Advice Line with Troy Carter of Atom Factory

Summary

How I Built This with Guy Raz — Episode Summary: Advice Line with Troy Carter of Atom Factory

Release Date: July 24, 2025

In this engaging episode of How I Built This with Guy Raz, host Guy Raz collaborates with renowned entrepreneur Troy Carter, founder of Atom Factory, to address real-time business challenges faced by listeners. Leveraging Troy's extensive experience in the music industry and venture investing, the duo offers invaluable insights to aspiring entrepreneurs navigating the complexities of scaling their ventures.

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Introduction to the Advice Line

At the outset (02:54), Guy Raz introduces the Advice Line segment, a platform where entrepreneurs can seek guidance from experienced founders. This episode features Troy Carter, a recurring guest on the show, renowned for managing stars like Lady Gaga and investing early in companies such as Uber and Spotify.

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Caller 1: Madeline Nosik Ellis of The Nest Prep

Background:
Madeline Nosik Ellis (09:44) calls from Phoenix, Arizona, representing The Nest Prep, a service dedicated to producing and delivering custom postpartum meals and snacks to new families. Her venture focuses on providing freezer-friendly, nutritious meals that cater to families with newborns and toddlers.

Business Model & Challenges:
With a team of four and a state-of-the-art commercial kitchen, The Nest Prep has seen a steady increase in orders, approaching the six-figure mark (18:46). Madeline seeks advice on scaling her local business to other cities or nationally while maintaining the quality and community-centric approach that defines her brand.

Advice from Troy & Madeline:
Troy emphasizes a methodical and patient approach to scaling, suggesting piloting in nearby markets like Tucson or Las Vegas before expanding further (13:08). He advises focusing on Arizona initially to fine-tune operations and ensure the brand's essence remains intact during growth. Additionally, Troy recommends researching cities with high birth rates and affluence to identify optimal expansion targets (18:15).

Madeline echoes the sentiment, highlighting the importance of penetrating the existing market thoroughly before venturing out. She underscores the significance of local partnerships and perfecting the delivery model to ensure sustainable growth (19:10).

Notable Quotes:

• "Getting the experience right is more important than scaling too quickly." — Troy Carter (16:34)
• "Focusing on exceptional service and product quality paves the way for long-term success." — Madeline Nosik Ellis (08:29)

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Caller 2: Gina Davis of Guzzle H2O

Background:
Gina Davis (23:30) from Hood River, Oregon, introduces Guzzle H2O, an e-commerce business specializing in portable water purification equipment. Their flagship product is a compact unit that purifies 35 gallons of water using carbon filters and UV sterilization, catering to RV enthusiasts, adventurers, and off-grid communities.

Business Model & Challenges:
With sales nearing $800,000 last year and products priced between $200 to $1,000, Gina highlights the impact of Apple's privacy changes on digital advertising ROI, which has plummeted from 10x to 3x (37:49). She seeks strategies to scale effectively and authentically without relying heavily on traditional digital ads.

Advice from Troy & Madeline:
Troy delves into the evolving landscape of digital marketing, acknowledging the diminishing returns from platforms like Facebook and Instagram. He advises exploring influencer partnerships, particularly with micro-influencers who have genuine connections with their audiences (28:16). Additionally, he suggests leveraging storytelling and earned media through events and strategic partnerships to build brand authenticity and community engagement.

Madeline complements this by emphasizing the importance of storytelling and non-transactional relationships with influencers. She recommends creating structured programs with clear deliverables, such as advisory roles or product feedback sessions, to foster long-term collaborations (30:32).

Notable Quotes:

• "Authentic partnerships with influencers can drive more meaningful engagement than traditional ads." — Troy Carter (28:16)
• "Storytelling builds a stronger, less transactional connection with your audience." — Madeline Nosik Ellis (41:55)

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Closing Reflections

As the episode draws to a close (46:01), Guy Raz and Troy Carter reflect on the shared experiences of entrepreneurship. They highlight the importance of community and support, acknowledging that ventures can often feel isolating. Troy shares a poignant story from his early days managing Lady Gaga, emphasizing resilience and the importance of not panicking during crises (46:49).

Madeline adds a personal touch, discussing the value of self-compassion and grace during challenging times, encouraging entrepreneurs to remain steadfast and patient (47:31).

Notable Quotes:

• "Entrepreneurship can be a lonely journey, but building a community helps mitigate that isolation." — Gina Davis (46:01)
• "Don't panic when things get tough; take a step back and approach challenges with clarity." — Madeline Nosik Ellis (47:31)

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Key Takeaways

1. Strategic Scaling:

   • Start by solidifying your presence in the local market before expanding.
   • Pilot in nearby cities to test scalability without overextending resources.

2. Authentic Marketing:

   • Move beyond traditional digital ads; focus on storytelling and building genuine relationships.
   • Utilize influencer partnerships thoughtfully, ensuring they align with your brand's mission and values.

3. Operational Excellence:

   • Maintain high standards of product quality and customer service to foster loyalty and drive word-of-mouth referrals.
   • Streamline operations to handle increased demand without compromising on the customer experience.

4. Resilience and Adaptability:

   • Embrace challenges as opportunities to grow and refine your business model.
   • Show self-compassion and patience during setbacks, learning from each experience to build a stronger foundation.

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This episode serves as a masterclass in navigating the entrepreneurial journey, offering actionable insights from Troy Carter and shared experiences from budding entrepreneurs like Madeline Nosik Ellis and Gina Davis. Whether you're in the early stages of your venture or looking to scale, the advice dispensed in this episode provides a roadmap for sustainable and authentic growth.

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Notable Quotes with Timestamps:

• "Getting the experience right is more important than scaling too quickly." — Troy Carter (16:34)
• "Authentic partnerships with influencers can drive more meaningful engagement than traditional ads." — Troy Carter (28:16)
• "Storytelling builds a stronger, less transactional connection with your audience." — Madeline Nosik Ellis (41:55)
• "Don't panic when things get tough; take a step back and approach challenges with clarity." — Madeline Nosik Ellis (47:31)

Transcript

[Guy Raz]

Wondery subscribers can listen to How I Built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. Listening on Audible helps your imagination soar. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, and new ways of thinking. Audible has an incredible selection with over 1 million audiobooks, podcasts and audible originals all in one easy app. Enjoy Audible anytime while doing other things household chores, exercising on the road, commuting, you name it. Audible makes it easy to be inspired and entertained as part of your everyday routine without needing to set aside extra time. There's more to imagine when you listen. Sign up for a free 30 day Audible trial and your first audiobook is free. Visit audible.combiltine if you've started your own business, you know just how many challenges there are, big and small. I mean, look at how I built this building. This show came with a lot of trials, late nights, very, very early mornings. But even though there were challenges getting started, there is something that makes setting up a new business easier. Getting connected with AT&T business it doesn't matter what your business is dealing with, AT&T business helps to make it much, much easier. And that's the point of a provider in the first place. Making building your dream easier. Wake up to the power of att [e-mail] that's business.att.com if you're running a small business, you know there's nothing small about it. Running a new business is all consuming and every day there are new decisions, new problems to solve, and new challenges to face. But knowing you have the right tools can give you a ton of comfort. And that's why I really like Shopify. Shopify's Point of Sale system is a unified command center for your retail business. It brings together in store and online operations across up to 1000 locations. Get all the big stuff for your small business right with Shopify. Sign up for your $1 per trial and start selling today at shopify.combilt go to shopify.com built shopify.combilt hello and welcome to the advice line on how I built this label.

[Troy Carter]

Hi, I'm Guy Raz.

[Guy Raz]

This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you.

[Troy Carter]

Need advice, give us a call.

[Guy Raz]

And you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a 1 minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice [e-mail] and make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from.

[Troy Carter]

The world's greatest entrepreneurs.

[Guy Raz]

You can sign up for [e-mail] and we'll put all this info in the podcast description. Alright, let's get to it.

[Troy Carter]

Joining me today is Troy Carter, founder of Atom Factory, which manage stars like Lady Gaga and John Legend.

[Guy Raz]

Troy, welcome back to the show.

[Troy Carter]

It's great to have you on.

[Madeline Nosik Ellis]

Thank you for having me. Love being here.

[Troy Carter]

We love having you. You were first on the show. Troy was first on the show back in 2018. He told us about how he went from West Philadelphia to the heights of the music business in la. It's an amazing story. In la, he discovered and started managing the rapper Eve. But then it all came crashing. She left Troy as a client. His house was foreclosed on, his car was repossessed, and at the lowest point, Troy, you were introduced to a then unknown singer songwriter called Lady Gaga. And of course you helped build her brand and her career. And it's just an amazing story. And if you guys have not heard that episode with Troy Carter, we'll put a link to it in the podcast description. It is so awesome. It's just amazing. Anyway, after that, Troy, you became an investor. You got in early on companies like Uber and Lyft and Spotify. And you also had a stint at Spotify for a while and now you are in the music distribution business. So you are still working with artists and creatives. Give us a quick update on what's going on in your life right now.

[Madeline Nosik Ellis]

Yeah, you know, when I left Spotify, I decided that there was this opportunity in the independent music space to really help out independent music artists with distribution and services and technology. So basically took, you know, my experience as a manager, my experience of working with artists and technology at Spotify, and now we're distribute and independent artists.

[Troy Carter]

That's awesome. And you know, it's interesting because you hear a lot of sort of conversations around, you know, Spotify and how it compensates people and the reality is like if you are an independent artist and you own the rights and your recordings and everything, like you get all the money, right? It's it's, it's that, but it's the way the money is distributed. Because if you are an artist and there's writers and there's composers and there's, you know, all kinds of people involved that, you know, that dollar gets split, you know, 20 different, 50 different ways.

[Madeline Nosik Ellis]

Yeah. And for us, you know, we, we like to work with artists who own all of their music. We encourage them to keep that, to hold on to their rights. And you know, if the music does well, they do incredibly well.

[Troy Carter]

Yeah, you, when, when I remember on the show is still. You've been on the show since then a few times, but your first episode, the story of your life. And just I still think about it sometimes going up and down California in a van, you know, with, with Lady Gaga, before she was Lady Gaga. You guys also at the time use social media, YouTube to kind of help launch your career. And back then, and even until recently, that kind of digital discovery was new. Right. And it's a different world now. I mean, social media platforms are, you know, they're saturated. Right. Digital ads, we're hearing from a lot of startup founders that, that and even established companies, digital ads are not performing as well. Right. And as they used to. So what are some ways that you're hearing about how entrepreneurs, creators, other people that you work with, are building their brands and reaching audiences despite those challenges?

[Madeline Nosik Ellis]

Yeah, we're having these conversations in real time. I was just talking to my team a few weeks ago about even with my own habits, when I use search now, which I rarely do, but when I do, I'm basically reading the AI summary and not even sort of clicking through or whatever on whatever else. So discovery is definitely shifting now. The reality is you just got to be really, really, really great at what you do and have a really great product, you know, because in music we've always been like the canary in a coal mine. So probably a decade ago when the barriers to entry to music went away because of technology and all of a sudden you have hundreds of thousands of artists releasing music. You know, we figured out ways to be able to cut through the noise, but part of it was you gotta take a really patient long term approach and not expect things to happen overnight and not fall for the traps that happen and taking shortcuts to sort of accelerate things. So, you know, I just think continuing to focus on product, on exceptional service, and to me it's a bit of a longer route, but it works. But the shortcuts and the growth hacks, you know, is going to be a Little bit tougher right now.

[Troy Carter]

Before we get to our callers, one last question for you. I mean, a lot of people, a lot of founders, startup founders today, and we may get this question today, too. Ask me about working with influencers and celebrities. Right. Because now you're seeing just an explosion of celebrity products.

[Guy Raz]

Not all of them work.

[Troy Carter]

Right. We only hear about the occasional, you know, billion dollar deals of the Hailey Biebers of the world. But most of the time, they. They don't really pan out. What kind of advice do you. Would you give to entrepreneurs thinking about whether to work with celebrities or creators, even giving them equity in their product to. In the brand to, you know, boost it?

[Madeline Nosik Ellis]

You know, making sure that is not transactional? You know, if it was me sitting in that seat, I would want somebody who's in love with my product and mission aligned with the vision of the company. And if you didn't have to pay them, that they still would promote your product, you know, and that's the type of relationship you need to have. If it's transactional, it usually doesn't work.

[Troy Carter]

Yeah, makes a lot of sense. All right, let's bring in our first caller. Welcome to the advice line. You're on with me and Troy Carter. Tell us your name and where you're calling from and just one line about your business, please.

[Tyler Beck]

Hello, Guy. Troy, thank you so much for having me. It's truly an honor. My name is Madeline Nosik Ellis. I am in Phoenix, Arizona, and my business is the Nest Prep. We produce and deliver custom postpartum meals and snacks to new families that have just had a baby and extending into toddlerhood families that just need to feed everybody around them.

[Troy Carter]

Nice. Awesome. Welcome to the show, Madeline. So you make fresh meals. Are they frozen or fresh?

[Tyler Beck]

Yes, they're freezer friendly. So everything that we make is intended to be stored in the freezer so that you can stock up before the baby is born. That's the primary model that we have. So we deliver frozen.

[Troy Carter]

And this is designed. You designed this for people who postpartum. So a lot of times I'm sure people listening have had like a meal train sent to you.

[Guy Raz]

Oh, our friend had a baby.

[Troy Carter]

Let's do a meal train.

[Tyler Beck]

Yes.

[Troy Carter]

So something like this is probably perfect. They can just order food and then the food is delivered to their front door and they've got the got it ready to go. Tell me how you, how you came up with this idea or how did you decide to launch this business?

[Tyler Beck]

Exactly. Yeah. So I have always just loved feeding people I mean, since I was a kid, I can remember wanting to feed people and cook. And so I worked in food service management really my whole career. And I just. I love it. Through that career, I started having babies of my own. And that would kind of be my postpartum gift to my friends, you know, and especially ones having their second or third babies. They don't really need a lot more space.

[Troy Carter]

You stack up meals for them.

[Tyler Beck]

Exactly.

[Troy Carter]

Bring them to their door.

[Tyler Beck]

Yep. Yeah. I would make things for them at home, at my home, and then pack it up for them, bring it and, you know, help them reorganize the freezer a little bit, ask them what kind of things that they were into and liked. And I just. I loved it. And I remember doing it for myself when I was pregnant with my first baby. And I just had this daydream about how amazing it would be to do this for other people as a job. And it took me, you know, having a couple more babies to actually make it happen. But once I decided it was time, I just designed the website and went all in.

[Troy Carter]

And who is doing all the cooking?

[Tyler Beck]

So we have a team of four. The kitchen team is really two or three of us, and it's. We have a beautiful commercial kitchen. We produce everything in the span of like, two or three days, depending on our amount of orders, which have just increased every week. So we have three of us on the team with nutrition and culinary backgrounds, and then one who's more in, like, operations management.

[Troy Carter]

Right. So there's. This is a. But it's a labor intensive business right now. You're a small team.

[Tyler Beck]

Yes.

[Troy Carter]

Yeah. All right, before we dig in more, tell us your question.

[Tyler Beck]

Yeah. So right now we serve the Phoenix area and every one of our customers, everyone that we talk to, expresses what a need this is. You know, the need to feed your family is not exclusive. So my question is, when you have a business model like ours that not only takes pride in, but really focuses on utilizing the resources of, like, a local community, what's the first step to scaling that into other cities or national.

[Troy Carter]

All right, Troy, you know this well, Troy, because you've invested in companies that have started in one place and had to expand all over the country. Food delivery service designed for postpartum parents. Looks like a cool business. It's in Phoenix right now, but down the road, maybe get it to Tucson and to Los Angeles and San Diego. And how does she start thinking about this?

[Madeline Nosik Ellis]

I guess. What's the current distribution?

[Tyler Beck]

So weekly we have, you know, we have a couple hundred Customers right now. We also have a retail partnership with a local mom and baby sort of boutique workout class. They're sort of an all encompassing location where they've agreed to have a branded freezer of ours on site. And we actually stock that every week as well. People can go in and buy it on site.

[Madeline Nosik Ellis]

And what's the. What's the shelf life on the product?

[Tyler Beck]

So we say on our labels anywhere from three to four months. Technically it's really more like six to 12. Just because everything is designed to be frozen. Once you take it out and prepare it for consumption, obviously the shelf life changes a little bit. But we have that on our labels. So, you know, you can stock up. But we have several families that order every week, so it's become a part of their weekly grocery delivery.

[Madeline Nosik Ellis]

What's the price point?

[Tyler Beck]

So the price range on our website, the snacks are anywhere from like the 15 to $18 range. And then our meals are 30 to $45. They usually feed four. So a typical average order for us is around $200.

[Madeline Nosik Ellis]

Got it. So is there a possibility of doing like a pilot program with a Target or somebody along those lines?

[Tyler Beck]

I've looked into sprouts that would kind of be. That's kind of our local, you know, west coast health grocery store. They have a pilot program available for people who are trying to get their products on shelves. That is sort of a. It's one route that I see possibly happening, kind of taking that retail route. But we really have found that this delivery model is very well received by our customers.

[Madeline Nosik Ellis]

So I guess explain how the delivery model works.

[Tyler Beck]

Yeah. So our order cutoff is Thursday every week. And then we use that Thursday to Monday time frame to prepare the meals. Monday is our delivery day around Phoenix right now. So we have a team that shows up to the kitchen Monday morning where we produce it all, grabs the bags with their labels and then they have a route on their phone. We've got a delivery driver app where they will take that to everyone's home that's ordered for that week. So we do it week after week deliveries every Monday.

[Madeline Nosik Ellis]

I would pilot a small market nearby and just to make sure that you can replicate what people already love about your brand. So, you know, don't feel the pressure right away on scaling because I think that the experience is way more important than scale. And especially since you have a small team at the moment. Because once you start scaling as the CEO, your job changes. Now, you know, you leave the kitchen to manage people and so. And you don't want to lose the magic of your brand within that transition. So I think being able to do a small pilot nearby might be the sort of way to sort of test it out to see whether or not it changes the experience for your customers.

[Troy Carter]

Yeah, I think that's right. I mean, I think that right now, you know, thinking about ways to scale it, you should do it very slowly and methodically. I mean, there are a couple of things here. Your price point is higher than, you know, than what some frozen meal would be. Obviously the quality is better and it's, you know, prepared by chefs, so that makes a lot of sense. But there are meal delivery services in cities all across the country. So the question is, what is a thing you're offering? Right? What is the value prop here? Is it the branding? Is it the idea that this is for postpartum, you know, families, et cetera? And that could be an interesting, you know, way to position it. I think that you might want to start. Start going to, just literally to Tucson or I don't know if you reach Prescott, Arizona, but a smaller, closer place that you can reach in a couple hours where you don't have to hire too many more people. Because if you're doing it in Tucson and then eventually you've got a kitchen in Tucson and you're going to need a staff there, a team there. But it could be a great model for how to think about expanding out of state. I would really try and focus on Arizona first and the markets there, and then see whether it's worth trying going into Las Vegas. But also the other thing I would do is I would literally just do research on what cities, what parts of the country are seeing the highest number of births? I mean, literally I would go and is it Columbus, Ohio? Is it in proportion of population, where are you seeing the highest number of births in proportion of population?

[Guy Raz]

And.

[Troy Carter]

And then also, you know, you want to cross reference that with affluence.

[Madeline Nosik Ellis]

That's. That's what I was going to say, because it's probably not a direct correlation. You know, you think higher births and higher births usually equals lower education level. If you look at all of the data in terms of high birth rates and education level and education usually equates directly to income.

[Troy Carter]

Yeah.

[Madeline Nosik Ellis]

What's the current size of the business?

[Tyler Beck]

We're approaching the six figure mark.

[Madeline Nosik Ellis]

I would really focus on penetrating your own market first because you can grow, you can grow the business there substantially, but it gives you the opportunity to really work out any kinks that you may need to work out before, before you know, you scale.

[Troy Carter]

Yeah, I agree you're too small right now to work with sprouts or any kind of national chain, but you're not too small to work with a local co op. I mean, that could be an interesting way to try and test out how this might work in retail.

[Tyler Beck]

I am all for that. I would love to be able to saturate it here and really work out the kinks like you said. I mean, food services, high overhead, high labor, and the goal is to be able to have the service in other cities, but definitely not in some sort of rash decision or, you know, something that's not going to sustain itself.

[Troy Carter]

Yeah. All right, madelinessic. The brand is called the Nest Prep. Good luck. Congrats. Thanks for calling in.

[Madeline Nosik Ellis]

Congratulations.

[Tyler Beck]

Thank you both.

[Guy Raz]

Alright, we're going to take a quick break, but we'll be right back with another caller and another round of advice.

[Troy Carter]

Stay with us.

[Guy Raz]

I'm Guy Raz and you're listening to the advice line right here on how.

[Troy Carter]

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[Guy Raz]

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[Troy Carter]

Welcome back to the advice line on how I built this lab. I'm Guy Raz and my guest today is Troy Carter, founder of Atom Factory and former manager of Lady Gaga, among others. And we are taking your calls. So let's bring in our next caller. Tell us your name, where you're calling from and just one line about your business, please.

[Gina Davis]

Hi, Troy. Hi, Guy. My name is Tyler Beck. I'm calling from Hood River, Oregon. Name of the company is Guzzle H2O and we build portable water purification equipment.

[Troy Carter]

Cool. Portable for like RVs and like that kind of thing.

[Gina Davis]

Yeah. So our flagship product is like a box that's got a carbon filter, a UV sterilizer, a pump and a battery. And so it will pump, filter and purify 35 gallons of water on a battery charge and it will fill up like a five gallon jerry can in about seven minutes. So wow.

[Troy Carter]

So you can, you can just like park your RV next to a river or like a lake and just get that water purified, fill up your onboard.

[Gina Davis]

Tanks with clean drinking water. Yeah. So we've got a lot of customers that with RVs. The van size RVs are really popular these days. A lot of people just doing, you know, car camping and adventure travel, you know, in vehicles where they need to source water and then, you know, all kinds of people with off grid residences and like hunting camps and that kind of thing that would use a product like ours. And then we also have point of use systems that you can install in an adventure vehicle or an RV that treats the water coming out of your tank and cleans it as you use it because Most people with an RV don't want to drink the water that's coming out of the. Out of the onboard tank because it either tastes like plastic or, you know, they're worried that it's got mildew or bacteria in it. So the UV ensures that it's safe.

[Guy Raz]

So that's just.

[Troy Carter]

You can really literally go to any body of water. Not. Not the ocean, obviously, that's desalination, but pretty much most relatively clean bodies of water. And you can get clean drinking water from this product?

[Gina Davis]

Any. Any fresh water source. Yeah.

[Troy Carter]

That's awesome. Well, tell me how you came. Came to this.

[Guy Raz]

Were you.

[Troy Carter]

Are you an engineer? Is this your background? What. How'd you start this business?

[Gina Davis]

Yeah, so my business partner is actually a professional sailor, and he, you know, put up a Facebook rant. You know, five or six years ago, he was traveling with his sailing team, and they would be, you know, at some international waterfront, and there's water on tap, but to support the team, they would go buy bottled water. And so they'd get to the end of the event, and the dumpster is 50 bottles, single use, plastic bottles. And so he was like, wait a minute. We are, you know, sailing on the ocean. All the plastic trash ends up in the ocean. You know, we can't keep doing this. So. And I picked up on it, and I've known Sean for a while.

[Troy Carter]

So Sean is a sailor?

[Gina Davis]

Sean Kuvreau. Yeah. And, yeah, so we just started, like, the first project was to see if we could put a drinking water treatment system in a case that they could travel around the world with. And so.

[Troy Carter]

Wow. Yeah, that's how it started. So. All right, so now you guys have this business going. Tell me a little bit about your sales. Like, what. How did you guys do last year?

[Gina Davis]

Yeah, so we did about $800,000 last year. Yeah.

[Madeline Nosik Ellis]

What's the price point? And, like, how many units is that?

[Gina Davis]

Yes, we've got products that range from $200 up to $1,000 is like the flagship system.

[Troy Carter]

Got it. All right, and before we. Before we dig in deeper, what's your question for us?

[Gina Davis]

I guess, as a small brand, trying to grow awareness, how should we think about working with micro influencers, particularly? Like, we have a lot of people that, you know, YouTubers and people on Instagram that are doing, like, we have people that drive from the north side of Alaska to the tip of South America, and so they'll bring our equipment. And so we have great relationships with them. But we'd like to give these relationships some longevity. And we've basically found that as we call bigger influencers, they don't call us back. So we're sort of thinking if we had more structure to our program with working with these people, we might have a little more success. Not that we're not having success, but it seems like it could work a little smoother and with a little more clarity for everybody involved.

[Troy Carter]

Before I bring in Troy, just really quickly, what's been the return, like, on working with micro influencers, are you actually seeing a significant boost in sales or is it mixed bag?

[Gina Davis]

It's a mixed bag. And, you know, that is another reason I'm asking the question. I would say, you know, it kind of ranges from you end up with a whole community that adopts your product because you pick the person that is talking to that community and it's super successful. And you'll even end up with, you know, we'll end up with deals with RV manufacturers to sell OEM equipment to them. Like, that would be the most successful, and then sort of the least successful is you just sort of never hear from them again. So. Yeah.

[Troy Carter]

All right, Troy Carter, I want to bring you in. This is very unusual because this is not like a simple kind of consumer product. I mean, this is for people who are traveling. RVs, boats. Right. Recreational. And that's off grid. And there are a lot of people like that.

[Madeline Nosik Ellis]

Yeah. Like, these are the kind of categories that I actually like. And what I mean by that is the types of influencers in this space carry a lot of weight, you know, so when you find the right people, they have the YouTube following or TikTok following or whatever else, you want to know what type of gear that they're using. You know, you're sort of following a story, you know, and that. And that's what's great about it. What I would say from a structure standpoint, figuring out some sort of equity pool with advisory shares, when I look at advisory deals that work really well, is somebody who loves your product, you know, and that part you'll hear me repeat a million times, because if it's not authentic, it's not worth it. But being able to call on that person a few times a year for feedback on product, helping you develop product, you know, hey, this is our next iteration. I want you to give us some feedback on how you're thinking about it. And. And then the other piece too is making sure that in some of the content that you do that there's some sort of call to action, because I think that's how you can really Test, you know, conversion to, you know, sort of directly, but just making sure that is a clear call to action as well.

[Gina Davis]

Yeah, yeah, yeah, that's, that's interesting. Those are, those are great ideas. Typically we don't even set up an agreement with these people. Like it's, you know, we'll have exchange emails and like this is what we'd like to get. And I can see how thinking the deliverables through a little bit more and building in some things like product development and event appearances could be great. Yeah.

[Madeline Nosik Ellis]

So, yeah, look, you know, even with my business, we set aside advisory shares, you know, so it's, it's certain artists I call, some product people I call and they're just incredibly helpful, you know, and so, and sometimes you may need somebody to do something forward facing, but a lot of times it's just the, the behind the scene things that actually move the needle the mo. The most.

[Gina Davis]

Yeah, yeah, that's interesting.

[Troy Carter]

You know, we did an episode on Solo Stove a couple years ago on the show and it's worth listening to because the founders of that brand, they, they really were, they're not, I mean they were campers, but they were not like necessarily, you know, that was their passion, but they were looking for a category and a product that, that, that they thought could do really well. And they found that campers had a really hard time just, you know, quickly building a fire in a safe way. And that's how they came up with Solo Stove. They really kind of researched the space and they came up with it and it turned out to be an amazing product and a hugely successful brand. And I think that there are some insights in there that might be helpful for you. I mean, you're dealing with people who are outdoors building tents, right. They're in RVs, they're traveling. And to have a great access to great, clean potable water, you know, is that simple is a bonus.

[Gina Davis]

There's also. Yeah. People that are just interested in preparedness and you know, having like we've got a home product as well. So people just want higher quality water in their home.

[Troy Carter]

Right, right. When apocalypse happens.

[Madeline Nosik Ellis]

And you know, we've, we did, we've done a lot of work with. I'm not sure if you're familiar with charity water, but I've been to Ethiopia quite a few times with them on, on trips and when I think about the problem you're solving is a huge market, you know, sort of outside of campers as well. So I think is a, is a big opportunity that sort of extends out of, you know, just the core market you focused on too. Sounds like a great, great business.

[Troy Carter]

It's a cool product. The brand is called Guzzle H2O. Tyler Beck, thanks for calling in.

[Gina Davis]

Thanks.

[Madeline Nosik Ellis]

Yes. You have a new, you have a new customer. I'm going to order one.

[Gina Davis]

Yeah, sounds good.

[Troy Carter]

Awesome. All right, thanks for calling in. Bye.

[Gina Davis]

Bye.

[Troy Carter]

Yeah, I mean, listen, judging by what's happening in the world today and, you know, all the changes in politics in our country, who knows, Armageddon might be close at hand.

[Madeline Nosik Ellis]

I'm a prepper, guy. You never know.

[Guy Raz]

All right, we're going to take another quick break, but we'll be right back with another caller.

[Troy Carter]

Stay with us.

[Guy Raz]

I'm Guy Raz and you're listening to the advice line right here on how.

[Troy Carter]

I built this lab.

[Guy Raz]

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[Troy Carter]

Welcome back to the advice line on how I built this lab. I'm Guy Raz and today I'm taking calls with Troy Carter. So let's bring on our next call. Hello. Welcome caller.

[F]

Hi, Guy. Hi, Troy. Thank you for having me. I'm very excited to be here. My name is Gina Davis and I am calling in from Minneapolis, Minnesota and our company is good Thomas. We are an e commerce gift shop for dog lovers best known for our matching outfits seen on shark tank and playful gifts like the dogfather embroidered hat.

[Troy Carter]

All right, welcome to the show Gina. So matching up. Let's dive into this. You sell matching outfits for humans and dogs?

[F]

We do, yes.

[Troy Carter]

So your dog. I love my dog Kiki very much, but she's very little, so she could put basically a dog shirt on Kiki and a dog shirt on me, and we would walk down the street, we'd be matching.

[F]

That's it. Yep. And kids too.

[Troy Carter]

And you also make like dog accessories. Like, tell me a little bit more about what else you saw.

[F]

Yeah, so we have fun little poop bags that say fresh as daisies on them. We have playful hats like the dog Father demilf. Not for everyone, but certain people love it. Dog, mommy, things like that. So. But our main bread and butter is definitely the matching outfits and clothing.

[Troy Carter]

And you mentioned you were on Shark Tank at one point back in. When did you start the company?

[F]

We started in 2014, actually. We were in Shark Tank in 2019.

[Troy Carter]

And how did. Shark Tank must have been huge, right? It must have boosted sales.

[F]

It was. It was amazing. I mean, I was a big fan of the show and my husband and I went on and it actually aired in November, which is our. The biggest Christmas.

[Troy Carter]

Yeah, yeah.

[F]

Q4 is massive for us. So it was. It was great. And we made an onair deal with Cuban, so we were very happy.

[Madeline Nosik Ellis]

Amazing. You made the right. Right person.

[Troy Carter]

Yeah, he's been on the show. He's awesome. So. So now I'm sure you did very well then after that. But how. How have sales been since then? Have you sustained those sales or has been been a bit tough?

[F]

Highs and lows, of course. Like most businesses, we. That was great for our business. And then 2020 was, you know, following that and pandemic hit and we actually were lucky. One of those businesses that did good during the pandemic. So we saw continuous growth. So we decided to spend the year looking at if we really wanted to raise this outside capital through friends and family, et cetera. And we decided that the best way for us to scale was through digital advertising. We're seeing around 10x return on ad spend, so it seemed like the best way to go. 86% of millennials said that they would dress their dogs in clothing. So the market potential was huge. So we raised that Outside Capital in 2021. And then in the summer of 2022, the Apple Privacy act happened and our digital ad spend or return on ads went from 10x to 8x to 5x. And now we are lucky to hit 3x.

[Guy Raz]

Wow.

[Troy Carter]

Well, how much did you guys spend.

[F]

On ads that first year? It was around $100,000.

[Troy Carter]

That was the money you raised in 2022?

[F]

We raised 150 and 50 went to inventory.

[Troy Carter]

Before we dive into this more, what's your question for us?

[F]

So our question is just related to that or my question is that, you know, ads used to perform really well for us. And ever since that change with Apple privacy, the return on ad spend has declined. And so how can we scale effectively and authentically as an E commerce brand and make the return back that we need?

[Troy Carter]

All right, so a lot going on here, Troy. We talked about this a little bit. Ad spend, digital marketing. I mean, people are getting hammered. I mean, so many brands on how I built this, basically built their brands off Facebook ads. You know, it was like shooting fish in a barrel. Right. People have literally said that. And it's completely changed now. You know, you spend money on an ad on Facebook or on Instagram, wherever, and it just does not convert. So let's dive into it.

[Madeline Nosik Ellis]

Tell me a little bit about your social footprint and your social strategy.

[F]

Yeah, so we, when we launched the brand, Instagram was just starting to take off. And that's kind of how we grew the business so organically, not everyone wants to take a picture of themselves in a shirt that they love, but almost everyone wants to take a picture of their dog and post it in a shirt. And so the word spread, we couldn't get inventory in stock, and so did our social media following. So we have around 100,000 followers, which is great. But also Instagram has changed meta drastically, you know, in recent years, and now we can hardly even reach our 100,000 followers through organic posts. So they almost have to be paid to reach them. So our business has just changed completely. And we continue to post, we work with some influencers, but it's not our main focus anymore. And we're just trying to figure out how to reach, you know, the massive audience set of people that would love our product.

[Madeline Nosik Ellis]

Yeah, and what's the, I guess, outside of ads, is there a brand strategy that lives outside of ads?

[F]

So we do some local markets, but it's pretty, you know, the return is pretty small there. And also our audience, I'm in Minneapolis now, I went to school in LA, but our customer is not huge here. It's mostly LA, NY and bigger cities. We've also done some trade shows to try to focus on wholesale, but we have found that the return is best spent on online. Just because when we've been in retail, you see our products hanging up on a hanger and it Just doesn't do it justice. People don't even know what it is. You really need to see a photo like on our website of a dog and their human matching.

[Madeline Nosik Ellis]

And that's what I was thinking and that's why I was asking about the social footprint because this is a brand that's born for social, you know, for Instagram and TikTok. And it's almost like a marketer's dream in terms of being able to have dog and man. Yes, it's like same outfit. It's like is a, is a marketer's dream and then you can have a lot of fun with it. And I feel like you could get a lot of earned media versus paid media sort of based off of event based marketing. And what I mean by that, it's like, you know, fashion shows, pop ups, you know, you know, things that you can do that that's going to get more word of mouth than anything else because I just feel like you're never going to get that return back from, from ads. What it is that that era is over with, you know, so. So I feel like the storytelling piece of it is the way you could sort of get the attention you need around it.

[Troy Carter]

I mean, your website is great and you've got great photos on it. You've done a great job with it. Really, really. And the pictures of people with their dogs are funny. The guy with the cucumbers on his eyes and a bathrobe and the dog with a cucumber on his eyes. It's very funny and it's good stuff and I think that makes sense. Troy, how do they get sort of these images, you know, out there in a way that as you say, is organic.

[Madeline Nosik Ellis]

So it's storytelling. So we went through, we went through a similar problem. Right. And one of the things that we talked about was we have to make our social profiles valuable to artists, whether they're artists that's with Venice or whether they're with somebody else. And what we started doing was we started doing case studies on artists who broke out. So whether it was Chapel Roan, whether it's Billie Eilish, whether, you know, whatever these new breakout artists were, we basically spent a month studying how they broke and then breaking that down and then telling artists, these are the steps that this artist took and this is how you can do it as an independent artist. And it became incredibly valuable and it started traveling essentially. So and so a lot of our customers who have come in have actually come in through our case studies. The thing is you, you Own a relationship. You know, like people's relationships with their pets are sacred. And so you finding ways to add value to that relationship, that creates stickiness, and that stickiness creates trust, and trust then creates conversion. So I just would sort of really focus around the storytelling and probably less on ad strategy.

[F]

Yeah.

[Madeline Nosik Ellis]

Are you familiar with the brand Melbourne, the golf brand?

[F]

No, I am not.

[Madeline Nosik Ellis]

They're an incredible case study. They've done incredible work in terms of partnerships. So they basically took a supreme model where they found, okay, what type of partnerships can we form that keep people coming back? So whether it's with a Nike or whether it's with Wu Tang Clan or whether it's like, they find these really interesting partnerships and their customer keeps coming back buying a new version of something that they bought already based off of this new type of partnership. And so if you can make it a fashion or cultural thing that sort of sits outside of just your brand, is that a way to be able to get the repeat customers and sort of the cultural impact around it as well, you know, so if it's. I'm making it up. If it's a Louis Vuitton or something that you partner with a dog and human outfit, or whether it's a Supreme, like whoever it might be, but something that. And you know your customer better than I would ever know your customer. But just thinking about these sort of partnerships, that could keep it interesting. But Melbourne, you should study that brand like they. They've taken the golf world by. By storm. It was a boring category. They've taken it by storm.

[F]

That's a great idea. Thank you.

[Troy Carter]

The brand is called Good. Thomas, Gina Davis, thanks for calling in.

[F]

Thank you for having me. Honestly, it's. It's such a pleasure. And I do feel like being an entrepreneur can be kind of a lonely thing, especially when you don't have other friends that are in the same game as you. And so listening to this podcast has been truly life changing, making me feel like I'm not alone and part of a community.

[Troy Carter]

So that's why we do it. Gina, thanks for calling in. Thank you so much, Troy. Great advice. Wow, you. I mean, not wow, I know you're a superstar. Great advice. Really great advice.

[Guy Raz]

Because you.

[Troy Carter]

You understand that it's not, you know, there's no quick, quick switch here. But, I mean, you understand how quickly the dynamics are changing in the marketplace.

[Madeline Nosik Ellis]

It is. And, you know, I kind of felt bad, you know, because as we're talking about ads is. No, nobody has the answer. But I feel like entrepreneurs who like who we just spoke with, they have stories that they can tell. And so I think being able to, you know, tell the stories, I think it builds a, a stronger, less transactional connection.

[Troy Carter]

Anyway, Troy, I still remember so visually, and you guys have to hear this story. It's so good. Troy, story is amazing. You know, you were talking about when you were young and you know, you met like the Fresh Prince and then you were, you got involved in like booking shows and it was like cash. You had to like bring paper bags full of cash right in like West Philadelphia to pay the venues or to collect the tickets. And you had to be really careful that you wouldn't get robbed. When you think about you, who you were back then and what you knew and didn't know, really, because you didn't know what you know now. If you could go back to him now with everything you know and all your perspective, what, what do you think would have been helpful for him to know back then?

[Madeline Nosik Ellis]

Not to panic, you know, when think, when things hit the fan, you start feeling uncomfortable. Don't panic, you know, And I think the years of experience, I probably would have saved myself a lot of strife if I knew how to take slower breaths and just not react so quickly or so rashly, you know, but the other big piece that I think is probably even more important than that is showing myself grace. I think I was really tough on myself a lot of times when things went, didn't go so well, but being able to give myself, you know, a little bit more grace.

[Troy Carter]

Troy, thanks so much for coming back on the show. It's great having you.

[Madeline Nosik Ellis]

Thanks for having me, guy. I missed you.

[Troy Carter]

Yeah, you too. And by the way, if you guys haven't heard the Adam Factory episode, go back and check it out. It's truly, it's so good. We'll put a link to it in the podcast in the show notes on your podcast app. So check it out. And here's one of my favorite moments from that episode.

[Guy Raz]

So what happened to the business?

[Madeline Nosik Ellis]

It was over, you know, I didn't have the cash flow and the phone started ringing and it was the landlord of that building saying, you know what? Rent hasn't been paid. You know, all of my vendors, you know, started calling me. My house was under foreclosure and my wife and my mother in law ended up pawning their wedding rings, you know, to save the house.

[Troy Carter]

Wow.

[Madeline Nosik Ellis]

You know, and with me, you know, I never, you know, considered suicide, but I know why people do.

[Guy Raz]

Hey, thanks so much for listening to.

[Troy Carter]

The show this week.

[Guy Raz]

And by the way, please make sure to check out my newsletter. You can sign up for it for [e-mail] or on substack. And of course, if you're working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the questions.

[Troy Carter]

Or issues you are currently facing because.

[Guy Raz]

We would love to try and help you solve them. You can send us a voice [e-mail] or call us at 1-800-433-1298. You can leave a message there and make sure to tell us how to reach you. And by the way, we'll put all of this in the podcast description as well. This episode was produced by Sam Paulson.

[Troy Carter]

With music composed by Ramtin Era Bluey. It was edited by Andrea Bruce and.

[Guy Raz]

Our audio engineer was Neil Rauch. Our production team at How I Built this also includes Alex Chung, Karla Estevez, Casey Herman, Elaine Coates, J.C. howard, Katherine Cipher, Kerry Thompson, and Neva Grant. I'm Guy Raz and you've been listening to the advice line on How I Built this Lab. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short [e-mail] survey.