so I'm really been interested to see how. Yeah. What a big deal it's become. It's so crazy for a traffic source to pop up all of a sudden. Rivals for some brands like Meta, you know, it's wild.
- [30:35]
Andy
Yeah. Everybody say, I've heard good things from pretty much everyone. So I'm optimistic on it. We're going to push hard to have love.
- [30:42]
Eric Dick
Everyone tempers it a little bit that they're all testing and they want to make sure. But it's like you'd think you'd see some red flag, more red flags if it wasn't a great new, a great new audience set that people are discovering. Right.
- [30:54]
Andy
You know, but that's what, that's, that's, that was our intention. So I'm in a community of a bunch of other founders. There's one company that's doing like 150 million in revenue directed to consumer brand and they are actually pulling back on Applovin because they're finding that it's a great, it's not driving new customers.
- [31:13]
Eric Dick
Oh, interesting.
- [31:14]
Andy
Another touch point. So like how much do you want to invest in that channel? It's hard to say.
- [31:19]
Eric Dick
Yeah, that makes sense. Interesting. Well, we'll Continue that conversation. Going.
- [31:24]
Andy
We'll see.
- [31:25]
Eric Dick
You going to any other events this year?
- [31:27]
Andy
Yeah, there's a bunch of other, there's a good E Comm event in New York. There's a bunch of, like, there's a ton of other events. And yeah, I'm always going to events, meeting people, but E Commerce has, has great, great events. I'll be, I'll be at their next one for sure.
- [31:38]
Eric Dick
Are you going to the one in Singapore?
- [31:40]
Andy
No. That's crazy.
- [31:41]
Eric Dick
No, you go to Singapore. I don't think I'm gonna go. I, I, we're doing some stuff with Shop Talk this year. We going to the, the Las Vegas Shop Talk event and they mentioned that if it goes well, they're like, and we're doing one in Abu Dhabi.
- [31:52]
Andy
Nice.
- [31:53]
Eric Dick
That could be an interesting trip.
- [31:55]
Andy
Yeah, I've been, I've been thinking of going to is Shop Talk is in. Where's it going to be this year?
- [31:59]
Eric Dick
That's in Vegas.
- [32:00]
Andy
It's always in, it's not always in Vegas.
- [32:01]
Eric Dick
It, it's, it's Vegas and then Europe. It's, they do they have like four or five different events, but their big one is in Vegas in March. At the end of March, we're going to be going, doing some live content from, from their podcast area, which should be fun. Well, great catching up. I'm excited. It's, you know, I'm excited to keep following your venture because it's a really interesting one. A lot of different, A lot of moving pieces on it.
- [32:21]
Andy
Yeah, hopefully, fingers crossed. We, we do well. It's, it's a tough environment, tough times, but we're confident we got, I think, something pretty special.
- [32:29]
Eric Dick
And I think your advice, if, you know, if you had any parting advice for founders who are thinking of similarly big tasks, what, what would be your, your advice?
- [32:38]
Andy
Big. In hindsight, I don't know if I'd do it again, you know, because it was, it was painful. Not just painful as in, like, the amount of work, but the amount of risks that I put on myself in terms of, like, capital. And it was actually pretty stupid. I'm really fortunate it worked out, but we were close to going bankrupt and I would have been in the whole half a million dollars. Like, I don't really think you should do what I do unless you have a crazy amount of confidence and you're insane.
- [33:08]
Eric Dick
Yeah.
- [33:10]
Andy
Yeah. I don't know if it's good advice.
- [33:12]
Eric Dick
For all of the crazy, insane people in our audience. Hope you can take that to heart. Everyone else, just keep listen to the pod. Andy, great to connect, man. And I look forward to seeing you at a future event. Hopefully you'll have a little more sleep next time.
- [33:23]
Andy
Awesome. Thank you. It was a pleasure.
- [33:31]
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 directtoconsumeralloneword. Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.