C (5:09)

Dealing with big box retailers means EDI connections and that's often a trigger for needing an ERP system. We've been using EDI connections to Costco forever and the only way that we've really solved that problem to make it seamless is through Fulfill. EDI adds complexity to everything you do and Fulfill solves that complexity with their connections to their systems. You need Fulfill to move from being just a D2C brand to being a true multi channel brand because big box retailers are going to require you to connect to their systems using edi. Let me tell you, it's way easier if you do it with Fulfill.

A (5:42)

Curtis the is there with what Mike is saying if you go a level deeper. So obviously consumables, we all see that, like that's the trend. It's like this is all beauty in food and Bev or some kind of consumable. None of us here, I mean Mike, you have Trevi Curtis, you've, you sell products that are not consumable. But I think people buy a lot of them. What, what do you think is outside of just the consumable piece? Like what do you think is so good about consumer. Like what, what does a brand have to do to build to a point where they can exit like this?

D (6:20)

If you're talking about the exits right now, they all have something in common to when I did art festivals, okay, So I would go out to art festivals, I would sell my products. And you notice there was generational things, okay. Young people want things that they can carry around. That's how I looked at it. They would buy a journal to put in their bag because they're in an apartment, they're at college and they're going to leave the house in the morning with their bag. So they want their iPhone, their iPhone case, something they have with them. They're going to go party in their going to come back at midnight, okay? So that's what they want. People middle of age, they wanted to buy things for their house. And then older people like 70 and older, they wanted they could put in their garden. We called it crap on a stick. Like anything you would buy and you put it on a metal thing and you put like they bought things for their garden.

B (7:06)

I cannot wait for the tie in here. I, I literally have no idea where you're going next.

D (7:09)

That's very true. But now if you're looking for something that has that long term, those legs, if you want something in the consumable, you want something to grow, all the companies that are doing something right now is something you put in your mouth or you put to make look better. Okay, I'm going to take this supplement to get healthier. I'm going to eat this food regularly so I get more healthy. I'm going to put this blush, I'm going to put this deodorant. I'm going to put something that is a younger market, right. That are folks that are out there on that, all the different social media platforms. And if you capture them now and you can build that brand, these big folks feel they can scale them for five to 10 years. So if you want that 20 to 40, get a consumable that goes like, hey, our products are not consumable, but people do buy a great deal of them. But look at all the deals that are happening right now. It is nutrition, it is weight loss, it is health, it is deodorant, it is makeup. It's something small, easy to make quickly, to fill the demand, send it out in high margins.

A (8:11)

Yeah, actually there's a couple patterns there.

D (8:13)

Right.

A (8:14)

So some of a lot of these deals that domestic manufacturing, so like all the products are pretty insulated. They're not as susceptible to all of this global macro that we've been talking about. The other thing is they're all incredibly omnichannel. So like, yes, they're consumable, but like these guys are scaled up in retail. Like this is, this looks like these look like Warren Buffett deals.

B (8:36)

Like, these are like, I mean, Warren Buffett thankfully would say that the best investments were ones that if you went to the moon for 20 years and you came back, people would still be using the product. And I think that that's kind of what we're saying is that a lot of these are things that you can imagine people using for 10, 20 years. So the potential, like my way of thinking about it is one of the reasons why consumables is where a lot of the heat is right now. It's twofold. One is that the ltvs just like the length of time that somebody could use your product. I probably still eat and drink things that I first got on in college, you know, and I'm not going to say how long ago that was, but it was more than a year ago and that, that's not uncommon to me that people can get onto some of these things and then it's like, oh yeah, I use this, this shade of blush and I've used it for 30 years. Like what's the LTV on that? And then I think that the other thing that you're kind of pointing at, Matt, is that we all know that CPMs are going to up and I, I don't think there's any belief that CPMs will come down in our lifetime. It's a chart that probably only goes one way. And if that's the case, then user acquisition costs will only rise over time. So the companies that are finding these really good valuations are the ones that have engines of customer acquisition that they can sustainably repeat is the way that I think about it. Can you sustainably get new people in the door where there's positive unicorn economics and you really. I don't know, having omnichannel makes that a lot easier. I'm not going to say it's impossible with digital only, but what we have found is it's a heck of a lot easier when you also have physical retail.

A (10:18)

No, I think, I think the multi channel thing, Curtis, is like it, it speaks to a quality of revenue and a durability of revenue. Going back to Mike's very first point, like, Curtis, you're opening stores, right? You're not selling, I don't think you sell wholesale but you, you're definitely opening a lot of stores. I see McCoy always talking about opening more PLG stores. So it does seem that the, and obviously CPMs.

B (10:41)

Mike, can we pause for a second? Matt, I want to know, Curtis, do you see that as more of an acquisition or LTV play or is it both?

D (10:52)

You know, we grew our company on Meta like everybody does one of the greatest engines in lifetime and you're like, where do we go from here? And we had such a love for our product that we went to retail stores and I put the first one up, as I've said many times, as a joke. I thought it would fail. I literally put it up to prove my employees wrong. And the thing took off and I'm like, how did it make that much money? And they're like, well, you don't have all the shipping costs to send to each end consumer. We don't have our marketing online. You're not buying the CPMs. People come in, you pay some people. And it worked. So now we have 15. I think we have three more going up in the next month, but here's

B (11:30)

some more in the next month. So you are really scaling in that well.

D (11:34)

They work. Yeah, that's how they work.

E (11:38)

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A (12:22)

Yeah, but the buildups cost money, man. Like there's, there's, there's like, it's like opening a restaurant. There's a build out cost to every store. Although I, maybe you're doing it in a very efficient way but.

D (12:32)

Well, we try to do everything efficient but yeah, sure, there's a cost. But here's the thing, as well as they work and as profitable as they are, we started on TikTok two weeks ago and we're doing $200,000 extra a day because of TikTok.

B (12:47)

Let me ask you a question about that, Curtis. When you're doing TikTok, and I'm just going to make an assumption here, you're focused on acquisition and not really profitability in that channel. Right? And that's really what I hear from everybody, that, that's everybody, everyone has conceded that TikTok is an acquis. You know, I would even say it's

A (13:05)

not an acquisition, Mike. I think it's genuinely, it's awareness and it's content generation.

B (13:10)

Yeah, it's, it's both. So like kind of stick with that idea. The problem with water bottles, and I don't know if handbags are the same way, but the problem with water bottles is if you sell somebody a really good water bottle, how frequently do they need to come back to you? And what we found is not that frequently. You know, like that thing will last them for a year or two and so maybe you sell them half of another order in the first year. If you sell them a really good water bottle. And so if we're for simple modern, if we're going to use TikTok, it has to be awareness generation. But it's easy to see if you're a consumable, if you're a makeup brand, if you're a electrolyte company, if you're a protein shake or whatever that's not the case. You can be underwater fairly significantly on that first transaction with them. And the economics still look quite good on a 6 or 12 month basis even before all of the kind of like the awareness halo that we talk about. So this is another reason why I think you're seeing investors gravitate towards consumables is they're just starting to realize if a lot of this goes back to LTVs and the reason why LTVs are so important is customer acquisition, then it starts to make a lot of sense that if you're going to be really active in acquisition on Meta, on TikTok, wherever, you've got to have the kind of LTVs where you can spend significant money up front.

A (14:34)

Well, dude, there's $5 trillion in market cap between Google and Facebook. There's a lot of incentive for CPMs to not go down. Like that's a lot of trillions. So yeah, I mean I think that the smart money is saying that if CPMs and CAC is going to go up forever, then who can pay the most and it's the people who get the most dollars on the other end of it. And, and I would even argue that like in a world where SaaS is getting compressed, like pricing in SaaS is going to get compressed or it's just going to change entirely. Like we had a good chat with Amit from Rich Panel on this. Like we're probably going to see software go to a Tokens plus model probably

B (15:13)

as opposed to a per seat model

A (15:14)

instead of a per seat or whatever else like the. So you know, then if that's true, like who's, who's got the most money to be paying the, the ad platforms. Like even if you're, if you look at like TikTok Shops, TikTok Shops is still an ad platform. Like you're still using, you're, you're seeding products, you're getting a lot of creative content but then you're still sticking all that content into a GMV Max or whatever the hell they call it on TikTok shops like it's still paid media. So. And those CPMs aren't going down like same Thing.

B (15:43)

One of my favorite takes about this SaaS thing, by the way, I know this isn't the primary thrust what we're talking about but, but I'm starting to come around to the idea that the big winners of AI are going to be the incumbent SaaS. Like I think that, I mean they are the best positioned and yeah, their margin structure is going to get disrupted and they're going to have to stop giving out stock like it's candy with stock based compensation. But they're the ones that already have the user bases people want them to win. Like we want Adobe to or you know, Canva to provide the best solution. We want that and if we have to go elsewhere, we will, but we would prefer them to figure it out. And so they're going to be the ones that if they figure out the right pricing model and they're willing to do the hard work organizationally, they're going to be the ones that reap all the benefits because they're going to go from needing whatever 50 engineers to maintain a portion of their business to like three or one or something. And so I actually am kind of coming around to this idea in SaaS, which brings me back to consumer, which is, it's starting to become clear to me that the way the market is trending is this idea that the incumbents are going to win from AI.

A (16:52)

Yes.

B (16:52)

You, you really kind of have to develop a perspective. Is it the best time ever to start a small company? I think it might be true, but I think it also might be true that the biggest winners in the age we're going into are the people that had pre existing distribution, pre existing customer bases and that they were most able to kind of bring in AI and reap the benefits just almost immediately and extend their lead.

A (17:15)

I, I think in SaaS, Mike, I, I, I, I've put this in our chat. I, I think with software we're all going to buy a lot more software.

B (17:23)

Well, that's certainly what my credit card says.

A (17:25)

Yep, absolutely. Like we're all going to buy a lot more software. It's going to come out of people like, let's just stop beating around the bush. That money's got to come from somewhere. It's going to come around, it's going to come out of people. The current model of people, like that's the part of your GNA where software is going to come out of is going to be the people part.

B (17:41)

Well, maybe, but like in the longer run, Matt, that's kind of a scarcity mentality. It's like you believe that AI grows the economy then it's like maybe we just spend a lot more on software and that's just excess value created.

A (17:54)

I was going to say in the short term we definitely coming out of people and in the long term I completely agree and I think in the short term capital is going to. Investors are not long term thinkers.

D (18:05)

No. Like no they're not.

A (18:07)

Be honest. Okay. They're moving around. They move around so quickly there. It's like a flight of capital right now going. I actually think like the consumer looks really great right now because SaaS looks really bad. We're the consumer is like the. The what is it? The you know, we're the best looking leper in the colony.

B (18:26)

Like that saying in the land of. In the land of blind men the cyclops is king.

A (18:31)

Yes. Like consumer is like a really good looking cyclops right now because everything else is so scary. And I think Mike, the your comment on like on where capital is moving. The other thing I think about is like AI is the massive risk on investment at the moment. Right. And there's only so much money if you're a capital allocator. There's only so much money you're willing to put into anthropic or into OpenAI. You're not going to put all of it in is as good as those businesses are. You're still just not that like every rule book says you shouldn't do that. So some amount of money has to go to a what's safe And I think right now consumer staples consumer just looks safe. Curtis, you were going to say something.

D (19:12)

Sorry man, I'm not going to give these investment bankers and these big people as much credit. I think they're bored. We started this conversation off and we mentioned hey Anthropic got killed because of one announcement. No they didn't. They made a decision and one man and Maverick's going to be angry at me for saying this threw a bomb and said we don't want to work with them. They're not giving us. We have been living on one man's whim since. For a year and over a year now, right? Whether it's tariffs, whether it's war, whether it's all of these things one man controls. And everyone's been sitting back saying okay, we're going to wait for it to stabilize, we're going to wait for it to settle down. Well guess what, it's not settling down. So they've been sitting around on this money for a year and everyone's AI AI AI. And they're like, yeah, AI can go crazy too. Like, we need to diversify some way. Where do we go? And so that's why I'm talking to people right now. There are lots of people who say, hey, port and leather goods, you guys are just booming. We want to talk to you. These guys have money and they want to allocate it into something that's going to jump. These guys aren't geniuses. They've been doing this thing since they went to college. They ask these questions that they don't even understand the answers to. Let's talk about your ltv. Let's talk about this. Let's talk about multichannel. They sound like marketing people are magicians. You try to explain in depth what you're doing, they have no clue. They're just reading a sheet, trying to guess what's going to happen. And some of these, hey, low cost of goods, lifetime value subscriptions, people gonna do it. We can make it in the US it's small, it sends ship, they love that stuff. So they just wanna get some money out there. And that's why some of these people are doing these big deals deals right now. That's my belief. And I'm someone who gets calls every day to work on these things. So right now everyone's itching to give out money.

A (21:08)

There, there is a, I've been talking to a few bankers recently and there's a ton of deal, like there's a lot of deals happening. So I think Mike, you mentioned this at the, at the onset, like there's a lot of stuff that's still not even announced, that's being worked on. And then there's a, the, the flip side to this guys, is there is a ton of distressed asset deals, like tons. I talked to three bankers last week and all of them are like, yeah, we're just hunting out quality right now because there's so much stuff. Like commercial large banks are tightening credit in, in both the US And Canada. So you're seeing a lot of companies, like, I know a company that literally had their line of credit pulled last week for no good reason, just like they pulled it. And he's like, I don't understand why. And it's like the bank's like, we just tightening, we're tightening up our debt facilities right now. So he's fine, he makes a ton of cash and it's not a huge business. He's fine. But it still was shocking to me to hear that. And at the same time, I don't know if you guys think about this too much, but like to me it's all connected. Consumer buying behavior is absolutely shifting. One of you guys mentioned the whole like health thing. Like people are buying things that they can like make them, make them healthier. Like wellness is a trend. The GLP1 wave is freaking insane. You gotta think this is gonna shift buying behavior even more.

B (22:22)

Well, it's already, yeah, it's already happening.

A (22:24)

It's already happening, right? So like the macro picture in consumer, while all this deal making is happening, I'm like, this also feels like it's getting harder, you know, like, are we, are we on offense or defense here?

B (22:38)

One of the, one of like first principles ideas is that why does disruption happen? And the reason it happens is, is that you build a company based on an insight and a great team and then as time goes on and your company is successful, people leave, they go on to other projects, people get fat and happy. Technology changes, you know, and you just, the surface area, you kind of open up flanks for a new hungry challenger to come in and, and take you down. And the thing that's interesting about AI is that I think it reduces your flank if you're an established company. Is kind of why I'm starting to lean towards the incumbents that it's like, you know, we've all talked to companies where like for example, social, they just have no clue, you know, and they're not even like, to Curtis's point, they're not even asking the right questions. And. But it's easy to imagine a world a year or two from now where that doesn't really matter. They can just tell their AI like hey, I need my social to be good, you know, and that's like the extent of direction they need to give to actually have a pretty coherent good strategy around social and spending and influencer outreach and all that stuff. And so I think generally the idea that the incumbents are going to be able to hold on to their, to their leads is probably, is probably where I come out right now. And that this is one of the reasons why I kind of view this as a land run period, where it's a really good time to be launching brands, it's a really good time to be scaling brands because there's going to be a point where it's harder is kind of my take. And I, we live in this kind of echo chamber. And so I constantly like, man, we're behind, we're not going fast enough, you know, whatever. And then it's like, no, you're like, my. The people around me are like, you're insane. Like, you are like in the, like you're so far out in front of the average company in person that you don't even understand. But it's just the people that you run with are like all in on this. So I do think we're on the front end. Like everything we're talking about. We might be five or 10 years out from this stuff. Really getting, you know, fully recognized in the average company. I have no idea. But I do think that there is this unique window of opportunity right now for operators to really take advantage of tools that are widely available but not widely used.

A (24:58)

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D (25:59)

Screw all that. Welcome to being a CEO and a founder and entrepreneur. You have to hold two things in your hands at all times and they don't make sense. There's cognitive dissonance, right? I read the New York Times, the Wall Street Journal every single day. I did my PhD work in political science. I get on and I read the news and I get scared out of my mind. And then I go and tell everyone that the world's going to be great and everything's going on our side. I met Mike for the first time. I saw him in person at the Hex Plat offices in la. And the one thing I remember is on stage, he was up there and he said, hey, people who have a lead who already have A company built, they're going to do better in all the disruption that's happening. And I believe that's true. But we're talking on this podcast. So this is the best podcast that there is out there to talk to people who have a million or a 4, 5 or a 10 or a 20. Best one, if you've got that. You listen to the each one of these and you're going to learn something. I learned something that day. If you get the lead, it's easier to keep that lead. But you get the lead by building systems over time. So if you're talking about AI search coming up, you're not like, I have to scam the system and create AI content to create a content. No, it's. Did you have a PR company? Are you putting out content for the last year, 2, 3, 4? This stuff takes time to build. Like, people have a lead because they built things. So sometimes when you're saying, what can I do today to make money today? Or what's the investment for long term? You have to be putting some time and energy into building things for the long term because in three years you're going to be really glad that you did.

A (27:42)

You know what, Curtis? Like, okay, so like, this is an interesting point, guys. Consumer, I've long said this and I know we've all said this on the show, like, consumer is very much a long game and it's not. And what I always find interesting, Mike, is if you talk to an investor, their worry is that consumer is not very durable. They're like, consumer preferences change all the time. My argument back is like, no, they don't. Their brand preference might change, but consumer preferences, that takes a long time to move.

D (28:12)

Right?

A (28:12)

Like these trends that happen in consumer, they don't come along for a year. Like maybe if it's a labubu, like a stupid stuffy thing on the purse. But like broad, big trends, health, wellness, like, better for you. That is not a one or two year trend. Like it is actually a very durable tailwind that's going to go on for quite some time. It makes no sense to me, right? Like, like you said the you get rich, you get fat. I'm like, we've always done that as a species, but for some reason right now we're going to get like, we're not going to get fat and happy, we're going to get fit and unhappy. I don't know what the reverse of this is, but these trends are. I actually do think that these trends are durable and I think Curtis is Making a really good point, like you want to be operating from this place of like stacking bricks and compounding. Doesn't matter how fast AI goes, it doesn't matter. Just do the damn boring work in consumer because that's where it's durable.

B (29:06)

What I've come to the conclusion of is that being a good operator now requires thinking in first principles instead of thinking in front pages. And that if you try to build your business around the latest headline, you're just constantly going to be chasing shadows and you're going to constantly be guessing and often guessing wrong about what the next thing you should do with your business is. Instead, you have to think from first principles about the market and about the consumer and about what creating value looks like. Put your head down and focus on those things. I cannot tell you where oil will be in six months. Nobody can. Obviously, just look at the volatility in the chart. But I know that people are still going to care about their health and their wellness. They're going to care about it even more than they care about it today. I know that people are going to want, you know, like they're going to want faster shipping, not slower shipping, that they're going to want lower prices, not higher prices. They're going to want, you know, like this is, this is the thing that the great investors and business owners do is they say, I am going to look at the timeless principles and I'm going to build around those and I am going to try and not be distracted by the day to day. One of the more interesting examples of this, I was reading about a famous investor and one of the most powerful things that they did is super counterintuitive. So if you are running a hedge fund, running a mutual fund, you have a Bloomberg terminal. Now, maybe that won't be the case in five or ten years, but today with the way that that industry works, you have a Bloomberg terminal. That's the brain that has all the quotes, the latest data, the latest news, and everybody just kind of lives on their Bloomberg terminal. This investor was making a point about thinking long term, which is the point Curtis is making. You're making that. And in their office, they did something really simple. They put the Bloomberg terminal on a desk and there was no chair at the desk. And the reason why there was no chair at the desk is that they intentionally were saying, we have to have a terminal in the office. But this is not a thing you spend hours looking at. You might go over there to look up a piece of information or to glance at it. But this is not where you spend your day because it's all about short term data. And that's not really how you make winning investment decisions, you think in longer chunks of time.

D (31:26)

Time.

B (31:27)

And so that that same principle is worth asking if you're an operator. It's like where are you over indexing on Twitter? And the noise of today, the news, the, the volatility of a stock or an industry today and how can you reduce that exposure? And over. If you're going to over index on anything overindex, on human nature and on the things that you know are true today, five years from now, ten years from now, that's how you build a really successful business.

A (31:57)

Curtis, do you think that the, this is on Mike's point? Do you think that the consumer, this whole trend towards wellness is this part of like a broader, an even bigger trend towards like more intentional consumption? I, I come back to this whole GLP one thing often guys, I don't know how much you follow the space, but like there, it's having second order effects that I don't know that people saw, right? So like people who are on some version of a GLP1 or whatever. I don't know technical terms of these things, I can't pronounce all that. Okay, but the, their sex drives are lower, they desire less. Right? So like if you desire something like intimacy less, do you then change your consumption habits? Like broadly.

D (32:47)

Right.

A (32:47)

Or. And then if you combine that with AI is do like Mike, you're hitting it on the head. The news cycle on X. If you are on there all the time, you feel so far behind. Like as an operator you are like, oh my God, I'm the dumbest person in the room. I'm not doing any of this. So like I look at AI right now and I'm like, it's producing such an amount of noise. Like we thought social media was bad. Oh my God. No, that the snapback, the pushback to this is I just want less. I want less in general. I want less. So like you got GLP1s and this like reduction of desire. Then you have all this noise coming from these AI companies and all the people that are like up their ass. I just don't want to be online. Like that's sort of where I get to. I'm like, I'm going to turn the Internet off. I don't know if an old man or are more people feeling this way, like, am I the only one?

D (33:43)

So I, I get you complete. I run my day in three phases. Okay. I get up in the morning, I have coffee, no one else is around. And I write a LinkedIn post or do a video. Okay. I go on LinkedIn. It's my thoughts, it's my quiet time. It's what's actually happened to me that day. Okay. I read some stuff. I don't read too much. Occasionally I'll go onto Twitter and I'll see you post something or Sean Frank, and then I'll look down a little bit farther and it's just this crazy stuff. And I'm like, no way. Twitter is not for me. And I jump off. I've never been on Twitter for more than three minutes. So that is just too much chaos in my brain. So the first phase is me getting my thoughts together and writing on LinkedIn. The next.

B (34:24)

That's why you're mentally healthy, Curtis, by the way, the fact that there's a direct correlation between mental health and time on Twitter.

D (34:30)

Then I go to work all day long and love it. That's on day to day, building long terms, solving problems. What's the biggest problem? And that's just so much fun and energy. And then at night, I go home and I watch romantic comedies or sports in a team that I don't care about. So Mike has it the worst way because when his team plays, he cares. And if I care about a team, I get so angry if they lose, right? I love. If I love a team, I can't watch the game. I wait for the result. If I don't care, I'll watch it and I'll really enjoy it. So my evenings are never about conflict. I'll watch Brooklyn 9 9. I'll watch the Good Place. I'll watch K dramas, nothing with conflict in it. And then I'll take a bath and I'll sit around. I'll go to bed and I'll start that thing over again, right? That's just my day. So it's like mixes things. I don't want too much conflict. I create enough crazy and conflict in my life. Just being me out there in work that when I get home, turn this stuff off.

A (35:35)

Do you, do you, Curtis, do you think this is like. I don't know, I guess that I, I, maybe my friends are just all too old like you guys. We're all just too old. But there's definitely a trend here. And I'm even noticing it with younger people in our office. They're just less online like they absolutely are. They're. They're being more intentional with how they consume. They're very concerned with, like, is this AI or not? Like, that's a big trend right now, like, America. And if you look at, like, all survey data in the States, like, people do not like AI, like, broadly, this is a negative sentiment.

D (36:07)

If you're looking for a trend, if you want the trend that's occurring. Everyone's trying to spend less time online, but it's so intoxicating, they can't. They think they are, but they can't. The next thing is community. It's community in some. It's either community online and then getting it offline. It's them connecting to other people in a real way is the next trend for the next 10 to 15 years.

B (36:30)

And this is what Hudson with Comfort would say, is that ultimately, like, that propelled, you know, the success that we've. They've had. But think about what Curtis is saying. That is a timeless need of human beings to feel connected to others.

A (36:43)

And part of the first principles thing.

B (36:45)

It's the first principle. It's like, you don't have to. Like, people would rather be healthy than unhealthy. People would rather feel known and cared for than unknown and alone. You know, like, like. And great business owners are able to think in first principles of the human condition and say, if I address the human condition and the needs that are never going anywhere, then, like, it's impossible that my business will suddenly not have demand one day. And. And that's why I, I think that today you have an opportunity that the more noise there is, the more disruption, the more distraction, the. The harder it is to focus on that. But we see every week on this podcast, we see people that are breaking through the noise and creating really significant value, great businesses. But usually, Matt, you and I have done a bunch of these with, with titans and with operators. When you dig down, dig down, dig down, you realize that they've just found something about the human condition that was true 5,000 years ago. It'll be true 5,000 years from now. And that's what great business people are able to do.

A (37:51)

Yeah, it's the wobles thing, right? Her. Her whole, like, Fiero. It's like that you just want to accomplish something. It's like, that's such a human thing. I just want. I want to do something hard because I feel good when I do something hard.

B (38:02)

Well, and ironically, this is worth pausing and talking about because you just mentioned, like, the sentiment on AI and I think you could more generally say, like, this is the sentiment about technology.

A (38:14)

Yep.

B (38:14)

Kind of, by and large, like, I think people are using AI as just a, a placeholder for technology. The sentiment is very negative. And I get it. Like, for me personally, I took everything on my phone that I significantly use off about a week and a half ago because I'm like, I just don't want to be on my phone. I do not want to be doing that much screen time. And I feel better, you know, like. And I think everybody is kind of making the same kind of observation.

E (38:44)

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B (39:26)

One of the reasons why I think the sentiment on technology and AI has turned so negative goes back to that pro, which is a need that every human has that transcends time, is the need to feel like your day mattered and you accomplished something of purpose. And it is very depressing. The idea that you can't offer anything that the technology can't do better, quicker, you know, less expensively than you. Like, that is not, you know, like in the, the software community right now, there's this real existential kind of dread. They all see the writing on the wall. It's like, at best, your job is babysitting a computer basically going forward and just like hitting approve, you know, like, and kind of like that, that clip of all the people at the slot machines at Vegas where it's just like, you know, they're all just hitting the button. It's like that's what Claude Code has kind of turned some of us into. And so my, my kind of optimistic view is that's not what the future is going to look like, but it's a great example of another one of those undying human needs. If you help people feel like they made their day count, they accomplished something, there will always be a market and there will always be people that are ready to pay your feet for that.

A (40:36)

It's the programmers. It's like first principles for programmers. Is everybody Devolves or evolves into a parent. Like you're just. You're Claude's dad. Okay. Or mom. Just make sure it doesn't like barf on itself. That's your job. Right.

B (40:51)

Would probably have something to say about what you're saying. I'm not sure what it would be, but.

A (40:57)

Okay. So all this to say then if you're thinking incumbent versus challenger. Mike, you brought this up. And Curtis, I'm curious your thoughts on this. That we've got a several year period here. Who knows how long where you can just build things so much easier.

D (41:13)

Right.

A (41:14)

And the incumbents, like I like to. Sometimes I think Mike, you and I were talking about this like you know, simple, modern, you could say is. Is an incumbent. Portland Leather Goods is an incumbent. You guys have been around for a while but like if we're really looking at the scale of consumer. The incumbents are Procter and Gamble and Unilever and Coke.

B (41:30)

Well that's, that's the biggest acquisition.

A (41:31)

Those are the incumbents.

B (41:32)

We're talking about these people raising 20 million dollar rounds. The big announcement was Unilever and McCormick creating a 60 billion dollar company. Like that is, that's, that's. And that's significant. You know it's significant when you're like talking about two of the real big dogs being like you know what, I think it's the right time to merge. And it tells you something about their view of the world that they think being bigger is better than being smaller right now. Which is interesting. And, and I agree, Matt. Like, yeah, it's like on some scale, I guess we're incumbent and established but on the larger scale of the US economy, we're still.

A (42:08)

You're actually a challenger. Right? Like ultimately like the way that you run your company and the way that Curtis, you run your company, you guys are actually the challengers of broader consumer like going for share of wallet. What. What else can you build? Curtis, I know you've been looking at you, you and Mike actually share this. Like you guys are both wanting to build other brands in other categories stories. I'm the same way. Like I just want to build brands. I just think this is the best time in history to be doing that. But I am. Curtis, I'm curious, like do you, would you rather, do you think it's a, it's good to tell people like right now is a great time to start or is it going to get harder and harder as Mike is saying, like every day.

D (42:44)

It doesn't matter. It doesn't matter. It's a great time to start. It's always a great time to start. Like, it's the famous Lord of the Rings quote. The job that takes longest is the job that's never finished. My old gaffer used to say, right. Like the. It's just like, yeah, you start, things go up and down. You can overanalyze everything. It's. This is a cocky, egotistical way that I look at the world, but I'm going to say it because for people who watch this, a lot of them think the same way. And that is, you need to be better than 90% of the people out

A (43:14)

there, dude, 100% agree with that.

D (43:16)

You do. Now, the good news is 60% of them suck. I remember being and taking those scholastic tests when I was young, and they're like, hey, you're in. You're in Montana, and you're in the 98, 99 percentile. And all of these things. You're like, wow. And then you talk to Doug, who's the idiot in the class, and he got 78, and you're like, who's 77% worse than Doug? Right? Like, you know what I mean? Like, there are people who are going to make the wrong mistakes again and again because they're just out there flailing along. The right time to start in business is right now. There is not what podcasters ask. If you could break it down to one secret, like, oh, the worst question in the world, the answer is, it's not one thing. It's, you've got to grow as your company grows. You've got to be better at making decisions, hiring people, and all of that. And the time to start that is right now. And as the world changes, you change because you become more competent in doing that. And everybody. Matt does that, Mike does that, Sean does that. Everybody does that. You're better now than you were a year ago. So everyone who watches this podcast just has to say, I start now, next week, I'll be better. I'll make some mistakes. And in a year or two, I'm looking, I'm the incumbent. I'm talking to those people who are starting now saying, dude, you started two or three years ago when I did, right? It's always start now.

A (44:44)

The one thing is actually just what you guys keep hitting on. And I think Hudson said it like, it's funny. I got a bunch of feedback for the Titans episode with Hudson because Hudson's like, I think I'm the greatest consumer operator out there. And then he went on to clarify he's Like. And I think Sean should think he thinks that way, too. Yeah, right. And like, everybody, you, all entrepreneurs that I know that are successful have an irrational optimism and an irrational belief in themselves. Like, it makes no sense. You know, like, none of us have any amount of. Like, there's no past history that we're taking from saying, like, oh, I could definitely, definitely do this. It's like, no, no, I can do it. I know I can do it. How do you know it? I don't know. I just can't. That is, like, that's such a core thing to people who build.

D (45:23)

My partner often says. My partner says, you have more confidence than you have any right to have. You've never done anything in your life to make you that confidence.

A (45:33)

Tell me that.

D (45:33)

But your confidence is your superpower.

A (45:36)

Yes.

D (45:36)

And I'm like, okay, I guess so. I have no ability to look back backwards and to go through mistakes. I only have the ability to say, what did I learn? And how do I go forward? Okay.

A (45:48)

Okay. So here on this, then what you guys are making me think of right now is like, all right, we're all saying it's like, it's a great time to be starting. Go out, build a brand. Like, Mike, you're building brands. Curtis, you're building brands. I'm doing it. Like, it's a great time to start on this other side. These massive deals are happening, and you're constantly hearing from guys like you who have established companies who are omnichannel, who are like, they have lots of things that are making them successful. If you were to break down, like, right now, I'm gonna go out and build a winning brand. What do you think? Like, are you still telling people, omnichannel, super important. You got to get there as soon as you can. Profit versus growth, consumable. Like, are there things that you're like, guys, this again, maybe not first principles, Mike, but, like, characteristics of how you're thinking about building brands today. Like, what can you give people to say, like, look, this is how I'm thinking of them. This is what's important to me and how we're going to do it?

B (46:46)

Yeah.

A (46:46)

I just like to leave people with like, okay, here's some structure to this.

B (46:51)

Here's the single best piece of advice I can give. I've worked with countless people trying to start businesses. I'm the entrepreneur in residence at ou. Your business being successful, the most important thing is that you find a channel where you can sustainably acquire customers profitably. The end, like, all the other Stuff is secondary. Can you find one channel where you can sustainably that means over and over and over again perpetually acquire customers, where it's going to be positive economics. And if you can, you've got a business, you've got cash flow, you've got a future. And if you can't, none of the other stuff matters. And so when I'm evaluating new business models that we want to get into, that is absolutely at the very top of the waterfall is what is that channel and why do I think I can sustainably acquire customers profitably? And, and part of that actually there's an implicit question in there which is how am I going to get better than market returns in that channel? Because if I use the same approach that everybody else is in that channel, whether that is Walmart or Amazon or Target or TikTok or D2C then I am not going to be able to sustainably generate a profit. So I have to understand what it is. What is the unique value proposition that I am offering that is going to allow me to generate those excess returns and that consistent user acquisition in that channel. And sometimes that's saying I have a better price than others. I can bring the same product with the same quality at a better price or I can bring a product that fits and meets a customer need that none of the other products in this space are meeting. And I know there are people ready to pay for it, it or whatever it else. You have to have some kind of unique differentiator competitive advantage that makes it possible for you to sustainably acquire positive economic people in one channel and then you build outward.

A (49:00)

Do you Curtis, do you think that, that obviously I mean like that. Amen, Mike. But is that category dependent or is that more founder? Like what's what, what's more important? There's like Hammer, it's like, you know, some operators, like I'm sure Hudson would tell you or whoever's really good at TikTok shops, like Jordan, who runs social commerce club, TikTok Shops is where they would start. They'd start from the channel because that's their skill set.

B (49:25)

Can I take a stab at that? When, when I think about it, I think about your company, whether it's one person or 70 people, you have a unique set of assets. It's like a fingerprint. No two companies have exactly the same set of competitive advantages and assets. And the answer to the question that I just posed comes back to what are your unique set of competitive advantages? It just so happens with me that I never really cut my teeth on meta ads. But I know Amazon and so it is completely true that I'm able to see and take advantage of opportunities on Amazon that others would not see. Really simple example of this that's coming. We will get into a category on Amazon that if I told you you would say that's interesting but sounds suicidal but we're going to win. And I understand how to win in that channel because of my unique experience as a founder entrepreneur. You have to be able to have the self awareness to assess where do I have unique advantages and where do I not. And that's almost as powerful is that I know all the areas where you know, like there is nothing special. I like to think I'm a smart guy but like there's a lot of areas where I do not have any kind of particular unique advantage and so I don't try and play in those areas. I try and maximize my chances to win by playing in areas where I've got the biggest unique advantages to me.

A (50:46)

Curtis, so curious your thoughts on this. I have so many.

D (50:50)

So I spent a winter in a Zen monastery in the northwest. It was me and eight Buddhist monks and over here an absolute was wonderful winter up at literally the top of a mountain. And I remember the chosen saying, as long as you're centered, you'll be able to make the decisions that life throws at you. I really was angry because Mike just nailed that. Like it's not multi channel, it's what channel can get you new customers at a profit. And you pour everything into that until you get good enough that you can go to that next one and the next one. You don't say, oh I just read that this is what we do. TikTok's the way to go. That the thing is is and please, I mentioned this earlier about TikTok, okay, we're doing $200,000 a day more every single day since we started TikTok 11 to 12 days ago. Okay, now only 90,000 to 100,000 is TikTok. But all of our other areas are making more money because of TikTok tok. If you had not set up profitability on those other ones, you couldn't pay for the acquisition. Mike nailed it. Find out a way to get a new customer and a profit. How can you test it very, very quickly, inexpensively and learn how to get a new customer. Once you have those basics, then you make the decisions to build that over that. You don't look at the news, you don't look at a podcast, you don't look at the reels and say, oh my gosh, I got to jump there because everyone's doing it. He nailed it. Learn how to sell something at a profit and then sell more of them.

A (52:31)

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D (53:16)

The wisdom you came with, Mike, you're just better than those monks, man.

B (53:20)

Well, that's why I cut mine and cut Matt off. I was like, Curtis is going to crush this. I gotta. I gotta jump the line and say it before Curtis does it.

A (53:27)

No, look, it's listening to both of you. Have you ever seen the Japanese? Is it like the ikigai thing? Like the overlapping concentric circles of like, what are you good at? What makes you happy? What is the world value? It's that, right? Like, Mike, I've watched you do this. Like, you have a set of things that you know really well. And you seem to be picking moves as far as brands and categories that line up with the things that you know really well, which to me makes a ton of sense.

B (53:54)

Right? Yeah. Like, I think it's a counter almost to what Hudson was saying, is that I am not the best at many, many, many things.

D (54:04)

Yeah.

B (54:04)

And I think that's a strength that I know that. But I might be one of the best at very, very few things, but that's enough, you know, Like, I. I have somebody I know from growing up and he is like, probably a top 20 neurosurgeon in the world. And I was asking him about it and he's like, basically, I'm an idiot in like 99% of my life. Like, I barely know how to, like, you know, run the dishwasher, but I have this very specific skill set and the market really values that, you know, because he knows how to operate on brains in a very particular way. And so the market's willing to pay him millions of dollars a year to do that. And that's, that's the way that business is. I don't have to be the best at hardly anything. I just need one or two things that I'm really good at and then I can provide for myself, my family, my kids, generations to come, the community around me. And that's the inspiring thing about business. It does seem intimidating where it's like, well, I gotta be an expert on TikTok shops and I gotta be a guru at Meta ads, and I also have to be, you know, a genius at operational efficiency and I've gotta be able to, to project the price of oil. And I've got to crawl inside head and understand what he's likely to do when this set of tariffs run out. And I've got to, you know, and on and on and on. And no, you don't. You need to find one or two things that you can be really, really great at, and then you need to focus on them. And the more you focus on them, the better you'll get at them and you'll build something of value and maybe someday somebody will come and give you a check for that, or maybe every year it'll just pay you some money, but you'll have a better life either way. And that's what makes business great, and that's what makes technology and where it's going great, is that it is going to democratize access to building things of value, and it is going to help lift people out of poverty. It is going to help people get away from working from somebody else to create value, to having their own vision and having more flexibility. And these are all great things. This is what we celebrate with this podcast.

A (56:02)

How do you guys think founders, operators, should be spending their time right now with respect to AI? Because, like, there is a limit to what it's going to do for a consumer brand at this moment in time. Like, it's, it's, it's not gonna, I'm not running a better ad account because of AI. Like, not really. So, like, Curtis, how much time are you spending on this? Mike, I, I, I, you and I know you and I are spending a lot of time on this, but like, Curtis, I'm curious, in this grand world of like, you just got to pick things that you're, you can be really great at and focus on them. Like, how do you think about this?

D (56:39)

So the fun news is I have an opinion on everything. So if you ever ask me, I'm going to have an opinion. But on AI, I'm going to go back and hop off the computer and talk about something that Mike mentioned very early on. He said, first of all, let's talk about this at a high level level. You have to be a CEO or a founder to say that. Because if you talk to any of your employees or all these startups, they want to talk about all the noise down at the bottom part of what we do. Matt, I know you do it. Mike, I know you do it. Say, I understand all this, this garbage down here. Let's talk about it at a different level. Let's look in at it on this. So we have people using AI, coming up with things, doing all of this stuff. And my job is to say, let's look at it from a higher level. We're not doing it enough. We're doing it too much. We need to put the. Because when I make a decision, I'm saying we're going to take time, money and people and we're going to put toward that and it's going to save us time, money or people. It's going to make us more money over the long term. So I have to look at that. Are we using AI? Absolutely. I'm using it to simplify the way that I view the world. I, I am not on cloud creating apps like you guys. I am not on. I, I don't know all of these things, but I've hired some really smart people that I talk to every day that I'm saying, let's look into it. Come back to me and tell me in three or four simple sentences why this is going to work. I don't want to, you know, you guys are younger and smarter than me. I do not want to be involved in that all day, every day. I think it clogs up my, the simple way I look at the world. But if you're not jumping into this heavy meaning, every question you have say, could I solve that more quickly? It's so simple. You know, when people ask me a question, I'm like, I wish you had a device that you could literally ask that same question to and it would answer that right now. I wish we could look into some of these things that we do. We have that our first instinct is not to use AI to solve our problems. And we have to train our brains to saying, first of all, can I solve this and what's coming in the long term? I'm not up in it as much as you guys. I am not. But we use it. I love it. It's the reality of the world. And it's going to make your opinion offline of taking all that information and making decisions that change your company, that's going to make the difference.

A (59:08)

Mike, I'm so like, let's go to you on this one.

B (59:11)

They asked Sam Altman, what would you not use AI for? And he said, well, I don't think I would ask it about the meaning of life. And there's something pretty interesting there. And I'm going to make a really generalized observation. Our ability to think high level and our ability to think about meaning and purpose is being impaired by our technology. How online we are and how often we go to our technology to answer questions for us. It's ironic because if you listen to the people that are on the front rows of building this, what they're saying is, yes, it will be able to do anything. However, the thing that is going to create leverage is understanding how to deploy that power. And that is more of a first principles question. That is a question that only comes from somebody who is able to think about the world and how they want to impact it and what they want to build and how that's going to create value. And so the point, I use this analogy because I think it's really effective. Arabian Nights, you know, the, the Aladdin story, he, he finds a magic lamp and if you rub it, the genie comes out and he grants you three wishes. And the story is really about how difficult it is to answer the question of if a genie could do anything, what would you have it do? How would you use those three wishes? I think AI is a nice placeholder for the genie that imagine the technology does get to the point where it can do anything. You know what that still doesn't answer is it doesn't answer the question of what is it worth doing? What is it worth building? Only you can answer that. And that the people who will succeed won't necessarily be the most technologically smart. They'll be the people that have the vision of what is worth spending my time towards building and that the tools to help them to build those things are going to be more capable, more abundant and more inexpensive than ever before. But they can never solve the question for you of what is worth doing. You have to do that hard work. And those are going to be the people that thrive in the years ahead.

A (61:26)

Can I expand on what you're both saying then? I think, I also think, Mike, at the same time, like this is one of those instances where lots of things can be true at the same time. I think you should be spending as much time on it as possible. And I, and I think the reason for that is this word understanding which is what you just said. I think every operator, every CEO needs to understand this at the level that they understand every other very important part of their business. Like I know enough about my supply chain to be dangerous. I know I, I can build factories now. Now that doesn't mean that I'm the one doing it, but I still know enough to be dangerous. I know if somebody is like doing it right or not. I know enough about how to run an ad account, but I'm not flipping the switches. But I still know enough. And I think this is a new area for operators because most operators don't know a thing about how software works. Not even one. We just know it works and I negotiate the price of it. That's like been the history of software and most brands is like does it work and how much? And I think this is a unique time where like I am seeing operators like non technical people getting in the weeds trying to figure this out. The ones that are doing it well are doing it from a place of I need to understand how this is going to add value to my business. Like where can it provide leverage? And the ones that are doing it wrong are the ones that are trying to become software engineers. And I've been saying this a lot lately to people I'm like, just because you can code doesn't mean you should.

B (62:54)

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A (65:49)

Love that. Curtis, do you want the final word? I want to wrap this show up because that's a great, this is a great way to place to end.

D (65:56)

You did great, Matt, and thanks for, for guiding us along through this. I just, when, when Mike was talking I was thinking of philosopher Bertrand Russell who said philosophy is not to figure out the question, it's to figure out what questions we should ask. And I think that's AI I think he's figuring out the right things to use it for is number one. And then I want to tell all these operators that are starting at 1 million right now or at zero and they're today they're, they think they want to start that and we've motivated that the great news is if you build a $200 million company, you will be a much better person, because you can't do it if you're a person. Like, the growth personally that you make is equal to the company growth. So when you look back, you won't even remember that person that you were, because you have to get more integrity, more thoughtful, better with people, better at salesmanship, better at making the hard decisions, better at everything that you do. You're going to be a better person. You want to know how to be an entrepreneur? It's the best way to become the person that you meant to be. It's hard. It's. It's rough, and you give out the other end, and you're. You feel like you can take over the world.

A (67:07)

Yeah. Ultimately, what you're both saying is how you actually build a great, valuable business. That's. All these deals that are happening. That's what they did. You know, that's it, boys. This was fun. I like this one. This is going to be a great app. I appreciate you both. I'm. I got. I got to take notes now. That's how I know we have a good episode is I leave and I'm

D (67:28)

like, got to write things down, as

B (67:30)

opposed to most episodes where Matt just tunes out, and this one he actually might learn something from. So hopefully you did as well.

A (67:39)

I got. I just got to take some notes. All right, guys, that's a wrap.