Unknown (7:52)

Business owners and marketers, honest question for you. Is the money you spend on social media worth it? Can you point to sales you've made from Instagram or TikTok or LinkedIn? If the answer is no, I've got something for you. It's a playbook I wrote called how to Build a Social Media Selling Machine. It's a nine step formula designed to turn your social media into a true sales channel. One that produces revenue at scale. Get it now@johndavids.com Playbook if you're spending more than $100,000 a year on marketing, you can't afford to miss this. Grab it now@johndavids.com Playbook back in 2007.

John Davids (8:31)

In Los Angeles, Danny and Marco had a totally and completely unfair advantage because they were close in proximity to the tastemakers. There were lots of yoga instructors in LA, but in 2025, this strategy is actually accessible to anyone because of social media. TikTok, Facebook, Instagram, YouTube, LinkedIn, they've totally flattened the playing field. You've got the world of creators and even micro creators, people with less than 5,000 followers who also are making really good content and have a lot of influence and they're defined by their subject matter. These are the people, big and small, that have the most trust. Today, that might be your version of the yoga teacher, whatever your business is. So let's talk about how I would apply this step by step. Number one, start with your niche. Don't go broad, go deep. If you sell running shoes, find the local marathon coach. If you sell skincare, find the estheticians that are talking about all the new products on the market. If you sell productivity software, find the dudes, the mid level managers on LinkedIn that are sharing their productivity tips. There are so many of them. So that's step one. Step two, look for real people who live and breathe your product or products like yours. Now, when I say people, I don't mean content creators. And this is where a lot of businesses mess up. They think that everyone they work with needs to have 200,000 followers on Instagram. They don't. You want people who love the product and happen to make content. Now, I wouldn't rule out the creator class, people who make a living making content, but I would expand my footprint. Here's some secret sauce. Here's an inner secret for all you guys. At Influicity, we run influencer programs for hundreds of brands every year. And we work with thousands of influencers creators, whatever you want to call them, people who make content. And some of those people are full time creators, but many of them are not. They're just really passionate about a subject and they kind of want to talk about it on social media. And they can be super effective at getting the word out because it's authentic. So don't be afraid to work with these people. Don't just look at the people who are making content full time, look at everybody. Because you can get a whole lot done for less money than you think. Again, we pay a lot of these people and sometimes it doesn't cost as much as you might think it does. You just gotta be smart about it. Number three, give these people, whoever the creators, the tastemakers, whoever your yoga instructors are, give them the tools they need to succeed. Tell them your story, but do not tell them what to say about your product. Never. Ugh. That comes off stale, it comes off weak. You gotta have more integrity than that. Give them the product, give them your backstory, give them the origin story. I talk about the origin story in my book, Marketing Superpowers. I literally give you guys the entire playbook. Marketing Superpowers. I give you the entire formula for a world class origin story. Let your creators run with it and then finally just stay in touch with them. Engage, stay close, follow them. Comment, share, build relationships, not transactions. You're going to be around for a long time. They're going to be around for a long time. So make that relationship last. Just like Alo did. Now let's talk about another advantage that Alo has had over the years, and one that really doesn't get talked about enough. But it's so so. And that's the advantage of slow growth. For a lot of people building businesses today, the words slow growth sound like a problem, like something you gotta fix. It's a bug, not a feature. Because growth is supposed to be quick, right? It's gotta be rapid. If we're not growing fast, what are we doing here? Well, that's really not always true. In fact, in most markets, growing slow or growing fast makes no difference in your ability to succeed. It's really just a matter of your own patience, your own timeline, and what your business is doing at any given time. And in a lot of cases, growing slowly is actually one of the biggest advantages you can have. ALO is case study number one for this and to explain why. Let's start with the idea of a winner take all market. What is a winner take all market? Well, it's one where a single company Captures the majority of the value in that market. Think Google in search, think Amazon in E commerce, think Facebook in social media, think Uber in ride sharing, think Microsoft in professional software. In those markets, you have to grow fast. And there are some very specific reasons why. The first one is called the network effect, which means that the product becomes more valuable as more people use it. So the more businesses who use Microsoft Teams, the more that other businesses need to use Microsoft Teams in order to connect with that first business. The more people who use Instagram, the more people want to use Instagram to see and share with the people who are already on Instagram. And then more advertisers join Instagram to reach all those people. And the loop just continues. The more sellers who are selling their sneakers on StockX, the more customers they're attracting. And the more customers who come to StockX to buy sneakers, the more sellers want to be there. With Uber, the more riders who are on the app, the more drivers that are going to sign up to the app, and the more drivers that are on the app means you have shorter wait times, which makes Uber more desirable for riders. And you guys get the idea. It's a feedback loop. And once it starts spinning, this is hard to stop. The first company that gets that flywheel going and builds an infrastructure to support it, and that's an important part, also becomes incredibly hard to unseat. Their lead compounds their scale, gives them a lot of leverage, and their product just keeps getting better. Every new person that joins makes it stronger. So in these cases, and these are very few cases, fast growth is actually a core part of the strategy. And in those types of businesses, yes, you do want to go fast. So that's number one. The number two factor in winner take all markets is high switching costs. So look at how hard it is for someone to switch from one provider to another. Again, if I'm using Microsoft Teams at my company and my whole company runs on it, I'm not going to casually switch to Google Workspace. There's training involved, there's integrations, there's historical files, there's archives. It's really sticky. And that stickiness creates defensibility. It tilts the market in one direction towards one winner. So if switching from one provider to another is very painful, technically, financially, emotionally, that's another sign that it probably is a winner take all. Space and high switching costs. By the way, guys also give the company lots of pricing power. It's the reason you get those emails every year from Google and Microsoft and Intuit where they're just raising prices by 5, 10, 15%. I think my Google workspace price went up by like 20% this year. I get it. The AI is kind of cool. I don't mind, but I'm not going to leave over a pricing switch because I again high switching costs. It makes it tough to leave number three in winner take all markets. Economies of scale. And this is where bigger really, really is better. In a scale driven business, the more you grow, the more efficient you get. Your costs go down, your margins go up. We see this with Netflix. Like they're super profitable now because for years they spent billions of dollars burning cash throwing it in the incinerator so that we could binge watch 8, 10 hours of Netflix. We love it. Today they're super profitable because of economies of scale. It's not really a total winner take all market, but I would argue Netflix is pretty dominant over time. Your costs go down, your margins go up, you can reinvest into better pricing, better services, more aggressive growth, again, taking share away from others, and then you can effectively outrun any competitor who tries to catch up with you. Amazon's marketplace business again is a textbook example here. They've got logistics, they've got infrastructure and inventory models that they've built up over so long, it gets more powerful with every single order. And that makes it nearly impossible for someone else to compete on speed or price. Like could you imagine someone trying to compete with Amazon on those functions? The downside here by the way, is you start to get plenty of attention from regulators and antitrust players who want to break you up. That's a high class problem that our friends at Meta and Google and Amazon are all facing right now. But from a pure commercial standpoint, this is a big advantage and it's a feature of fast growth. So if your cost structure improves significantly with scale, yes, you are in a winner take all market. So those are the three signs, right? And maybe there are more. You can drop them in the comments. I'd love to hear your thoughts, but, and this is a big but, the majority of markets are not winner take all markets. And therefore fast growth might feel nice, but it doesn't actually make you a better company. It doesn't secure some future advantage like it does in the cases that I've mentioned before with Microsoft and Amazon and all those guys. If you don't have a real network effect or real switching costs or real economies of scale, it's not a winner take all market. And be honest with yourself, you might say, oh yeah, it's a Hard switching cost, getting away from me. Customers never leave. Uh, you guys know what I mean. So be honest. So how do you win then? If you're in a multi winner market, which is like what most of us are doing, you don't win because you're the fastest. You win because you're different or you're better in some way. And you also probably don't ever win 90% of the market. The biggest player might only have 17% market share or 12% market share. And in a $50 billion market, that's actually a lot. It's a very good business. Look at the coffee category. You've got Starbucks, Dunkin Blue Bottle, the Coffee Bean, and Tea Leaf, which I love, Pete's Coffee, Gregory's Coffee, Blank Street Coffee. It goes on and on and on, and they all do well. Now, clearly Starbucks and Dunkin are at the top of the food chain. But that doesn't mean other coffee shops can't grow or can't exist. Of course they can. Look at luxury watches. Omega, Patek Philippe, Rolex, Tag Heuer, Breitling, Cartier, Hublot, Tudor, Grand Seiko. I got my Omega on today. You know, I'm in the market for a Rolex. I kind of like the sub. I just. I can't do it. I'm not really a Rolex guy. I love my Omega. I love my Hublot. What do you guys think? Should I go for the Rolex? I don't know. But here's the thing. Lots of players can coexist in watches. It's totally fine. So let's get back to aloe. Now, I would argue that yoga clothes are definitely a multi winner market. We know this because we already have Lululemon and Vuori and Fabletics and Athleta. So there's lots of room here. And because there's no pressure to really grow fast, slow growth, especially early on, is very smart. You get more time to understand your customer so you can strengthen your marketing and your channel strategy. You can define your product without burning cash on overhead and useless things like ping pong tables.

Unknown (20:00)

Ugh.

John Davids (20:00)

Get rid of these ping pong tables, you can build healthy operations instead of just duct taping systems together because you're desperate to keep up with this frantic growth for no reason. And you can stay under the radar longer, which keeps competitors off your back. And listen, I know it's fun to be in the headlines and grabbing market share, but it also makes you a target. You're the guy with a thousand arrows in your back because everyone is always trying to take down the giant. And by the way, I'm not trying to say that you should grow slow on purpose. If there's plenty of demand on the table and you are able to hit the gas, that's great, go for it. But don't fool yourself into thinking that rapid growth early on is an advantage in itself, because it is almost always not. So let's now get back to the story of Allo. They launch in 2007. They don't raise any funding, they don't rush to dominate the market. They don't launch 45 SKUs out of the gate. They just focus on a narrow product, a narrow market, and they spend years building a strong brand, a loyal customer base, solid operations. By the time they open that first retail store and start getting some headlines, the foundation was already there. They're not scrambling to keep up with their growth. Right? That's the advantage slow growth gives you. It gives you space to figure things out, refine your offer, test your product, learn from your customers, all that good stuff. And one more thing, guys, if you're growing really fast because you've got great marketing and sales but a weak product, then yes, you will have fast growth. But your fast growth is probably going to take you down faster. Because if you grow super fast because you've got great marketing and sales, but your product sucks, guess what? You're growing in the wrong direction. So you got to do it right. Now. I mentioned at the very beginning of this story that in 2007, Danny and Marco launched Allo. But they had actually been in the wholesale clothing business for a long time before that. And that's obviously a really important part of this story. So let's get into it. Back in 1992, they launched a women's wholesale clothing company called Bella. So you can buy T shirts and hoodies and sweatpants, put your brand logo on them, or you can pay Danny and Marco to screen print them on for you. And there was also another company called Canvas, which was the exact same thing, but for menswear. And then eventually at some point, they merged these two companies together and it's called Bella and Canvas. I think it's still called that today. So I'm just going to call it Bella and Canvas, even though it wasn't always called that. So this wasn't a sexy business. There were no iconic brands, it wasn't aspirational, but it was a real business making real cash flow. And Bella and Canvas grew into a high volume player in that space. And that means Danny and Marco, who were hands on. Operators were learning every inch of the apparel business. They were masters at it, Designing clothes, building supply chains, logistics, delivery, all that stuff. And that experience gave them the foundation to do what they did next. So fast forward to the early 2000s. Yoga's exploding. These guys are living that life themselves. They see Lululemon start to take off. They see a gap in the market. They launch alo. And y'all know what happens next. Think about the wild advantage that they had here. Most people when they dream up of launching an apparel brand, they start with a Google search. How do I find a manufacturer? What are the minimum order quantities? How do I ship to America? Our boys didn't need to do this. They could pretty much spend all their time on the product design and the marketing. And this brings me to the most foundational truth about success in scaling your business. You need to stack growth. You need to look at what you're already doing successfully and ask yourself, what's the next logical thing that I could do where I could short circuit 90% of the work because I've already done that work and I can focus 100% of my attention on 10% of the activity. In other words, I can afford to spend 10 times the brain power than someone else would on solving this one problem. Danny and Marco just needed to figure out product design and marketing. That's it. They already had everything else figured out. This was stacking growth. Compare this to the real estate agent who spent 12 years selling houses and now they want to launch a wine brand. Or the dentist who wants to start a D2C skincare line. Or the personal trainer who decides they're going to build an app for tracking crypto. And by the way, I hear these stories all the time. You guys should see my DMs. These entrepreneurs message me with the craziest out there ideas where their backgrounds have no connections to the high risk thing they want to do next. And I say to myself, why doesn't that real estate agent just launch a high end home staging company? Or maybe a CRM tool designed specifically for boutique retailers just like them. Or a local content platform that showcases listings with cinematic tours. Whatever. Something having to do with real estate. The dentist, instead of cliff jumping into a D2C skincare line, should probably just launch an oral care brand. Maybe they can sell teeth whitening kits or floss or mouthwash, all backed by their clinical knowledge. The personal trainer, instead of getting into crypto, which is fun, maybe get into a supplement company or start a consulting service where you teach other personal trainers, how to scale their businesses, you know, stuff you actually know about. And look, guys, I'm sort of teasing when I say all this, and you do, you. You got to figure out what's best for yourself. But I want to see people maximize their odds of success. I want to see you win. And you do that when you stack growth, not when you try to hit the reset button every 39 months and get into a whole new game competing against others who have been playing that game for two decades. Let's look back at the Alo story. Because of Bella and Canvas, these guys were able to control quality at every single level. They didn't have to pay manufacturers to make their clothing at high markups. They could move faster from concept to production, and they could scale more profitably without relying on any outside partners or investors. That's how to do it. That's how you stack growth. That's how you scale in business and in life. So if you're wondering how these two guys ended up running one of the most influential lifestyle brands today, that's the answer. That's the story of Danny and Marco. That's the story of ALO. Get my best stuff to your inbox@johndavids.com.