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- [00:00]
Sean
I'm glad you guys invited me here because you're slumming it down with, like, the E Comm millionaires again.
- [00:05]
Sam
This is like a make a wish type of episode for us.
- [00:09]
Sean
You know, I feel like I can rule the world. I know I could be what I want to. I put my all in it. Like, no days off on a road less travel.
- [00:20]
Connor
Never.
- [00:20]
Sam
There's really two things that I need to talk to you about. Two reasons you're here. Number one, I cannot believe that you sell hundreds of millions of dollars of this stupid little wallet. This is unbelievable to me. It's been blowing my ever since I found that out. And now you're here finally to give us some answers. And two, I think you're very opinionated when it comes to ecom. You don't hold back, you don't pull punches. And so we like that. We like spicy guests. And I think you're. You're going to be able to have both of those things for us.
- [00:47]
Connor
I think you. You should smack Sean right now for calling. Stupid little wallet. Did you hear that?
- [00:52]
Sam
Stupid little wallet. I'm just trying to get him fired up. I told you, he gets. He gets fiery. He gets feisty. So I wanted to, you know, stir the pot a little bit.
- [00:58]
Sean
You. You better play nice. I'll docs your. Your E Commerce brand. That's true.
- [01:02]
Sam
He know he's got. He's got some too much. He's got some compromise on me, dude.
- [01:07]
Connor
I've been a. I've been a Ridge wallet owner since 2016 or 17. You know, Ridge sponsored the Hustle.
- [01:15]
Sean
Well, dude, thank you for the support. And you guys were super early for newsletter sponsorships. Like, we probably run, like, a pretty big sponsorship like ecosystem now. We sponsor, like a ton of newsletters, like, you know, YouTubers. Obviously, you guys were like one of the first people selling that ad space, so.
- [01:32]
Connor
Yeah. And you know what I learned about your guys's industry? Well, just any marketer who's savvy is people like you and Sean. You guys know how to find early interesting stuff, and you take all of the risks and you. And you just. You understand the arbitrage, like the underpriced opportunity. And so we had a lot of smart people who would buy these ads with us. And I'm like, I can't believe they're doing this is so unproven. And then I realized that that's like the theme of a smart marketer, which is throw dollars at a variety of things and then exhaust it once everyone else comes and finds it.
- [02:01]
Sean
Yeah, it's ad arbitrage, right? Like everything's attention. So if I'm giving Facebook at this point, $15 per thousand views, and if I can get a better price off of newsletters or influencer or YouTube, like, it's all just an attention economy. And it's so funny to watch that, like, pendulum swing back linear tv. Like the TV your parents probably watch is so cheap to run ads on because nobody's buying it. So, like, you know, I'll probably spend.
- [02:27]
Sam
What'S like the CPM of linear tv a dollar.
- [02:31]
Sean
Like, oh, wow. It's like, because there's all these channels, right? There's been like, you know, thousands of channels that have come out that like have 800 people who watch them. So, like, you just buy like big blocks of random ad space that are just very male. Male targeted and like. Yeah, literally like a dollar to reach a thousand people.
- [02:49]
Sam
Sam, do you know what our best performing ad channel is? Our marketing channel for my brand? Postcards. You would not believe it. Postcards. It's not super scalable. Like, you can't just like spend to infinity on it, but, you know, you put a dollar in, you'll get eight or nine dollars out of revenue. It's amazing.
- [03:06]
Connor
That's great. Use post pilot.
- [03:08]
Sam
Postpilot. Yeah.
- [03:09]
Connor
Nice.
- [03:09]
Sam
So, okay, so, Sean, we should start at the start. So what's cool about your story is you sell a simple product. It wasn't like some. Some Mark Zuckerberg, you know, innovation or anything like that. And you've scaled it up. You built it brick by brick. But you said you started in the service then like a sign of sort of a sweaty services business. You didn't start the company and you didn't start off in the product game. So can we just do your story for a little bit and then I want to brainstorm other DTC ideas with you afterwards. But first, let's do. Let's do your story.
- [03:38]
Sean
Sure. Yeah, you got that right. The show's my first million, so I made my first million dollars off of an ad agency. So, you know, Facebook ads came out in 2012. That was like when it was probably like an open beta, anybody could join. And I learned how to do Facebook ads. I worked at an agency with my cmo Connor, and the agency sucked. Like, you know, it was 200. 200 people working there, probably 500 clients.
- [04:03]
Connor
You were an employee?
- [04:05]
Sean
Yeah, yeah, I was just an employee. And then I was like, oh, I should do this. I could do a better job of this. The ad agency I worked at, the average client was around for four months. So imagine that sales cycle. Like it takes 60 days to onboard them. They get 30 days worth of work and they're like, this sucks. And then 30 days to off board. The average client was four months, right. And I'm like, imagine if I just did this. But I kept them for a year. I'm like, I'll make so much money, right? So I started an ad agency. I have 10 clients.
- [04:35]
Sam
So you're saying this like it's simple. So you. You're working at a ad agency. How old are you roughly at this time?
- [04:41]
Sean
I was 22.
- [04:42]
Sam
You're 22 years old. You're not like a marketing expert yet, right? You're like, you know, you're learning on the job, I would assume.
- [04:51]
Sean
Yeah, yeah. But like it was. It's kind of like TikTok shops is today. Like, nobody's an expert, right? Like it's. It's a brand new thing that came out. Like I was. We're probably two and a half years into Facebook ads. People still thought Instagram followers were the most important metric. And they're like wanting to run campaigns to get followers. Right.
- [05:09]
Sam
And was your agency super bullish on Facebook as a channel or. It was kind of like this new thing that, you know, you got really interested in. Cause it was new. But was the whole agency like, hey, this is going to be a really big deal?
- [05:21]
Sean
Yeah, it was like a cookie cutter D2C agency. Like in the heyday, this is probably like 2015. Right. So Facebook was Facebook and email was the services we were providing. Like there was no other services. Maybe there was one guy doing Google Ads. Right. But it was really all in on Facebook as like this brand new channel. And if I could go back in time, I would have been even deeper into Facebook. Like the biggest challenge with Ridge, I mean, we're skipping a couple years in the future, but like, we try to diversify too fast. Like I was doing newsletter sponsorships and like, they worked. I should have put all of my dollars into Facebook back then up until like 2020. I would have just been better off putting as much money into that as possible. But.
- [06:02]
Connor
And Ridge was one of your clients. Were they an early client?
- [06:06]
Sean
Yeah, So I had 10. So I'm at an agency. It sucks. I think I can do a better job. Me and my cmo, Connor, we ended up starting an agency together. We take 10 clients with us. Eight of them you have never heard of. Okay. Like, they've just, you know, gone extinct. One of Them was Ridge and then one of them was actually mud water, which has actually gone on to crush it. Like we did their Google Ads at some point, like in 2016 or whatever. But yeah, so we end up taking Ridge over. Father, son, best friend, they start this business, they get to like $5 million a year in sales. And they are, you know, like the dad was a special ed teacher. Like, you know, Daniel was gonna go to go be an accountant and this thing just kind of caught fire and he really didn't wanna be an accountant. So like, their expectations for the brand when they got to $5 million a year, they're like, this is the best thing that's ever happened, right? And me and Connor being hella young and I'm like, I think we can get to $15 million a year. I think we can get this thing to $30 million a year. I remember telling Conor, I'm like, I think we can do $100 million a year selling this wallet. And he looks me dead in the face and he's like, there is no fucking way in hell we to do that, right? This was like 2017. But they didn't really want to run it all that much anymore, right? Like they didn't want to manage people. So I'm like, cool, we'll do everything else. So my agency kind of gets built around running Ridge Wallet. We do their customer service, we do their product importation, we do all of their marketing, we do their web dev. And then I'm charging them like $200,000 a month. Like all of the money is coming from Ridge Wallet. They end up being like 60% of all agency billables for my, for my tiny agency. And at a certain point they're like, hey, we should just merge, right? So me and Connor take an equity stake. Everyone in my agency just goes in house to Ridge. I end up selling off the agency to one of the people who was running it. And that was probably 2018. And since then Ridge has gone from, you know, $30 million a year to over 200.
- [08:05]
Sam
That's amazing. What I, what I love about that story is that it sounds like when you were running the agency, like almost like nobody would in a business school would recommend, hey, you're running this marketing agency and then for one client you're going to start doing customer service, you know, logistics support, all, all these other things. It sounds like wrong to do that. It's like, wow, one customer is going to make up 60% of your billables. From a business school perspective, that would be Like a bad move.
- [08:32]
Sean
But.
- [08:33]
Sam
But Dharmes said something once on the podcast. He goes, with my first business, he goes, I. I got. I got mixed up later. He goes, just because I was ignorant doesn't mean I was wrong. Meaning I didn't know the right way to do it, but my instincts actually were leading me in the right direction. It just wasn't, you know, I didn't have like some sophisticated game plan. And maybe it wasn't typical, but it was. My instincts were correct. And it sounds like your instincts were correct that you should just keep leaning into the Ridge thing, even though it was like, maybe not what a normal agent, normal marketing agency ever would have done.
- [09:02]
Sean
Most clients suck. Like, if you guys have ever done client work, like, most clients fight with you, they don't pay you. Like, they're always trying to fire you, right? And Ridge as a business was ran by really cool guys who didn't want to take any, like, reigns away from us. They were very happy with the $5 million a year business. And they're like, we could always go back to shipping the orders ourselves, right? Like, I mean, the guys are like, you know, Buddhist. Like, raised, Raised Buddhist their whole lives. I think that's part of it. But they were very much like, hey, this is a good thing. These guys are grow this business. Let's give them more responsibility. And, you know, you can't really exit agency businesses for all that much, right? One reason why we went all in on Ridge and did the merger is like, an agency is probably worth maybe 1x client contracts, and maybe at the peak it was 2x client contracts, right? So, like, if your clients, you know, if you have a guaranteed million dollars in revenue, you might be able to sell it for a million or two. Where Ridge at the time were like, fucking $10 billion year business right here. We're going to grow this thing to the fucking moon. So it just made sense to put all our chips in that basket.
- [10:07]
Connor
What was the metric that you saw that gave you the aha moment where you were like, all right, they're doing 5 million now, but this could be 30, this could be a hundred. Was there one or two metrics or was it just a guess? What was that research process like?
- [10:20]
Sean
It just, it just seemed like they could always put another dollar into Facebook and it could work, right? Like, the limiting factor wasn't like marketing or awareness. It was like the operations of the business, right? We ended up like, we had a year where we didn't have any wallets because we couldn't keep them in stock. So, like, we went from 15 million to 18 million one year, and that was just because we couldn't make enough of the fucking product. And I'm like, you know, so often demand is the thing that stops these brands. Like, you can only get to so big of an a tam. And that wasn't the case here. You know, we did like, a wearable, and it was so hard to get people to buy the wearable. Like, the CAC on Facebook was $400 back then, okay? It was, like, so fucking hard to get people to buy these wearables where the wallet. It was like a $6 cac. Like, we could just put up a new ad, and they were just static images, and they were just selling. So that was the metric man.
- [11:10]
Connor
That's like, an interesting process because a lot of people, myself included, will say, focus, focus, focus. Get it right. Make it great. It's going to take a decade plus. But your story is more. So like, I tried this, I tried this, I tried this. None of it worked. This thing was clearly the winner. I should go all in on this. Is that what your recommendation is?
- [11:28]
Sean
Well, my recommendation as a person trying to make it, is you should make the best decision at the time. So whatever the facts are, when the facts change, make a different decision. Right? Strong beliefs held loosely. So I'm like, I'm at an agency. I could have just did that grind and be like, I'm gonna be a VP at this agency when I'm 26. I'll make like 200 grand a year. But I was like, no, these people suck. I think the best decision for me is to just do what they're doing better, right? And then from the agency to Ridge, I'm like, running an agency business. I'm like, running an agency sucks. The Ridge thing seems to be going better, so I should just do that instead. I should find a way to entrench myself inside of this business. And then at Ridge, it was just like. I mean, for so long, we did not launch any other products for eight years. It was just selling more of the wallet because that's what was working. As soon as it started to get a little hard, then we pivoted to everything else.
- [12:19]
Connor
Which is funny, because I would have thought early on I would have. The paralysis of analysis would have been like, well, there's not that many wallet. Like, you're like, if you told me $200 million a year in revenue, I would say, well, you've. You've sold every man in America a wallet. Like, there are no more wallet buyers. You know what I mean? That's like one of my uneducated, self limiting belief a little bit would have been on that. If you said 200 million a year. I'm like, well there are no wall, there are norm. No more people who need a wallet.
- [12:46]
Sean
Dude, it's a weirdly big tam. Like the reason why, like we in, you know, in retrospect, I could tell you all the reasons why Ridge Wallet worked. It's a $10 billion a year TAM, okay? And like most of that is luxury brands. LVMH sells like $4 billion a year in men's wallets. Like curing, they own Gucci, they sell a ton of men's wallets. But then Tapestry, which owns Coach Coach, does a billion dollar a year in men's sales. So that's men's accessories. No men are buying those products. They're all gifts that are given to them and nobody's ever excited about getting those products. So the reason why I'm very public that I think Rich can get to a billion dollars in revenue is because Tapestry has a men's business doing a billion dollars a year in revenue with nobody loyal or passionate about that. So I'm just going to make whatever they make in all of our cool colors and our cool materials and you know, I think it's been so sexy to be talking about tech and AI these past 10 years, right? Or you know, tech for 10 years, AI for 10 months. But I was at like the all in Summit and I'm looking at those guys and like the products they're talking about exist inside their phones, right? Like they exist inside some server somewhere, but they're all wearing fucking cool suits and watches and leather belts. And I'm like, okay, I'll just sell them all that shit, right? Like I was going to sell like all the like the most practical thing ever because also smart people don't enter the space, right? The reason why Ridgewall was able to be so successful is because we're the only people running Facebook ads for wallets. Like then there's been a bunch of other like people who've started up and like, and I've tried, they've all end up going out of business because it's really difficult to get right, right? Like there is no repeat business. You can't like believe that the LTV will come save you later. It's very much like, can you tactically acquire customers profitably every single day?
- [14:32]
Connor
Hey, hey, Brown. Sean White. Sean's got that immigrant energy that I love. He's got, you know what I mean?
- [14:39]
Sam
Like he's got the, what do you call it? The Korean restaurant.
- [14:42]
Connor
I call it, I call it a Korean, Korean convenience store owner energy. You know, it's just like there's not like too, too much overthinking it. It was like, well, you guys are all wearing this. I'll just sell that, right?
- [14:54]
Sam
You know, like, yeah, and I think you'll keep wearing this. So you know, Munger has these great quotes where he's like his, his main thing is like instead of trying to be brilliant, just avoid st. Or he'll be like, you know, the best thing in the world is stupid competition. And we just have not much and stupid competition. It sounds like that's part of what in retrospect made Ridge work was you were like, hey look, we took the simple idea and there's not a lot of other really smart, you know, DTC marketers that were doing this. And so we were able to. To make hay.
- [15:27]
Sean
Yeah, totally man. I mean, and to this day the best DTC marketers are working on stuff like, you know, AG1, right. Like they're selling supplements and it's because it's a better business. Like undoubtedly if there's an LTV tied to your business, like it's going to be better, it's going to be more valuable, it's going to trade at a higher multiple. But the other thing is like the best marketers have more or less left the industry. Right. Like in 2021, running an E comm brand was incredibly cool. It has gotten less cool every single year. So there's less people doing it, there's less voices, there's less people talking about it. It's because it's f hard. Like I, I unjokingly call it like the, the blue collar work. It's like, you know, everyone wants to be shipping cool AI products or everybody wants to be shipping, you know, something that isn't physical boxes to people's doors of products. You actually have to like make. Everyone wants to build, you know, the services of whatever. So anyway, yeah, over the past four years it's gotten really uncool to do what I do.
- [16:25]
Connor
Do you guys on $200 million in revenue, are you able to make good cash flow and profit or. You know, I know so many friends who have these companies and their numbers are huge but they cash is always an issue. Are you able to manage this well and. Or at that scale? Do you still struggle?
- [16:43]
Sean
I think the reason why you guys asked me to be Here is to talk about the fact that you can in fact make a profit running E Commerce brand. So Ridge has never raised any money. We have no debt. So every dollar in this business, every dollar on my balance sheet is profit that has been reinvested. I've been able to make millions of dollars a year for the past years running this business. So yeah, it can definitely be done, man. Like I, I, I bought a house in LA directly because of selling wallets on the Internet.
- [17:10]
Sam
Give us a sense of the timeline. So you said kind of like, I don't know, it was 2016is right when you, when you guys merged or you took over the brand. But can you just give us kind of like a year? 1, 5, 5 million when you, when you started working with them, then it went to 10, then it went to 22, then it, you know, give us a timeline.
- [17:27]
Sean
Yeah, and I'm fucking horrible at timelines, so I'll give it my best. It's basically been, it's like a 50% CAGR since I started working with the business. So I think they did a Kickstarter in 2013. The first year they do like a million revenue. In 2015 they probably do two or three when I meet them. 2016 they do like 5 million bucks. So I think it went from 5 to 10 to 15 to 18. And that's like the hardest year of the business. When we went from 15 to 18, that was like we had no inventory with this massive fucking tax bill. That sucked. That was probably 2018 or 19 when that happened, 2020 we do $50 million. So that must have been 2018. It must have been 30. So 18 to 30 to 50 and then 50, this the COVID year. So it went from 50 to 100 and then it's been like. Yeah, I mean last year was a, I'll just say a multi hundred million dollar year.
- [18:26]
Connor
So let me, let me, let me, let me recap that for the listener. So you started in 15. I didn't hear what you said, but in 2016, 5 million. And then each year for that was 5 million. 10, 15, 18, 30, 50, 100. With last year being multi hundred. That's incredible growth.
- [18:42]
Sean
Yeah, something like that. So it's been super fun, man. You know. And Sam, you brought up have I sold every wallet in America? That was like one of your concerns. Right? So like I said, it's a massive tam, right. And I always say like we're a great uncle gift. Like you guys are going to go to Christmas or you guys are going to Go to fucking A birthday or whatever, and you have to buy some guy in your life a present and you don't know his size, right? The Ridge wallet's a perfect price point. You can get one on sale today for like 76 bucks. And it is sizeless. And like every guy in your life, you'd be like, hey, look, it has your favorite sports team on it. Or it has carbon fiber or whatever else, right? So it's a perfect uncle gift. And most of our products are probably sold as gifts, right? Some woman in their life buying it for some guy in their life. And the wallets are about half of revenue right now. The other half of revenue is all the other stuff we've launched. So the biggest unlock we've ever had was in 2022, we started selling men's wedding bands. And once again, this is a category where people thought it was so fucking dumb to sell men's wedding bands. They're like, it is a commodity. Good. Like, who the hell is buying this? The first year we do eight figures, it is the highest margin. Fastest growing part of my company is selling men's wedding bands on the Internet.
- [20:00]
Sam
So let's, let's talk about this because we're in this group chat that you, you have, which is like a bunch of. Bunch of DTC brands. I don't, I don't know what the cutoff is. I think I'm like below whatever the cutoff was supposed to be. But you let me in, which was nice of you.
- [20:12]
Connor
You're in the, like the charisma hire.
- [20:14]
Sam
Yeah, exactly. I'm the personality hire. So. So I. You. You talked about, like, going into new categories and like the wedding band was obviously a smash success. You've said the wearable thing maybe wasn't as big of a success. And you had this kind of interesting way of looking at it, because I just thought Ridge Wallets, that kind of like the, the sort of carbon fiber metal wallet company. And you were talking about, like, Mont Blanc and you were talking about these other almost like luxury accessory brands, and that was the vision you had for the company. When did that vision kick in? So, like, when did you reframe what the company is? Because I think entrepreneurs, we hear stories or somebody already has the vision and they already have the right frame and it sounds beautiful and big and, and really appealing, but at the beginning, they don't always have that. You know, Mark Zuckerberg, there's a video of him on a couch somewhere, and somebody's like, are you going to expand past colleges he's like, nah, that wouldn't be cool. And now he's like, got satellites above India giving people Internet so they can use Facebook. Like, you know, your vision expands as you grow. When did your the vision kind of change or when did you reframe it? And secondly, how do you think about going into new categories?
- [21:18]
Sean
Yeah, well, I'm a very paranoid person. So, like, in 2018, I'm like, this is going to end. We have to fucking find some other shit to sell. So we got into backpacks and phone cases and all this stuff pretty early in 2018. And we. The first year, we did like $4 million in backpack sales, or maybe it was 3 million. It was like a big chunk of ren revenue. And we canceled that program because I was too stupid to know that was, like, actually a good amount of backpacks. I was like, I'm like, The wallet's doing $20 million. How come we can't do $20 million in backpacks? In retrospect, we've since relaunched backpacks, so I was just too stupid, right? So we were always looking for new products to sell, mostly because I was worried that I was going to sell every wallet to every man in America. But as you learn more about the industry, like, the very common thing is very large hold co's holding lots of accessory brands. Like LVMH is just an accessory brand. Like, everything inside their portfolio just sells accessories, mostly to women. But there are occasionally pop ups of, like, very strong men's accessory brands. Mont Blanc is owned by Richmond. They own Cartier. Like, that is the strongest men's accessory brand. And they do $500 million a year. You think it's going to be pens? Pens are like 18% of revenue. It's mostly just like small leather goods, right? And it's across the world, people buying each other gifts, like wallets and backpacks and belts and everything else. So there's a playbook here. It's like you have to find a group of customers who like you. You have to continue to make products that they like and sell it into them. And I am more ruthless with product expansion than I think a lot of brands are. And I think more people should just try. They're really worried about hurting brand. And I'm like, your customers never fucking think about you. Like, you're lucky if somebody is mad you launched something like, you know, I always go to, like, Bic is one of my favorite brands. Like, they make lighters and they make pens and they make razors, right? And we buy all of Those products independently and they're best in class.
- [23:08]
Connor
I didn't even think of the, I didn't even think of. Yeah, but you saying that I'm like, oh, it's same.
- [23:15]
Sean
Yeah, yeah. And they're the best in class in all three of those. If you want a disposable razor or a cheap pen or a lighter, they, that's the only one. They, they own those markets. And it's just because the guy had a plastic factory and he's like, he's, it's a French company and they're actually, they got into tattoo removal now, right? Like, they're making like they just bought a bunch of tattoo companies because they're like, yeah, whatever takes plastic. We're just going to do those things, right? And it doesn't violate anything in your brain because you just like, that's just the way it's always been. So I think it's more elastic than a lot of people want to admit. And brands die by being too rigid by that. Like all birds should have got into fucking bedding and like all these different type of things, but they didn't. So now they're just a fucking dead shoe company. Right? Like, you should just be so ruthless with that product expansion.
- [24:02]
Connor
You're a very charismatic guy. You, you're, you have a lot of interesting parts of your personality that I enjoy. What attributes would you say are most responsible for the ridgid success, you think?
- [24:14]
Sean
One, it's a very trust forward organization. It's a very transparent organization. When I say trust forward, six of us own it. You know, three of them are father, son, best friend, like literally would die for each other. And then me and my cmo Connor, I lived with him for fucking five years. Like the guy we, I was talking last night, there was a time when we were running the agency where we did not have a thousand dollars. Like we would have to take. His dad gave him a car and it was like a 1997 Honda Civic that smelled and like paint was peeling, windows didn't work. We would take it to meetings, we would have to park it behind buildings so people didn't see us get out of this fucking junkie car. And you know, tying it to that, it's like not being scared to go back to zero, right? Like, I'm from like a very poor bad area where kids d of fentanyl overdoses and like I lived in a flop house with like, like, it was like 14 guys living in bunk beds when I moved to LA. And so I'm like, dude, not scared to go back there. So just more, more willing to take risks. Things are never that bad. Also being willing to eat shit. I'm like, bro, if I have to fucking be a waiter, we'll figure it out. Right? Yeah. So I, yeah, that, that fortitude like not being like so ego tied to whatever the fuck you're doing. If I, if I have to pack boxes, I'm going to pack boxes. Right.
- [25:32]
Sam
What are the ways people get E Comm wrong? So we've talked about allbirds, right. It was a, a product that was hot and now the stock is, you know, dead. There's you know, a bunch of other kind of famous examples of that. And then there's companies like yours, which is keep scaling profitably, you know, never took a dollar of debt, never took a dollar of investment and made it work. What are the kind of give us like your, your version of the do's and don'ts and maybe just start with the don'ts. Like the dumb shit that people do, the bad decisions that people make or the, the common traps you see people fall into. Because I'm sure that's your network is E Comm. So you see the full spectrum. People who totally flop, people who grind away for years and get nothing out of it, and people who excel and succeed.
- [26:15]
Sean
Yeah. So you can't out muscle a tam. So understand what you're selling and how big the market actually is. I see amazing operators waste time with horrible opportunities. Right. The TAM is what the TAM is. And if you're like the number one fucking garlic press seller, like that's kind of a meme in the community. Like dude, I'm like in your executing ruthlessly to be the number one garlic press seller. That is worse than being the 12th best creatine gummy. Right. Because that market is exponentially growing. There's LTV tied to it. Like so many people just waste energy and time on these horrible fucking product categories. So you can't beat a Tammy. You're not better than the trend. So bone broth, there was companies that exploded, got to $80 million in revenue. It was like, dude, this is the new way people are gonna consume calories. Bone broth that is now at a 30 year low because that's not the cool thing anymore. Right?
- [27:12]
Connor
Same with keto stuff.
- [27:13]
Sean
Yeah, exactly. So there's a guy from IQ bar, his name's Will, he's incredibly smart, he talks about his trend surface area. So it's like, look, people start with their luck surface area. He's like, I make products to have as much trend surface area as possible. So if keto's hot, I'll be keto. If gluten free is hot, I'll be gluten free. If it's sugar, that's cool or non sugar, like, whatever, I'll make those products to just hit whatever the trend is. And I'll just change my packaging so I'm always top of trend. And you're not better than the trend. Right? So that's the point I'm trying to make, is you can write it up, but as soon as it crashes, you'll crash with it. And then my third one, the most controversial one, is that LTV isn't real. Like, lifetime value only works if you're alive. So most brands die waiting for ltv, right?
- [28:00]
Sam
And what you mean by that is you got to be profitable early on on that customer you acquired. If you acquire the customer for $200 and you only made, you know, $20, and you're saying, oh, the LTV, it'll all pay off. That's kind of what you're talking about, right? Versus the way you guys do it is you're trying to be profitable either first purchase or are you guys profitable first purchase, or is it like, you know, a month or two later? Where are you guys at?
- [28:22]
Sean
Dude, I have to be profitable in the first purchase. You think people are coming back to buy a second wallet in a month? It's like, I'm like, dude, the LTV from wallet customers is like, maybe in 90 days I get 10%. So, like, it's very much. I have to be. I have to turn not, not. Not a contribution margin. Like, actual true. Paying for all my fixed costs every time I sell a wallet to somebody.
- [28:47]
Connor
Can we play a game called change my opinion? And this is for both of you guys, I have a bone to pick with your industry. I. I think Sean's heard me with this spiel before. What. What frustrates me sometimes. Not exactly you guys, but I'm gonna use you as an example, but of people who they. All they worry about is like, the CAC and the LTV and the. The TAM of these industries or. And they don't spend any time actually thinking, is this product awesome? Is this the best? You know, like, is this truly solving a problem? And it bothers me sometimes that it's more of an arbitrage. Not exactly thinking about, can I create a widget that makes a customer's life better and is of high quality? I wish that more people in this industry sort of talked about that a bit more. Do you think that's a fair criticism or where am I wrong on this, dude?
- [29:42]
Sean
I mean, I think it's a fair criticism. My industry's been washed out though. So like the people you're talking about probably have all left. There's so few people left in E Comm. Like Sean brought up the group chat. Maybe two people respond every single day and one of them's metab. It's like we're at a multi year low of interest in the industry. So yeah, all those people have left. The people who are still here in shipping. Dude, I bring up Hexclad you guys want to talk about. Amazing. Yeah. So like I'm very close to you.
- [30:14]
Connor
Tweet about them all the time and like they inspired me because you said they like worked for three years finding the perfect pan.
- [30:20]
Sean
Okay. So when I met Danny, it was 2020. They, they didn't have a website. He says they did, but like you couldn't check out on the fucking website. Okay? They, they were fucking selling pans at trade shows and like county fairs, cooking up eggs themselves. Right. In Costco roadshow. So not even in Costco, they had to pay to show up at Costco and fucking cook up these eggs. And they. From 2020, they'll do. I mean it's documented at this point over a half a billion dollars a year. Like they, they got to hundreds and hundreds of millions of dollars in annual turnover with a hundred million plus in profit. Danny will fucking shoot me for saying all this stuff, but like, I think it's all pretty rare public, you know, Gordon, Gordon joined the brand. They have Fox as an investor now. Pre all that. They were doing nine figures in EBITDA a year. Okay.
- [31:12]
Sam
Didn't Gordon Ramsay like write a huge check? He didn't just like sort of join the brand. He like invested a pretty sizable amount. Or was he part of a round or was it him personally investing in it?
- [31:22]
Sean
That's all public. There's like, there's like a thing. He came in with Fox on some, on something and like, you know, because Fox, it's like a three way deal. Fox wants to give him money to make shows and he wants to get more equity in Hexcloud. So it's like a big three way guy.
- [31:34]
Sam
Gotcha.
- [31:35]
Sean
Gotcha.
- [31:35]
Sam
Dude. I have like 12 hex clad pants in my.
- [31:38]
Connor
Are they awesome, Sean?
- [31:39]
Sam
They're great. You know, I don't know if they're the best pants that I've tried, 100 pans, but they're Way better than the pans I had before. And to the point where I bought a second set of them because I was like, these are great. I'm happy with these pants.
- [31:51]
Sean
Yeah. And they put years into that product development. Like they actually, like, they care about their customers. What it comes down to is respecting your customers. If you're just like, that's why I don't like info products. Like, if you don't respect your customers, if you're just like trying to arb them or like, you know, we have a customer name, so our customer is everyday dad. We call him Ed. And I'm like, almost every meeting I'm like, are we respecting Ed? Are we delivering value to Ed? Right. Everyone has an Ed in their life. Think about like your guys brothers or your dads. He's just like a guy, he likes widgets and like he loves fishing and like he loves NFL. Like that's fucking Ed. And I'm like, look, Ed has paid for everything in my entire life. We need to take care of Ed. We want to make sure Ed gets like the best, coolest shit possible. That we give him great value and great deals. And that's when Hexclad did. And like when we talk about like, I think this industry, it's a bad rap because so many people have entered it and so few people have left with any amount of money. Or like the people who did leave with money, like it was like a greater fool theory. They were just tricking somebody to give them money and then they bailed out. But then there's companies like Hexclad where there'll be a 50 year brand, there'll be a generational brand and they're fucking crushing it. So it's possible they're buying super bowl ads. Like, I mean this is, you know, a. They were bootstrapped up until like two years ago. Like a bootstrap brand. Getting that done. It's amazing.
- [33:10]
Connor
Yeah.
- [33:11]
Sam
I think, Sam, what you said is true. That marketing skill is the core competency for most of the winners in this space. Most, There's a few, there's a couple who just really nailed product or community. Right? And then they just, they, they built slowly, brick by brick over, over the, over a decade. But for the most part, the people you'll hear about and the people you'll meet, they're great because they are great at doing Facebook ads and Google Ads or now TikTok content. And so that's true. But at the same time you're like, oh, I hate that. It's this CAC to LTV thing, well, it's like, guess what? When you sit down with your team, you're like, how do we raise ltv? Right? Like, there's some natural gravity. Like Sean's saying, like, you buy a wallet every seven years, you're not really going to change that. But, like, for my product, you do buy it more, way more often. You know, in the first six months, we double our. Double the amount that they paid us on the first order, right? So it's really, it's a, it's, it's, it's a movable number, right? We can actually affect that. And then you're like, all right, well, how do we increase ltv? It's like, yeah, you could spam them with emails, you could spam them with text messages, but guess what? The better way to do it is to make an amazing product that they're going to want to buy again. And, like, lower the return rate. How do you lower the return rate to get more profit?
- [34:19]
Sean
Right?
- [34:19]
Sam
It's like, make a better quality product. And so I think that, that when you. That for anybody who's actually going to try to win, you will have to make an amazing product, otherwise you won't be able to do the, the ad arbitrage you're trying to do. Because how else could you increase the LTV if everyone hates your product or it's not doing anything for them? And so, you know, I think the, the people who stick around and actually win in the long run are the ones who, who do what you.
- [34:43]
Connor
Yeah, I think those are good answers to the, to the question. I think that, like, you know, when I see someone making like a boost your testosterone, like, thing, or I'm like, dude, I don't know if any of this works or if they're just really good at making a label that's appealing. And so I like, start to lose confidence in the industry as a whole.
- [35:04]
Sean
Oh, totally.
- [35:05]
Connor
Well, actually, and that's actually, I'm actually curious if you guys have any of these, like, DTC brands where you're like, this product is amazing. And so it's actually really good to hear that Hexclad is one of them. Do you guys have any other favorites?
- [35:16]
Sean
Well, going back to the supplement side, a lot of it is like, I mean, a lot of this work is being done like the co manufacturers, right? Like, there's co packers that actually do all the formulation. So a lot of times people are just showing up and buying stuff off the shelf. So if you're getting any sort of supplement. Like, it's probably the same supplement, white labeled a hundred times. And that's just like the way the industry works. So, you know, I would put hard goods in a special category. And like, we talk about D2C brands. I mean, all of my favorite fashion brands are small and independently owned, right? Like, does that count? Like, this is Buck Mason. These pants are James Purse, right? Like, I just got a suit from Billy Reed. Like, these are all small independently owned companies, right, that are, that are running. They have Shopify websites. Does that count as D2C? Right? It's. It's very much like there's a black box of. Of bad rap products. And I think a lot of the supplements that come from comands, right? Or anything to do in the health and wellness space, like that is like typically where there's a bunch of shit, but if you buy a Ridge wallet, you're gonna get what is on the package. You know what I mean? Like, or one of our phone cases or whatever. It's like a fucking phone case, man. It's pretty good.
- [36:28]
Sam
Who else is crushing it? So what are some DTC brands that we wouldn't know or we wouldn't really realize how well they're doing? Just because we're not in the space, we're not paying attention.
- [36:38]
Sean
Yeah. The other reason you guys called me here to talk about the Woobles. Okay. The Woobles is fucking crushing it. The Woobles.
- [36:45]
Sam
Okay, so what are the Woobles?
- [36:47]
Sean
So, yeah, we are three young adult men. We're not the core customer, right? It is a crocheting product. So it is like you make little characters and they have licensing and there's little education. It's like basically like either it's young people doing it to have less screen time, or it's you're doing with your kids so they have less screen time. And that's awesome. Yeah, dude, When I met them, they might be. They might have been doing $10 million a year. Like in two years, they've gone from 10 to probably $150 million in revenue. Like, no capital raised. They are still. And I really, I like them and I respect them. They will not fucking launch subscription boxes. They're like, yeah, we don't think it's that important. I'm like, Jesus fucking Christ. Like, if I could shoot these people, I would. Because they won't do subscription. It's like the perfect product. Like, it is just educational. It's fun. It's connecting with your family. Like, it's this movement against screen time, which is like A big trend that they can take advantage of. There's every month they could have new characters, they could just show up in your door, you do them. There's a little community aspect. It's the single best, best brand and execution that I've ever seen. Like this will be a billion dollar exit because they're so fucking good at it. They've never raised any goddamn money. Just like it's two people just putting it together in North Carolina.
- [38:10]
Sam
How did they even think of this? Like, how did this get on the road? Were they big crocheters? What is the origin story of this?
- [38:16]
Sean
Yeah, so I think it's a husband and wife team. I think she was just crocheting and she's like, yeah, I would love to have little guides. And there was like an etsy community of people like selling crochet guides. And she's like, like she would buy em and then she'd be like, okay, I'm gonna make my own. And then she would release them and then it's like, oh, maybe I should just sell my little crochet kits. And bam. Fucking explodes, dude. So like if you're listening to this and you're thinking like, okay, I'm not washed out, I want to try E Commerce. I highly recommend getting into services first. Okay? Like you should learn how to make money on the Internet via services. And if the show's called My first million, you'll make your first million dollars delivering good value to people like me or like Woobles, whoever else. Then find a trend that's very fast emerging, right? Like I think no screen time, I think creatine. Those are the two biggest ones for the next two or three years. Like if you can do a no screen time creatine, crochet kid something fucking, you'll figure it out, right?
- [39:13]
Connor
Dude, I've spent so much money on Legos lately for that no screen time trend. What are other no screen time?
- [39:20]
Sam
I feel like, I feel like the microplastics is another, another trend, right?
- [39:24]
Connor
Like, like and air quality.
- [39:27]
Sean
Yeah, dude, yeah. So like just glass everything. Glass bottles, glass containers, what? Just like imagine if you could just buy a backpack and they're like, we guarantee there's no plastic in it. Fucking awesome. You wrap it in paper, ship it to people. That's another trend I think is going to be fast emerging. Yeah, no screen time. Just more physical tactical toys, right? Like bringing back the fidget spinner, but as like a focus tool. Right? Like I think there's a bunch of shit you could do in there, but Anyway, those are fast emerging trends right now. Protein was a trend that's basically probably dead, right? Pre protein was collagen. There's always these just like pockets of success you'll find. And that's the beauty of the space. It's like, you know what it is.
- [40:08]
Connor
Right now in that space? What's the early boob milk? What's that called? Colostrum.
- [40:15]
Sam
Colostrum, yeah.
- [40:16]
Connor
Oh, my God, I'm getting so many ads for Colostrum.
- [40:20]
Sean
Yeah. You know, the other one will be like, I think raw honey. It had like a small moment. I'm sure it's going to come back, right? There's like a bunch of New Zealand honey companies.
- [40:30]
Sam
And if you, if you were a founder, where would you kind of look for these? Are you, are you a proponent of look in your own life? What are you doing? Or what is your wife doing? That seems unusual, but actually there's a passionate community. Are you like, I scour Etsy and Reddit, Is that where you would look? How would you do this if you didn't know which trend to start with With, Right?
- [40:47]
Sean
So you should look in your own life because you probably don't have the skills to actually go out there and like, like, you know, or I'm assuming you have no resources to actually pick a trend and double down and actually deliver on those promises. Right? So you should find something in your own life that you actually know and are passionate about. If you're more seasoned, professional, I think you can find those things. Right. And really what it would be is I think Reddit's dead. I think Etsy's dead. Like, that's AI slope, basically. @ this point, the inshinification of the Internet has happened to those two websites. I would look at literally what's happening inside of Erwan. Like, I would just move to LA and go to Irwan every single day. Because those are the best people at catching trends. Like they were anti vax in fucking 1997. Right? Like that. They are very, very early on those things. And if you're, if you're not going to do that, then it's like you just, you have to follow the girlies on TikTok, right? The other one, bring up his Pilates. Like, Pilates was a thing in 2000. It's having a massive resurgence right now. And like, once again, we're three young men. How are we going to fucking make a Pilates brand? But Pilates for guys probably could be another trend.
- [41:59]
Sam
Just needs a new name.
- [42:00]
Sean
Yeah, totally. Well, Laplace, I think is what the actual name is? Oh no. Lagree, something like that. My wife knows. But yoga is a very much a downward trend, right. And like this yoga was just a synonym for health and wellness and like, you know, non just Jack dudes wait listing. I think that's actually changing and it'll be something else like Pilates or something else.
- [42:28]
Connor
New York City founders. If you've listened to my first million before, you know I've got this company called Hampton. And Hampton is a community for founders and CEOs. A lot of the stories and ideas that I get for this podcast, I actually got it from people who I met in Hampton. We have this big community of a thousand plus people and it's amazing. But the main part is this eight person core group that becomes your board of advisors for your life and for your business. And it's life changing. Now to the folks in New York City, I'm building a in real life core group in New York City. And so if you meet one of the following criteria, your business either does 3 million in revenue or you've raised 3 million in funding, or you've started and sold a company for at least $10 million, then you are eligible to apply. So go to joinhampton.com and apply. I'm going to be reviewing all of the applications myself, so put that you heard about this on mfm, so I know to give you a little extra love. Now back to the show. What are some other going up and going down? Give me like a topic or a trend and tell me, is this a buy or sell moment?
- [43:31]
Sean
Well, look, this is not a hot take. This is not Scott Galloway fucking. But all, all big box department stores. Like it's very, very much like we just saw Joanne's fabric go down. We just saw Container Store go down. We just saw Party City. Like that's gonna accelerate. Like, there's. We are over commercial real estate. There's too many big box stores. Like even Target is having a really fucking hard time. And my biggest wholesaler is Best Buy. I crush it in Best Buy. But all of that shit is probably the FUD isn't real enough. It should be even more real. Like Nordstrom's, Macy's. Like, I think small independent brick and mortar shops really do work. Like if you're in la, you go to Century City. Like, but the. I was walking around Bloomingdale's and you know, like 10 years ago it was or even 20 years ago probably it was like the, like the, the number one place to buy women's fashion. Like Women, contemporary fashion. It was the coolest thing ever. I'm walking around, they got blouses that are 800 and it's dead on a Saturday. Like nobody's shopping there at the best mall in la. So I think the FUD isn't even. You should. We should. We should be even more scared that there's going to be more collapses and any. Any sort of commercial real estate that's like 10,000 square feet plus. That is like selling physical goods. The other one is probably better for you. Candy. Like there's like VCs have really backed this, like, better for you artificial sugar. Like you go to a fucking Target, like there's all of these like weird artificial sugar brands. I think it's going to come out that that causes cancer and RFK is going to be pretty against it. So anyway, I'm probably not launching anything in there. Probably. Probably launching real sugar. And that's a very hot tape that could age really bad that like real sugar is going to make a massive resurgence.
- [45:24]
Sam
What do you think about like, you know, these, like other people who do the same model you did. Services to products. So for example, I think the guys behind Brez, which is that I think it's a. I don't know what it is like a mushroom drink or it's like an adaptogenic drink. So basically it's like it gives you a high, but it's not alcohol. It's like. Or something.
- [45:45]
Connor
Their website says Brez is microdosed cannabis and mushrooms in a can.
- [45:51]
Sam
It's a weed drink.
- [45:52]
Sean
Okay, great.
- [45:53]
Sam
It's a weed drink. Those guys were agency people, right?
- [45:56]
Sean
I beg to be the first check in Brez do screenshots where they said they were working on it. I'm like, let me be the first check because Aaron is incredibly smart. He was the first person to figure out how to work with Meta to have controlled substances be advertised. So that's like his specialty. If you had a cannabis company, you had to go through him and his agency called we are Lucid to actually do the cannabis advertising on Meta, right? He found a compliant way to do it. So he's incredibly smart. Nick's an amazing operator, ran a great agency. That's the best model. The other person is Zach from Homestead. He has a company called Holo Socks. Like, I don't know how much time we have, but to unpack the history of E Commerce. E Commerce 1.0 selling random shit on the Internet, okay, like whatever Pets.com, e Commerce 2.0 was marketplaces. It was eBay versus Amazon versus everything else. E Commerce 3.0 is what we consider DTC 1.0, which was like the first brands coming online, the Allbirds, whatever else. Then you get DTC 2.0, which was the COVID hotness, the peak, everything exploding. Right? We are now in DTC 3.0, which is small serviced providers pivoting to brands with very lean teams and Create Gummies, Holo socks, Brez, the three best examples. Create Gummies has a team of eight people I think will do $40 million this year, right? Holo Socks is a team of five people. They'll do $30 million this year selling socks. Most of them met ads, right? And then Brez, they're public with their numbers. Follow Aaron on LinkedIn. And I think they did $5 million last month in revenue, okay. In beverage, in a controlled substance. That's fucking insane. That company's worth $300 million today, right. And I think their team's incredibly small, maybe 20 people at this point. So yeah, that is the best bull case for E Commerce right now. Service operators who've seen the rise and fall of all these different brands have learned from them, have spent their money to get good at ads, right? Launching targeted hyper specific brands. And the three I named are the best.
- [48:13]
Connor
Sean, you should go, go to drinkbreads.com do you see their website? That's the prettiest website I've ever seen in my life.
- [48:19]
Sam
Yeah, that's usually not a good thing. The prettiest websites are not usually the ones that work the best.
- [48:23]
Connor
I hear you and I am on board with that. This is one of the exceptions. Look at this.
- [48:28]
Sam
But I, you know, I think what, what happens is you see the front, front. The front of the house is not always where the traffic is going. So you know, the front of the house is the, it's kind of the hero. It's the brand, it's the aspirational. But you run your ads and maybe you're running straight to a PDP or to a TikTok shop or to different things like that. I think they're very heavy into TikTok, right? Like that. Their model is the, the TikTok blueprint, which we just did an episode with with Rob from Rob the bank about like the, the TikTok blueprint that a bunch of the brands are using right now. And I think Brez is doing that where it's organic. It's. It's kind of the TikTok affiliate slash organic model where you're getting really cheap CPMs because TikTok videos can just pop off and you know, you're, you're putting out thousands of pieces of content a month but. And it's driving sales. Unlike the way, you know, I've been doing it or you've been doing it, Sean, which is like a lot of, you know, Facebook Google Ads. You know, you put a dollar in, it's attributed exactly how much that that ad generated in revenue and you just sort of optimize from there. The TikTok game is a little bit different. It's a bit of a spray and pray game for the most part.
- [49:30]
Sean
Yeah. So I just sent you guys. This is from Aaron from brez. They did 4.6 million in revenue in month 21, January. This is their LinkedIn post. So this is all public information that they share. TikTok shop was 37 grand. Amazon revenue was 342. I'm not going to read this for the audience. Maybe I'll just show it. But dude, they're fucking killing it. Bryce is awesome.
- [49:55]
Sam
Well, they post their P L basically every month on not it's not an actual P L but like you know, sort of a marketing P L on. On Twitter and LinkedIn. It's great. Listen, we could read this. So total net revenue 4.5 million. Let's see, that's in. You said month 21 now. Yeah, yeah, dude, like then their ads, they spent a million dollars on Facebook, 400,000 on Google. On TikTok ads they spent zero. But I know that they must be spending on. On the affiliate part of TikTok because I, if I'm on TikTok, I see Brez stuff all the time and it's always an affiliate link. You know, swipe up and you can sort of buy it from there. Applovin 472,000.
- [50:37]
Connor
It really seems like the. One of the keys to this business like and this is not always the case, but it's picking the right idea. The right idea and the right angle. It seems like there's no other way to explain how something can get to $4 million in monthly revenue in 21 months.
- [50:54]
Sean
Yeah, I mean and the reason they were able to be right is because they're both agency operators. Right? Like they the right people to launch a product like this. And also it's so hard. The reason why they're willingly sharing their P and L is they have nothing to hide and they don't think you can beat them. Right. And I think anybody listening to this can't beat them them because are they.
- [51:13]
Sam
Shutting down Their agency or they're just going to keep trying to do both. Like, why would you run your agency once this happens?
- [51:18]
Sean
Yeah, I mean, you end up just like, you know, selling it off or hiring operators. I mean, I mean Nick Shackelford, which was the partner in Brez, I mean he had, you know, an events business, he had an agency business, he had an email business. I think you just, you find partners, take that over and you just put more time into this. But I mean, early on I was like willing to bet on these fucking guys because they're the best.
- [51:38]
Sam
Sam, I want you to Google Nick Shackelford tattoo and tell me if you want to compete with this guy.
- [51:47]
Connor
Oh my God. His whole body is covered.
- [51:51]
Sean
Yeah.
- [51:51]
Sam
From the neck down to his toe. Every inch of his body is covered in a tattoo.
- [51:55]
Connor
He looks like a, like he looks.
- [51:57]
Sam
Like the guy from Prison Break dude.
- [51:58]
Sean
Yeah.
- [51:58]
Connor
He looks like a Japanese murderer. Like, you know how they do like the Yakuza, they do like the whole. That's insane.
- [52:04]
Sean
Including his dick. I mean, he actually got it done, man. He said it was so painful.
- [52:08]
Sam
Oh my God.
- [52:09]
Connor
It looks horrible. I mean it looks great, but I don't want to do it Looks painful. Yeah, that's what I mean. That's insane. What do you think Ridge is worth right now?
- [52:20]
Sean
Oh, man. I mean the, the, the market for a brand like us is at an all time low and like, like look.
- [52:26]
Connor
Well, what's the all time low number?
- [52:30]
Sean
We'd probably. A market clearing price is probably 300 million. Like I could probably clear that at, at the market with our growth and everything. It's really hard to sell my business right now. And like, I'm not trying to sell my business right now.
- [52:42]
Sam
Right.
- [52:42]
Sean
Like, I think we have like by the end of the decade we'll be doing like 5 or $600 million a year in annual revenue, really driven by this big tech rollout. So like we're really big in Best Buy already. We're going to be in Apple, we're going to be in Verizon selling power, banks, phone cases, cables. We already sell our wallets in a lot of those places. So that's like the next evolution of the brand is just more product expansion. But it's hard for me to sell my brand when Solo Stove of is in a public company. And I think they're worth maybe 100 million on the public market. Right. Like there's. They peaked at $2.1 billion and now they're probably. The market cap today is 100 million and they have like 400 plus million in revenue. They own chubbies. Like it's very hard for my brand to go to market when if you squint we kind of look like them. And they are. They just need to be taken private. There's a lot of take private needs to happen and interest rates are still too high to take a lot of stuff private. So we're just waiting, waiting for all that.
- [53:38]
Connor
What would you want to sell if you weren't doing Ridge? If you had to sell Ridge today, what would you, what other product? I mean you're not a guy who would stop. What other product would you want to sell?
- [53:47]
Sean
Yeah, my goal for Ridge eventually I'm not the long term shepherd of this brand. Like if it's going to go public or whatever or most likely get bought by one of the rollups like in our industry that's the exit path. There's 10 strategics that end up buying brands like ours. I would like to net $100 million and then I would like to start a portfolio of brands and services basically like you know, everyone wants to have their own little pe, their own little family office type thing. So I would launch a bunch of weird little e commerce brands that I think are going to be trend relevant and hire service providers to, to run those businesses.
- [54:24]
Connor
I love that you know what you want. You know, you've mapped this out of like what your ideal setup is. I love that. I love people who call their shop hot.
- [54:34]
Sam
Do you, you talk about trends like but, but you know, bone, bone broth, it's hot, then it's not. Keto tot, then it's not. And so like why go after a trend if it's going to ultimately, you know, do what trends do? Most trends don't last forever. So is that like building your sand castle, you know, building your castle on quicksand or something like that? Like why, why go after a trend when trends have this like, like shelf life? Are you trying to time and exit or are you trying to, you're going to hop trends? What, what's the plan if you're going to build on top of a trend?
- [55:06]
Sean
Yeah dude, going back to will from IQ bar trend surface area. Like you create a product in a trend because that's the, the best way to grow is in a growing market. You can be average in a growing market and grow very, very fast. Right. I was an average operator when Facebook ads were growing and that's why my business grows, grew. Now I can be a good operator because I have to be right. But When a market's growing very fast, you could just be average. And then once, once you get some sort of success, it's, it's pivoting. So like, if I was in the bone broth business, I would have told them, like, hey, we have to do protein focused bone broths or bone bars. Like, I, I'm that guy coming in here trying to like, disrupt whatever fucking business I'm in. I'm like, we, yeah, if I was at bone broth, I'd be like, look, that's fine. We should do that. We're going to do bone bars and we're going to get, get whatever. Some jack guy talk about how they're great. Then I'd be in the bars business. Then it'd be like, we got to do bone supplements. We got to be the only guys doing bone, whatever, marrow pills. That's the type of shit I'd be pitching to them.
- [56:09]
Sam
I love that that's your answer because it's like, that's the attitude you have to have to win in that game. My takeaway is Ben, what a horrible game to play. I was just doing a podcast yesterday with a guy and he goes, you don't want to be in the fresh produce business business. He's like, you know, you know, he's like, you want to be YouTube, not a YouTuber, right? Just as a simple example, he's like, you take the best YouTuber and they're in the fresh produce business. They have to keep running as fast as they can on that treadmill, and the treadmill gets faster and faster every year. And if they stop, they fall behind and there's a thousand other people on that treadmill. And so same thing, like if you're on a trend, and a trend, you know, almost by definition is going to sort of peter out and then the new trends will emerge. That just seems like a really hard way to win in business when there's other styles of businesses that don't have that problem.
- [56:58]
Sean
Right?
- [56:59]
Connor
But Sean, I think you're both could be right. I think the right answer though is to whichever path you take should fit your skill set and interest and you should commit to it and be that. We had Moyes on Moise Ali from Native Deodorant and we said, why don't you do something easier? He goes, because I'm a merchant. This is what I do.
- [57:17]
Sam
I think that stuff is silly, dude.
- [57:19]
Connor
No, it's not silly. I actually disagree. I think committing to a path is. Is significantly better than not. And if Sean Frank is committing to this trend thing. Then he, yeah, that's exhausting for you.
- [57:29]
Sam
Because I think you're committed to a better path. That's not true.
- [57:33]
Connor
How much better path could it be? He's got a 10 year old company that's doing $200 billion a year in revenue. That sounds like a good path.
- [57:39]
Sam
Yeah, I'm not saying what he's doing is bad. I'm saying he's an outlier winner. And even he's like, yeah, there's a company that's like us that does 400 million a year and is worth a hundred million on the public markets. Right. Or you know, we have to continually hop, you know, from one category to the next and he's in a better one, it's more enduring. But let's say you're on the bone broth type of, type of thing where it's a wellness trend and the wellness trends or the diet trends, they change very, very, very rapidly.
- [58:04]
Sean
Right?
- [58:04]
Sam
It's like that's a hard game to play compared to like, you know, look at the other, look at the possible set of businesses you could go into. That's, that's definitely on the hard side, dude. Like E comm is definitely on the hard side. An E comm on top of a trend is the hard version of the hard version.
- [58:22]
Sean
Oh, dude, look, I understand completely. But the reason why I'm in it is because it's permissionless. When I was 22, nobody would let me build fucking Nvidia servers or whatever. Like, you know, a more robust infrastructure LED business, right? Like if I was going to provide, I don't know, fucking routing cable services, some random shit like that, like maybe now, you know, I could get into that. But E commerce is permissionless. And that's why I like it. Agencies are permissionless. It's like the reason why we sold on Shopify is because nobody would give us a Nordstrom's po right? Like there's a level of gauge, there's.
- [58:58]
Sam
A lot of things. SaaS is permissionless. Communities are permissionless. There's a lot of things that are permission. Newsletters are permissionless, whatever. There's a lot of things that are permissionless. The agency one is actually more permissionless than E comm because, you know, for E comm you have to buy inventory, right? There's a, there is a capital requirement. The agency one is different.
- [59:14]
Sean
Right?
- [59:15]
Sam
That's just, I'm going to hustle my skills and I'll get cash flow. Then what you did was use that cash flow to then, you know, Invest and continue to grow the brand.
- [59:22]
Sean
Right?
- [59:23]
Sam
But for most people, they get. I know a lot of people that got excited about E Comm and didn't realize, like, how scaling works with E.
- [59:31]
Sean
Comm, where, yeah, it's. It's like people squint and think it's SaaS, and it's not. It's like. It's like your bit. Your problems get harder the bigger you get, right? Like, it's bigger pos, it's more management. It's everything else where, you know, if you're SaaS, it's like, you know, if. If it's 10 zeros or a thousand zeros being processed through your thing, who the fuck cares?
- [59:53]
Connor
Hey, Sean, you've gotten more. You're a great follow on Twitter because you're hilarious, but you're this perfect combination of being hilarious, but also, I think you're right because you've been there, done that. But has being as opinionated as you have been and willingness to call people out and this willingness to say what you think, has that ever held you back? And do you regret doing that, or do you think that going all in on being a strong personality has benefited you?
- [60:19]
Sean
I mean, the only tangible negatives of being a public personality on the Internet is. Is if and when you get sued. Because you will be sued, right? Everyone gets sued, and it's a cost of doing business. They will read your tweets in depositions. So just, like, that is the reality, right? I think a lot of people, like, don't want to, like, offend.
- [60:40]
Sam
You're like, that's embarrassing or what?
- [60:41]
Connor
Like, what did you mean by saying you want to shine? Shoot the wobble family, dude.
- [60:47]
Sean
No. Like, I mean, I got deposed. I told someone I was going to drop a nuclear bomb on them, and they read that. I had to explain, like, I don't have access to nuclear weapons. It sucked. But, I mean, you should be yourself and authentic. And my Twitter has stole, like, $300,000 worth of wallets, so definitely it's a net positive.
- [61:11]
Sam
And your podcast, right? So your personality and being public about what you guys. How well you guys are doing with R and being funny and opinionated led to you guys doing this E. Com Podcast. And the E. Comm podcast pays you a bunch of money, right? Like, you guys are doing really, really well off that. So that's paid off in. In a different way, right? You want to talk about that?
- [61:28]
Sean
Yeah. Yeah. So I only have, like, four minutes. I got to go to a call and do my real job. Maybe something you Guys don't know anything about, but.
- [61:35]
Sam
Yeah, what are you talking about, huh? I take naps after this.
- [61:40]
Sean
Yeah, so? So, look, the reason why I got public on the Internet is because in 2022, all of my friends moved across the whole world because of COVID and I didn't hang out with anybody, and it sucked for everybody. 2021, 2022, I used to have a community of people who talk about E commerce, and then they've all moved. So I was just by myself, and I'm like, let me just get on Twitter and start talking about E commerce. And through that, I made a bunch of great friends because it's a very lonely thing running a big business. Like, you know, my best friends from high school, one of them goes to, like, crime scenes and cleans up, like, when somebody kills themselves or whatever, and the other one does garage doors. So, like, imagine trying to tell them, being like, yeah, man. Like, you know, I spent $8 million on Meta, but I probably should have spent, like, they told me to shut the fuck up. So you want to find friends who, you know, can have some sort of sympathy for what you're building. So I got on Twitter, found those people. They're all like, you know, Jason from Hexclad's on there, Mike Beckham from Simple Modern. He has, like, $200 million still in fucking water bottles. Matt from Pela Case. We started a podcast. Yeah, dude, what's it called? It's called Operators. So it's a niche e commerce podcast. We have spinoffs, we have marketing operators, dude. I think it'll bill at least $2 million to sponsors, but it might bill, like, $4 million to sponsors, and it's just us talking about E commerce probably maybe 1/10 the listenership. I mean, way less, maybe 1/100 the listenership you guys get. But because it's so niche, it's like, way more of an actual, like, community, right? And, you know, I think people want to be you guys because you guys are, like, an entertainment show, right? You guys are, like a big show, you know, massive reach, entertaining people. But if you listen to this and you're an expert at something, do an incredibly niche YouTube channel because, like, the. The sponsor integrations are just so much deeper. Like, our sponsors fulfill the erp, right? And, like, you guys don't know what that is. But if you're an E commerce merchant, you need an ERP. And the annual contracts are $150,000 a year, and we've probably sold a hundred of them, right? So it's like they'll give us $600,000 a year because we're the only marketing channel for them. Right. Anyway, yeah, so we do a podcast.
- [63:54]
Sam
I think that's great advice. All right, we'll let you go. We know you gotta go sell wallets and rings and other great things, which people always. So give. Shout out your Twitter, shout out your. Your URL. Where do you want people to go?
- [64:06]
Sean
Okay, go to ridge.com Sean and buy a wallet. That's the best way to support me right now in this time. Never stop selling, Guys, we appreciate you, man.
- [64:16]
Connor
Thanks for doing this. All right, that's the pod.
- [64:19]
Sean
I feel like I can rule the world I know I could be what I want to I put my all in it like no days off on a road to let's travel never looking back.
- [64:33]
Sam
Hey, Sean here. I want to take a minute to tell you a David Ogilvy story. One of the great ad men, he said, remember, the consumer is not a moron. She's your wife. You wouldn't lie to your own wife, so don't lie to mine. And I love that. You guys, you're my family. You're like my wife. And I won't lie to you either. So I'll tell you the truth. For every company I own right now, six companies, I use Mercury for all of them. So I'm proud to partner with Mercury because I use it for all of my banking needs across my personal account, my business accounts, and anytime I start a new company, it's my first move. I go open up a Mercury account. I'm very confident in recommending it because I actually use it. I've used it for years. It is the best product on the market. So if you want to be like me and 200,000 other ambitious founders, go to mercury.com and apply in minutes. And remember, Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve bank and Trust members. Fdic See?
- [65:24]
Sean
All right, back to the episode.