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Get a DemoLive Q&A panel with Matt Bertulli (CEO, Pela Case & Lomi), Cherene Aubert (CEO, Growth Capital), Zach Stuck (Co-Founder, Mars Men & Hollow Socks), and Steven Borrelli (Founder, Cuts Clothing). Get all resources and decks: https://www.9operators.com/new-dtc Check out the Operators Portal: https://portal.9operators.com/ Chapters 00:00:00 Operators Q&A Hotline 00:02:13 Which AI Tools Will Survive? 00:07:00 Going Beyond Digital Channels? 00:13:08 Retail & Non-Digital Strategy? 00:16:00 Are You Stuck at Low 7 Figures? 00:22:12 How to Size New Product Bets? 00:24:18 Inventory Metrics That Matter? 00:33:12 Recruiting Top Operators? 00:41:59 Using AI to Stay Lean: Psyop? 00:48:59 Showing Up in AEO Search? 00:53:19 Operators Portal, Revealed
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Matt Bertulli, Shireen O'Brien, no stranger to the show, uh, Zach Stuck, no stranger to the show now that we nabbed him for a monster Titans episode, uh, and Stephen. I don't know how we haven't had you roll through yet, how this is your first time, but, uh, I'm gonna go ahead and, uh, I'm gonna turn myself off here in just a minute. Let's do a quick round of introductions for anybody that doesn't know, and shame on them if they don't, starting with Shireen. Zach, Steven, and then I'll officially hand it over to you, Matt. Shereen, who the heck are you?
Hi, I'm Shireen. I'm the CEO of Growth Capital, uh, formerly SVP e-com at ILIA and growth at Bobby. Excited to be here.
We had Bobby in the house represented today already. Angela came through. I'm almost sure you were one of those intros that was made. Uh, Zach. Where are you calling in from?
Who are you?
In from Wisconsin. Still here.
Still in Wisconsin.
But yeah, co-founder of Mars Men and Holo Socks and the original founder of Homestead, a growth agency. So great to be here.
Go follow Zach on any of the social media platforms for eat your heart out pictures of post-acquisition life, at least agency post-acquisition life. That dock shot was like, mwah, today.
What's going on, Aaron? Zach, it's good to see you in the flesh. I feel like we've been Twitter friends for a while. Uh, so good to see you guys. I'm Steven Borelli, founder and CEO at, uh, Cuts Apparel. We make clothing for the sport of business, been around since, uh, 2017, 2018, and big fan of all you guys. Know Matt, know Aaron a little bit, and Cherie, nice to meet you.
Thanks. Excellent crew. Matt, I'm gonna be quiet and, uh, hand it over to you for, uh, we've got a ton of questions that were submitted. As long as the juices are flowing, we will go to the hilt on this puppy. Matt, take it away.
Aaron, do you want to— and if we get going and there's any other questions in chat, I can't see the chat. So if like somebody can message me things, I can always add to the list as these guys get going. Well, let's just do that. Let's just do it.
Fabulous.
Let's roll.
Cool.
Right on. All right. I got a list of questions. I'm going to call it like the first name of the person's question and then Shireen, Zach, Steve, I'm gonna do my best to like point it at one or two of you, or maybe all three of you, and just get some opinions. But I wanna start with a, let's, let's see if this is a hard one, Shireen, 'cause I think this might be in your, up your alley. Cody Lukens, Lukens, I don't know. That's a cool last name. His first question is like, so we talked AI and consumer, but he is curious if If you have an opinion on what AI tools you feel will not be used in 12 months from now. So like, what is, what is everybody currently excited about that's gonna disappear? Where should he not spend money and time?
This is a hard one because there's so much speculation and there is like so much conversation about being model agnostic and just going with the best model. Like we are in the Coke and Pepsi wars of Claude versus ChatGPT and you know, putting, putting all of your eggs in one basket can be a risky move, especially if the other player launches a better model and you have your whole organization on, on one. So yeah, I, I mean, honestly, I am a, an avid OpenAI user. I'm watching closely to see what the big models are continuing to release. And I, I think one of, you know, just watching what Claude is releasing, it seems like they're trying to release things that would make something like an OpenAI irrelevant. And I would be more curious about what AI will— what software become— will become irrelevant as Claude and OpenAI gets better.
You know, I don't know if Zach or Steve, you guys have an opinion on this, but like, there is something weirdly terrifying about turning everything over to one, like, one company. So like, if everything is in Claude, I don't know why that makes me so uncomfortable. Meanwhile, like, Google can have all of my email and calendar and docs, and I'm totally fine with it. I don't know if that's just because, like, I trust Google. They've been around a long time. But I feel like Anthropic, these companies just get on— their PR game is basically scare the shit out of everybody, which I think then for me— Zach, you're laughing— like, makes me not want to give them everything. I don't know how you guys feel about this.
Stephen, why don't you go? Yes.
So we, you know, in terms of being scared about using Claude and, you know, we use it for everything now. But one of the— like we used to use Tableau a lot, something that for inventory reporting or, you know, even profit loss, things like that. Now I can build my own custom dashboard in Claude and use it as an artifact. And it's been such a hack for us 'cause I can have it personalized to how I wanna view it.
Yeah.
And maybe someone else on the team wants to do it specific to how they wanna view it. And we're all looking at the same data, but it sometimes, like yesterday I was like, tell me the sell-through rate over the last 7 days. The dashboard didn't have that up versus 1 day. So I can kind of, when I pull up our, all of our SKUs, I can see what was the 7-day trend versus 1 day. I asked that, 1 second it was updated on a live, on an artifact on Claude. So little things like that, like Tableau, I don't know why you would use that anymore. Um, and that, and that's one of them.
You had like all your data would have been like, you know, you're using Tableau to visualize everything. So like Zach, then on your side, any concern over lock-in? Like what Shireen is kind of highlighting? Uh, I think she's saying it without saying it.
Concern, maybe one thing. I think it's like we're feeding it everything right now, which is like, I don't know, a little bullish, I guess. But I think it's more— I think Shereen's right. It's more about like what maybe what software gets replaced, right? Like we've, we're building new dashboards that we've never had as good as what we wanted them that are actually usable. And we're taking insights from them and going in and working on whatever, you know, new idea we find. I think like the dashboard business is really an interesting one because you can now literally tell it and make it exactly like the unique way that you want it to be formatted. Like we set up a new one recently that's like a landing page reporting dashboard that, yeah, it's great to see landing page data, but now it like pipes in ad data by landing page. So I can literally filter by landers. I can see visual charts to see what landers are like breaking through and not. So for me, as more of like a marketer, I mean, yeah, the marketing tools are going to be really interesting to see what's around. I mean, like we're not biased. I mean, we use a little bit of everything, but we're definitely— Yeah.
I mean, there is, there is definitely something super powerful about being able to talk to your data. Like as a marketer, like I love that. Like you guys are both hitting on it. On this, like as you guys get more information, right? Like one of the questions we got from somebody named Rhoda was all around non-digital channels and how you guys think about expanding into them. So like, you know, TV, linear or connected, out of home. Maybe Shireen, you can kick us off on this one. Like, When do you start to consider non-digital channels as a brand? And then how, like, did you, do you have a sequence that you like to go and approach those in? And I'd love to, I actually like to just go around the horn on this one and get everybody's opinion.
Yeah, I feel like there's a huge temptation, especially for smaller brands to like want to do these like big, what they believe, like big glossy brand campaigns out in the wild. But I mean, I've done so many market research studies in different markets to try to understand How do consumers actually shop? Where do they shop? And like, just to boil it down to its most simplest, most people do most of their shopping in stores, in retail.
Mm-hmm.
And then most people do most of their discovery online, even if they're purchasing in store. So like, that's the first place I would start is like, have you fully tapped digital discovery? Probably not. And then what stage is your business? Are you at the stage where you have to have stories to tell that are different than what you can tell in a social-first platform? Like, do you have long-form brand stories to tell that you can afford to invest in something that may not pay back immediately and may pay back in 6 to 12 months or never? So I think it's different for every brand. It's just revenue size, distribution. Are you in retail, out of home? Yeah, might be different then.
Steve, what about you, man? Like, I know you've done actual brand, you've done quite a bit of brand work. in recent history, right? It stands out to me as the whole Jeremy Piven thing, which was awesome. How do you think about this? And then how do you like taking that kind of creative and then putting it in more than just like a digital channel?
Well, I would give one short answer and one long-form answer. From a very tactical standpoint, if you're a new brand, I would look at your contribution margin on a month, and let's just say you're above You need $500K contribution margin to overcome all of your expenses. And so let's just say you're at $650K, maybe then and only then you'll be able to say, hey, we're going to take $20K of contribute— of contribution margin dollars and invest in this brand campaign that it's really hard to measure. Until you can do that, I wouldn't do it. So that's a very like tactical approach to, hey, when you're ready. But in terms of like executing one, For us, we've done some that have been very ineffective and some that have been effective. With the Jeremy Piven one, it was very timely. You know, tariffs happened, I was on the news, I did like a press tour, and then the team was like, hey, how do we use this to like break the third marketing wall? So we said, hey, let's fake your death. Let's say, hey, things aren't going well and create a lot of organic impression. And then I came on and said, just joking, Jeremy Piven is our chief—
Yeah.
entertainment officer, and he was gonna step into the new CEO role. And that kind of like broke the internet for a day. And it, you know, it went off that wave that we already had from me being on Jake Tapper and things like that. So I think a lot of them are actually very timely to do it really well. And you can't always plan it. Sometimes like there's a cultural moment and wave that you've gotta jump on for it to be successful.
Zach, I know we've talked a lot about Meta. I mean, just all things digital for you as you scale up Mars Men right now and you're hitting like pretty serious spend levels on, I would say like, let's just use Meta as an example. At what point are you considering television, out-of-home, like other places to put like the next dollar?
Yeah.
Yeah.
I mean, we just started to spend pretty heavily into podcast first.
Okay.
We felt like that was a good opportunity. Um, just knowing our demo well, um, mostly men, you know, we're, we're running ads with a lot of like comedians actually, um, that are doing incredible ad reads. Like the ad reads are like hilarious. So that's been really interesting. So yeah, I mean, we'll spend, you know, mid-six figures a month now on, on podcasts and we have for like the last month and it went well in, in May. June's looking good too. So that's, that's really exciting for us. So we're kind of starting there. Um, because we can get the talent and really interesting and we could try a bunch of different people and like that gives us a lot more breadth and we're starting to get some of those ad reads that we can actually pull in and use for, for Meta ads too, which is obviously like the backbone of, of the business. But for us, the one that was, I'm kind of actually bummed that we weren't able to pull it off, but our Father's Day sale and like the Father's Day language around Mars Men was incredible. Like we had a ton of customers. We had a lot of Our brand ambassadors that we actually asked for content to tell them about, like what Father's Day means to them and what like their health and wellness and testosterone means to them as a father. And we had some like really, really interesting stories to tell. And so from like an ad creative, like we got to use it for such a short period of time, but I really would've wished that we would've spent and took a shot at some out-of-home stuff because some of like the one-liners that these dads dropped—
Oh dude, the one you shared is so good.
And it was like, oh man, like that, that on like a, on a subway or that on a bus, like would have been impactful. So I think like when you, when you're thinking about out of home and once you're getting enough scale, like, can there be an emotional pull on a one-liner? And if not, then like maybe just like showing your product and spending like $100 grand on like an out of home placement probably isn't worth it. But if there's something that like pulls you in besides just like a clever phrase, I think that's when it's really worth it. So for us, I think we kind of missed our mark on the Father's Day thing. I really wish we would have done it there, but in the future, that's kind of how we're thinking about it. If we're going to go do it, we want to have that same like emotional pull behind, you know, the one-liner.
Would being in retail skew any of your answers? So like if you had a lot of points of sale, right? Like, Shereen, I'm just thinking like you come from beauty, there's a lot of channel in beauty. Is that impact your decision to go to like something like a television? Like these feel like more like carpet bomb channels. Like they're not trackable. You're just sort of like blanket picking a geography or the whole country, um, and spending money there, would that impact things?
Yeah, definitely. I mean, I, I, that's kind of why I go back to the size of business, because then you start, you start, you stop playing the like new customer CAC direct response game and you're, you start playing the, hey, we need more market share. We are, we have 25% market awareness. We need to get to 50% market awareness because we know that our awareness has a conversion into purchase and you start measuring the whole thing differently. And so at that stage, and that could be a different stage for everyone. Yeah, we would, we would do it. We did. I've done a ton of testing on TV. We've done out-of-home. And the best impact that I've seen, I've been in situations where we've been doing like drips and drabs of ad home here and there. And it like is not, not impactful. The best impact I've seen for any kind of like brand media is when you combine it with a larger campaign. And, you know, using beauty as an example, that typically is with like a launch campaign because innovation and newness is the lifeblood of that category. So it's like, okay, we have a launch campaign. We already know we're spending into that launch because we have an inventory forecast against it. We need to run, you know, we need to sell through those products and we need to do a certain amount of retail velocity. And there's like a moment in time where we need to capture lightning in a bottle. And you have that media planned against that launch, and then you build a full funnel media plan against that launch, and you create a huge peak for the brand. And as a part of that, you have your DR media, you have your, you know, let's do CTV, let's do out-of-home, like all the things that we can't measure, but we wanna just incubate culture with this thing that we're doing right now because our distribution is so big.
Mm-hmm.
And we want everyone to know about it and be talking about it. Like that's, the strategy and I've done the like evergreen CTV, always-on CTV. And it's great for like figuring out what publishers are the best, figuring out what content performs the best on the channel, but it's not like the right strategy for that, in my opinion, unless you have like massive budgets and you can run awareness media and you're playing the impressions game all day long.
Yeah, my experience with like, we did a lot with TV with Lomi early on, but it was like around key gifting moments. Like we would lean into it like 6 weeks leading up to Black Friday, Cyber Monday. So we'd run like a, you know, let's call it like an 8-week window where that's when we would go lean into linear, right? And we're basically buying awareness for gifting for the holidays. We were never always on in those channels. It was always like a campaign moment, kind of, Zach, like what you're hitting on, like some of your headlines around Father's Day, we're just like, they're worthy of those other placements. And the moment is also worthy of those other placements.
Okay.
So on the flip side of this, can I, I want to bring you guys down to like, we're talking like large-scale channel expansion. Let's go to the opposite end. There's a question from somebody named Anthony. And his question is around like when you're stuck at sort of like low 7 figures of annual revenue. So let's just say like 1 to $5 million, $1 to $7 million, and you're kind of there like for a year or two. How do you know if the niche you're in is just like got a low ceiling or if there's still room to grow? Like, how would you advise somebody on this? And maybe, uh, Stephen, let's start with you. And, and Zach, I really want to get your, your view on this too, because like you've been all over the map in scale.
Um, yeah.
So Steve, what do you think, man? How, how would you advise Anthony on figuring out if the ceiling of his market is actually too low?
Well, we dealt with something similar to this at a larger scale. We did our first $40 million with just one SKU, and then after that, that SKU started getting a lot harder and harder to advertise on it. And we kept, you know, doing more creative, more creative, and that didn't unlock additional ad spend. So we had to innovate to grow the business. So I think just you need to go through your checklist. Is— and, and you have to look at the marketplace. Has it been— is there a lot of people in this, uh, category now that since you, since you started? Is, uh, is the price competitive? Because sometimes that, that's it too. We've realized is you're in, you're in that niche, but because you've now done it for a few years, there's a cheaper, uh, option, and that can cause you, uh, challenges to scale. And then 3, the market might be moving away from that. Like, I'll use us, black teas. in 2017, 2018, 2019, it was dressing up. You could get a nice tee and dress up with it, but then over time, dressing up meant something different to our audience. So then we started to get scale with different type of tops to accomplish that desired state for the customer. So you really got to look at it from a market landscape. And I don't think we did that very well early on. We were, hey, we had so much success here, we got to double down with it. But that's That's not really how it works.
Zach, what about you, man? How would you go and figure like how to test your way out of this or work your way out of this?
Yeah, I mean, Holo has no business being as big of a brand as it is selling alpaca socks. So I'll say like if there's any testament to like a product that's worked its way out and found new pockets of customers, like it's a good example. I mean, I think part of it is just, are you selling the product to the right person? I think is like a good question to ask. I think a lot of people think that they know who their customer is in the beginning, but like really finding out and digging in and talking to the customers. Like for us, I would have never known that we'd have had like such a big, like blue collar breakout. I mean, our socks were really expensive in the beginning, so I didn't think that that's who was going to be buying our product. And so we found that out, dug deeper into it, built a product for them. And, you know, that added 8 figures of business just with like a new product line. So I'd say like, it's not always necessarily, um, you know, who you think you're selling the product to. It's like, who are you actually selling the product to that really loves it? And see if there's a way that you're not even like positioning the product You know, to those people correctly. So I think some of it is that. Um, and then, yeah, I mean, to Stephen's point, it's like product innovation. There's a certain degree where you might sell t-shirts, but it's like, you know, if the way that the style is cut now is out of date, like you might need the new fresh cut to actually like get it back into trend.
Right.
So, um, I think it's, you know, small product innovation mixed with like, are you actually talking about your product to the right people the right way?
Yeah.
Which usually just takes some digging into your own customers and finding out why they're buying it.
And what I mean by that is also, if you innovate too quick though, on the other end of it, when you have acquired a bunch of these people and then they want to come back for the same thing and you don't have it because you're innovating, that can give you like a false signal that it's not working anymore when it's really that you just didn't have that and maybe an additional color. So it's really having like a fine line of innovation, uh, if you can see it, but also not forgetting who your core is, because that's also happened to us. Um, we hired this gal from Aloha. She was like, you should only do 4 colors. We only do 4 colors. So we were like, oh, we're only going to do 4. And then when we just started adding more colors, we started to uptick again because the whole funnel of that product kind of got chopped off by, uh, by not offering those additional colors. So it's really both.
Very cool. So, Shereen, have you encountered this before? Like where you're like, you just like, you hit a ceiling, uh, and there's like questions around like, is this just the TAM of what we're selling?
Um, I like hardly, hardly for a business of low 7 figures, usually there's more of a TAM and they're just not capturing it. And if there isn't a bigger TAM, then they should probably, then, then you're building the category and you have to be ready to invest in building the category and educating everyone about the category. category. But I think if this is like, I asked Anthony, is this like, what is the product? It's a consumable powdered energy drink. And if it's a consumable product, there's, you know, I would, you would kind of have all of the ingredients to scale a business with a consumable because it has a high LTV. So I think what Zach said, and actually what Steven said too, is like, yeah, get innovation going. Are there other flavors? Like, what is the launch cycle? And, you know, talk to the customer because if they're not coming back, there could be a product issue. And I think that's worth digging into.
Hmm.
So when you launch— Matt, can I ask a question real quick? When you launch new products, do you set a specific budget for that new product? Because like we, with, with Holo, we have like a rule where it's like 20,000 units is kind of like our new test launch where it's like, we'll take a bet on 20,000 units. If it fails, now we know that we're not big enough that like we can't afford to like sell that or sell it off slowly over the course of a year. I'm curious as like you who have, you have a lot more SKUs. Like, how do you guys think about taking bets on products like that? Cause I think that that's where to kind of your point, you don't want to overshoot it, right? You don't, you don't entirely know, like we launched Run Socks. We thought it was going to be a home run and it like went really slow out of the gate, uh, which was surprising to us. But yeah, how do you, I'm curious how you think about that bet.
So we look at, uh, and one word, we're always getting better at this. This is, this is what makes our like all of our jobs, this is where the money's at. Like, you got to get this good and you got to get a good process in it because there's no magic bullet. But we look at like in the marketplace, can we make— is it a commoditized product, which means a lot of brands have it and people are going to buy it from us? Those type products we don't think can get a lot of ad spend out of the gate because it's going to be really competitive. But if it's a product that is slightly different, we can give it a feature, then we believe in that. But in terms of— we look at it more of a cash outlay, because each product might have different COGS, of like $150K of COGS. Because worst case, let's say we sell half of them, and then we, we can go to like TJ Maxx and get like most of our money back, where it's not like a, like a, uh, a be-all end-all where it's like, oh, this is really going to hurt our business. Um, but at the same time, in '23, we, we innovated too much. We didn't have enough, uh, SKUs to get any data. So we would sell out of everything quick, but we never really knew if it worked on ad spend. So to Zach, your point, like you need a, there's a minimum you need as well. Because if you, you can get, you can get another false signal of, hey, I sold it really quickly, but maybe it was only returning customers and maybe it was really low ad spend. So then that's not something that is actually scalable. So understanding like that is where, is where the money's at.
You guys are talking inventory and there was a question from Zach on what good inventory management metrics are. So Zach, like your question is a good one. It's like, how do you size the bet for a new product? But I actually think we could back up and just say like, how, what are numbers that you guys look at that would tell you that you are healthy when it comes to inventory? Like the business is in a healthy position. How much do you keep? Like, I don't know, Steven, maybe this is a good place for you to start because like you do have a lot of SKU breadth and Zach and Shreen, I know you guys are gonna have opinions here, but Stephen, kick us off, man.
So on, uh, 4 turns a year, usually, uh, per product is what we want. But some, we've also had it higher than that, but then you end up getting a lot of sellouts and then your ad account is like up and down, up and down. That's not good either. So 4 is, we've seen a good balance.
Okay. Zach, would you agree? Is like, is momentum in the ad account how you think about inventory? Like I'd need to keep Like, because these damn algorithms love momentum. And if you lose them, Amazon being the most famous, that will just kick your ass. How are you doing?
This is why Marsman has one product, is because even the 100 SKUs that I have, which is not many for an apparel brand for Hollow, is like, was a lot to deal with, candidly. Like, you'd stock out of a medium and it's like, okay, now all of our female buyers fell off a cliff and now the whole ad account starts to get weird or wonky. So yeah, I mean, we try to have Um, 2 months of inventory per SKU on hand at all times. Now we weren't able to afford to do that up until more recently, but that's kind of like how we think about it. So we basically have a window where we know our manufacturing turn time. We know like our landed time and we try to keep like that sweet spot so that if our marketing team does find like a pocket of ads or a new like breakthrough, whatever ad or something, or a new channel that we can scale into it without having to like have those moments of dips. where we can still manufacture the products in time to like keep, keep up. And I mean, the other part for us too is like we manufacture all of our products in the States for Holo, which, you know, where they're a little bit less dynamic in the States than they are overseas to like move and shift and be as nimble. So I mean, for us, yeah, it kind of requires like 2 to 3 months extra inventory per SKU to actually like get away with it in case we do find those pockets of wins.
And we test on that note, we test, we have 2 different buckets of products. One is scale products and test products. And scale products, they're all on a graze program. So we buy the fabric, we hold the fabric, and then let's just say we're ordering, you know, 20,000 units a month. We'll have another 20,000 that can be ready to cut in here in 6 weeks. So if in the first 4 weeks we're starting to oversell, we'll pull that demand forward. And then vice versa, if it's taking a little bit longer, we won't cut that. And that means we're not starting the clock on when we have to pay for it. So that graze program has been huge for scale products. You got to have a good factory that's willing to hold fabric for you, but it, it can help you, you know, avoid those sellouts in a much quicker way.
Shareen, tie in the marketing side of this. So like you worked at some pretty big companies, largely leading growth in marketing, and it can be very frustrating to run out of inventory when you're in charge of that part of the business, not the other. How, how did you sort of bridge this gap and how were you thinking about like guiding the supply chain in your, in these businesses that you were involved in to make sure that like you guys were in a good spot for, for employee.
Yeah. And fun fact, for a time at Bobby, I was overseeing demand planning and their S&OP process. And then at ILIA, both, both businesses overseeing data. So like, you know, while I wasn't directly responsible for the ops, you know, KPIs, Weeks on hand is a great place to start, like Zach and Stephen were talking about. And I think your supply chain timelines will be a big factor in that. One thing that I learned is if you have a hero product or the product that carries your business, you probably want more inventory on hand than your other products. If you have products that expire or have shelf life, I think keeping track of your shelf life on products From a marketing standpoint, knowing like when expirations are going to happen and what's the last date that you can actually sell that product to a customer, then you can like, again, if you have a product that has a shelf life, you can use that in gifting. If you know that it's going to expire in 6 months or, and you need to sell it before the 6-month mark or get rid of it before the 6-month mark. So consumers have active window to consume it. And then Huge topic that we can spend a whole probably podcast talking about is like, how do you match your inventory to your marketing planning? And how do you track those metrics? Because you have your inventory, you're, you're, you're buying inventory based on some forecast that someone's coming up with, probably making it up. And you wanna actually be able to track the forecast versus actuals and get tighter on that forecast over time and match your marketing investment against that supply, you know, inventory level forecast that you have. And so many businesses don't have the connective tissue between inventory planning and media planning. And you have your media buyers sitting in the ad account, putting all their ads in one campaign, and then you have your ops team buying inventory and they're buying all this inventory for this product. That's like the number 2 product in the business that's getting zero ad spend because they're, no one's making creative for it because no one. knows how big of a, how much of the weight of the business it's carrying. So I actually build this report now. I like can't do my job without it, which is like product sales against spend actually spent against that product. And just like looking at the mix of sales and mix of spend by product to say it to, and it will highlight, oh, you probably have like products in your top 5 that you're spending $0 against. Like, that's crazy. That's a huge problem.
That is, uh, Zach, I was going to ask you that very question is we have some products that are our top sellers, but we cannot spend any more money on them online because they're so competitive. But then like we have scale products that sell everything. Did you, do you deal with that too? Because it's not always a one-to-one where a dollar goes in for one product and it sells the other. Versus sometimes we, we, uh, you know, the, the click-through rate and the, the CPA is really high on medicine. We're like, we can't, but it's still a top seller. So has that ever, you have to deal with that with socks?
Yeah. I mean, so Shereen, like spot on what you just talked about took me 4 years to figure out for Hollow where we would, now we start with our like, you know, P&L forecast where it's like, okay, what are the numbers we want to hit for the year? Then it's like, what units do we need to sell to hit those numbers? Then it's how much are we going to spend to sell those numbers in that month? And then how much are we going to spend on creative to sell those products during that month? So yeah, you're spot on. Like if you don't have that like top-down approach, you're going to absolutely botch things. So, um, great callout. I wish I would have many years ago, but yeah, I mean, the way that we think about, um, Holo, Stephen, is a little unique where we kind of treat it as like 5 or 6 different business lines. So each, each one of our products is like a completely different cohort where like our compression is like we treat separately than like our trades versus our hunting. Versus like our ski, they're all kind of moments throughout the year where we know, hey, there's going to be this like big peak and then valley. So we kind of time it more around that than anything else. So it's, it's less about like, we don't have many socks that are super like evergreen right now outside of like kind of our compression, um, is becoming that, but it's more been, it's more been like kind of each one is its own line item that we kind of trend throughout when it's like the peak part of the year.
So it's all demand, uh, gen— uh, demand gen, not really, uh, organic.
Right. I mean, like, of course we have returning customer, but it's, it's not as, you know, it's not as like if they come in and buy compression socks, usually they're coming back to buy the same thing for the most part versus buying like a different one. We actually haven't dropped like an everyday perfect everyday sock yet, which is something that we're working on launching this year. Um, that then someone could come in and they might buy the sock to do their job, the function. Like I always say, we're function over fashion. So like they're buying the product to do the function. We don't have the perfect sock for like every day, because to your point, the everyday sock, we're now competing with Nike and Adidas and, you know, like $2 socks that you can get a 20-pack of on Amazon. So that's where we've kind of waited until we've gotten big enough to actually like launch that, that, that product line.
Zach, you said it took you 4 years to figure out something that Shireen just dropped in 30 seconds. One of the questions we got was, how do you guys go about recruiting high-level operators? Like, how do you go about finding a Shireen who can save you 4 years of screwing it up? I'm sure you—
I'm one of a kind, baby.
How do you think about recruiting talent? You can't hire Shireen.
Let's just start with that.
That's like, that's not a good answer.
Stephen, what do you got? I mean, I've got some thoughts, but I'd love to hear.
Yeah, we've, we've struggled with this over time because with Claude and all of these new software tools like that, you know, Claude dropped March 8th and it changed everything. It's been, we've actually kind of struggled with the more senior level people. We've hired people from FIGS, Lululemon, Nike, and honestly, those were some of our biggest mistakes. So speaking about the demand, the design versus ad spend, That was one of the— we hired a, like, a public CFO. He came in and he was supposed to help us, and he honestly didn't know anything. So I'm really, you know, in this second phase is I'm very like, uh, you know, need someone that I feel like can be an operator of a whole department. And then we kind of— the shot— what Sean does where you, you give them outsourced talent, and then, and then maybe we offer them, you know, some some support roles. But, um, in terms of looking for a Shireen, I don't know if people listen on this call, that's necessarily the best thing to do rather than, you know, bring someone in your business and that has a huge willingness to learn because everything's so new. Zach, I would love to hear what you said, what you think on that.
Yeah, I mean, a lot of the team that's still with me, um, started like 3 or 4 years ago and started working on, on Holo originally. And now we're kind of like spread across Mars and Holo and, um, all the projects. But The, the thing that was interesting to me is that exactly like super driven individuals, young, hungry, willing to learn. And then it's like, can I tap my network to go connect them with people? So this guy Jacob, who's our VP of finance now, had no background in D2C, no background in consumer. He was working for a public accounting company and he was like 26 when we hired him. He runs all finance for Marsman, Hollow, and my other entities and oversaw even Homestead. one individual. Now, this is like, this is the perfect example of someone coming in that was just like willing to, you know, grind through things. But I think the best thing you can do as like a founder or, you know, a high-level operator is like build a great network that you can connect your team with. So like for me, I brought in Jacob and I connected him with like the CFO of Javy Coffee, the CFO of like, you know, a handful of other, other like large 9-figure brands. And he was able to just like learn from them. We'd pay small like consulting fees, but like, he was able to get the playbook from a lot of these people. So I think if you, if you hire the super hungry individual person and then you build your own network out that you can kind of like tap into, um, that's been the best use of, you know, from, from our end. Of course, we've, we've gotten lucky with some really talented people that have come in with like a, a really great resume, but less of that and more of like the kind of scrappy individuals that are, that are willing and have the grit to learn.
That's actually a great hack, uh, on the Like hire somebody who's got the raw capacity, and then if you've got the network or, you know, the right people, have them actually just consult and help train. Shireen, tell these guys how companies hired you, because you clearly are talent that was hireable at one point. And they just— Steven's like, I don't have a lot of luck hiring people like Shireen. And a lot of people would agree with that, by the way, Steven. I would agree with that. I've had some shitty luck hiring VP-level folks.
So Shereen has been on a tear recently on the growth capital, like profiles of who she's been getting on board.
How?
Yes.
That's a great twofer for Shereen.
Yeah. You guys, I'm living this because I have started a business where I have to figure out how to keep hiring myself over and over again. And it's really the biggest challenge, but I, I will answer your question, Matt, but I want to first, like Taylor Holiday finds a way to make it into like every, uh, discussion that happens on these, uh, on any event, but have some really good advice from him. He was like, there's only like a small percentage of people that are actually that, like, like that, like that motivated and that good and that eager and hungry. And you just have to accept that everyone else is not going to be and then look for those people and then invest your time and effort into those people. And I agree with everything Zach and Steven said, where you find that characteristic and then you build those people. The other piece of advice, um, was you don't necessarily need to find someone that is like straight out of college, even though there are benefits to that, or someone that doesn't have working experience. And that's how I'm building my team is there's like a really great, like mid, mid-career layer of people who are hungry and like want to grow their career and are eager and want to learn from someone and like want to go to that next level. And if you— that's how I'm building my team where they're like, They're not even necessarily mid-level. They've been in brands and they've been, you know, done this work before and they like have incentives and you figure out what their incentives are and align with them. But to answer your question, Matt, I mean, I think it's the, like the obsessive with learn— obsessed with learning, obsessed with growing, like wanting to prove that you can do something difficult. Like that type of characteristic is what you should look for. And I think the question was like, How do you find a CEO or a VP or an executive-level person? The reality is there's just like a, such a small amount of people who are like that and are in the job market because most of them have figured out that they can work for themselves if they're that obsessive. And so like, that's where I think like you probably can find that like amazing hungry person and train them up that you have a better shot.
Yeah.
Shireen, I'll give you the— I got a, I have a pretty strong view on the how do you get like the very best talent. So, and I tell you what people don't do, and this is, I think, the fix for it. So if you want to hire somebody who has an insane amount of drive and ambition and capacity, right? So they are entrepreneurial. They may not be an entrepreneur yet, but they are entrepreneurial. They can just do a ton.
Right.
The problem is that you, the founder, or you, the business, do not have an opportunity large enough to satisfy their ambition.
Yeah.
Okay.
So like, I am actually hireable, guys. Somebody shows me how to make $10 million a year in my pocket, I'm fucking for hire. But you probably don't got a business that can do that for me. So no, I'm not for hire. I'm gonna go start my own thing. So think about the container and the, the opportunity that you are creating. And do not come into it with a small-ass opportunity expecting to get somebody who wants a big-ass outcome. That would be my very strong belief on this.
That's, that's so good. Um, sometimes you get that with like early entry-level people that are kind of like you, where they, they get super excited and they're studs for you, and then they come in and they have such a huge demand and you just can't do that, and then you end up working with them as an As a contractor or something, you know, that's happened before. But yeah, it's like sometimes like that B-level person that's been in a couple of DDC companies that wants kind of their own department are better than like the super aggressive, you know, entrepreneur because your container, that's exactly right.
Yeah, I think that you guys, what you're also hitting on is like, Shireen, that talent is very rare and it's probably the wrong idea to like try to recruit just that talent. Like, let's just be honest, like most people on most teams are B players and they might be A minuses. Anybody who says like, no, I only have AAA talent, I'm like, bullshit. Like, no, you do not, homie. That is not how it works. Like, even Google doesn't have AAA players and they can afford to pay them ungodly amounts of money. So I think it's like, just adjust your sights based on the role is another way to do about, uh, go about this. Shereen, can I ask you like a follow-up question on On this whole like talent and thinking through, because you're in like startup mode right now. And then I want to get Zach and Steven how you guys would think about this. So there's a question from Thomas or Tomas, I don't know what, dude, I'm sorry. However, I'm screwing your name up. If you were to start now, how would you guys think about using AI to either hire less or have a leaner team from day one? Like, what's your frame for someone like this? Shereen, I want to start with you.
I'm doing it. And I, this actually, I read this question and it inspired a tweet that I tweeted, but I, I actually think it's a psyop that AI is gonna make us hire less. I think AI is gonna make us do more work and work fits into whatever container you give it. Um, just like when the internet was created and the computer was created, like it made us way more efficient than when we were using typewriters and pens and paper and all that stuff. But the jobs didn't like job, there were not less or fewer jobs. The jobs just changed into different things. And, um, certain jobs went away. There was like some unemployment that is cyclical with economic change and innovation like that. Um, but yeah, I think these tools are gonna make us hyper-efficient.
Mm-hmm.
Jobs are gonna change and jobs are gonna fill the space of the business and the business is gonna, gonna continue to do more jobs. I am using, like, we have an AI-integrated operation, um, and whenever the tech has a hiccup, everybody's like, oh my gosh, I can't do my job anymore. Like, what's going on? I don't— and we're realizing like, oh, we've built our business. We don't have like, you know, 10 or 15 associates running around like other businesses that may be a similar, doing a similar size business to us. So there is like some efficiency gain and we're able to bring in like—
Yeah.
more experienced people and give them tools and give them more leverage and hire fewer, like, a certain type of talent. But I'm mad because I still have to continue to hire people. And I'm like, why haven't you guys figured out how to replace yourselves with a machine yet? Because work fits the container you give it, and the work just keeps expanding. And I think, unfortunately, or fortunately, it's a good thing, you do have to Add bodies to drive growth. Like adding bodies is a way to drive growth in a business. It's just getting smart about where those bodies are, what their job functions are. And those jobs are changing. Like now I'm thinking about who am I going to bring in? Who's actually going to automate all of our operations? Like we're, we're automating everything, but like, there needs to be like a person whose whole job that is. That job didn't exist before. So.
Zach, what about you, man? You've kind of like been in pretty serious scale-up mode for the last 12 months or 18 months with Marsmen. Like, so you started from zero and like you've built this thing up. How do you now think about team, people, AI, all of it?
Yeah, I mean, I think it's mostly like the A-players will find ways to do their work better at the end of the day. And I think, you know, there's always going to be this like next new role. Media buyers turned into creative strategists. who've turned into prompt engineers now. Like, there's going to be an iteration if you're a killer. So I think like, you know, if you've got a lot of drive and you've got a lot of passion, like, you're probably just fine. It's just going to be the next iteration of what that role is going to turn into. For the people that are a bit lazier and, you know, BC players, like, I don't know if I have the best news for you, but, you know, I don't know where all of them are going to go. But, you know, for probably everyone that's listening to this or that's in this ecosystem that pays attention and has a lot of like growth in mind, like, I think everything is just fine. It's just like the next new iteration that's going to come.
Steven, if you were starting over right now, would you be thinking of AI as a tool to hire less people, or would it be a tool to do more with what Shireen is saying, in that you're, you are still going to hire people because people are, you know, pretty important?
It's a little bit of both. For example, like demand planner, we used to have a demand planner that would sit on the, like almost on the finance team, and then they would plan out the products that we would order. Now with Claude, our VP of marketing is essentially the demand planner, and because they know how much ad spend going on and they have demand planning at their fingertips with Claude, so that's a role that we haven't needed, and it actually made us much more effective. Similarly, our merchandisers are actually better designers because oftentimes in design we would get, you know, 10 go back and forth and It, it would slow the process. Now with like ChatGPT's image editor and kind of using that software to create infinite number of variations of something you want to create, it's just so much faster. So like having someone sitting in that role just would bog it, bog it down. And the merchant can actually think more from a marketing lens of what could sell rather than a designer. And not having that communication saves a ton of time. So It kind of, it's kind of both. Yes, those roles don't exist, but the people that we do have are doing much more.
Yeah. You know, it's, this is an interesting, I think the framing of this question, and I'm not saying that Thomas or Tomas is actually asking it this way, but there was sort of a, do you guys remember like the whole solopreneur trend from a few years ago? It was like, it was the new hotness, right? It's like, I'm my, I'm my own thing. I don't have any employees. I gotta be honest, I think it's a weird-ass objective. to go into business saying, I want to hire nobody and I want to be alone with my, my machines. Uh, I don't think that that's the— I think you're like missing a lot of the joy of building a company and like working with awesome people is awesome. So like, don't— And now at the same time, what can also be true is like, don't go into business trying to hire lots of people. Like, minimum effective dose is likely the approach. So I guess, yeah, I'm with Shireen. I think like the, the, you know, AI is gonna make us all have no employees is a, is a really weird narrative and a psyop. So, okay.
And the thing that AI can't do yet is sit in meetings and talk to people. And the number one thing that you can't pry out of anyone's cold, dead fingers is sitting in meetings with each other. So like, that's gonna keep happening. You're still gonna need people to sit down in meetings with each other.
I don't wanna talk to a freaking robot all day, Shireen. Like, I do like hanging out with my friends and build companies with my friends. Like, that's why we do this damn podcast, because I get to spend time with my friends. Like, if Mike showed up one day and said, hey, listen, man, I'm not going to come to the pod anymore, I'm just going to send AI Mike, I'd be like, get fucked, bro. Like, I'm here to talk to you, man. I don't want to talk to your robot version of you. So no, I think it's all overrated. Okay, last one. I think we're coming up on time and we're going to stay on this AI and DTC thing. Have you guys been thinking at all about, and Zach, I wanna start with you here, this whole like traffic and sale selling through the chats, like the ChatGPTs, the Geminis, like how do I show up in these things? I think they're called AEO or whatever the hell we're calling this next version of SEO. Do you think about this much and are you doing work to make sure that your brands are There?
Uh, so we just started, we're just starting to dabble with running ads on OpenAI. Um, and I'd say it's like up in the air right now. Not really sure how to, how to, how to, you know, report on it yet. It's not like, you know, AppLovin was a year and a half ago, 2 years ago, when you just like, if you were there early, you felt it immediately. Um, so that's my first take is like, it's not immediate.
Yeah.
I think the other part of it is like the way people prompt and the way people ask questions into AI is different than how they like Google searched, right? So you have to start thinking about how people are actually prompting to actually think about how you want to present information, right? So you might just, you're not usually going into like, you know, GPT and saying like, best men's test booster. You're usually being like asking it questions about your health and being weird and trying to figure something out. So you kind of have to think about like the new way humans are approaching asking the machine the question and how you're going to like provide it with the right answer. So the way that we're thinking about like creatives is very different than the way that we were thinking about them even on like a Meta or anything else. So I guess that's really where our heads are at right now is just like, think about it differently because people talk to it differently. So just showing up how you've been showing up is like not going to just work out of the gate.
Stephen, what about you, man? And then Sharin, we'll finish with you and then we'll wrap.
You know, I get an email from my inbox every day from a new agency trying to get us on there. So we Similar, it's up in the air. We, I think it's, it's minimal spend right now on OpenAI. But it, it's not something that we've seen be like a huge difference maker. Yeah.
Very cool. Shereen, wrap us up here.
I have a, I have a flex here that I'm so excited to share. So if you look, someone, someone shared like Profound is a great way to look for AI visibility. So ILIA is like one of the top. It is, I think it, I think it is the top for beauty for AI search visibility. Even against like Sephora and brands that are way bigger than it. And how we got there, Aaron, you're gonna love this. We did a lot of good SEO work on our site. We did a lot of like onsite optimization, content consolidation. We had a really strong PR and affiliate program, um, and invested in building the brand, invested in influencer and all the like traditional marketing things that you do to build a brand. I believe those are what drive like AI visibility for organic, not paid. And yeah, and so there's this other huge discourse about like, is D2C going away? Is AI going to replace D2C? Like, is the brand's website going to go away? I think the brand's website is actually still a critical part of search visibility.
Oh, it's a blue screen.
I look up cosmetics and see at the top, you can just be— they've done a phenomenal job. And then we are testing with some brands ChatGPT ads and trying to understand how those work.
Hearing the same thing from everybody that they're all saying. I think that that's a wrap. Aaron, should we finish here?
That, that is a wrap. I've got a few more questions. I'm going to divvy those out to their appropriate podcasts. Test these wonderful people's patience with maybe just tossing a couple of them over as well. Angus asked a few that were really great, so shout out. Thanks for hanging out with the chat. And yeah, I'll tell you what: round of applause for our operators hotline. More questions than we've ever gotten before, and I really appreciate this crew jumping in. You didn't know that these three folks all said yes on Friday. That's why they were late additions because Mr. Frank, oh, he he he had he had a thing. That's why he was in the earlier panel. So uh. Mad props all around. Go ahead and take them down. We'll have Steven, Zach, Shereen, and Matt leave the screen. I've got four minutes and just a few seconds left. We'll bring Matt back up to the top to give us a goodbye, thanks, that sort of thing. And for those of you stalwart, my my people, wrong Matt. We want Matt Parkin to come back up. I like Matt.
What the hell am I doing here?
Wrong Matt. Get him down. Get him down. Because, because here we go. There's the Matt. Matt, you know, I'm about to drop into the chat, right? And I'm so glad that we're now sub-300 people here because I'm a little nervous. What am I going to drop into the chat, Matt?
I don't know if Steven, Zach, and Matt knew what they were alluding to earlier in the conversation, but, um, well, while some people might not want to talk to robot Matt or robot Mike, I think other, other people might want to, Aaron.
And they freaking can.
All right. All right.
Please, people, I just dropped it into the chat, portaloperators.com. All right.
Yeah.
Please do not share this. This is our beta release, close friends and family kind of idea. So I'm going to go ahead and share my screen and then make a request as you jump over. To— let me find it with, uh, yep, that's what I want to show. All right, everybody's seeing now the operator's portal. Okay, now inside of this bad boy is every single episode, newsletter, events, podcast, uh, every spoken and written word from the operators that we have collected into our catalog over the last 2 and a half, darn near 3 years so far. All Fully searchable, and we have built an ask an operator chat into the top of it. Now, what I would love for those of you that are here to do is— this is the early release, please do not share— what would thrill me to the core is if I could get however many of you to click through, leave open, and rather than lead the witness, what I would like is Go inside of this puppy and just smash, smash, smash around, screenshot anything that doesn't work for you, including the chat. As you go through and look at things like, can you actually register for the event? All of them will be inside here. Once you create an account, you can actually do all of this automatically. Uh, you can start ignoring the emails from me, but please don't actually do that. All of the episodes are inside of this as well. These are favorable. They have all been meticulously transcribed through a combination of AI tools that we've put together. Uh, so this is everything that essentially we have ever put together, ever released, all searchable, including the newsletter down there at the bottom. You can create a profile, you can start asking your questions. Um, and my number one ask and plea is to let me know what doesn't work before we release this into the world. I am. I'm gonna give you right here, aaron@nineoperators.com. That's not a fake email. That is the real email. Do screenshot, do send me, fire the DMs off at me, whatever it is. Uh, go tell me what you didn't expect, what didn't work, what turned up sort of funny, what would be amazing features to add. And we're going to hustle on this over the next week or so, uh, to get it ready for, for, for for the big stage. Um, now Matt, any, any suggestions of what they should ask the operators first?
I think, I think ask whatever's top of mind, right? Instead of, uh, scrolling through, uh, you know, your Apple Podcasts or your Spotify to try and find the episode on a certain topic from, you know, 9 months ago, just ask a question and see what pops up because you got the, the newsletters in there as well. So So get out of the email inbox and into the operators portal, and hopefully this is a helpful, exciting resource for everyone.
Now, I was going to say you should immediately go ask it what is the best ERP that the operators recommend, but Matt is too good of a dude to take the shameless low-hanging fruit softball that I teed up for him. But I know, I'll tell you, the search that really converted Mr. Sean Frake on this was who is the best operator? So that's also a really fun one. To go ask, how do I launch my first product and go from zero to a million dollars? Get as specific, get as niche as you possibly can in these questions. You're going to get citations and all the answers exactly to what episode the answers appears from. You're going to see the names of the speakers, not just the operators, but every guest that has been on it as well. So it's all attributable. This is one of our team members in particular, Baby. So her and I are going to be working on this and sending this out. Uh, with the email, with the recordings, all the good stuff, the decks you've got today. I want to give everybody, um, another big thank you for showing up, giving us your time today. Uh, mad props. Shout out to Matt, to Fulfill, uh, for being one of our cornerstones that makes this possible, that makes this free for all of you. And that includes the freaking operator's portal.
All right.
Grab that link. Matt, thank you so much, sir.
Thank you.
And I will see all of you on the Twitters and the LinkedIns.
Later.