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- [00:00]
Matt
Imagine a toilet that weighed you every time you went to the bathroom and it was just part of your daily health measurement routine. It sounds weird, I know, but this company does exactly this. But for cats. I've experienced the level of difficulty that it is building hardware product firsthand. The moving parts, the firmware, the software, the long lead times. It's hell. And it might be the hardest kind of consumer category to build in, but the CEO has done it, they've done it for a long time. At bottom, very large scale. So you're going to learn about the importance of iterating on a single product over decades, how to think about taking large creative bets, what it's really like to create a category from nothing. This is Operators Titans. It is brought to you by Applovin. And today we are talking to Jacob Zupke, the CEO of Whisker, the makers of the litter robot. 2 million units sold, 4.7 million cat weigh ins per day. I am so excited for you to join us in this conversation. Can you just start off with like, what is Whisker? What is Litter Robot? Why the two names?
- [01:02]
Jacob Zupke
And then we can go from there best analogous version. I could like frame that up as we built our iPhone before we built our Apple. So we did a really good job building a product brand. And the problem was we knew that there were other products to follow. So I publicly stated this before. We're working on a really exciting line of automatic feeders and a really exciting line of automatic waterers. We want to bring a entire ecosystem to market for our consumers who really want to track everything their cat's doing and have one source of truth for how their cat's well being is with respect to food, water and waste. Knowing that we had a future where an app would connect a series of products across an ecosystem or we wanted the brand to be the parent brand and you know, talk about things that don't roll off your tongue. The Litter Robot water doesn't really roll off your tongue, you know, off your tongue well. And so we knew that we needed to rebrand the parent company to be a consumer brand that people loved and a brand that, you know, we could really create an identity around the feline world. And Whisker is a domain that I bought I think at the end of 2015, knowing that years later we would rebrand the company as Whisker.
- [02:22]
Matt
Can I ask then, like when you started sort of working with the company, it was like marketing, only how long before you were kind of getting into more parts of the business. So like you've already said you liked going deeper. Was it right away? Did that come later? Like, can you just give us a bit of an arc there?
- [02:42]
Jacob Zupke
I'll give you like the quick three year story. 2015 focused on the launch of the Gen 3. In Q4 of 2015, we launched Litter Robot 3. I lined up a bunch of social celebrities now called influencers. They didn't have that word yet and it just exploded overnight. December 1, 2015 and our website traffic 10x our revenue just shot up and we like broke it all seams of the business. Going into 2016, what was a 15 year old company grew by 80%. So at the time we were 7.7 and a half million and we ended up growing to about 14 million in 2016 and then carried that kind of playbook into 16 and then ended with the 17 and the founder and I put a bonus structure together that if I could get the company to 20 million, which for him was like, if I get to 20 million, I've done it. And I was like, I can get us there. I think if I can get the 20 million, I got an X dollar bonus. We ended up hitting 21 point something million. But I learned a lot about gap accounting because we recognize our revenue when we ship product. So at the end of the year I was all excited, I got my bonus. He's like, what bonus? We didn't hit our milestone. That was the same time in 17 that we were building our app and I just, we didn't have anyone to build it so I took it on wireframe, did, built it, figured it out, hired, fired, hired agencies to try and figure out how to build the first ever connected litter box. Learned all lot about IoT very quickly what not to do. And then that kind of, it was, I don't know, very informal. But I just started carrying a bunch of different responsibilities across the business where we didn't have a person to do it. But I was really building out the team and building out kind of the process and the plan. Marketing, biz, Dev international. So I started to pick up new projects and I never lost them.
- [05:00]
Matt
That's one way to. How do you wind up running the joint? Well, you just don't give anything back over time. That's the, that's the lesson there.
- [05:08]
Mike
It's such a crazy story because like it just sat there for like 15 years and then just exploded. Right.
- [05:15]
Jacob Zupke
You know, talking to two fellow product people, like, product was by far the part that made it possible for me. The hard work had been done before I got here on the Gen 3 model. I got to be the marketer to kind of shape it and then I got to evolve the company to really build around that success that we were realizing. And the founder and I have two different superpowers. He is more. He's hardwired to solve the problem himself. I'm hardwired to build a team to solve the problem. So it was a really good pairing of personality types where I started building out the team. He could solve a B and C problem that he would run after that he felt was the highest priority. And I built the team around it. So we went from like 25 people. At the end of 2018, we were probably at 60 or 70 people. I remember we ended in 2019 at about 95 people. And so that kind of three, four year period was about building some of the foundation and then I'll pause there. But 2019 was kind of our breakout year that we had
- [06:22]
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- [07:28]
Matt
So your breakout year was pre Covid.
- [07:31]
Jacob Zupke
It was.
- [07:31]
Matt
Oh, that's interesting. Okay, so before we go, I mean
- [07:35]
Mike
in some ways it kind of needed to be for you to be prepared for what was about to happen during
- [07:39]
Matt
COVID I was gonna say like Your timing on that is actually exceptional, you know, in like from a foundation perspective.
- [07:45]
Mike
A lot of the companies that benefited from COVID or, you know, air quotes, benefited from COVID It crushed them is actually what happened, you know. And like, dude, we were one.
- [07:54]
Matt
Like we, we ripped with. With Lomi during COVID and it was so hard because the supply chains were messed up. Like getting parts was a pain in the. Like, we didn't. I wasn't ready to go that fast. You know, like it just happened.
- [08:07]
Mike
Like people were building inventory based on what they were seeing in 2020. That was never going to happen. That was like, you know, like when they say like, oh, it's in a 100 year floodplain, it's like that's what that was like. It's. It seems like impossible to have a year like that. But every once in so ever many years, I guess you get this year that's just a total outlier. And so like anybody who experienced significantly different demand in 2020 got crushed one way or another in the coming years, but because it was such a pump fake.
- [08:35]
Matt
But I guess, Jacob, that one of the hard things with you guys is you are vertical, right? Like you guys actually make your own product.
- [08:43]
Jacob Zupke
We do. And I'm very proud of the fact that we have our own factory in Wisconsin where we're making, you know, hundreds of thousands of robots a year. And we do most of our. A lot of our supply chain is stateside. We of course source components globally as well. But in. At the end of 18, we started working on. Hey, we were outgrowing our space going into 19. So we actually kicked off a project to expand our plant by double at the time, which was 30,000ft to 60. And we were already taking a bunch of cold storage space down the street. And in 19, we figured out how to do video marketing better than we had done before. And it was around the. The age of your squatty potty poo pourri chat books. And so we had interviewed of course the agency that did all of those purple commercial and all of them and they wanted, I believe they wanted full creative control at the time. And I was not ready to do that. And I was like, I think we can do it. So I wrote a creative brief internally and I grabbed five of our people and I ended up hiring this outside director to come on this writing retreat that we went on. And one of our. We all pitched a concept and the first like four, like, oh, it's gonna be a long couple days. We didn't have like a Great idea. And then my creative director comes and he opens this imaginary oven and we're all sitting there in the kitchen at this house we rented, opens his imaginary oven and he goes, do you smell that? That's cat and it's all over your house. And we just all died laughing. And he just went on, he wrote this incredible spot and that ended up becoming don't be a Scooper, which was like our hero spot that we launched at the end of 2019. And that just set us on this exciting path. Fortunately, we had already kicked off our manufacturing plant expansion. So by the time we started to realize that growth in Q4, we were kind of on our way to being able to fulfill at the level that we ended up growing into pretty quickly. And then going into 2020, we quickly outpaced what we could build. But our supply chain was stateside. So while a lot of companies were challenged, our peak wait time was in May of 2020. We went up to like an eight week lead time. But I remember I was trying to buy a chest freezer because the world was ending and I needed to buy as much, you know, meat and vegetables and everything. So I tried to buy chest freezer and you couldn't get one for like six months. And I was like, oh, our eight week lead time isn't that bad. And by the, by July we, we had normalized onto like a three to five day ship time and we ended up growing by 100% in 2020 from about 40 to 80 million that year. And I mean you'll learn a lot through that kind of growth. But we were able to keep up. We were able to keep driving everything we were doing. We were able to take advantage of a lot of the cheap media because so many advertisers pulled out in 2020. We ended up doubling down on Fox News and CNN because it was election timing and that worked. And so we were able to kind of play into, you know, the news channel where everybody was glued amongst Covid and getting updates every day. So we had really great attention at the same time of having great new creative and the manufacturing ready to go.
- [12:21]
Mike
Just, just what you're saying about the websites. I'm remembering the websites I was on in 2020 that it's just like, you know, like the COVID virus tracker and just all like the random stuff we were doing that year.
- [12:32]
Matt
What a weird year, but had its best year ever. That was basically the best year for news ever, ever.
- [12:37]
Mike
It was ever like peak, peak news, you know, like, and like it's a Great example of like you just took advantage of an opportunity the market gave you. And so like, I think that this is kind of a key point in your story that's worth flushing out here is that I'll see this a lot in E commerce. I'll see one time opportunities or windows that will close. And I think sometimes, often, usually you see people that milk that and then when the window closes it's like, well, it's over because they haven't really built enterprise value. And then you'll see other people like the, the 1%, the 5% that instead use that to build enterprise value and it just kind of resets the level of their business. And you're definitely in this latter group where it wasn't just like, oh great, you know, cheap CPMs for a few months and we're going to be able to really crush it during this period. But you've actually used that to propel your business to like a totally different
- [13:31]
Jacob Zupke
stratosphere, you know, given how many having listened to you guys for, you know, a long time, you know. Right. The meta bug hadn't bit us yet. So we were really all in on TV in the news channels and we ended up getting our spend up quite a bit through 2020 and 2021 on the news channels. And that just, it crushed for like all of 2020. And I think it was until August of 21 where it was just, it was still like August was. Or 2021 for us was another year of about 100% growth. So we ended up going to about 150 million that year. And TV was like our channel. And it was that same commercial we shot. We cut it up so many different ways. It was a woman, you know, grabbing chocolate cake and says, you scoop the poop, licked her finger with your hands. We got some lovely hate mail for that. And you know, people saying we ruined their dinner. And I was like, look, we have a point of view. And it worked. We made scooper like a mean word, kind of like a, you know, we call people scoopers sort of term.
- [14:37]
Mike
She's such a scooper. Karen. Such a scooper. Don't be Karen.
- [14:41]
Jacob Zupke
That worked for like two years and then it stopped working and we switched to meta. And then that started to do really well for us. So I never got overly hooked on the cheap CPMs at the time, which was kind of nice and we did on tv. But when TV started to get more expensive then we went to meta. So I never had the dirt cheap kind of meta conversion dollar or meta conversion. You Know, funnel that were, you know, that kind of disappeared at that point.
- [15:09]
Mike
Yeah. You didn't get your cheese moved like a bunch of people did in. In 21.
- [15:13]
Matt
Well, dude, iOS 14 was, like, the thing that just took out. I talked to a guy yesterday. Mike runs a couple companies. Like, well into the nine figures, iOS14 took out his first business. Like, they just. They couldn't adapt.
- [15:26]
Mike
There's a difference between having enterprise value and having, you know, a marketing flow that. That generates profit. And. And they're different things. And iOS14 was one of those events that kind of separated the wheat from the chafe, you know, where it's kind of like, I. I always. I love that term, too, because, like, it's. It's kind of a biblical reference. But, like, where it comes from is there's certain wheat in. In, like, the Middle east where when it grows, there's also wee with it. They're called tears. And so the wheat's growing and the tears are growing, but they look identical until they get to maturity. And so the point of the parable is that sometimes, you know, you can't really tell the difference between. The difference between the wheat and the chafe and until, like, it's at maturity. And I think the same is true in business. And this is one of the ways that entrepreneurs, in my opinion, drive themselves crazy, is that they're constantly comparing themselves to other businesses, but they don't know all the challenges of those other businesses. They don't know the. The income statements of all those other businesses. And so one of the things that I had to just train myself to do is just not think about other people's businesses. I need to run my business because there's so much I don't necessarily know. And then you have events like iOS 14 that just kind of prove that.
- [16:37]
Matt
Yeah, Mike, it's a good rule for life. If you. I think Ryan. I was at an event once, and I. I got to spend some time with Ryan Holiday. He's like, the stoicism dude. He's, like, good friends with a bunch of my friends. And I remember he was talking about this with a small group of us that his way of not being envious of other people is, you know, because his. His way of thinking of it was you become envious because you see one part of what somebody has, and you want that part. And he's like, the way that you get around that is just to imagine you have to have all of what they have to have that one part. He's like. And often when you look at the whole picture. You're like, well, I don't want the rest of what they have. I just want the shiny part that I really like. He's like, I don't want the. The two divorces and the, like, whatever, you know, collateral damage came into, you know, came out of what it took to get to where they were. And that always stuck with me. It's like, you can't just be. You can't take, like, an Instagram edit of the world, you know, even though we're all marketers here and, like, I'm Jacob, I love making these videos as much as you do. That's just not how we have to look at life or business. Like, you just can't pick what you like.
- [17:43]
Mike
And one of the reasons for that, I think, guys, is that what we tend to see, the only time that people, the, you know, people that are not close friends, puncture kind of our consciousness is when they're at a peak achievement in some way. Like, that they had the Instagram post that went really viral, that they won the award that their company sold, that, you know, whatever. And so it's just very disorienting. It feels like the world outside of us, anytime we hear about it, it's because something awesome is happening or somebody died, and. And, like, that's actually not real life. And I think it's. It's true, Matt. It's like everybody wants to. Wants to win the gold medal. Nobody wants to wake up at 5am every year for eight years to try and win a gold medal. You know, and we could say that across. I mean, it's true in business, you know, everybody wants to have a great marriage. Not, you know, not everybody wants to work through every conflict that it takes to have a great marriage, or everybody wants to have great kids that love them. Not everybody wants to put in the work that it takes to get the. So I think that the principle of the more that you can focus on kind of like what's in front of you, the more successful you can be. And I think this is also, like, probably helps prevent the shiny object syndrome, where it's just like, whatever the latest thing is, like, I'm gonna go chase that because I heard a few people talking about it or whatever.
- [18:57]
Matt
Yeah. On this, Jacob, like, when you just go back to the. Like, you had just doubled. You just made this commitment to, like, double the manufacturing capacity before you had this, like, this banger year, Right? So, like, why did you guys decide at that time to make the investment, double capacity when you didn't yet know that you were gonna have like have an abnormal amount of growth. Like what, what was, can you just take us there? Because I, I, I need to unpack this.
- [19:25]
Jacob Zupke
So we had gone from like 7 million to 40 million in five years, which was an incredible amount of growth for a company of our maturity at the time. And I think when we were getting up there, it was a revelation, or not even a revelation, but it was like, hey, we're paying for, we're paying for storage over here. I mean similar to Mike, you buying your building for ostrich. We're paying for storage over here, we're paying for rent over here. We may as well own it so that we have it all under one roof. And if we're paying for it anyways, we can afford to get a mortgage or borrow or just pay for the expansion. So we were in a position financially to do it. We've always operated profitably and within our own means. And so we were in, we had the balance sheet to support it. And so we made the bet in 19 that we would keep growing. We did not anticipate the growth that followed that quickly. And that breakout that we got from the commercial, I think until I showed a few people the commercial before we went live, I was like, okay, I think we actually have something here. But in 2020, before we even finished that, we kicked off another expansion going into 21 and 22 and we tripled the whole factory size. So we went from 60,000 to 225,000 on our thin property. We bought the neighboring lots from the city and we kind of kicked that off as well even before we saw some of our follow up expansion. Knowing we wanted to make things here, knowing that we really wanted to do it under one roof because it's more efficient than multiple facilities for a larger product. You know, unlike, I'll just use water bottles as an example, you know, I don't know. I mean you can fit it on a truck, but it's a hell of a lot more than the litter robot. And I can get like 208 on a truck. So it, it doesn't pack well. And so for us, being under one roof is very efficient. So long answer to say our manufacturing is also limited by our size. And so building here and building under one roof is actually good business for us versus doing that overseas.
- [21:35]
Matt
I was going to say, why did you, you must have had the conversation or several at some point in this growth journey to say like, should we still be a manufacturer?
- [21:44]
Jacob Zupke
That was in 19. So when we decided to double, we looked at it again and it was like, I mean, very fortunately we didn't make that decision to go overseas with what came. But the way that we pack out is not great for containers or for trucking. And so if I lose a lot of the value of going overseas despite speed and my ability to influence manufacturing tomorrow, if I want to make a change or to get new firmware on a device, literally rolling off the assembly line tomorrow so the user doesn't have to update it right when they get the device, all of those things are advantages of doing it here. But I think also when you look at great appliance manufacturers like Whirlpool, Whirlpool or Wolf or other brands like that, I mean they do it here because it's good business. It's not easy, it's smart business for them to do it here because of how it ships. And I think the advantages that come from doing it stateside and then of course the years to come with tariffs and shipping and container pricing, that was. We made the right bet and it happened to pay off meaningfully.
- [23:06]
Matt
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- [23:41]
Mike
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- [23:43]
Matt
Go to 9operators.com applovin to give it a shot today. You'll also get access to the live Operators Mastermind that we ran with over 25 Ecom heavyweights plus our step by step playbook to channel expansion. That's all I got for you. Let's get back to the show. I can't help but say like the, like a series of fortunate decisions and circumstances like in a few year period here, right, like you kind of made the right calls, the right bets and then somehow followed them up with like now we can deliver on demand, you know, like that it's a, it's incredible. Like have you ever looked at that, you know, 2019 to like 2021 and, and looked back and said like well, geez, what could have gone wrong here? Like, where. Where would we have, like, totally just put it off the rails.
- [24:34]
Jacob Zupke
We also built our new headquarters, by the way, at the same time. So that was in 2019 as well. So that. I remember it was the second week of March of 2020 when Covid started. I remember I was in Colorado skiing on Sunday. We shut our office down on Wednesday and like, it went from like, hey, this is, oh, a thing that's happening, that's all over to like, hey, the world's shutting down. And that two week period, our sales started to be like this. It was like. And I was like, oh, new factory, new headquarters. This is not a great feeling. And then I remember it was a person on my team named Dave. And our TV media buyer started to talk about how everybody was watching the news right now and maybe we should move our media dollars to the news. And it was like one of those moments where you're like, all right, let's just try it and see what it does. The couple of days later, everyone's pulling out all their media. So it was like a couple good decisions that happened to play out very well. I think we did the right. Maybe not the right thing. We did the right thing when no one was watching, but like, you know, we. We wanted to invest in our people. We wanted to invest in US Manufacturing. We thought it would be good business, and it happened to pay out. We ended up not taking the PPP loan because we were doing really well. I don't know if that was a good or a bad thing, but we ended up not taking it. And, you know, it was a meaningful amount of money. But we started to do really well. And we felt like it was our responsibility not to take it because we benefited from what was happening. I think it was helpful that people were stuck at home with their cats. It was helpful that people were closer to their litter box. It was helpful that we were able to reach the media. But we had the commercial ready to go, we had the manufacturing in place, and we had the ability to keep up. So it. I think you create your own luck, and I think we created a little bit of our own luck.
- [26:37]
Matt
So when we launched Lomi the. The thing, we. We had a video. It was a founder video, right? Where we. Like, I scripted this thing out and it just smashed. I think. I think I spent on one video. Like, this is rare when it comes to advertising. I think one video. I may have spent 13, 14, $15 million on ads, like on one video, right? And I remember Thinking the whole time, how the hell am I gonna follow this up? Did you. When this thing hit in the way that it did? Cause I remember the ad and it's great. Like you had that, the, the poo pourri, the squatty potty, the like you guys nailed the comedic ad. And at that time there was one group of guys down in Utah that like they were basically the gold standard, right? And what they charged to do this was really high. Like while that was happening, were you already working on like, what's the follow up to this thing? Like how the hell do we keep this machine going? Because you know, any a good marketer, you're going to be the. You're going to sit there and say like, it's going to burn out. We know it's going to burn out. We don't know when. Walk me through that.
- [27:44]
Jacob Zupke
I would say our growth journey has been a combination of good product, then great marketing and then good product and then great marketing. So we were getting ready to Launch Litter Robot 4 in 2022. So 2020, 2021 we got the benefit from that video. Going into 2022, we knew we were launching the new model, which design wise, like industrial design, it's the sexy. At the time, it was the sexiest litter box ever seen.
- [28:12]
Matt
And you never thought you'd say that, would you? Like that? Come on. There's no way you thought in life I'm going to say those words.
- [28:19]
Jacob Zupke
It's my favorite line to use now. Because nobody thought they would ever hear that. 2021, we were so focused on getting LR4 to market because we knew that one of the comments we always got was just the look of the LR3. It looked like a cement mixer. We got Death Star. We got. We used to get Kenny from South Park. I mean we've had every reference. There are over 10,000 names in the Whisker app. And this was about a year and a half ago when I pulled this data, there was over 10,000 Star wars references to the way that the Litter Robot looked to name their device R2D. Two tons of them. And so we knew that the Gen 4 was just visually more appealing. And it had a built in scale, which was the first product to really weigh your cat in real time every time they go to the bathroom. So we added a much better health element to it. And in 2022 we really focused on that. It was a slower growth year because it just completely occupied us to get the new product to market. And then in 23 we had our Biggest growth year we've ever had. Following that. And we also launched an awesome ad with Jenna Fisher from the office that right at the beginning of 23, we had built up demand or built up supply chain to be able to keep up with demand. And then we launched this Jenna Fisher ad, and 23 ended up being our biggest growth year, not by percent, but by absolute dollars.
- [29:52]
Matt
One of the things that kind of lit Lomi up initially was she bought one. And the. But the video that she posted on her Instagram account was her talking about how she promised her followers that she would never buy anything off Instagram again. And then she's like, but I caved, and I bought a Lomi. And when we saw this video, my team was like, pam from the office just posted this thing on Instagram saying that she didn't want to buy it, but she bought it. And it's funny, is like, one of my best friends plays hockey with her husband. And I'm like, I sent it to him. And I'm like, dude, did you do this? He's like, not at all, man. He's like, that's real. She was like, I swear I didn't want to buy the damn thing. Um, so I remember you telling me this story that. That you guys got in there early. Dude. The. The thing I want to dig into this because I don't. What I don't get quite yet is like, the how often you release generations of the product, right? So, like, you know, you're 15 years in when the company's 15 years old, when you join Literal Bot 3. And then how many years later did it take to get to the 4?
- [30:57]
Jacob Zupke
7. It took us a while.
- [30:59]
Matt
Uh, so you're the CEO of this company now. At what point did you. Did that become official? Because it sounds like you just sort of collected responsibilities as you went. Went along. Uh, when did it become, like, more formal where you're like, oh, I'm running this place.
- [31:13]
Jacob Zupke
Uh, 2020. I mean, during COVID was like, I mean, for me, I still think it's the most exciting time of my career. I don't think anything has topped that yet. I'm just like, 100% growth alongside scaling up manufacturing, opening up a new part of our plant, like, figuring out the world. I was sending a weekly memo to our team. There's no training on that. And for me, that was kind of the moment where the founder made me president. And so in 2020, I became president, and in 2021, I became CEO. And I would say, but in 2020, I was running all the day to day and Brad really had a deep hand in all of our engineering and finance. So I took on all of the operations for the company at that point. And he and I have built such a good partnership that we really don't step on each other's toes. And I'm still very proud to work with the founder of the company. You know, 26 years into his journey, 11 years of us working together, we have a mutual respect for how each other works. He really. And you know, we were in how I built this. I think what he said about me was I was the glue, which was something that he never really liked to do, which he didn't want to bring everyone together and align everybody on where they were going. And that's what I love doing. And I don't think I even realized that I was just doing it, which
- [32:44]
Matt
him as a founder, that's also quite rare to have that kind of self awareness to say like, you know, I. This is. These are the things I don't want to do. I've got this person who's like exceptionally great at these things. I'm willing to just like, okay, dude, Jacob, you're the CEO, you run it. That, that is typically like most founder stories do not go with like a hand raise when them doing it. Most founder stories are like, listen, bro, you're out.
- [33:10]
Jacob Zupke
I gave you the single Instagram photo version of it. You know, going back to our conversation, right. There's a lot of bumps and bruises along the way where, you know, I think it wasn't formal that way. Like we never, we have had one real argument. We argue a lot, but we've had one real argument in 11 years and it didn't have to do with work. And so. Right. Like we have always been able to work through things. Our bickering and our pushing of one another and me challenging him saying, hey, we're going to come out with that. Here's what it's going to do. It's going to open with this thing that says there's cat shit all over your house. And he is very like traditional line of thinking for advertising. Or a couple of years later I was like, all right, here's a new one. I'm going to have that same actress, Kizzy, who we had do that ad. I'm going to have her squatting in a human sized litter box in the middle of the living room as if she just finished her business saying, and starting the commercial as if he just, you know, and he, I mean just his Uncomfort level was through the roof. And so I think what we've always done is we can bounce things off each other and I, I gauge his level of either uncomfort or uncertainty and then we're evolving together to get to something and he's like my go to person that I want to bring something tough to because he'll give it to me real. And I think that that has been part of how we got to this point but along the way it's for sure been a journey but I love it. I mean it's a part of how we got here.
- [34:53]
Matt
Is your philosophy more to the I want to take big swings on creative, on product or are you more incremental? Brick by brick, lots of testing. Like where do you land on that spectrum? Because you're like very much a marketing first CEO. Like that's so obvious.
- [35:14]
Jacob Zupke
Both. So for our brand creative big swings for our UGC iterative right. It's. We gotta. We're running so many, we're running so much advertising that we need a combination of both. I think we're about to take a big swing. I'm really excited about it. It's. And by the time this airs so anybody listening will see it out in the market at that time. But we're taking a really big swing on Cats are better than dogs and that's going to be our new campaign and I think it's going to stir the pot. I think it's going to make people feel something. And I'm excited about that because my hope a dog person looks at it and says how dare you. A cat person looks at it and says man, they're awesome. And I feel more empowered by this brand. And the mixed households that have a cat and a dog are like oh, they got me. That's pretty good. And somewhere in between all of that. But I want people to have reaction. I want people to feel something because otherwise you're vanilla. And I think that on the UGC front it's very iterative. Right. Should we have a cat in the first frame? Should we have a person in the first frame? You know, right now we're about to run something with toxoplasmosis. You know, women can't scoop the litter box when they're pregnant. And so we just did a shoot with a bunch of pregnant women that have a litter robot that they're able to tell their story about how litter robot helps to automate the chore while they can't scoop. My wife being one of them. And I think that, you know, we do a combination of both, but we take our big swings on the brand and creative.
- [36:55]
Matt
Mike, I know we've talked about this on the show a whole bunch, but, like, when it comes to these larger swings, how are you underwriting these from a, like, risk reward? Like, have you taken some. Let me ask this every way. Have you, like, taken some. Some, like, real swings, and they just not worked?
- [37:11]
Jacob Zupke
Yeah, we. We did Never Scoop again, which is. It's a really funny spot, but it didn't move the needle. Like, it just was kind of a. I'm not gonna say it was a dud. I think we used it. We spent, I don't know, a few million bucks on media. It worked, but it. It was nowhere near the success of some of our winning spots. We did another one, which was another big swing. We had kids. We shot a commercial with a bunch of kids talking about the litter robot in kind of kid language about how the poop gets eaten by this robot. And it was really funny. It was a great spot. But what came out of it was one of the outtakes is actually the one that ended up crushing for us. It wasn't the spot itself. The spot was fine. It was kind of neutral relative to other things. But we ended up with one spot of. I forget the guy's name, but it was the uncle in the spot. And, like, he's talking about how now he wants to get a cat so he can get a litter robot. And that ended up being the winning, like, spot. And it was just an outtake we shot at the end of the production. So, yeah, we spent all this money and time on, like, this really cool spot. It came out beautiful. It was a great branded spot. It did not hit the way we were hoping it would.
- [38:24]
Matt
So, like, one of the things I want to know is where you spend the majority of your time? We were talking a lot about, like, marketing and marketing swings, and. And I know this is, like, another one of those things that we just. We get asked a lot, and we talk about it a lot. And I. Mike. Mike has, like, an insane team around him where, like, everybody is, like, he's got sort of, like, a general that is just, like, exceptional in every area. But I still want to know, Jacob, like, where do you spend most of your week? Like, if we just look like an average week, how are you dividing time up right now?
- [38:56]
Jacob Zupke
I say year to date product is where I'm spending the majority of my time. We're going through a software evolution in the company right now, and we're really trying to get our app to just be a powerhouse product. We have, you know, 700,000 something mobile app users of the Whisker app, monthly active users. So there's a lot of people who rely on the Whisker app for updates on their robot, updates on their cat, and real time insights about how their cat's bathroom habits are trending. And so for me that has become the face of the product. It's the thing that's truly a moat in our future state that we get copied on our hardware. People are going to try and solve the problem the way that we have. And what really a standout is how people use our app. So that's really a big focus for me this year. And then we also have several new hardware product lines that are, I'm going to call them category defining in my opinion on how we're approaching them. It requires a lot of time. It's a lot of the invention process and reinvention process for some of them where we've got in one almost all the way there. And then we pivoted because we realized there was a better way to do it that we thought would be better for the consumer. So we pivoted and you know, I'm excited about it. Like it's a good pivot, but it's a lot of now more work ahead. So product engineering and then fortunately I hired a CMO in Q4 of last year and I had an awesome team in place that he got to come and lead. So that's been really helpful and then really developing our leadership team to be very capable of leading the company without my involvement so that I can focus on where we're going. I've never really had that spot. I've been very hands on for a long time and while I don't wish to change that, I need to evolve that so the company can continue to thrive without my day to day, you know, or week to week involvement.
- [41:10]
Mike
Okay, I'd love to know more about the technology piece of this because I think like you said, it is very unique to have so many people using an app that you produce. Like really there's not that many companies in the world that that's true of. And so how do you use that to create Walk In? How do you use that to create moats? What are the challenges that come with that? I mean that's a whole new kind of ball of wax and set of problems I would guess, but also some new advantages and possibilities as well.
- [41:41]
Jacob Zupke
My longer term goal would be that this is a clinical grade habit forming moat. I want something that truly understands the longitudinal health of your cat. So if you look at how you would measure oura ring or whoop for humans, I know how I feel when I wake up. I know that I maybe didn't sleep well or I shouldn't have, you know, worked out so late or whatever it might have been. We can't get that same, you know, feedback from our cat because cats often hide when they don't feel well or when something's going wrong, or they visit the litter box more frequently when they have a UTI or a problem and
- [42:21]
Mike
they can't talk because they're a cat
- [42:23]
Jacob Zupke
and they can't talk yet because they're a cat. And we hope to bring that voice to them. And that's really our goal. So the app is designed to give you the intelligence that you've never had before with a traditional litter box. There are very few good scoopers in the world. Okay, so you, like the general vet recommended rule would be scoop two times per day and have in n plus one litter boxes. Meaning if you have two cats, you have three litter boxes. So they always have a clean bed of litter. With the litter robot, they have clean bed of litter every time, three, seven or 15 minutes after they go to the bathroom. In our case, we're able to deliver that clean beta litter every time. We're able to deliver the intelligence that you would never get from a regular litter box because you're leaving it for a day, two days, multiple days, where ultimately you don't know which cat had the, you know, the blood and it's either feces or they weren't able to go and they were constipated or they went into the litter box 15 times that day, which is different than their standard four times. Just like humans, right? They build patterns, right? A cat's gonna go to the bathroom at 7am, 12, 5 and maybe midnight. If that changes, that can be indicative of a problem for us. We want to bring that intelligence, that actionable intelligence to the pet parent and that's really what we're focused on. So, you know, I'm weighing now 4 point something million cat weights per day. That means I know the duration of every visit, the weight of the cat, the trending weight of the cat, up, down or neutral, the duration trends, the time of day trend. There's a lot of insight from the litter box. And the litter box is often the first line of understanding of a change in your cat's health. So we have a very Unique opportunity to bring like a depth of understanding to that. Also based on millions of other pet parents that we're learning from their cats as well. So if you have a seven year old Siberian cat, there's 3,000 other seven year old Siberian cats. Then I have five year old Siberian cats and nine year old Siberian cats. So I can look at that trend. All of that's what we're focused on with our software. We also just launched weight, we have a weight based ID algorithm. We have, I think, as far as I'm aware, the best facial identification for cats. On the new LR5 platform. We have a waste ID platform. So we're telling you number one versus number two. So just like tracking your baby's output in a human, you know, parents will often track how many times a day they, you know, they went to the bathroom. We can now do that for your cat and then identify which one it was as well. So that's the layer we're trying to build. That's how we believe it will create value for the consumer. And we believe that that has a moat or an intelligence layer that the consumer won't be able to live without.
- [45:36]
Matt
So it's like a lock in, basically. Like the theory on the moat is like the, the experience gets so good and it's so valuable for the pet that the theory is that it locks it, it just locks them into the platform, right? So like if they go from a litter robot four to a liberal litter robot five, like they're going to stick with the brand and the product because all of this history is there and I actually like it because cats live a long time, like, you know, compared to most pets. Like my cat lived like 21 years, dude.
- [46:06]
Mike
And they're saying there's a new drug that could make them live 10 years longer that they were talking about. I mean, it's crazy. Wait, so do you, do they pay for the monthly access? Jacob?
- [46:18]
Jacob Zupke
So we have a freemium and a premium version. The premium just launched in light of the amount of data that we're processing now with respect to each household. So facial identification is not, you know, cheap. Streaming video is not cheap. On my unit right now I've got some of our new beta features that are coming out with some of the exciting like globe camera feature and other products that will be released soon. Those are all part of the Whisker plus experience because they all have a compute to them. And then we want to remain having a free version, really with device insights. So, you know, where we're bringing intelligence for your cat. We believe that should be part of the paid platform where we're giving you device insights. We believe that should be part of the freemium platform because we just believe that's kind of core to what the product is, and we have to deliver on the product experience before we can get you to want to buy into more.
- [47:22]
Matt
Am I the only one sitting here thinking, like, why don't my. Why does not. Why doesn't my toilet weigh me every time I go? Like, why. Why is my toilet not tracking me every time I go to the bathroom? Is the problem that I just don't want my picture taken?
- [47:34]
Mike
There's people. There's people working on stuff like that. I mean, I think there has to be, right? Yeah. And I think. I think that there's just a trend in general towards less privacy and more knowledge that that seems to be winning in the market.
- [47:47]
Matt
A weird place for less privacy.
- [47:49]
Jacob Zupke
Yeah.
- [47:49]
Mike
I mean, that would. That's the ultimate right. But, like, I. I do think in general, like, I mean, think about how normative it is now for us to upload our medical data to these models, you know, and say, hey, what do you think of my blood work? What do you think? And, you know, you think about HIPPA and how it's like, basically you get, you know, like, thrown in jail forever if you were to release somebody else's medical records. But we kind of like, willingly, like, you know, are. Are pretty liberal with them is at least my experience. So I. I think there's probably something generationally, we just think about privacy differently with the amount of technology that's infused in our lives.
- [48:23]
Matt
Yeah, I mean, there's definitely like, tech in toilets, for sure. Like, just like all those Japanese.
- [48:27]
Jacob Zupke
There are two companies working on that. I think to your second point, there was like, do I really want that in the. My human bathroom? I think part of why I think people want it in their litter box is this. When you've automated the chore. One of the things I used to hear from a lot of pet parents or cat parents was, well, how am I going to be able to track my cat's output then? Right. If we automate the chore now we're making it easy for you, you know, when you're struggling to go to the bathroom as a human you. And I'm not saying, you know, why, but, like, you know what's happening. And I think that's a big reason why people like the Whisker app is that the chore that they used to have to deal with gave them Insights, which was, is there blood? Is there. Are they not going. Are they going too frequent or their clumps a lot larger, which means they're, you know, urinating more. We're now able to bring a lot of that visibility to them through the Whisker app. And so what was out of sight is no longer out of mind.
- [49:33]
Matt
Is it because of all this, then, Jacob, Is this how you guys got the HSA spending approval? Like, I. I don't. I. That was actually kind of shocking to me when I read that. I'm like, how the hell does this work? So give us a little bit of the story there.
- [49:51]
Jacob Zupke
I started to see the HSA and the FSA banners popping up on a lot of different products and expanding from a mattress to wearables to, you know, percussion massage machines. And I know those were all for humans. They're a part of human health. But one of the things that we often heard is that litter robot makes it able for somebody with a disability to get a cat and care for their cat. And so we had people of, you know, all different backgrounds with different types of disabilities that have shared and raved about how the litter robot has enabled them to live a life with their cat that they didn't think they could live before. And so we. We realized that that was an audience that needed a solution, like the HSA FSA funding, and that they would rather use it for a bigger purchase like the litter robot, and unlock a purchase that they've been maybe dreaming of, whether it be a companion animal or, you know, if I. If I have a disability where I can't bend down, a back problem or, you know, missing limbs or whatever it is that makes it so that I can't take care of my cat. That was really kind of the. Oh, wait, we're already serving this audience. They love our brand because we solve a key problem in their home. And so I think that's why it was able to get approved, is that we're truly unlocking something that changes their life with their pet.
- [51:28]
Matt
This kind of work is difficult in pet because you're. And I'm. I mean, I'm asking the question because, like, a pet does not talk to you, right? Like, it's. You're designing the experience, like, for you guys. Like, you're thinking about the owner of the pet. But that, to me, that strikes me that, like, category creation and innovation in pet feels hard because you've got no feedback from the user.
- [51:50]
Jacob Zupke
No, we talk about how we have two customers. We have the cat and the Cat parent because, right, I want to buy a sexy litter box, right? We're looking at some awesome colors, and we're looking at finishes that feel appliance grade that match the home. We chose to upgrade to ABS plastics. The cat does not care if we use ABS or polypropylene, I can tell you that for sure. But, you know, it looks sexier. It looks like an appliance. And when you're putting this in a studio apartment and you don't have many choices of where to put it, you either wanted to blend in or be a fashion statement. I've got, you know, a nice Dyson fan here. I've got, you know, various appliances around my home that I'm proud to put out, you know, out in the open, a robot vacuum and other products that, like, I'm very proud to have in my living room because they're beautiful appliances. And that's the way that we're looking at the cat parent. And then for the cat noise, I mean, you know, you've had a cat, the last thing you want to do is introduce new noises to them. The openness of our product is really a key element. The design of how we get the cat into the device, how we help cat parents teach their cat to use it. These are all for the cat. And we've learned quite a bit over 26 years and millions of cats on what to do and what to avoid in the future. So I think each version continues to get better. Our adoption rate goes up with each version. And I believe that is the direct result of listening to consumer feedback, but also having good. I'll call it proprietary intuition. 26 years of doing something, you'll learn a few things. And I think that we really take that to heart. And being direct to consumer, we get the immediate feedback.
- [53:45]
Matt
I don't know if I told you this, Jacob, when we spoke, but, like, one of the things that came out of left field when it came to customer feedback, when we, like, when we were really scaling loamy up, was there was a portion of the Internet that really did not like us. And I expected it to come from. Well, we got like, there was two portions. Like, one was the climate. People who were like, you know, don't plug anything in energy. It uses energy. Okay. I expected that the. The cohort of people that I got that really hated us were people with chickens. And in their mind, they're like, why would you buy this Lomi device when you could just have chickens? Chickens eat everything. And then we were looking at that. We're like, you realize that not everybody can have chickens, right? Like that. To me, that was like the rational thing. I think of your product and I immediately have, I have to ask, man, are there people out there who are like anti litter robot? Like, is there, is there some subsect of like, is there a Reddit? Like a subreddit of like, I love to scoop people.
- [54:50]
Jacob Zupke
I love that question. We have a very, very passionate subreddit of people that love their litter robot. There's 50 to 60,000 people in our subreddit now that are super active, I mean really, really, really active. And I am very proudly cat poop man on Reddit and I am also very active and I've been part of the Reddit community for about four years. We had some challenges with our LR4 launch and I got right in the thick of it and I was out front and center and I owned it. I wrote an apology to our customers and it was a small subset of our customers, but I owned it. And I got so much love from the Reddit community of like, wow, you just owned it in front of all of us and then you're super engaged. And I, and I really do, I appreciate the community. They give me very direct feedback and unfiltered feedback. So that's the love for our brand. Passionate love for our brand. On the hate for our brand. Jackson Galaxy, if you remember the show My Cat from Hell, it was on Animal Planet, I believe, for like 10.
- [56:07]
Mike
I missed that one.
- [56:09]
Jacob Zupke
Oh, you gotta catch up on it. Mike Jackson Galaxy was a public spokesperson. He's got millions of followers everywhere and he used to say, if you can't scoop the litter, a litter box, get a goldfish. He hated the litter robot for 10 years. And I remember joining the company and just thinking, why does someone have so much hate for this product? Years and years later, Jackson Galaxy in 2025 started to use a litter robot. A friend of his said, you gotta look at it with fresh eyes. Who's also a friend of mine. Jackson and I had never met, and she's like, you gotta talk to Jacob, their CEO, just talk to him. Just be open minded. And he's got a really funny video on YouTube kind of telling the story now of how he flipped. And it wasn't until after he flipped and started to use it that we partnered with him and did an ad together. But it was all about the fact that for 10 years and he pulled out all the clips of him saying like, you know, don't get a litter robot. And if you can't scoop, get a goldfish and you're lazy and all these different kind of fun things that he poked fun at people who got automatic litter boxes and then he got one and he was like, okay with the insights that I can track my cat's waste behaviors. I feel like I'm doing the right cat parent thing now. And I would say this is also representative of how we partner with any influencers, creators, or celebrities. We only work with people that actually use our product as well. Because I, I think it's, it's gotta have that authenticity. And, and I, I don't wanna, I don't wanna flip somebody who doesn't wanna be flipped.
- [58:00]
Matt
I, I, I love all of this. This is like, I'm, I feel like I'm getting a window into like, the world of cats.
- [58:05]
Mike
There's always room for counter positioning against that crowd also, you know, whoever your detractors are, it's like, do you wanna be like those crazy folks over there, the, the chicken people, you know, like, anyway, I think that, like, great marketers, I mean, it seems like that's actually one of the things you've done, Jacob, is like, you intentionally are picking angles that are, that will be like kind of illicit emotion. It seems like that's been one of the strategies, which makes a lot of sense. I mean, it just makes your products stand out.
- [58:35]
Matt
You guys know how on, on Instagram there's like a common ad format which is like, don't buy a blah blah if you whatever, right? Like, Jacob, you know what I'm talking about, Mike, I don't know how much time you spend on Instagram.
- [58:46]
Jacob Zupke
Don't buy a litter robot if you love the smell of cat poop. Want to be elbow deep in cat
- [58:52]
Mike
D and yeah, want to, want to catch any communicable diseases from your cat. You know, like, these are, you should not buy this product.
- [59:00]
Matt
So I took I my genius idea and the way that we followed up that hero video was when I saw the chicken people on like, Reddit and whatever and like YouTube just torching us. We made a video at the time, this is years ago, called don't buy a Lomi. And it was like, I wrote this script. I'm like, you don't buy a Lomi. You should get chickens instead. And it was like just me in a white background. We had like, the editing was brilliant. We had like a bunch of chickens and it freaking ripped, man. Like, people were like, I love this. This is great. Like, because at the end of it, we're like, okay, if you can't have chickens. You should buy a lami. Like that was basically our pitch.
- [59:37]
Mike
Yeti.
- [59:37]
Matt
Yeti did like that. What's that, Mike?
- [59:40]
Mike
Yeti did the same thing. Don't, don't get him a Yeti. It was like their, their big brand campaign.
- [59:45]
Jacob Zupke
They ran over it, they did all that was such a great spot. And I remember that like vividly.
- [59:51]
Mike
Well, counter, counter positioning is great.
- [59:53]
Matt
Yeah, yeah, it works. I just think there's so many lessons in it. Like people I find like, there's founders where I've met and I've talked to where like they just don't like reading the negative stuff, like the feedback. I'm like, number one, you learn about your product, that's great. You about your experience, that's great. But number two, like you can counter position against so much of this. And Jacob, like what I love, one of the things I love about what you've done with this brand is like you've used humor in so many different ways over so many years. Like you guys have fun with it. It's not like you're taking a, it's like it's a fricking litter box, you know? And I don't know if I've ever told you this, dude, but like what? You're one of the companies I reference when people tell me that like not every category can have innovation in it. And I'm like, okay, listen kid, let me tell you about the, my friend who makes a litter box, like it's all possible.
- [60:44]
Jacob Zupke
When I joined the company in 2015, I had a couple buddies and just people in my like network like, you're doing what? And I just, I remember when we were getting ready to launch the Gen 4, I, I, I, I had a couple buddies are like, you guys are spending how much to get this product to market? And then on our Gen 5, we went to some really nice class A tools to get like just incredible finishes.
- [61:11]
Matt
You're like an automobile manufacturer, man.
- [61:14]
Mike
What does that mean? What does that 1400 press mean, Jacob? How strong is that?
- [61:18]
Jacob Zupke
In one of our presses, one of the bodies for like a three wheel car comes off right next to ours. It's. Yeah, I mean they're, they're big presses. They're, they're big machines.
- [61:30]
Mike
That's crazy. That's one of the fun things about manufacturing is just like when we built out a lot of our manufacturing, you just, I love the quote that everything you interact with throughout your day was someone else's passion project. But you see some of the machinery that Humans have been able to invent and build over the centuries. And it really is just mind blowing that, like, somebody came up with this idea, like, and it probably wasn't one person. It's like, you know, building blocks upon building blocks upon building blocks. And then you see some of the tools that we have today. And I think this is probably the hard part with technology, you know, like digital technology, is that it's harder to see that, right? To see all of the work. You see the magic, but you don't see all the work that went into it. But when you're physically making things, it's easier, I think, to just tangibly appreciate man. Like, it's. At one point it was like everybody was just like farming and there was none of this. And then like, we as a species have figured out how to make this press that can just like create immense pressure. Anyway, it's just amazing to me.
- [62:34]
Matt
I liken it guys, to. If you've never been in a factory, you've never made anything and you're in consumer, you're effectively like running a restaurant without having. Having ever having stepped in the kitchen. Like, you don't know what it's like to be the chef. And I that's. I love it. I love make like these like, factories. Like, I'd actually just come and tour your damn factory because I just want to see how it's made. I just think it's so freaking cool that, like, we make stuff, you know, and you happen to do it in North America, which is badass.
- [63:05]
Jacob Zupke
We have five molders in Wisconsin that we use to keep up with our volume. And it's cool watching how each of them, I mean, they're all similar, but yet they're all so different in their process and how they do things and what their factory looks like. And it's cool because for us, we get to learn from all of these partners along the way and how we do things as well. And some of the semi automation we've put in place, both internally. And then watching our manufacturers in injection molding, who have very automated facilities, pulling our parts off, placing them on a drying rack, putting them into a cooling fixture. It's incredible to watch, like, the automation that goes into place. And I remember the first time I. Well, two things. The first time I set foot into our factory in 2015, I think it was in June. I went with the founder and I remember we were doing batch manufacturing. So one person built the bottom half, one person built the top. And I remember saying to Brad, this is before we had an assembly line and a lot of our process in place. I said, so I've never been in a factory before, but I have to ask, is it normal to learn how to build the same part two different ways? Because I had two different operators tell me how to do it two different ways. And the outcome was the same, but the wiring was different. And that's circa 2015. We're now much more regimented in how we have standardized. Maybe in rigor. Yeah, but. And he starts laughing, he goes, that's a great observation. The answer is no. And then this isn't.
- [64:43]
Mike
This is a postmodern manufacturing. It's just however you feel like it should come together is how it's built.
- [64:51]
Jacob Zupke
Well, when your volumes are lower, I guess you have a little more flexibility. But. And then in. I went to the injection molder later that, later that year. And ever since that time, I can't look at any product anymore without thinking about how it's made. And it just, it was one of those moments where it clicks. And I think back to like just as a, as a kid, I used to love the, oh, it was called how it's Made, the Candy show. And I used to love that stuff. Like I. And then one of my favorite shows is, you know, the Men who Made America, the Machines who made America, the Food that made America. And like seeing how things have evolved over time to me just gives you such a cool appreciation for how the world is made, how things are made. And now I look at anything and I'm just, I'm thinking about the manufacturing of it before I even think about like how beautiful the product came to be. And then the other part of it too is the product management side, which I didn't have an appreciation for many, many years ago of like how many small decisions make a product good versus great, versus just like a delightful end to end experience. And all the little things that go into it, from the packaging to what it sounds like when it turns on, to what it feels like when you take it out of the box.
- [66:11]
Matt
There's such an, a level of obsession, I mean, which is, this is like my favorite word these days is like when you, you see things done with excellence, that's typically a core ingredient there. There's. And you are obviously like, you guys are a complicated product. There's hardware, there's firmware, there's software. Like there's a lot happening to make the litter robot work, right? So like tons of iteration and product management is a real thing. And I think there's somebody Listening to this thinking like that makes sense if you're making a litter robot. But I want to say like I discovered this brand a year or two ago. They make their clothing brand. Like they make basics. They're. I think they're out of Sweden. They're called Asket A S K E T. So shout out to those guys. I saw a video recently where like they don't make a lot of things. So they don't actually, every year they don't actually add more stuff. They just iterate on the things that they make. And I think I saw a video guys where like just their T shirt has gone through dozens of like iterations over years. And I'm like, you would think that's a T shirt. That's not a complicated thing. Lots of people make T shirts. But these fricking guys are just so obsessed with it. They're like, no, we just continue to make small adjustments to make the product better and better. I know. Mike, you've done this with several of Simple Modern's products like down to like how is the little, the straw going to connect to this thing? Like what's the mechanism? That level of product development is so core to so many great companies in consumer.
- [67:41]
Mike
Right?
- [67:42]
Matt
And Jacob, like you're an example of like you're just like, you live in consumer. Dude, you want to know how the sausage is made? I think we all do. Like this is part of why we do this damn show is like I just want to know, I want to know how, how big is the press? Like tell me that. So I freaking. I love it.
- [67:59]
Jacob Zupke
Yeah, go ahead.
- [68:00]
Matt
No, I was going to say like I want to. You mentioned earlier this like £4.1 million or, or like you measure. This is another thing I'm curious about. In your business like you have numbers that you throw out while you're talking to us that like we probably don't think of. So what's the £4.1 million? Like what, what are we talking about here?
- [68:19]
Jacob Zupke
We are weighing. So if you think about stepping on a scale about between 4 and 5 million times per day, we have a cat stepping on the scale. So we're weighing 4 to 5 million cats every day or 4 to. Sorry, 4 to 5 million weigh ins. Perfect per day. That might be one cat weighing in three to four times.
- [68:42]
Matt
So 700,000 monthly active users. You've sold millions of litter robots at this point. You mentioned you make, you make hundreds of thousands of these things every year right now. How one of these nerdy questions I want to ask Is how just in time is your manufacturing to your D2C business. We're going to talk channels, but before we talk channels, I kind of want to know like supply chain a little more. Are you making a lot of inventory long in advance? Do you kind of make things as you sell them? Like, can you just give us a bit of context on how that works?
- [69:20]
Jacob Zupke
Right now we're starting to build up a Bank for Q4. Our business is not overly seasonal. We grow pretty consistently throughout the year. And then of course, like any consumer business in Q4, we pick up an uptick. But we start to build a bank, I would say coming into the summer, so that I'm adding however many units per day to that bank so that as I get into Q4 or Q3 end of, and I start to load in retailers, I already have inventory bill or I build all my D2C volume. I can move those into our 3 PL down the street where we're shipping, you know, maybe all of our finished goods to get things out of our facility because they take up a lot of space. So I'm able to move my D2C units over there. And then I build maybe to order on retail. But at any given moment, I mean we're, we have a few weeks worth of, I would say finished goods and then that starts to ramp as we get into Q4 so that we're not pushing too hard into Q4 to keep up with demand. Because you know, there's a correlation between ship time and you know, conversion rate. And we want to make sure that we can keep our ship times where
- [70:32]
Matt
they are talking channels. You mentioned retail. How omnichannel are you guys at this point?
- [70:40]
Jacob Zupke
We're still like 70 something percent DTC. Wow. So we've been able to remain really well our DTC marketing drives our retail sales. So as a direct to consumer native brand, my brain just indexes on like what are we doing that would move the needle on D2C because it also moves the needle for retail. We're doing some retail marketing, but we're really focused on like what is just great DTC marketing for our channels. And then in turn that's helped really grow our retail business as well. We are now in, we're in every petsmart were, you know, we did a big Costco rollout last year. It was successful. We'll continue to partner. We did a big Best Buy rollout. We'll continue to partner there. We've got some other international retailers that we've picked up our international business. It's still smaller than we would like it to be, but growing. And then some other retailers that you know, we're in online, Chewy, Walmart, Target and a couple other retailers as well.
- [71:53]
Matt
And as you guys have like gone from sort of D2C so you were, you started out like direct consumer. Everything is owned, you've pushed into retail which is like for people listening this is like the typical kind of arc, right? Like Mike, you're often the person I point to that the exceptions like from Amazon to retail to dtc, literally.
- [72:11]
Mike
Mike, I just think, I think it's about understanding, it's about understanding your product. And, and Jacob, you have a really good sense that like the best channel for your product, the prime channel is going to be D2C and that everything else is going to be secondary to that and that this is what all of the best operators I know do, they kind of understand here's my core channel. And then there's a waterfall downward from that in terms of how I think about pricing, how I think about my marketing strategy and everything else. And typically you can harvest some money from your secondary, you know, auxiliary tertiary channels but it's the business is going to go as that prime channel goes. And so a lot of times on this show we talk to people where DTC is the prime channel and I'm kind of like the black sheep where my DTC is not my prime channel. But it's really no different. It's just about like the way that you think about trade offs and how you formulate the strategy looks a little bit different. But I can tell you even when you're omnichannel channel like we are, you still get put in situations where you have to say what is the prime channel? Because we have trade offs and we have to choose between these different channels. So it makes a lot of sense that you have a very clear sense of that Jacob, and that you always work backwards from like what's best from for D2C.
- [73:30]
Jacob Zupke
Two things on that one, I think we have a destination product meaning would you be willing to leave Amazon or your favorite retailer to go buy this product? Right. I, we have tons of simple modern products in our home. I bought them all from Amazon because while There's a great D2C site to shop from, it to me is a destination. I don't need to leave Amazon unless it's a limited drop that I would leave Amazon for. If it's some specific SKU that's out on Amazon, I might go seek that elsewhere or I might pick A different color. Whereas with Litter Robot we didn't start selling on. Well, we were selling on Amazon until 2017. I pulled us out of Amazon and said I think we'd do this all D2C. We had to add Amazon pay to our website and it kind of offset it, I think. And we're able to drive D2C until 2021. Then we started to see some of the foreign products show up on Amazon. They were capitalizing on our branded search so we put a limited presence on there really as a defensive strategy. We kept that going until this year. So we were really just defensive only. And we still been number one by revenue, not by volume of units because they sell for much che. But we've been able to maintain a bundle strategy on Amazon that's worked well. Just recently, for the first time in our history, we just went prime. We've never been prime, we've been non prime. Two weeks shipping and we just.
- [74:58]
Mike
I bet that juice hit. I bet, I bet you felt it. Yeah, yeah, yeah.
- [75:03]
Matt
That's like straight to the veins.
- [75:04]
Jacob Zupke
It is.
- [75:04]
Mike
That's like getting on. It's like getting on testosterone or something, man. It's like the moment it happens, like,
- [75:11]
Jacob Zupke
ooh, I like this. But the cool part is so if I go back in time, I'm a search geek. So like I, I tracked our trend and I have a really cool graph that shows search volume for automatic letterbox, search volume for self cleaning letterbox which are, they're interchangeable but Google does have a different SERP for both of them. And then search trend for robotic litter box. So those three are kind of the three. And then against search trend for litter robot and our marketing spend and it is a beautiful SEO dream graph for me. We flew past the category awareness in 2017 after we started to do a lot of our branded marketing and we are a multiple grader for litter robot than the category. All three words in the category. And so what happened was people were searching for our brand not for the category, not for water model, but for simple modern. And so for us I was like, well they're going to then seek us out, they're going to buy from us. And so the demand capture on Amazon or another channel at our price point five years ago on Amazon you weren't necessarily buying a 500, 600 product. Amazon's business has just grown so significantly during COVID I buy all my TVs from there. I buy more premium goods, but I'm not going to buy my barbecue from there. The selection's different The Skus are different. I'm going to get a different selection off Amazon. So to me that's a destination product. But for years we didn't have to be there. Now the category search volume on Amazon has grown, but the litter robot search volume has grown so significantly that if I'm not there and if I'm not trying to win there, like just being prime versus not prime, I'm now back to position one for all the organic searches for our brand. We weren't. I'm now able to command velocity, you know, trends. And it's just, it's a better, it's better, right? There's no question about it. You've been selling prime for years. But I didn't think it would matter that much for our product and it,
- [77:11]
Mike
it did and it does. Like, I'm gonna get on my soapbox. I don't, I don't know how many times I've said this on this show, but like, listen, if in the year of our Lord 2026, you think it would be better to not have a presence on Amazon, you are almost for sure wrong. We've seen this with so many brands. It's like, oh, no, we're a unique snowflake. No, you're not. They are the biggest retailer in the world and they can drop things by drone to your house in 30 minutes. Now, like, it's crazy. We had a buyer from another major retailer being like, we can no longer beat Amazon in same day sales. Like, we think if a, if a customer's like, we want it today, they think they're going to Amazon. I mean, just think about that for a second. And the other part about Amazon that I'm really like clear about separating for people is that if you think about one Amazon is one channel, you get it wrong. Amazon's two channels. It's a website. It's a website for your brand that happens to be hosted by Amazon and it's a wholesaler that you know is like Target or Walmart that has their own kind of generic search. And when people don't delineate that, that's really what, what trips them up. Jacob, you functionally had a website that a bunch of people were showing up to every day like looking for your stuff and you were like, you know what, I'm just not going to sell you stuff. I don't care. You went to the wrong place. I'm not going to give you access to my product. And that's an insane point of view when you put it that way. But this is what a lot of brands do. And so, like, you have to engage. You don't necessarily have to engage in a way. Like, so like with our business, we get a lot of sales on generic terms like people search, kids, water bottle. And we get a lot of. Probably more than 50% of our sales come from terms that are like, really people looking for simple modern, simple modern water bottles, simple modern, you know, Tumblr, whatever. And we could run the business where we just went after the branded search people, the people that are looking for simple modern. Or we can run the business where we're trying to get new customers in the door also. But it would be the worst business strategy to not go and get all of the people like Jacob that are just looking for our product and want to get it done via prime. And what your experience. It's actually funny, Jacob, because you encapsulated it really well. We, over 10 years of banging our head against the wall with D2C, have learned that everybody thinks the way that you just, you know, spoke it, that like, everybody wants to shop basically the way that you do. And so it's like, okay, well then we should, we should provide product to people the way that, that Jacob wants to, you know, shop.
- [79:42]
Jacob Zupke
I bought a hat last night and I found a hat. One of our, one of our data data analysts on our marketing team. And the hat said, not now, sweetie. Mommy is turning unstructured data into actionable business insight. And I thought it was so good. I sent it to her. She loved it. She doesn't know this yet. She'll know by the time the pod comes out. But I ordered for her first thought. I took the hat, dropped it into Google image search. It came out with a bunch of weird, like, just blogs. So I went right to Amazon, used their image search, couldn't find the hat, typed in the text that said this kind of hat. Nothing came up. Then I went back and found a random site, but it was Shopify. So I used Shopay and I bought it. But my first, like, I was trying to find the Amazon listing through Google. Cause I thought that maybe that search might be a little better for what I was trying to find with an image. And then I use the Amazon one and it was like, but my first instinct is go to Amazon, which none of this is new. And no one listening is like, ah, duh. I think when you, when you think about your big purchases though, a grill, a tv, an appliance, Amazon may not be the place that you're like, I'm gonna go to Amazon and search for it. You're probably gonna look at like a Business Insider listicle or Good Housekeeping Appliance Institute or one of these like roundups that tells you here's what to consider. They're going to link to ABC or site but it's usually not Amazon for larger goods. A trampoline and I think I had that mindset for so many years. And then I just. The data like beat us. The search volume started to catch up. Like I can't argue with that. And then we tried prime and to your point, it was like, oh, wow, we're.
- [81:40]
Matt
We can't go back since we're talking channels like you're. You started out, you said like you. You actually avoided meta somehow in the early years. So you guys were like heavy TV spenders right? Then you went heavy on meta. I'm assuming that because you're omnichannel, you are back to spending pretty well on tv. Like you're, you're. You must like if you're taking big creative swings, you must still be spending. There's maybe. Jacob, can you walk us through like demand mix over time? Like where do you. Where are you spending media dollars over time? And. And what does that look like today? I guess and land it there.
- [82:19]
Jacob Zupke
So going back to 15 just to kind of like the quick influencer. Our media budget was a lot smaller with search TV then meta in order to that carried through 16 as well. 17 we started to spend a little bit more on meta but nothing like meaningful. And TV was still. I would say TV and meta were probably equal at the time. Search was still the biggest, but we were spending on influencer and we were still going pretty big on organic Influencer before influencers at agents and you know, you were really doing all the paid social or paid sponsorship for it. 18, 19 we started to index more on TV because we shot a couple spots before the don't be a scooper ramped up there. 20, 21 TV, I'll bet you TV was 4 to 1 on meta and then 22 completely flipped meta overnight meta on 22, 23, 24, 25, we flipped meta. Google, YouTube, TV, other Pinterest, TikTok, everything else. Now that we're getting ready to ramp up with our new creative, we're gonna probably go pretty big again on TV and YouTube. I'm actually, I'm most excited about YouTube right now because I think our new spot is really perfect for it. Um, it grabs your attention. I want to be able to retarget people very well and then We've got a Tatari for our TV partner for TBCTV. And I think YouTube and TV will be a big part of how we launch this spot. And then some fun activations around it as well. Some fun press angles with, you know, how the spot's got a point of view. So I think it'll have its own built in organic arm to it as well.
- [84:21]
Matt
It is hilarious how similar our mix is on Lomi in those years, dude. Like in 21 and 22 we were spending three to one YouTube TV to Meta. Like I'm so, I was so I became like, I never thought I would become such a YouTube bull. And I was just like, oh my gosh, like this place is amazing. Then I had this. But what, what you just said is really important for people. Like, we talk a lot about product market fit. There's actually creative channel fit, right? And that every piece of creative does have a place that it will, it's like, it's like it will feel more native. And some people go out to make creative for specific channels. Dude, sometimes we've made creative where I'm like, nah, that needs to be on TV. Or like, no, that's absolutely a YouTube spot. Like you just, once you see the finished thing, you're like, that's not gonna work on meta. That's absolutely gonna work on YouTube.
- [85:18]
Jacob Zupke
Funny. And again, I'm totally biased cause my last few year pickleball addiction. But where I play, there's a TV on the other side, there's a row of TVs for sports. And I'm watching most of my TV now every Saturday and Sunday for two hours while I play. And I'm only watching from a hundred feet away or 75ft away. And all I'm seeing is no audio commercials. And if you go out to a restaurant or a bar, you're watching the game, you can't really hear much, you're seeing the commercial. So the visual piece. So we have a lot like our focus is with the text on screen to really win for TVCTV. And then that also can work for YouTube. We've got some really great sound effects, but it's not a lot of. There's no voiceover for these. I mean, we'll add other versions for Meta and TikTok. And when we cut them up, we shot a ton of shorts out of it of, you know, people picking up dog poop. And then we cut over to a cat majestically getting out of the litter robot and you know, poking fun at those dog poop picker uppers in the rain. And like they're good shortcuts. They're very cutty. We cut each spot to be intentional. It was a three or four day production. Also self brag moment at ideated, wrote it, produced it all in house and no agencies. We hired up freelance talent to help us with the production on set, but did it all in house. And I think our incoming CMO was like, dude, wow. Like we, we built such a cool team that's able to do it all in house. We just hired a badass producer who's been like super fun to have on board and she produced the hell out of it. So it was really kind of a self brag moment that I had to take.
- [87:07]
Matt
Yeah, I'm one of those people. I think creative is one of the most enjoyable parts of being consumer is. Is just like that, that piece that you're talking about. We like to finish these shows with this segment called the Titan 10. It's just a bunch of questions. We're going to like kind of hit you with them. I want you to answer them as like gut feel initial reaction as you can. You've gone from like 25 employees to I think like over 600 now. So I am so curious to hear your answers on these. So I'm just going to hit you with them and fire back. Okay. First one is you get to a desert island. You have to manage the business from the desert island. You get nothing but a piece of paper every week with three numbers on it to tell you how the business is doing. What are the three numbers?
- [87:57]
Jacob Zupke
Daily sales, weekly traffic to the site, conversion rate.
- [88:04]
Matt
Ooh, love it. Dude, you're such a DTC guy. You also get to bring a book resource, something to read, but it can't be about business. What are you bringing?
- [88:14]
Jacob Zupke
Cooking cookbook or if it's digital cooking show. That.
- [88:23]
Matt
That's a special kind of torture, dude. You're on a desert island and you want to read about things you can't have.
- [88:28]
Jacob Zupke
I like learning and I'm. I'm okay with that. My second hobby in life is cooking and so I consume a lot of content around it to try and improve.
- [88:42]
Matt
Very cool. What is. What's your one contrarian belief about business that you like? Other CEOs think you might be a little crazy for.
- [88:49]
Jacob Zupke
I don't know if this is contrarian, but follow your gut while the data can tell you a story. I think your gut is informed by the data and I think your gut over time learns the data over a period of time. And one data point can lead you in the wrong direction sometimes. And I think when you have a strong point of view based on your experience as an operator, I think sometimes you gotta let your gut override that. I'm not saying don't listen to the data. I think my gut is all informed by data. But over 11 years, not one data point tomorrow like that.
- [89:18]
Matt
What's the single most important word in leadership empowerment? What's the single most important word in business?
- [89:24]
Jacob Zupke
Winning.
- [89:27]
Mike
Awesome. Just to say, I've, like, come to really appreciate that Andreessen has something about this, that it's like, great leaders, the thing that they're able to do is just not have losing streaks that go on too long. And I think there's a lot to that. Like, it's so simplistic. It's like, yeah, you should just win, right? Like, that's good leadership. But it's like, I think there is something to that, that when you're strugg, like, you've just got to turn it around and, like, find a way to create wins.
- [89:53]
Matt
It's momentum, man. Like, Mike, I couldn't agree more. It's like, if you're struggling, just go find little wins and then just start stacking them up. And momentum loves friends, and it will just continue to build.
- [90:04]
Jacob Zupke
People remember the wins. The losses hurt, but people remember the wins enough to want another one. And if they believe that you can help them get there, I think that that's huge. And I think that that does overcome some of the challenges. And it's also why I care so much about who I'm doing it with, because I want to win with people that I really enjoy winning with. And when things aren't going as planned, I got to. I got to know who I'm in it with to get to the next win.
- [90:30]
Mike
This is also why the whole, like, you know, A players want to work with B players, you know, B players, higher C players. Like, there is something about that that, like, just the best. People, like, are addicted to winning, really, and they want to surround themselves with other people that they feel like will help them win and they want to win with.
- [90:48]
Matt
You love cooking. What's the best meal of the day
- [90:50]
Jacob Zupke
and why Anything kind of red meat, I just, like, enjoy. I enjoy, you know, steak, burgers, everything. But really, I just enjoy cooking proteins of all types. I don't eat fish. I love cooking fish for my family, so really, all proteins I find to be the most fun. But personally, I don't eat fish.
- [91:11]
Matt
Have you gotten into, like, cooking with open fire. Like, is that a thing for you?
- [91:15]
Jacob Zupke
I am like a die hard cast iron guy. I can do anything on a cast iron, and that is like my favorite. I, I like open fire. I got a Blackstone. I've got, you know, several of the people that have been on this show. I have all their products, tons from made in, shout out, and like, I. I love all the tools. Give me a $30 cast iron that I've had for however long now, I can do with that forever. And I can also take that on the desert by myself.
- [91:51]
Matt
Every time I'm with Panzer, I like to remind him that I still love cooking with cast iron. And he keeps telling. He's like, dude, that's a relic. And I'm like, yeah, I know, but I like my relic. It's like, I like my hexclad too, and I like my maiden, but I really like cast iron.
- [92:05]
Jacob Zupke
You know, Jason and I did a trade. He is a litter robot user, and so we did a trade. I've got a nice set of hexclad knives and we did some pan giveaways for our team, but he is a proud robot user now.
- [92:20]
Matt
Very cool. Okay, so what is the most overrated
- [92:23]
Jacob Zupke
growth tactic I'm going to right now? I'm going to say just blanket stating creative. And by that I mean I think creative is of course, the number one tool right now in the advent of AI but the strategy that goes into your creative is really where it's at. Just saying creative, I think, is a loose way of. Of framing a growth tactic. I think it's the strategic work that goes into every piece of creative that you create to build the foundation on how you keep learning and how you find the next winner. But just blanketly saying creative, I think is a weak answer.
- [92:57]
Matt
Oh, okay, cool. What's the most underrated tactic then?
- [93:00]
Jacob Zupke
Now I want to change my other answer because. Because now I want to say discounting for the other one, because I think it's a perpetual cycle and I'm not knocking discounting. I just think it's. It's. It's a tactic that's. I'm not going to call it the easy way out, because I think a lot of brands have built great companies on that, and that's just more fundamental to us. And then I would say I think the most underrated tactic is great creative, because I think it's really hard to do it. I think that it takes a ton of work. I think that we have been refining our engine for years and continue to Reinvent it. What worked last year, what worked last week may not work tomorrow. And I think the ability to build that into a science and an art is really hard to do. And I think it's what separates some of the great brands that are crushing it right now in marketing.
- [93:53]
Matt
Friggin love it, man. Big swings in creative. I am such a fan of that. Jacob, that's the pod, dude. You crushed it. This was a ton of fun. Like, this was, this was great. It was a lot. It was just like, nice to hear how you think about the business. Mike, anything you want to add or Jacob, anything you want to finish with. Because, guys, I'm just like, I'm so
- [94:13]
Mike
happy with this awesome story. And Jacob, the way you came all the way from, like, coming into a business and have just exploded the potential of the business and risen in leadership, I think it's really inspirational. And there's just a ton of different paths. I think, you know, the more amazing people I talk to like you, the more that it's just like the cream does rise to the top and that exceptional people find a way. Like, it's, it's really cool to see what you've done with your business. And it sounds like you're, you're still. You have a lot of growth ahead of you. So thanks for sharing, man. Awesome story.
- [94:44]
Jacob Zupke
Thank you. Yeah, I've been following the podcast. I love the newsletter and it's been, it's one of those I crave this, I crave talking to other operators in D2C or otherwise, but that understand growth, that understand how to build something and smaller, bigger, all over the map. It doesn't matter to me because I think there's little nuggets you can pick up from all of them. And, you know, it's why I fly out to every Ray dinner that he invites me to or, you know, other events where I'm like, look, if I can get one nugget out of it, that's a win. And being in Detroit, you know, my networking here isn't as strong as I would like.