E036: Our Biggest Mistakes & Lessons Learnt This Year

Summary

Podcast Summary: Marketing Operators E036 – "Our Biggest Mistakes & Lessons Learnt This Year"

In Episode 36 of Marketing Operators, hosts Connor Rolain, Connor MacDonald, Cody Plofker, and co-host Mike Beckham delve into their most significant mistakes of the year, the invaluable lessons drawn from them, and celebrate their notable wins. Additionally, they introduce a unique pricing test from Connor’s firm, Hexclab. This comprehensive discussion offers deep insights for marketers aiming to navigate the complexities of growth, paid media, and operational efficiency.

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1. Scaling Paid Social Through Creative Testing

Mike Beckham kicks off the conversation by sharing Hexclad’s strategic focus in 2023: scaling their top-line revenue by enhancing creative testing in paid social channels.

“We probably 2, 3, maybe even 4x our creative output in 2023 and that allowed us to scale our Facebook account efficiently in 2023 compared to 2022.”
[02:22]

Mike emphasizes that increasing creative variety mitigates the natural decline in ad efficiency as spend grows. Utilizing tools like Motion, they could identify top-performing creatives, maintaining their Return on Ad Spend (ROAS) despite a 50% year-over-year increase in expenditure.

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2. Navigating Agency Relationships and Internal Teams

A significant portion of the episode addresses the challenges of working with marketing agencies versus building internal teams.

Mike Beckham reflects on the misalignment experienced when expecting agencies to adapt to shifting business needs:

“Agencies are good at a certain thing... when you start to pivot, you start to feel like you're kind of butting your head against the wall.”
[16:43]

He elaborates that while agencies offer consistency and efficiency, brands often require flexibility that agencies may not inherently provide. Consequently, Hexclad decided to bring more functions in-house to better align creative efforts with their evolving strategies.

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3. Lessons from Missed Projections and Forecasting

Connor Rolain shares insights from missing Q2 projections, attributing it to overly optimistic forecasting based on an anomalous event in 2023.

“We did this year was hard for many reasons... we end up missing our projections by quite a bit to start.”
[22:35]

He outlines key lessons:

• Reversion to the Mean: Realizing that exceptional past performance (like a perfect month with Meta) isn’t always sustainable.

• Decoupling Inputs and Outcomes: Understanding that strong execution doesn’t always translate to expected results due to external factors like consumer sentiment and platform changes.

• Adjusting Forecasts Proactively: Recognizing the need to adapt forecasts more swiftly and drastically in response to real-time data and trends.

Mike Beckham adds to this by stressing the importance of linking revenue projections with appropriate ad spend inputs:

“We should never be talking about a revenue output number without a spend input number.”
[29:34]

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4. Embracing Failures and Pivoting Quickly

Connor discusses the cultural aspect of owning up to mistakes and making necessary pivots:

“You just have to decouple like the inputs and the work put in with the outcomes and then adjust for external factors.”
[27:05]

He emphasizes the importance of transparency within teams, encouraging directors to acknowledge missed targets without fear of reflecting poorly on themselves. This approach fosters a culture where quick adjustments are made to optimize outcomes.

Mike Beckham echoes this sentiment, sharing a real-world example from his time at an agency:

“We hit a local maximum and now we pivoted to find the new winning tactic... the ability to pivot and act quick is what really is the sign of a great operator.”
[48:59]

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5. Celebrating Wins and Operational Improvements

Despite the setbacks, the hosts share several wins that underscore their resilience and strategic prowess.

Cody Plofker highlights successful initiatives such as launching TV ads and expanding into the EU market:

“TV ads was a big one actually. We launched that December 26th of last year and it's been great for us... EU expansion went really well. Made a million in the first month.”
[60:54]

Mike Beckham celebrates the internal growth at Hexclad, particularly in building dedicated teams that enhance retention and paid media efforts:

“We've continued to build those teams internally and I've just seen the output of those functions just improve so much year over year.”
[60:27]

These victories illustrate the benefits of refining internal processes and investing in specialized teams to drive sustained growth.

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6. Test of the Week: Double Strike-Through Pricing

In the final segment, Mike Beckham introduces a pricing test conducted during Black Friday Cyber Monday (BFCM) to optimize revenue and conversion rates.

“The double strike through did have a better conversion rate.”
[66:28]

Test Details:

• Double Strike-Through Pricing: Displaying both the original bundle price and an additional Black Friday discount.

• Single Strike-Through Pricing: Showing a single discounted price without referencing the bundle's total value.

Findings:

The double strike-through approach resulted in a 3% lift in overall revenue and improved conversion rates compared to the single strike-through method. Mike concludes that the perceived value enhancement from the double strike-through positioning positively influenced consumer behavior.

“Complexity does not equal upside. It’s an interesting lesson here.”
[68:41]

This straightforward yet effective test underscores the importance of pricing strategies in maximizing sales during peak shopping periods.

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7. Conclusion and Forward Look

The episode wraps up with the hosts expressing optimism and readiness to leverage their learnings in upcoming sales events like Black Friday. They also hint at future discussions and encourage listeners to reach out via the moderator’s hotline for questions and podcast topic suggestions.

“Hopefully when people are listening to this, I'm like really feeling good... All the losses become wins if you're properly building the culture and refining the processes over time.”
[57:16]

The collective experiences shared in this episode provide a roadmap for marketers to navigate challenges, optimize operations, and celebrate successes in the dynamic landscape of digital marketing.

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Notable Quotes:

• Mike Beckham [02:22]: “We probably 2, 3, maybe even 4x our creative output in 2023 and that allowed us to scale our Facebook account efficiently in 2023 compared to 2022.”

• Mike Beckham [16:43]: “Agencies are good at a certain thing... when you start to pivot, you start to feel like you're kind of butting your head against the wall.”

• Connor Rolain [22:35]: “We did this year was hard for many reasons... we end up missing our projections by quite a bit to start.”

• Mike Beckham [29:34]: “We should never be talking about a revenue output number without a spend input number.”

• Mike Beckham [48:59]: “We hit a local maximum and now we pivoted to find the new winning tactic... the ability to pivot and act quick is what really is the sign of a great operator.”

• Cody Plofker [60:54]: “EU expansion went really well. Made a million in the first month.”

• Mike Beckham [66:28]: “The double strike through did have a better conversion rate.”

---

This episode serves as a valuable resource for marketers looking to learn from real-world experiences, adapt strategies dynamically, and implement effective pricing tactics to drive growth and efficiency.

Transcript

[Cody]

After that water bottle noise, we'll start after that. What's up, guys? How's it going?

[Connor]

It's going good. Connor, do you have a. What kind of water bottle do you have?

[Mike Beckham]

I have only a 9 operators water bottle. A simple modern.

[Connor]

Oh, right, dude, big shout out. All right. Can I commit a little bit of a faux pas here? I hope Mike Beckham's not listening, but have you guys had the. Have you guys tried the Owala water bottles? I have one right here.

[Cody]

Like blowing up, dude.

[Connor]

They are crushing. And they have the integrated. You can't see it here. They have the integrated. Oh, yes. Straw. And they have these cool colorways. Yeah, they're. They're blowing up.

[Cody]

They're popular around our office now. I have one. I have like one of the plastic ones. I think I need to get one of those because that whole microplastic thing. But yeah, they got the straw, so you can kind of do both out of it. But. But Mike, we're sorry, man. We love you still. I'm gonna buy simple modern.

[Mike Beckham]

All right. I gotta. I have two simple modern water bottles with me. I. I met with their team a few months back and they sent me a little care package. I like this one because it has the. This is like a great coffee mug. It's got the little. Kind of a. Kind of a fun, little innovative sipper I've never seen. Yeah, it's just like the push down and then. Then you can drink out of it. Keeps your coffee nice and hot for a long period of time.

[Cody]

Well, we know who Mike Beckham's favorite operator is.

[Connor]

Yeah, it's become abundantly clear.

[Cody]

Welcome to episode 36 of Marketing Operators. Today we talk about our biggest mistakes that we all have made this year. What we've learned from them, and we couldn't help ourselves. We even had to throw in a few wins there as well. Plus, we have a super unique pricing test as a test of the week from Connor firm Hexclab. If you have any questions for us, for me, Connor or Connor, hit up the moparator's hotline. It'll be in the show notes. Any questions you have, we'd love to answer on the next episode. And if you're enjoying this, as always, please share it, share it on Twitter, tag us with what you're liking and please subscribe wherever you at your podcast and on YouTube. Thank you to our sponsors, Motion Rich panel and prescient. Hope you enjoy.

[Connor]

Foreign.

[Mike Beckham]

So when I took over as head of growth at Hexclad, one of our biggest priorities in 2023 was to grow our revenue, our top line revenue by scaling paid social specifically through more creative testing. Everyone knows that as you spend more on Facebook ads using the same creative, the same landing pages, the same offers, your efficiency gets worse. That is a nature of of scaling paid media. As you spend more, you reach more people. As you reach more people, quality of traffic degrades. One way to offset this is by enhancing the amount of creative that you're testing. And like I said, that was a huge strategy of ours in 2023. It continues to be this year and it's ultimately what let us spend over 50% more year over year while maintaining our one day click ROAS. We probably 2, 3, maybe even 4x our creative output in 2023 and that allowed us to scale our Facebook account efficiently. Now Motion allowed us to understand out of that enhanced creative output what was actually working the best. You know, shots on net is great, but in order to do it effectively, you still need to understand which of those shots on net are doing the best so you can scale it up effectively. In motion let us understand what was working exactly while 3,4Xing our creative output and ultimately allowed us to scale our Facebook account very efficiently in 2023 compared to 2022. So if you're in the process of setting up your creative flywheel and you're about to really enhance the amount of creative testing that you're putting into your ad account, then you also need a tool like Motion to understand which of those creative tests are working and which ones you should be spending more on and less on and doing more of and less of. So if that's you and that's the stage that your brand is at, then you need to be booking a demo today or creating a free account@motion app.com Motion offers a monthly subscription plan so you can dodge those annoying annual contracts. And if you mention the marketing operators podcast emotion sales team, you can get 50% off your first month.

[Cody]

You know the only good thing about me not able to make the the episode of Zach. I had a doctor's appointment. I got to listen to it. I, I don't know about you guys. I don't know if you ever listen to to our stuff. I don't like to listen to when I'm on, but I was able to listen to one with Zach just as a fan and I loved it. I think that's a cool one. I think Zach is crushing it. And just like the playbook I thought was was so great and clear and I thought you guys had had some good stuff to add. Like, you know, Connor McDonald, you talked about like just like the leverage of like how to scale with, with a lean team. But yeah, what did you guys think of that one?

[Mike Beckham]

I thought it was, I mean I think that's a great one for a founder of any scale. Right. Because we address every different part and then we kind of like, you know, Mike, magnify glass that like 5 to 10 million band and then, and then what it's going to take to move beyond that. But I thought that was a fun one too because it's, it was so accessible for a wide, wide, wide range of brands. So I think yeah, if, if you're like anywhere from you know, launch to eight figures, that's a really applicable episode.

[Connor]

Yeah, I liked it a lot. Also I. Not to like really gas up Zach here. I was telling someone like now I really think he slept on as an operator. I mean there are very few people that he hasn't taken that many shots on goal. Right. Five or six brands in the holding company and I mean one's at one's on a eight figure run rate. Holo socks is well past eight figures. So it's like there aren't that many people who are able to reliably create eight figure businesses. That seems to be one of them. So yeah, awesome to get his insight.

[Cody]

And he's doing it with such a lean team too, dude.

[Connor]

Very unique. That's why, that's why I wanted to go back to the leverage where and I think we're gonna see more of that. And I talk about that in the episode. Just these super high leverage teams. People building brands in really interesting ways. The last thing I'll say, I was talking about this with someone last night. But on the topic of people from Twitter building great businesses, I'd put Zach really high on that list. Nick Shackelford tweeted that Brez is going to do 25 million this year or something. Insane. I mean that is like, that has a path to just a massive outcome. And then I mentioned this two episodes ago, but Dan McCormick also like very publicly building on Twitter with Create Creatine. They're blowing up too. Also super lean team. I'm sure Brez is also lean as well. So we're seeing these like, I'd put all three of those people in buckets of. They're on their like second phase. Nick Shackelford had his agency. Dan was at multiple D2 brands. We're seeing these people like execute in this like second wave of D2C brands. They're just operated differently, they're scaled differently. You see commonalities in terms of like economics or how they're going after categories. So it's a really interesting time and Zach was able to give us a good behind the scenes look. Was very fun.

[Cody]

Have you reached out to Dan? I feel like you've mentioned on multiple podcasts, but I feel like if not, we just need to reach out to him because I'm sure he'd come on.

[Connor]

I was just talking with him. I didn't ask if he'd come on. This is my second time talking about on the podcast, so I definitely want.

[Cody]

To have him on.

[Connor]

I'm just warming up the waters, you know.

[Cody]

I love that. Yeah, no, I love the like, I think they're, they're at like a very moderate, you know me are like maybe like 2 and a half, 3 MER, 2 Emmy are. And then just like 3% of, of revenue on payroll on opex. It's like super lean. Also like pretty similar Jolie. I think they've got like four full time employees and they're a figures.

[Connor]

Yeah.

[Cody]

So they're another one doing it super lean and doing it very.

[Mike Beckham]

Do they have like an insane agency stack though, do you think, to like compensate for the like, is it, is it a zero sum game? It's like, all right, maybe they're like internal opexes super, super low. But is it blended? Do you think this. I'd be curious because I know like Zach for example, he really leverages Homestead to like service his brands and I'm sure he gets, you know, the. I founded this company.

[Connor]

Right.

[Mike Beckham]

But I am curious, like, all right, you're lean internally, but does that mean you're kind of more over indexed external? If it's like, you know, I'm curious what that looks like for some of these brands that are a little lower on the, the internal operating expenses.

[Cody]

Yeah, it's got to be. And that's, that's why like even when we look at it like if I tell somebody what like our payroll is at a percent of revenue revenue, that's like all in. And so that's, that's for us, that's payroll. That's any benefits that gets associated with it. Plus our freelance file, which is any agencies or contractors or freelancers are going to go in there because like we'll make decisions throughout the year to increase working with a freelancer that we had budgeted for a full time or vice versa. So like yeah, to me it doesn't matter if you're spending small amount on payroll, if your agencies are, you know, 5% of revenue or whatever it is. So I think, like, all in is really what matters. But. Yeah, that's a good question.

[Connor]

I'm not sure, but I really think. I really think a lot of the brands that we talk about are built in a way to be super high leverage. It's not like, oh, they have a super lean in quote unquote internal team, but they have these massive agency fees. I think they are built and structured in a way that is just really scalable and high leverage.

[Cody]

I agree. I agree with you. All right, let's do a quick pulse check. Just super quick. How you guys feeling? Always some good chat going around the group chat. How you guys feel And Connor, I are probably about to fall asleep. We are 11-19- Recording this black Friday almost here. How are we doing?

[Connor]

This will come out after Black Friday, so hopefully everybody will have navigated.

[Cody]

All right, let's do some predictions then. How about some predictions? How's it going to go?

[Connor]

Well, what I think is going to happen now, we were talking about Connor Rowland and I have talked about this a number of times. Him and I have been geeking out about. Now, geeking out is not even the right word. We've been like, OCD about adjusting for, like, days of week.

[Mike Beckham]

That is the word.

[Connor]

And this is. This is like the super bowl for that. Because we are now, I think most people are in the same bucket. They launched their Black Friday sale earlier in November. We have an extra full week before Black Friday than we did last year. We're currently comping Black Friday now. We don't have Black Fridays. We have an extra full week. If you wanted to adjust for day of week, year over year. We'd been historically adding two days last year. Now we're doing minus five. So a full week swing is like, how do you forecast for that? You just got to, like, make it up. So what I think and what I think I've been hearing is it's been like a relatively soft start to November again. All the caveats of it being such a weird month from a calendar perspective, but relatively soft. And I think we'll see a peak year. Black Friday, I think we'll. I think we'll see the volume come towards the end of the month. And I think brands will disproportionately grow during the week of Black Friday versus, like, you know, this week before being, you know, roughly November 19th. So that's my prediction.

[Mike Beckham]

Yeah, we're I mean we're seeing the same thing where like it's our year over year is somewhat soft relatively right now compared to like, you know, our year to date growth and what we're projecting for December, but we plan for that. So we're at projection, which I feel good about. The year over year is still soft. And then yeah, we're projecting a massive, you know, Black Friday Cyber Monday weekend and then a massive December in terms of like actual percent year over year growth rate. So yeah, all the, it's, I'm like telling our team everyone's trying to like do all this like year over year jockeying. It's like, it's, I don't know, I think it's an interesting, fun exercise to do and maybe it's helpful in certain situations. I found for us at least when we're looking at the total business, it hasn't been super helpful because there's so much difference. Where it has been helpful is like looking at you know, specific strategic business units. Like, like I was texting you guys about today, like our non cookware stuff where we've done. There's just so much difference in our marketing tactics for those categories year over year that, that has been interesting to see because we're finally starting to see like the last five, six months of marketing pay off in the last like four days. And you can see it in the year over year growth. You can see it in the, the first time versus repeat revenue split. So that's been, that's been fun to see but it's been also just fun to like navigate these waters because I think it's something that's at least for me very new. Like I don't remember having a Black Friday Cyber Monday that's ever had this level of like year over year change just in terms of the date. So it's been, it's been kind of fun to, to navigate that but also a little, a little nerve wracking for sure.

[Cody]

Yeah, nerve wracking. I would say. Agree with that. I think, I think last year everyone was like, oh, is the consumer going to show up this year? And there was obviously so much concern about inflation and consumer spending and you know, they did this year. I feel like there's been less concern about that from what I've seen. I don't know if you guys have seen any recent data. It's like there's very mixed signals on that. There's definitely some, some positives, definitely still some, some struggle points. But I think you know, it's, it's very. If it does come, it's just going to be late. It's just going to be late. I think it'll be later, a later peak. I'm curious to see, like, what do you guys think December looks like post Cyber Monday? Because obviously having those two big peak days, you know, in December are huge. And like, that makes it hard to comp November. But do you think it's just those two days and then we get back to normal, or do you think, you know, just December in general is stronger? And have you guys adjusted sale dates based on that at all? Or are you ending Cyber Monday?

[Connor]

I think December will be stronger. I think a lot of our gift buying and shopping behavior is based around for some percentage of people. Like, it's obviously a mix of both. Like, I've been. I've been posing the question, maybe I did this last week too. Do people start shopping, you know, 15 days into November or do they start shopping 14 days before black Friday? Right. Like, what. What is that? And I do think it's more around. It's more around Thanksgiving. It's more around like, hey, you're going back home, you're seeing your family, you're talking about deals, you're having Thanksgiving, you're having Friendsgiving, etc. That's really what I think kickstarts a lot of consumer shopping, which means it's all getting pushed back, which means there are fewer shopping days, which means they're going to be bigger. That'd be my. That'd be my general thought there. And maybe it's wishful thinking, right? Be better for all of us if we just have a banger December. But intuitively I think there's a compelling case to make for it.

[Cody]

Okay, I think you heard it here first. Peak year. Peak this year. That's official terminology.

[Connor]

Yeah.

[Mike Beckham]

Also, like, I don't know about you guys, but with. With, first off, I totally agree, Connor, with everything you just said. We. We also launched our Black Friday deal on the 15th, which basically means that there's like less than a week to ensure Thanksgiving delivery through our free ground shipping option versus, you know, December. We basically have not quite three weeks, but almost three weeks basically from our. From the moment our. Well, including Black Friday, but also then including our holiday sale. So, like, I think that, like mix that into that kind of cauldron that you just mentioned with all people kind of like going home and talking. And I think that's also a recipe for a stronger first third of December this year compared to last year.

[Connor]

Dude, I. You asked you said Thanksgiving delivery. I'm like, who gives a if things get delivered on Thanksgiving? But I guess a lot of people are for us, right?

[Mike Beckham]

For us. And we'll push like, we'll like enhance our focus on Thanksgiving products early in our sale. Right. So for us like roasting pan was, was a huge focus like right when we launched. And then we'll, and then we'll transition into kind of more of our evergreen products. But yeah, for us, we'll, we'll hit on that messaging pretty hard. Like most of our email campaigns, if you're in our are a list are they have a block that's like the, you know, order by chart to really drive urgency. Before we, before we get to that.

[Cody]

Date, you guys want to talk about mistakes? We are now 15 minutes in, which means I am told by our producer I'm allowed to curse. So we're going to talk about fuck ups, our biggest fuck ups of 2024. So yeah, I thought this would be interesting. If we all share, I think we can get some wins as well. But you know, it's super cliche. But I've definitely learned more and am grateful for our losses. Not losses, but some mistakes that we've made this year that you know, we've talked about a little bit. Some we haven't. So I think it could be a good learning opportunity. I would love to hear what you guys have messed up if anything. I'm sure everything is just going perfectly well in your business and any mistakes are everybody else's fault, not yours. But you know, if you can, if you can find a few. Definitely want to hear who wants to kick it off. Who wants to be the, the brave one and kick it off with a few of theirs.

[Mike Beckham]

I'm happy to jump in. I got, I got one that I would like to start with that I think theme.

[Cody]

Let's, let's hear.

[Mike Beckham]

So. So. All right. Mistake number one. I think that we've found ourselves, we've made this mistake a handful of times and I think we're learning from it. But expecting agencies to change based on your business's needs, I think that that is like a fundamental difference in a brand versus an agency. An agency wants consistency. They want to create flywheels to allow them to service a lot of clients efficiently. They want like monthly deliverables month over month over month to guarantee that revenue. Like brands like we don't fundamentally need the same things month over month over month. So that is just like a misaligned model. But I guess like more importantly and I Love agencies. I think agencies make sense for brands at certain moments in time or over the like, certain like, you know, lengths of time. But generally like as we've worked with agencies and we try to like ask them to give us different things. A great example is like paid media, creative agencies where you know, for one three to four month clip we might have an initiative to insert like a certain asset type or a certain message or a certain angle. But then that might change from months, you know, four to six and like trying to get that same agency to kind of give you something different, just it hasn't worked. We end up like repeating ourselves a lot. We end up asking them to do the same thing with little progress. And I think it's fundamentally just because agencies are good at a certain thing and when you need that thing, they're really awesome to work with and they can help you. Like let's make a lot of learning curves less steep. But then as you pivot it's like you start to like feel like you're kind of butting your head against the wall. And like as we've started to compare that experience with the experience of like bringing people internally and all of a sudden like having to say something once or twice for it to like get implemented in the business, you start to get that comparison. So I think that's like, that's one big mistake that we're learning from. And again, I love agencies if what you need is aligned with what they do really well. But when you start to like try to shift that, it starts to get a little dicey.

[Connor]

Can you give some examples of the, you said you guys change messages or focuses throughout the year. What would an example of that be?

[Mike Beckham]

So we, in the last like three months or so, we've decided internally that we want to make a conscious effort to introduce more like hi fi. Higher production value, more brand oriented creative into our paid social account. You know, Dave Herman talks a lot about this, right? Like put those, turn those assets on, run them and reach campaigns, like let them run, don't touch them. We want to start to implement more of that. We, we had a, a hell of a time, you know, trying to give that direction to some agencies that are very, very good at paid social. They're very good at making direct response ads, right? Like static images, you know, very value propy stuff like user generated content. And like we have had a hell of a time trying to like get them to shift and do more high production value, more brand oriented assets. That's, that's like the biggest One that, that's top of mind for me.

[Cody]

And so what's the, what's like the solve? What's like the practical takeaway? Is it like is he changing your retainers with agencies or like the model you work with them? Is it less agencies in general? Like what's, what do you think you'll kind of do going forward?

[Mike Beckham]

I think we're just going to stop trying to like put you know, a square peg in a round hole. It's like it's pretty clear what these agencies are good and what they aren't good at. And I think we were just trying to have them solve a problem that they just aren't like qualified to solve. And that's not a knock on them. Like they're great at what they're great at. They're just, and they're just not at what they're not great at. So for us that solve is to honestly bring it more internal. Like we have an amazing head of content. We have really good production resources now internally. So let's just like try to produce these things internally to figure out what does and doesn't work. I mean that's going to be our, our long term solution anyway. So we might as well like innovate and test internally instead of trying to get an agency to do it that or, or the other option is let's go find an agency that is great.

[Connor]

Right.

[Mike Beckham]

But we're just past that I, I think with our internal team. So we've decided to go the internal route as opposed to like trying to find an agency that is great at making, you know, like a raindrop for example, where they could make probably really good hi fi. High production, very like brand storytelling, paid social assets. And I think they're probably great at that for a lot of brands. We just, we have the internal resourcing now. So we've decided to go that direction.

[Connor]

I love that as a, as a, as you could call it a failure. All of my like all the failures ultimately are like, oh, we should have done this faster. Right. Because it's like, because then you'll end up spending however long, 6, 812 weeks like trying to fit a square peg into a round hole. Yeah, I think that's a great takeaway.

[Cody]

What's, what's number two? What you got next here?

[Connor]

I got one I like kind of a, kind of a meaty one. I guess the overarching is, is that we had a really difficult Q2. We ended up growing year over year in Q2. But Father's Day is A really big period for us and we just came up short of original projections. And I think this year was hard for many reasons. So I have a couple lessons learned. So the failure being missing projections, whatever you want to call it. Right. I guess the point that I have here are more like the lessons that we've learned and the adjustments that we're, we're kind of taking out of this experience. The first one is going to sound super obvious, but I think is underrated. Forecasting growth is dependent on previous year's results. So like, obviously. Right. But one of our issues.

[Cody]

Well, last year.

[Connor]

Yeah, that's gonna be. That's the punchline. Thanks. Yeah, we did, we did too well last year, like I said, we, we, I think to a certain degree projected on top of an outlier event. We had a perfect storm. Q2, 2023, I think Meta was like at its peak. We were all, I guess you guys weren't there, but I remember the Meta event in San Francisco that May. We were like, you know, high fiving and kissing babies and everybody's stoked that like DDCs back. So Meta's cruising, we'd launched rings. We started to do a million dollars in rings that month. International's working like we just had the wind at our backs in every capacity. And coming into 2024, I don't think we realized, I don't think we properly accounted for that anomalous event, which makes it incredibly difficult. Now all of a sudden we're like, oh yeah, we can grow whatever, 20, 30% on top of that. We like don't really think about it. Whereas what we ended up seeing, once we like, we come into this period, we, we miss our projections by quite a bit to start. We're digging into it and, and maybe this is Cope, right? But like then I dive into the data and it's like, okay, this is more like a reversion to the mean. Like if you look at our 2022 data and 2021 data, this now feels more like that and that this 2023 period that we're forecasting growth on top of is just a little more anomalous than we otherwise thought. So that's, that's one lesson within this failure of missing Q2 projections. Have you guys had any experiences like that, Connor?

[Mike Beckham]

I do feel like that. I mean I have had that experience at Hexclad, like when we, in 2022, like there was a lot of. They had found product market fit, but there's a ton of low hanging fruit and like These classic growth channels being paid media and retention. And we started putting tons of shots on net and like we, we grew, grew the business like significantly top line while also chipping away at efficiency and improving that. And, and I was like kind of dropping hints along the way. I'm like, this is not normal. So, so, you know, this is not normal. Just, you know, this. Now, this year in like our third year, we've, we've scaled top line, but we're starting to see efficiency get a little bit worse as we're doing that. And I'm trying to like explain this to the team because, you know, I think with my background, I've seen this play out with a lot of brands and I know the relationship between like top line revenue scale in efficiency. There's a lot of people at Hexcloud where all they've known is increased revenue and increased efficiency or improved efficiency. So I think, I think that's a great example where like we're seeing a little bit of that regressing towards the mean this year, which I, in the back of my head all along it was only a matter of time. So yeah, we're seeing some of the same things, but you know, it's always year over year. It's never. Well, what about year over two years or year over? You know, it's, it's funny how like once that, once the calendar year ends, it's like, all right, the, the we only look back towards the last year. No one's ever saying, well, we're up 185 over two years ago. It's right now we're up 35 over, over last year, whatever it is. So it's, yeah, it's, it's funny how that's become like the norm for just reporting on growth. And like, if you want to push as hard as you can on your growth this year, great, but beware. All you're really doing in some ways is making it harder on yourself to hit your goals next year. And that's something I think people generally don't. It's all about maximizing now. And I've started to think more about that of like, what's the sustainable five year roadmap in our growth? Not just like, how can we maximize at all costs and not that we're doing that, but like I've seen glimpses of that and I'm always kind of trying to be that like cautionary, like, you know, let's make sure we're taking the sustainable long term approach here. And we're not Just maximizing, you know, this, this next month because we could do a lot of things to do that. But going back to like our episode with Shane, that's probably not the best long term growth decision. Right. Of like maximizing the next 30 days revenue all the time.

[Connor]

Totally.

[Mike Beckham]

Yeah.

[Connor]

I think, yeah. For every down month there's a potential for an up month. That's the silver lining.

[Mike Beckham]

Y. Exactly.

[Connor]

And then the other thing is like that, that's really. If you look back at the data from QC 2023, I mean we were, we grew year over year at a better efficiency. So we like volume was up. I Forget the exact numbers. 30%, 40% year over year. We spent like, I don't know, 10% more or something. So this massive increase in efficiency, massive increase in volume and we just tried to comp those numbers like cold. And that's, that, that's, that's tricky. So we learned that lesson.

[Cody]

Yeah, that's when you know it's an outlier. When efficiency and volume get better, that's an outlier.

[Connor]

We defied gravity, basically. And then we were like, yeah, we'll just do that even better.

[Cody]

Yeah, yeah.

[Connor]

No, okay, so, so that was one, that is one lesson takeaway of projecting Q2. Here's the second one. Or, sorry, these are, these are lessons learned from failing to hit Q2 projections. I've got the difference between inputs and outcomes. So like at least in this period also I, I really struggled because I felt like, I mean, undoubtedly, I know this for sure, we were more prepared than we'd ever been from an execution standpoint. I think we had never executed on Father's Day better. And it's tough to grapple with that sometimes when you're not hitting forecast or hitting projections. But you do have to decouple like the inputs and the work put in with the outcomes and then adjust for external factors. Which is a lesson that I think I've learned a handful of times over the last couple years where you can cook up all the growth you want in a spreadsheet. At the end of the day, like consumer sentiment has to be strong. Facebook has to not be buggy. You know, there's like, there's all sorts of things that are out of our control. CPMs can't be up 40% year over year. That's going to break all of your growth projections. So, so that was another one is like it's decoupling those things and understanding that putting in great work. Those inputs won't always result in the outcome that you want. And that's an important lesson. Everyone knows ad comments are super important for social proof, but they're a mess to handle. Spam trolls, customer questions, good reviews. At Ridge, we had four full time people to moderate all of this, which was expensive but necessary. One of the reasons we moved to Rich Panel is we knew they'd be launching new AI tools and they just launched their AI Social media manager that handles all of our ad comments. It's built right into Rich Panel, our help desk software, which no other help desk has anything like. In the first two months, AI handled 11,000 comments, saved us 760 hours of work. It's like four months of one person's time. And the best part is it didn't cost us anything else. It came with our regular subscription. If you want to learn more about Rich Panel, you can join one of their weekly migration webinars. It's 40 minutes. They show you the platform, how to switch from your current system, and how much money you can save. It's great for CX teams to evaluate Rich Panel and see if it's a fit for your business. If you want to add social media superpowers while becoming more efficient, go to richpanel.com book a spot for their weekly migration webinar and get your CX team a spot too.

[Mike Beckham]

So I have one that's kind of along that same, I guess like motif as it pertains like inputs, outputs. I think one of the biggest mistakes we made this year and we're getting better at it but there, there's just been too many like revenue projection numbers thrown down and what I see as an output without any consideration or not enough consideration of what the input I spend is required to hit those. And that's something that I'm, I'm like trying to create this. I think it's, it's, it's natural for like a performance paid media person to think that way. But I'm trying to like make sure that the entire team is thinking that way. Like we should never be talking about a revenue output number without a spend input number. And every single output that we want to project is possible as long as we are considering what the spend input is and how certain assumptions are going to change based on that spend input. Right? Like what's cat going to do? What's naov gonna do? Because those are the things that ultimately you need to make some assumptions about. So that, that was a mistake for us. I think this year that we're getting better at. But like I just, nothing makes me more sick than when I just see like a revenue number thrown out on in a spreadsheet without any sort of ad spend number thrown out as well. It's like there's, there's a way to hit these numbers and for a business like us, where we already paid Media driven, it's ad spend, it's, it's demand generation. And like, as we spend more or less amounts of money, there's different.

[Cody]

There shouldn't be a way to do it. There actually should not be a way to forecast revenue without spend in a business like ours.

[Mike Beckham]

Yeah, yeah, exactly. And that's something. Otherwise I was just a wish. Yep. Right. Yeah, it's, it's. Yeah, exactly. It's, it's. Yeah. A blind throw at a dartboard to an extent without that. So, yeah, big lesson for us that we're getting better at as a team. But yep, inputs drive outputs. Outputs don't just show up right here.

[Connor]

I'll, I'll. As a. Using that as a jumping off point spend is obviously a big one and I think a lot of our DTC businesses have been built that way. Like we sell a certain set of products and then we're scaling via channel expansion and larger cohorts and et cetera. As we have over the last two years invested more in product development and like our whole go to market strategy. Part of the inputs is what is, what is the product newness that can support that revenue target. Right. And that is something that also we're, we're comping. We had an awesome launch last summer. Our Smokey Bear collection absolutely crushed. And it's like, okay, yeah, if we want to grow in July year over year, not only do we maybe need to spend more, but also we have to be thinking we're gonna, we're comping against this like really successful launch of the, the Smokey Bear. So there's a lot. Yeah. It shouldn't be possible to project revenue without a spend input. But also you have to be considering the other inputs which for certain types of businesses, product launches are incredibly important. And that's a lesson that we're like learning or a process that we're like refining over time.

[Cody]

Yeah, I think like product based is more demand planning, at least how we do it. That's more kind of like I always think about it like what are the atomic units of it? And then it's not that one is right or wrong, it's just that they just. It's like one is math and one is science or like one is numbers and one is letters and we're trying to just kind of like make them talk to each other. But demand planning is very bottoms up. This is the skew. Here's how many of them we sell multiplied by the number by the price of that. Multiply, you know, add that together with the regions. Here's how much revenue from miracle bomb. Here's how much revenue from foundation. You know, here is kind of the year over year growth. So like you totally need that. Especially if you're, you know, not a single SKU business. But there is no spend assumption. So I would say the pro of that is they're doing an excellent job taking into account product newness and launches. So they're doing an excellent job of that. The con, I think it's pretty much all historical based. So there's nothing in that model that has spent as an input and degrading efficiency over time of that that would be more of like the cohort based forecasting model which I think does a much better job of that. It's got the cohort stuff, it's got spend in AMER and CAC and acquisition efficiency. And I just wish there was a way to blend them. We certainly do. And I will take into account product launches and newness and we have some data on we have an A launch or a B launch or a C launch and we have different increases above the norm. I just wish there was a way to kind of do both. I just don't know anyone that has the time to actually do both. I think that would be a very cool thing with AI is like taking both of those inputs both from the individual skew and quantity mix as well as the, you know, spend assumptions and put them together. But yeah, they're just like different atomic units I feel like. And not one of them is right or wrong. It's just like a different language.

[Connor]

Yeah, 100%. All right, I've got one more thing from here. So again failure of missing these projections. I said better forecasting and identifying like outlier events that you're not just projecting growth on top of frivolously. I said mistaking inputs for outcomes. And then the last one that I've got here is the first two you could describe as cope I guess. Right. It's like hey, we did a good job and like we're not getting the outcome that we want and hey, we should get better forecasts. The really the lesson learned is that like we should just be adjusting sooner and more drastically. It's really easy and I think for a long time we were able to like sit in a comfort zone of like we run certain promos in certain ways. We have a playbook, we have certain channel strategies, content strategies and just the nature of D2C. And given like a tightening consumer environment and increasing costs and you know, whatever else you want to say that doesn't have an infinite Runway. So my failure and not identifying that earlier and adjusting, adjusting beforehand and doing so more drastically is another big takeaway.

[Cody]

All right, well, should we just move on to the wins? Because I can't think of any failures. I got a long list. I got, I got a few. The two biggest ones for me that stand out for the year, they both come. I think that the central theme and I'm really happy about these and grateful for them because I think they've been great learning opportunities which I'll talk about what I've learned. New store opening. We have, I would say our first store that isn't doing amazingly well. That's quite below where we expected it to be and that's been one of our more recent stores and then our holiday collection launch which we are sitting on a lot of inventory. So you know, they're both painful financially. I mean the store is fine. Like we, we turned a slight profit in, in October. We're not like paid back yet. We, we would usually be paid back on like build out costs by now, but just definitely not what we expected. And yeah, I think they both just come from like most things that we've done like that whether it's launches or holiday or stores like have gone really well. And so we have a lot of confidence or we had a lot of confidence that you know, if we do it again and I think it's really easy to just kind of overlook certain things that you know, you, you probably hindsight, it's like, oh yeah, that was stupid. I should have realized that before. But like when everything that you're doing in that, you know that that domain is doing well, it's easy to just be like, yeah, it'll be fine. You know, I think it's really easy to get complacent. And so, you know, we made, we made really big bets on these holiday stuff. I mean, you know, 100k plus units of some of these things and it's obviously a limited edition thing. So we're going to be sitting on some, we're adjusting our Black Friday plans. You know, I, you know, I Friday afternoon changed our dates of everything. Brought it up, you know, almost a week earlier. Just trying to give us as much time to sell Them. I think that's one of the things I'm proudest of for my team and just most appreciative of is being able to pivot. Large companies can't do that. If we were in Sephora, we wouldn't be able to do that. But the fact that we can pivot, we can say, hey, this is not going well. I'll stand up there in front of team and say this is my fault. This is not going well. But one of our strengths is that we can pivot. I know it sucks, but let's buckle down, lock in, put on some Kendrick Lamar, whatever, whatever you got to do, you know, lock in and like, let's get it done so that it's just, it's great that we're able to kind of lock in and get that stuff done. It obviously sucks. I think, you know, I would rather be in the position where we under ordered and sold through it like we've done last year and feel like we left some meat on the bone. That's super frustrating at times when you're a growth person and a growth marketer and you feel like there was more demand and you get mad at your op team for not ordering enough. But, but you know, no businesses have really gone out of business from that. Obviously there have been plenty of business that. There's just like a, this doom loop of when you over order and then you got a discount and it hurts gross margin and it hurts cash flow and like, we're not near a position like that. You know, it'll hit gross margin a little bit. We'll, we'll, we'll take that trade off to kind of move some of these things and you know, chalk it up to a learning experience, you know. But it's just there, it's, there's a lot of lessons there and just kind of bringing us back down to reality and obviously a lot on the specific offering that I don't think we did a great job of. And we were just like, yeah, it'll work. We kind of were drinking our own Kool Aid a little bit too much. That was a painful one, dude.

[Connor]

Totally. Can we, can we, can I actually ask about the store opening? I don't know. We talked about inputs earlier. I don't know the inputs of what a good store opening is. So like, are, are you guys able to dive into the data and say, oh, we think this store is underperforming for XYZ reasons that we didn't realize beforehand?

[Cody]

Yeah, for sure. So I don't think we have an amazing way of forecasting stores yet. It's. It's hard, right? And you don't know. Obviously, you have to forecast them because we have to decide is the store going to be worthwhile for us to do or not. So one of the things we're finding is, right, we'll just look at our top DTC cities. One of the things we're finding, it's not. It's not apples to apples. It's not like a one to one of, like, where we're strong online and what regions would do well with the store. And so that is one and the other thing. So I would say all of our existing stores. So we've got six now. We'll have, you know, seven students for this store was number six. Our first five. Like, a lot of them are not in locations that, like, would be obvious. And I think we perform very well in a lot of these. Like, our Montclair, New Jersey store does great. Or like, our Greenwich Village. Like, we're not in, like, the biggest areas ever, but. But people have traveled to us. You know, we. We spend a good amount online. We spend a good amount on tv. There are certain people that, you know, aren't comfortable buying stuff online, so they'll want to go to store. So I thought, you know, all right, we don't need to be on the busiest street, the busiest avenue. Let's pay. You know, we can go four blocks away. People will come to us. People will find us, because they always have before. And so that was kind of like my blind, you know, my blind spot, my bias. I was just like, hey, like, drinking our own Kool Aid. Like, people will come to us. Like, it'll be fine. So we went, you know, cheaper. So one of the big lessons is it's kind of like CPMs and in media buying, like, maybe that maybe things are expensive because that's a good thing. You know, like, maybe it's a red flag if it's cheap. And, like, you guys rent a bullet.

[Connor]

Ad space of retail.

[Cody]

Yeah, exactly. Yeah. We got. The Google display network is essentially our store. So. So, like, that's my lesson. And we're gonna have to do a lot of them to. To. To learn and see. And we're gonna have to now do somewhere where we are on the Abbott or the main area. And the rents are pretty ridiculous. But maybe that's worthwhile. Maybe you don't have to do as much marketing. So that's, you know, that's been one where, you know, I've talked to some of the people that have stores and they're like, give it time. Like they've turned around stores after multiple years. So, you know, like I said, we're not, we're not losing money, so it's good. But we also opened up another store before the store opened, we signed a lease for another store with a very similar blueprint, similar size, similar square footage, similar distance away from the main area. Just because we were optimizing towards speed. Now for multiple reasons, I do feel better about this other store that's opening up soon. But obviously in hindsight I wouldn't do that again. I would get the learning from one, see how it did and then see if we can pivot. But obviously that's not, you know, that that's not congruent with the speed that we wanted. But I think obviously that would have made sense, but for multiple reasons have a good feeling about this other one better. So yeah, there's a lot of lessons. And then, you know, the other thing was this is you just you, when, when things are going well, it's really easy for everybody to look good. When things aren't going great, you really learn what people are made of. You really learn who has what it takes, who is an a player, who's not, who is willing to call stuff out. I think in that one of, you know that Mr. Beast memo that he wrote, one of the things, yeah, the one I've quoted the most, and I think this was in there, he said only good news can wait or you know, say bad news right away. And one of the things that I learned, especially because things were going super well is like we had a culture where people were just wanting to share the highlights and share good news and kind of sweeping some bad performance, negative stuff under the rug because it felt like it reflected poorly upon them. And so I've been using that quote a lot and I've told people and had to tell people, especially at director level. If you're at director level and we do either a stand up or a weekly meeting where it's like, this is how I compare it against forecast. So this was the number, here's how it was against forecast, here is why, and here is what I'm doing about it. And you know, that's what I expect for every director. And I don't want people to sweep things in the rug or put, you know, like a feedback sandwich, you know, good, bad, good. It's like own it. And what I've had to tell people as well is like if you miss Target, it Doesn't, it doesn't reflect poorly on you if you miss target and you are unwilling to face that and share that and like own that, that doesn't look good. And so just kind of seeing that. And unfortunately, you know, you got to make some changes Sometimes you gotta, you know, make sure you have the right manager. You have to make sure you have the right director. You know what, whatever it is, you gotta have some of those harder conversations. Which brings me to my next point in learning is just like you just, you can't, you, you can't wait. Like sometimes, you know, when stuff isn't going well, you know, when the person is just, they don't have it, sometimes you like them, you make excuses for them. You know, you're optimistic. It's kind of funny. All of these ones are almost from being like too optimistic. It's just this like typical entrepreneur mindset where it's just like it'll work out like it always does. But sometimes you, you, you, you just gotta face reality and realize that certain things aren't going well. It doesn't reflect poorly on me either. You know, I don't, I don't think I'm any less of a leader of having a few of these, you know, things that didn't go well, that are not, you know, great financial investments. But you got to own it, you got to take responsibility and you got to make a decision quickly because sometimes you can turn things around. So those are, those are my big learnings for the year. We've been talking about upper funnel channels a lot, especially leading up into peak moments. And honestly, it's been one of the biggest unlocks for us as a business is helping us reach net new customers and getting them into our funnel. But the challenge is historically this stuff is very difficult to measure. You're not going to see it, you know, in platform roas clicks. So one of our secret weapons this year has been prescient AI. We onboarded with them about midway through the year and it's been a game changer and helping us to measure some of these very difficult to measure upward funnel channels like tv, like linear tv, like streaming. They've been able to move really quickly, the team's been great and actually get betas up with new channels that we've been testing. So it's been great. We've been loving it. We're able to, to see and forecast. If we were able to scale and spend on some of these channels, you know what our incrementality would look like. Pression has become A really important part of our marketing workflow. It's, it's one of the main tools that we use to set our budgets every month. And yeah, it's just become a really important, you know, part of our stack that, that we feel like we can't live without at this point. We love the unbiased cross channel measurement it has also love the Halo effects where we're able to actually see how it's impacting. You know, we're just on D to C, but I know brands that are on Amazon, they're able to get Halo effects to actually see how their upper funnel spend and their DTC spend is impacting Amazon. So it's just become a really big part of our workflow and I can't recommend it enough. We're using it. Hexcloud is using it. Symbiotica Coterie and dozens more impressions blowing up from everyone I talk to. Can't say enough good things about it. If you want to try it to measure some of these upper funnel channels that we're talking about, go to pressionai.com/operators to book a demo.

[Mike Beckham]

Cody, I think, I think what's interesting about especially your holiday collection, like what you're saying is a mistake, is that, that, that is a. Like was a mistake now, but that was like, has been a winning tactic like for you guys for a long time until it wasn't. And that's like generally how these things always work, right? Like you try things, you find wins, you try to scale them. But at some point, like to Connor's point of like local maximums, like you hit that local maximum and it actually turns into a failing tactic. Like I remember a good example I have of this is when I was at Zach's agency, Homestead, we were working with this brand called Shark Shoes. I think they still work with them and they had never, they were like launching their DTC wing. And we got some good traction with like static ads, like kind of hi fi static ads. And then we introduced user generated content like review style, like voiceover camera creator with B roll happening and like mate like overnight like totally unlocked. The account gave them huge levels of scale over the course of the next like six to to nine months. But then we hit a point where we were hitting that local maximum and we could not break through into that next revenue band. And we kept trying to do it for like and all of a sudden I got to a point like guys, we need to like rethink this. We, we're just kind of like hitting the same wall here. And then we introduced like we kind of iterated on the strategy. We introduced ugc but it was from an older demo because we had a bunch of data saying that like 80% of their, their revenue and orders was from people 60 plus and all of our UGC was from like 28 year old creators. And I'm like, what, what would happen if we actually introduced like a highly aspirational like 62 year old woman? And what do you know, like overnight best performing ad best roas. We kind of broke into that new rev revenue band. But again it was a winning tactic until it wasn't. And then we pivoted quickly because we were able to, we were agile and like that's the same thing that you're doing is you're just finding that this historically winning tactic is now no longer winning for you. You've hit that local maximum and now you're pivoting to like find the new, the new winner and like you'll scale that as well. And like there's just like this never ending cycle of like you scale your winning tactics until it's not a winner anymore and then you need to find new winning tactics to scale. Which ultimately takes us back to Zach's episode where it's like these, there's different tactics at different revenue bands. So it's that like kind of, it's that vicious cycle. But you're totally right. It's like the, the ability to pivot and act quick and find that next winning tactic is what really is the sign of like a great operator and more specifically a great moparator.

[Cody]

Yeah, no, I think you're right on that. I think so many people will try to pivot too soon, right? They'll try to go on Applovin or Twitter too soon when like they can just scale Meta, you know. And I think like I usually like, well I'm, I'm kind of what I'm learning is like we, we, we, we launched, you know, another channel and we were 80 on, on Meta for way too long, you know. And as much as I love Meta, like I was just like, let me do this, it works. Let me just do it over and over and over again. And it almost feels like that's kind of like similar with, with other things, at least in some regards with Holiday. But yeah, we got greedy. There's definitely things that I can look back on and I can be like, okay, here was what was different in the last year. We got greedy with the margin and price and we were always having such high Demand. We're like, we just charge this much more for it. You know, we can buy this this much extra inventory. We can change the timing of it. Like, there were just so many factors that you look back in hindsight and you're like, yeah, like, had I been a little bit more realistic, I would have noticed some of these things, and hopefully we could have made better decisions. But, you know, I think you learn from. From the losses, and you probably learn from when stuff goes really well. You know, we opened a store in Chicago earlier in the year. It's doing well. Like, we're hitting projections. It was a really good one. Totally profitable. You know what I've learned from that one? Nothing. I've learned absolutely nothing from that one. It's not something where we've had to identify any glaring issues, had to create some new processes, how we do things. So obviously that's great, but there just was no learning from it. But I think the ones that crush and do well, you learn something. But I think you learn a lot more in the stuff that is really not going well. And I think, like, trying to get a culture where that's okay. Where. Where, you know, that's what I learned. And it. It just comes back to me where it's like, I've got to be willing to say and okay with saying, this was my decision. You know, I did this. Here's what I learned. It's okay. So that other people in the company can stand up and be like, yeah, that was on me. Here's what I'm going to do about it as well.

[Connor]

To. Yeah, to pivot quickly. 1. I don't know if you guys saw there was a bee flying around for a bit. Killed it. Something so situ. Situation handled over here. Dude, I don't know what's going on. I. I'm at this Airbnb and this is a brief aside I was doing. I was leading a call. This is last week, and I. And a beast stung me in the middle of the call. Just. You're not used to that in a remote workforce. I'm getting physically attacked during meetings.

[Mike Beckham]

Biggest mistake of the year. Getting stung by that bee.

[Connor]

Yeah, yeah. No, but around retail expansion. So, I mean, obviously, you guys are like, obviously super high percentage. If you're launching five, six stores that are successes and you've got one maybe blemish on the record, that's going to happen if we broaden the scope from biggest failures outside of this year so far, one of our biggest failures ever was launching kiosks. So this was 2019, we have no idea what we're doing. We're like, 2019, we do 30 million bucks or something. So we're pretty small. I think we've got maybe like 15 people working at Ridge. And we get the opportunity to launch kiosks. It's a partnership between Amazon and Simon Malls. So they own a bunch of key malls and they were trying to bring, like, upstart D2C brands into their stores. These kiosks is, like, relatively low risk, but we probably spent. We spent tens of thousands of dollars developing these kiosks. We had to ship them a couple different places. There were a couple in la, I flew out. So, like, me, CMO and like, our VP of product, one of the founders, had to, like, fly out to Houston to, like, set up these kiosks. We've got these set up. We have to figure out. We use a staffing agency to staff them. I don't remember exactly, but I bet we could count the number of wallets we sold on, like, all of our hands. I bet it was. I bet it was less than 30 wallets over the course of a couple of weeks. It was brutal.

[Cody]

So that sucks.

[Connor]

Look, one. One soft opening that's like not making money but not losing it. It sounds like a massive success compared to our, you know, foray into retail a couple years ago.

[Cody]

Yeah, I think, obviously you're right. Yeah, that sucks. Try to avoid those. Yeah, I mean, we're having. Haven't gotten paid back yet, so, you know, October was our. Our best month. That's looking up, but definitely not hitting projections of where we thought it would be.

[Connor]

Sure.

[Cody]

But yeah, I'm sure that was. That was painful in the moment. Any learnings from it besides not doing that again? Any learnings that came out?

[Connor]

Oh, that. That one's like a really, like a lesson that you could take away is we should say no to more things. Like, we should really. And we're still not good at this. Where we will. We will, like, approach new projects in, like, a. And there are all sorts of, like, I think many of our wins, honestly, it's one of our, like, strong suits, is that we'll be super scrappy and experimental and, like, that has resulted in some of our most enormous wins. But there are many. And the kiosks is an example of it where we will agree to do something and be like, we will just try really hard. We'll throw bodies at it. We'll, like, be smart. I'll fly across the country, I'll set up a kiosk. At the, at the Houston Galleria or whatever. And when in reality, like, if we want to do that, we should really try to execute on it better and we should hire the right talent and we should do it in the, in like the right way, which might feel riskier and more expensive, but ultimately like, give us a better indication of what that outcome could be. This was, let's do it super scrappy and our chances of this being a success were incredibly small because of it. That would be, that would be maybe one takeaway there. Looking at it in hindsight, again, this was five years ago, but do you.

[Cody]

Think you only have your wins because you're willing to say yes to a lot of things and try a lot and like shots at bat thing? Like, yeah, you totally, you know, you. Yeah, this, this one sucked. But you also, the four other things you said yes to, a. One of them worked and you wouldn't have even picked that one. Like, if you had to do just one, you wouldn't have picked that one.

[Connor]

Yeah, totally, totally. No, it's true. That's why it is a strength culturally that that will do that. Could we maybe act with a little more precision? Yeah, like, if we got approached with the kiosk thing today, we wouldn't be like, look to office manager and Connor and like, and Connor's roommate from college are going to like, figure this thing out. It's like we just wouldn't do it that way. We would, we would know that if we want to get to a positive outcome that we would invest in it a little bit further and try to execute on it better.

[Cody]

Yeah, for sure. No, that makes sense. On like a similar note, like, so we're opening another store in January and the way it worked, I was going to dinner with, with my family like last Monday and board member who lives in that area calls us like at like 12 o'clock that day. It's like, I found the space. I was walking by it and it's like a place we've been looking for like a year. I found the space, just went on the market, just called the landlord doesn't want to deal with a broker. And so we saw the space that day, just happened to be going in, just had to leave an hour early for dinner, you know, got most of the. We got agreed upon the lease the following day, got it physically signed two days later, you know, and like that just never happens. And then we'll open in January. So it'll be like, you know, the quickest turnaround ever. And it's just like, it's just like everything went perfectly. Like, it never goes that smoothly. Like, we've had other stores where, like, we've been working on them for a year and like going back and forth with lawyers for six months. But I was telling my wife, like, I don't think you get. It's just funny how it works. It's almost like you guys like ever do like a product, like a big production for ads, and you spend a lot on it and like, it doesn't do that well. And then you just have this one UGC ad or like iPhone ad that you didn't pay for that like, gobbles up all the spend. Like, I don't know if you get that really successful outcome that, you know, happened in three days without doing the work and taking enough shots on goal. And it's just hard to know what's going to work. It's like a VC approach. But, like, the only reason that we were even prepared to move this quickly was because we had to spend the time looking at all of the comps. We knew exactly what our forecasted revenue would be. We knew what we could afford. Like, we knew what areas we wanted to be. It's one of those just like overnight success things where it's like sometimes you have to take all of those other swings and even if they don't work out, but then by the time your, your big opportunity comes, you've already like, put in the reps and you know, you don't see that those, those failures are actually like, what allowed you to move quick and succeed on this next one.

[Connor]

Dude, 100%. So I know we don't have too much more time here, but one of my wins is basically what you're describing, where this is a very kind of like, ethereal win. But I mentioned our approach to product development, like our rapid, like, go to market strategy. We've been launching things, like, more than every other week. We're probably averaging a launch every 10 days or something. And there are a lot of losses in that and because of that and a lot of losses, a lot of pressure testing. But we've like sharpened the blade over time. So now we're going into sweepstakes, we're going into Q4. And I'm like, yeah, we're just getting better and better at executing across all fronts. The details are dialed in. We're processizing that. We're. We're pulling that, those lessons over into future launches. And that's what, that's what you're describing, right? That many store Launches some win, some losses. Put you in the place where when you need to move fast, you can. And it's the same with, you know, the, the holiday collection kit that you talked about needing to change all those dates. Yeah, the team is refined. You guys have a refined process so you can pivot, you can remain agile. So yeah, anyway, we're like, it's a little like self promotional at this point. Right. But like, yeah, all the losses become wins if you're properly building the, the culture and refining the processes over time.

[Cody]

Yeah, we're like humble bragging a little bit.

[Connor]

Yeah, yeah, 100.

[Cody]

Not the intention. All right, let's hit some wins, you guys. That's obviously one and a good one there. That segues into it. You guys got one or one or two you want to share?

[Mike Beckham]

Yeah, I think a win. I, I'll kind of. This is like the, the other side of the, of the same coin with our, with our losses. I've just been really, really happy with how we've been able to improve our, some of our internal growth functions by bringing our team internally and just having people focused on our business only day in, day out. Like the example I, I go to the most is like what's happened for our US Retention team. We worked with an agency and then we still work with this agency for some of our other markets and they were. Did an amazing job helping us take our retention from like 2 to 5. And then we just felt like for us to get like the content and the brand voice and everything we wanted to accomplish like as our. As our tactics got more and more nuanced for specific objectives, we just needed to bring it in house to, to accomplish that and like the level like if you go look at our like the period over period improvement in our just like the content alone, it's amazing. So I'm very proud of that. I think we've done a nice job of like A, hiring the right people, but that, but then B, building the flywheel so we can sustain it. And I also feel it's been cool to kind of like be involved in like setting that foundation but then having the, the talent to like not only maintain it but also like improve it. It's like, you know, so like, you know, I look at my roles like trying to drive this, the ship strategically, but then the team is the one that's like really fulfilling that and executing on it in a day to day and I think that's been a huge win of ours in the last year is like retention influencer, paid media Affiliate. We've continued to build those, those teams internally and I've just seen the output of those functions just improve so much year over year, both qualitatively and, and quantitatively.

[Cody]

That's a great win. Good, good, good segue from the, you know, what you learn from the loss. But definitely it's great. And obviously thrilled to hear that you guys are no surprise to anyone building a great team and crushing it.

[Connor]

Yeah, I, I, I kind of hit my win. I think we've been sharpening the blade very similar to Connor. We're not necessarily taking things internal but we have over time really, really refined processes. So I'm going to leave it at that. I, I, I hit that one hard earlier. Cody, what win do you have for us?

[Cody]

I got a few, not, I don't mean that to be arrogant or anything like that. Definitely got a lot of losses but you know, TV ads was a big one actually. We launched that December 26th of last year and you know it's, I, I think it's, it's been great for us and just helped us reach a new audience. Really, really helped us scale. It's pretty low lift especially you know, like once you get them launched, you know, like we just shot TV ads today for the second shoot, you know, second shoot. We did a one day shoot last year as well. It's not like Meta where you got to do something every month. So like there are totally our pros of it. You know we were in this like, like when we launched we could just see in the business like just took off. We had you know, a few great months and then I think we got to like summer like midway through here we're like, it's hard to know exactly how it's doing. Like are we wasting money on it? I don't know. So we got a little bit more scientific with our measurement shout out to prescient House, you know, everyone that, that we worked with. But it's, it's been great and, and go. You know the tests that we've done have been super positive and I really do think it's one of the big reasons why we've, you know, been able to reach a lot of new people and just grow this year. It's just having a new place to reach them when I don't want to say Meta's tapped out but you know, a solid one, two punch with Meta. So that's been great and that was, that was awesome. EU expansion went really well. I mean made a million in the first month. Like that was Great. We, you know, set up a warehouse. There was a big focus. Like, that was one of our big strategic initiatives for the year. And so that's. That's been great. And then we had a lot of like, again, like, we're also very product launch driven. Like, we probably launch two things a month. They're not all net new products, but a lot of kits that we've talked about. You know, pallets, limited edition things. Sold out of all of them except for the holiday kits. But obviously. But obviously. So that these are in the win column. Yeah, so. So that was great. And obviously is a large part of why we're up so much year over year. So that is. That is great. We have some kits next year, obviously, we still will do holiday. We'll just change it. We do have some a launches, some like, what we consider, like acquisition products for next year. So we didn't have as much like new net new products for this year. So those will be a lot of the focus. And I was just thinking about, while you guys were talking about. We definitely built the team a lot. I had one. I had maybe two directors on the marketing team before. Now I've probably got four or six or something like that. And so really proud of the team that we've built. And it's exciting because, you know, you guys are talking about coming up on Black Friday on the 2nd or 6th year with the same team. You know, I'm really excited to, you know, have the full year next year with. With all of them. Obviously we'll continue to add to it, but. But to really, you know, get some more leverage back and keep working with them. And just thinking about it from like an office staff perspective, like, I don't know if we've had anybody that's resigned. Like, we've had incredibly low turnover. So that's something I'm really grateful for as well. It's just, you know, building this team is always a fun thing to look back at and realize how many people you've added and how much better, you know, your team has gotten throughout the year.

[Connor]

Yeah, big wins.

[Cody]

Big wins. All right, let's. You guys want to.

[Connor]

It makes me. It makes me. I'm not. I'm not ready to celebrate too many wins until after Black Friday. So hopefully when people are listening to this, I'm like really feeling good. You know, we really sharpen the blade. Maybe I'm speaking too soon. Saying it on. On November 19th. So a lot of TBD. We could do some more end of year reflections as we get Closer to the actual new year.

[Cody]

Yeah, we're, we're, we are, you know, Western Conference finals talking about how great of a year it was.

[Connor]

Yeah, yeah, yeah.

[Cody]

All right, you guys want to go test of the week? We got either options. We can do both. We can do one. We got a test of the week. We got a moderators hotline question as well. What do you guys want to go with?

[Connor]

I think we should maybe just do test of the week. I. I think Connor's got a good one. I'm stoked to talk about it. But let's plug the operators hotline in the bio or sorry, what the show notes of the podcast. We've got a link if you've got questions or comments. We're fielding future podcast topics, so maybe we'll get to. To one today. I don't think so, but want to make sure the listeners know that that's an available resource to them.

[Cody]

Sounds good. Let's go text to the week. Connor, Hexclad, what do you got for us?

[Mike Beckham]

All right, all right, all right. Test of the week. So we. So BFCM in holiday sale is like I guess not one of the only time we'll do like a straight up dollar off discount on our top selling sets and then Evergreen. The way that we position our pricing during all moments is we always have a strikethrough price and a retail price and the strikethrough price is just the value of the individually the individual retail price of the product. So like we try to do that so we don't have this like feel that it's an always on sale. But there is value savings to bundle. So what we then do during holiday is we do this like what we call a double strike through. So we're trying to really enhance this idea that there's like an additional offer happening on this set and like we use that double strike through to, to and to like showcase that. So if you go to like our 12 piece set, it's a good example. If you go to the 12 piece set, that hero image has like a little badge with like a double strike through price. It's like total value. Like I forget the name. It's like bundle price and then it's like Black Friday offer. I had like this midnight like oh moment like a week ago where I was like wait, what if people see the double strike through price and instead of seeing what they should like yeah, so like instead of msrp, total value.

[Cody]

Is if there was zero discount bundle values.

[Mike Beckham]

Yeah, Evergreen, right, Exactly. So I had this like this like.

[Cody]

Yours is going to make me change our whole Black Friday merchandising right now.

[Mike Beckham]

By the way, price positioning change incoming for the JRV team. But I, what I was worried about was I like the double strike through because I think it drives home this point that like this is the best offer of the year. It's like not only one discount that like you can get, but it's like additionally discounted on top of that. But then my worry was that if people see like the 699 versus the 5.99 that the perceived value of like 100 off is not as strong as the perceived value of like 9.99 versus 5.99. Like if we only showed those two then like and we do message 400 off and like 40. So I was like, maybe we should test that. So that was the test. Is like what actually drives better revenue per user and conversion rate Is the, is it the double strike through and that like double price off positioning or is it just that straight up like 9.99 versus 5.99 and it wasn't a big lift, it was 3% lift. But we did find that the double strike through did have a better conversion rate. So something about that positioning does. Yeah, it just is a stronger perceived value, I guess. So I guess my, my midnight thought like spurt of anxiety was, was all for nothing and, and the way that we were gonna roll it out ended up being the winner. But I, you know, that's an interesting finding and I think we'll, you know, now we'll, we'll have that. You know, it's always good to like be able to quantify some of those kind of like worries. And now we'll feel confident in like using that double strike three through moving forward.

[Connor]

And was the test, the test technically was just for, for people listening, there's this badge that like overlays the variant photo on the pdp. Was the test just that badge existing and then hiding it?

[Mike Beckham]

It was two versions of that badge. So the one that you see now that has the two different strike through prices. Yeah. So it was at that version but now we got, we got rid of the 699 price strike through and we just did 9.99 and 5.99.

[Connor]

Yeah. Awesome. I also love the, the implementation here. That badge is like just a great call out. It's a really simple test. It's like nothing like super structural. Yeah, I'm a big fan.

[Mike Beckham]

Like that's a good example of how like that's a learning we can take a memorialize across email across paid. Right. Like now we know to position our pricing that way across all of our channels. And yeah, like super. But also super simple. Like nothing complicated dev wise or design wise about this test. So yeah, it, you know, complexity does not lead to like, complexity does not equal upside. I think is a. Is an interesting lesson here.

[Connor]

Yeah. 100. And frankly, it makes total sense. As someone who I've seen a lot of hexclad ads over the years. I'm not quite sure. Like, I know you guys do bundles all the time, so I don't know what the Black Friday deal is. It's 5.99 right now. It's like, for all I know, it could be, you know, 6:19 every other time of the year or whatever, you know, so I totally understand the. The idea of highlighting that. That's awesome.

[Cody]

All right, well, that was a good one. Some. Some wins, some losses, some learnings and mistakes. And I wish you guys a lot of success on Black Friday. I hope we're here in a week or two weeks just talking about how much we crushed it and doing a. Doing a victory lap on the pod.

[Connor]

Yeah, look, if Black Friday goes bad, we just won't publish another episode. So just.

[Cody]

Or we'll just go straight into 2025. Yeah. Yeah.

[Connor]

No, awesome. Great app. Thanks, guys.

[Cody]

Thanks for listening and thank you to our sponsors, Motion Rich panel and Prussian. Hope you enjoy this one, as always. If you liked it, we'd always appreciate any shares you get. Please subscribe anywhere you get your podcast and on YouTube. We'll see you guys next one. It.