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Get a Demo“Whoever can spend the most money is going to win.” Sean Frank (CEO, Ridge), Matt Bertulli (CEO, Pela Case & Lomi), Jason Panzer (President, HexClad), and Mike Beckham (CEO, Simple Modern) audit the first half of 2026. The focus is a sound ecommerce growth strategy for Q3 and Q4. No guests, no fluff. Just what worked, what blew up, and where they’re placing their bets. Amazon leads the conversation, with Sean up over 100% year over year on full assortment parity and Mike beating Liquid IV on a $4 blended CAC. Wholesale gets a harder look, with Sean holding a big-three PO and an 18-month runway to shelf. The group then pulls apart margin profile as a competitive weapon, why most consumable brands are quietly heading toward a reckoning, and what it takes to set a spending floor competitors cannot match. Powered By Fulfil https://9ops.co/fulfil Aftersell https://9ops.co/4i3bb5 Richpanel https://9ops.co/richpanel Northbeam https://www.northbeam.io/ Saras Analytics https://bit.ly/4a3gzVv Postscript https://9ops.co/postscript Operators Newsletter https://9operators.com/
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It is an Operators OG episode. We got everybody. We took Jason out of retirement. We got Mike. We got Mike in the building off of a devastating loss.
That was like a month ago. Stop it, stop it. It's over.
6 months later.
All right, so we got everybody here. One, how's everybody doing? Maybe just go in a circle, talk about that. And then I have a list of lessons from the first half of 2026. I got 4 things I wanna talk about. I think everybody else brought 4 things they wanna talk about, and we'll talk about it today. Going over wins, losses, learnings, how to get better, what, what we saw happen across the entire industry in the first half of 2026. But Jason, how have you been, man?
I'm great. It's great to be back. Uh, we had a really good time in Austin. Like a lot of really good people. I had a really nice little list of notes, just like met so many, so many cool people at our little, uh, offsite. We missed you, Sean. But we know you've got other things to handle. And always great getting together with everyone. I'm feeling good. You know, this year is an interesting year for everyone, as you know, but I'm excited to bring some heat today with you guys.
Beautiful. Love it, dude. Yeah, sorry I had to miss, but I had so much FOMO. The photos looked amazing. Thank you to the BK Beauty team for hosting an awesome dinner meetup the first day. And then Katie letting us use her Lake house. Seems like you guys were jet skiing, high-fiving, looked like, looked like a summer vacation.
Katie's house is awesome.
And this one guy whose name I, I, 'cause Sunil, he literally gets on a jet ski in his jeans and zips out. It was, it was classic. And, and when we went out on Katie's boat, he was just like the only one. He was literally standing up dancing in the boat. This guy was living his best life. Go Sunil.
We got a Titans episode coming up with Sunil. Mike was the first, Sean, Mike was the first person to get on the mechanical bull. This thing showed up and Mike was like, all right, I got this. I live close enough to Texas.
I was like, well, I mean, like I've got a compressed disc in my back, so I'm like, this is gonna be a terrible decision, but somebody's gotta break the seal on this. But I will say, I don't remember who did it, but like 4 or 5, 6 people in, one of the attendees, he, he like, I, I don't know if he had tearaway pants, but he, he had the equivalent. Imagine, imagine jorts in a Speedo form. He had jorts in a Speedo form on and got on that bull and he really rode it. And, uh, that, that was probably the high of the entire event for me.
Dynasty, baby.
Take from that what you will.
Sean, it was, it was one of the Shinesty guys. And are we surprised?
Great strategy going first because then if you look like an idiot, no one has any like comparison to it. So Mike, I like where you're coming from. Uh, Mike, how have you been, man?
I've been pretty good. Uh, I was hoping to make finals trip right around the, uh, operators event, but alas, the, the operators event was awesome. I mean, And in all seriousness, when we started this, the, the 4 of us and, and Finn, I don't think any of us would've dreamed that it would've gotten to this point, this many episodes and this much impact. And that event was incredible. Aaron and our entire team that organized it did a great job. I think the, we had such a good time and the feedback was so good. I bet we do more events like that. So that was really, really fun for me. Not a super robust D2C community. In Oklahoma. So for me, it's great to get to meet some people. Also shout out to Chad Janis who sent Aaron a message like, hey, what do I got to do to get invited to one of these? Chad, we are sorry. I think you have qualified for lifetime invites. We will rectify that wrong. But anyway, that was awesome. And then business-wise, a lot of interesting stuff. I think my favorite thing about my kind of like business life right now is it's very multiple. I just get to have my fingers in a lot of things and excited to talk about that when we talk about what's working and what to double down on.
Yeah, I'm with the guys. Austin was awesome. We, for the people listening, we hosted about 30 people, $4 billion in GMV, one day, not a strict agenda. Every single person was like invited one-on-one. So we just sent like one message to a person saying, hey, we're doing this thing. On this date in Austin. Do you want in? I think we had 100% hit rate. I think the only person that couldn't show up was literally having a baby. So, uh, it was great. Like, I'm so bullish on these, these events. I think we should absolutely do more of them. Um, total killers, man. I've never seen so many killers take so many notes either. It was kind of cool to watch. It just shows you, like, I don't know if Mike, you caught this, or Jason, uh, but like watching it, these are like people at the very top of their game and they're sitting there scribbling down as people are talking.
The rapid fire at the very end where you had people share like one tip was super fascinating. You just, a group that talented and everybody giving like one tactic that they've learned in the last year. I, I took 5 or 6 of those things to share with my team, including some of the totally illegal tactics that were not allowed. There was some gray bordering on black hat stuff mentioned, uh, I will say, but that's why we didn't record it.
Uh, and I, I, I timeboxed everybody, Sean, until like it's, I gotta under a minute. And bring, like, bring as much heat as you can in under a minute.
Matt spent like 4 minutes introducing it too. He was like, this has gotta be super quick, guys. And then he went on for like 3 minutes talking about how quick it had to be.
I get the exception. I'm, I'm hosting the damn thing.
You did a great job. You did it.
You did a great job, Matt. And Matt was a total hero. Like how many, how many Titans episodes did you record?
7.
Okay. That was really cool too. It was our first time to do in person. Is that right?
It was.
First time to do in person and we love that. Uh, so I think those episodes are gonna be fire.
They're gonna be bangers, man. They're gonna be so fun. Sean, you're gonna love it. It's great.
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Listening to this and it's roughly halfway through 2026 and we've talked about this in the past, but like every year since COVID there's been some sort of major challenge in the global economy or e-commerce or whatever you want to call it. Um, last year we had the the wonderful time dealing with tariffs. I'm sure everyone remembers that, right? The year before that, there was an election and interest rates and whatever else, right? No point in rehashing the past because we have a cool new thing we have to deal with this year, which was the Iran War and what it's going to do to oil prices and consumer demand and whatever else. Luckily, I mean, knock on wood, everybody, it seems like it's mostly spared the consumer spending and sentiment. Like, I thought it could have got a lot worse a lot faster. If you look at 2022 when Russia-Ukraine conflict happened, like consumer demand sucked that summer, right? Because oil prices just went through the roof. Somehow, for whatever reason, the world was more tempered this time around. So we had the beauty of dealing with this new thing, but overall I think it's been the strongest first half to any year probably since 2021. So I'm going to talk about a tactic that did better than we thought it was going to, something that blew up in my face, what I'm planning for the second half of the year, and the biggest learning of the year so far. And I think all the guys brought their own versions of this so we can dive into it right now. And for my number 1, a tactic that worked better than I expected, I'm going to say Amazon. I've— yeah, yeah, yeah. I've only ever been okay at Amazon. But I think because there's so much doubt on the platform, like, you know, Thrasyo's been dead for years. Like nobody's selling FBA courses anymore. Like you want to go where people are disappointed, right? And then like, you know, they're bearish on Amazon as a seller. And then it hasn't changed. It's still the largest marketplace that exists. I mean, they do in very close to a trillion dollars in GMV. It's like them and Walmart are neck and neck. But the difference is you can go out there and get the sales yourself. You don't have to go through a Walmart. Buyer to get all this access to these, this inventory. Um, so anyway, yeah, Amazon's just been ripping this year. Um, we leaned in really hard in January and we're up over 100% year over year for the entire year. And it's an 8-figure per quarter channel for us.
So, but Sean, you did launch a, you, you have a new product that's crushing, right? Like that's, that's gotta be part of it.
Yeah. A lot of, a lot of our strategy this year is Bringing more parity to Amazon. So like we've, we've typically only had, let's call it 30% of our wallet lineup on Amazon, right? We didn't really bring over stuff that was working on D2C cuz we're like, ah, it's just, it's Amazon. It's so hard to deal with. There's problems with Amazon, right? If you put something on Amazon, you basically have to commit to doing it forever. Like you lose momentum, you lose, you know, um, reviews, you lose seller ranking. If you put seasonal items on Amazon, So if you put it on Amazon, it needs to be an evergreen SKU. So we've just built more of the business to work on Amazon and that's just been super working. So we've committed to putting more stuff on Amazon and then we've just got better at ad buying. I think there's less competition on the channel.
So, Sean, are you, does that mean that you guys are actually making products with the intention of like they're just for Amazon? Like they're primary Amazon SKUs?
For sure, dude. And not just Amazon, TikTok Shop too. I'm making products just for TikTok Shop now.
I think that is the new playbook, Sean. I think every channel should have its own assortment unless you have a product that is like so transcendent that it goes to all the channels. And we just, we are seeing the same thing that we've gone back and forth of how much do we want to have the same product in every channel. And I think we're really starting to separate them out because you just, you just cannot meet the demands of all the channels with one thing usually, unless it's hyper popular.
Well, I mean, certain products just don't work on a, on certain channels.
Yeah.
Price points don't work or, you know, whatever. I mean, one of the things, go ahead.
No, sorry, Mike. I actually wanna ask you both this question then on this topic. Are you then, do either of you get concerned around like overall P&L level gross margin compression? So like, are, if you're making products that maybe have lower margin in different channels and it changes the, the makeup of a P&L, And I'm just thinking of like, Sean, any kind of future M&A, uh, buyers like to see margins expand over time, not contract. Um, is that something you consider when either one of you is making products?
They, they do, Matt, but also like you get a higher multiple as your EBITDA goes up. So like penny profit.
The point is that you, you need to think in terms of maximizing total dollars of profit. To the bottom line and not get too hung up on margin. But if you're not careful, yeah, if you're care— if you're not careful, then, you know, you actually, it's just super dilutive and it just doesn't work. Like a lot of people will just go and, and the margins just, just don't add more bottom line dollars, you know, but yeah, in certain, certain channels, you just have to be willing to take a lower margin because the volume is going to drive more profit to the bottom line.
Yeah, and you should understand what your strengths are as a business. Like, margin's never been our problem, right? You know, our fully loaded gross margins in the 80%, like, our only competitor in that category is Hermès, who's putting up similar gross margins compared to a Yeti, who's at like 55%, right? So different products for, for, for different markets makes a lot of sense. But I, I should tolerate lower gross margins if I'm getting more growth because I have that wiggle room where maybe you don't have gross margins to give up, but you might have like your MER is too high. So it's like you should figure out like what is your winning mix right now and where can you actually give up ground?
I wasn't going to say Amazon as my thing, like what's working, you know, or learning, whatever question we're on. But one of the things that I've been really surprised by when we walked into electrolytes, I mean, that is a knife fight of a category. There are so many competitors. There's so much money being spent on influencer, on TikTok shops, on everything else. And you know what? We're just freaking winning on Amazon and it's because we're just better tactically. Like we just, I mean, like, I don't know. I, I can't, I can't give you another reason than that. Like we're going up against things like Liquid IV that are freaking behemoths. And the, my point in that is not to kind of beat my chest. It's to more say like, I'm surprised that at this mature of a level, like actually just being better at the platform, better at the tactics, better at your strategy still is like huge alpha. Like you would think that had been competed away or commoditized away. And in my experience, it just hasn't.
That's gotta be by category though, right, Mike?
I don't know. I mean, I'm, I'm not sure that it is. I think it's tougher in some categories for sure, but like, Just as an example, I have spent a lot of time with the Amazon ad system because I've just been kind of curious. Um, because we really don't, we're not using the kind of strategy where I can do a lot of stuff on Meta. So my way of getting to kind of pretend like I'm cool like you guys is to play around with Amazon's ad system. And you just can get wildly different outcomes based on your skill in using the system, in my experience. Like probably even bigger ranges of outcomes than Meta.
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Sean, but like, couldn't you argue? I could argue right now that Meta's been doing the opposite. They just keep adding more and more buttons to click. Uh, like this year, it's like the running joke on X is like, What new thing can I exclude this week on Meta? You know, like what new checkbox to turn off some new other AI thing have they added that broke everything? So like, I agree. I just wonder at what point does it shift where they do start to abstract away choice and we're all just left with like, here, Zuck. Like, what did he say a year ago, two years ago? He's like, you're just going to connect your bank account to us.
But then shouldn't it then just come down to who has the best ads? I mean, isn't that really what it's about anyway? Like making great ads and I want a great product and a great ad, you know?
Well, on Amazon, it's also a value proposition. I mean, you guys, it's out there. We talked about it at this operator's thing. Anybody can go and look at the playbook that we're running with Trevi. And it was interesting hearing other people's perspectives 'cause they're like, man, your pricing is kind of predatory. And I'm like, I think I take, I, I took it as a compliment. I think it was meant as a compliment. Um, although predatory doesn't usually have positive connotations, but like the, the point being, it's like, yeah, yeah, I'm looking for the edge. Yeah, I'm looking for the thing other people can't do. Like one of the things Amazon surfaced places, uh, in, in its ads platform is it'll tell you what a new-to-brand purchaser is costing in your category. And our acquisition cost for a new-to-brand customer is 25% of what other people are paying. So when you're paying 1/4 what other people are paying, it's pretty, it's a pretty easy game. But you know, like again, like there were a million electrolytes companies. It's super comp— it's as, it's as saturated as you get. And there was still an angle to be taken. On user acquisition. I mean, we're going to get into supplements. We'll see. I mean, hyper-competitive. We'll see. But so I'll report back if this is true in other categories.
Sean, do you have a strong, like what Jason is saying about creative and product? I think the thing that I keep asking is there's lots of ways to win. It's like, which of these vectors is going to get harder or easier to compete on? So like what Mike is hitting on is value. So like just drive your product price down, be willing to accept lower margin, but go after total dollars. Jason's saying creative. Some people would say product, right? I wonder if you have a strong take here. Like I'm with Jason. I think, I actually think we're going to reenter the Mad Men era of advertising where like the, your creativity is going to, if you are like one of those people or teams that can be extremely creative, that's going to be a major edge because there's going to be so much swimming because like there's just going to be a cesspool of basic creative out there even more than there is today. So like standing above that is going to be competitive advantage for sure.
What I see as the biggest competitive advantage right now is margin profile and the ability to spend more acquiring a customer. You know, I look at Hims is going to be a generational business, not like just, just because during the VC-backed era they were able to spend billions of dollars in unprofitable spend to acquire customers. And now nobody else can do that. And it's the same reason why, yeah, it's the same reason why I think Uber is going to be a trillion-dollar company. Not stock advice, don't trade on this, but it's because they've spent $50 billion acquiring customers and the capital doesn't exist to do that anymore.
FedEx is this way also, Sean. FedEx is like, you can't build a FedEx competitor. How many, you know, hundreds of billions of dollars in CapEx would you need? Amazon Logistics is the same way. These are like true moats that people have. And they're the best businesses where it's like, yeah, even if you could hypothetically want to compete with them, you don't, you could never raise the capital you'd need to.
You know, it's interesting, guys, that there's common advice I've heard over the years is that capital is not like having lots of capital is a bad thing. And yet we're watching companies that have actually used it and weaponized it really well. I mean, Jesus, SpaceX did this, what, this week? It's like they've just financially engineered an outcome that let them just pick up Cursor for $60 billion only because like their value is actually the thing that creates more value.
Okay, going back to moats, Mike is bringing up very physical moats that are obvious to see, and I think digital moats are less obvious and advertising moats are never talked about. And the, the reality is that mindshare is very expensive. And Uber will continue to win more because people already think about Uber, right? It's on their phones already, right? It's like if you're gonna get food delivery, I think they'll win transportation. Like they'll just win because it's on people's phones. And going back to grounding this in what we do, we're not trying to build Ubers here, but if you can set up your business to spend the most amount of money on ads every single day, every single week, you'll take more and more share.
Let's, let's actually explore that, Sean, because I think you're making a great point. From my perspective, this has been one of the things I've learned from watching you. I would not have thought about spending a lot of money on advertising as necessarily being a moat, but I think I've come around to the idea of why it is. Uh, let, let's talk about what are some of the reasons why the fact that I spent $50 million last year has any kind of bearing on the future other than the customers I've acquired? What are some of the ways that that becomes, um, a moat? Is it relationships with advertising platforms? Is it the learnings that you've had to spend a lot of money to get? So that, you know, the buy-in to get that knowledge?
It's brand awareness. Like, that's what every public company CEO talks about. What's their number one goal is to increase brand awareness. They just, you just, you get such a lead if you're able to spend on brand awareness and then maintain that position either through continually spending or just actually executing well on your business with good products. Right. I think, I mean, Sean, I think it's brand awareness.
You heard it last week, guys. Like Mike, I don't know if you picked this up at the event in Austin, but like all of the larger scale spenders, they're most concerned with CPM and CPMR. They're like, I'm just trying to get the most amount of high quality impressions.
But they're talking about CPMR in their target audience, right? Not just generally we want impressions, but they care.
I think at some scale it was like It was just basically carpet bomb. Like, how do you just get every—
how—
because like a lot of the big— I mean, it's safe to say that like the larger the brand, the more likely they are a mass market product. Right. And therefore the CPMR thing is like, no, I just need to reach everybody with a mouth in the USA. Like, that's kind of what I took away from it. So I think that that might be what Sean's getting at is like, if you can just spend the money, like if you have the business model, allow you to do that, then it's a major moat, right? Because like other people can't.
Mike wanted to talk about it excluding the obvious customer benefit, but I do want to talk about the customer benefit. The more customers you have, the more word of mouth you have, the more products you have out in the world, right? It's like Mike probably sells 5% of all bottles he's ever sold because somebody saw one of his bottles in the real world, right? So like there's, there is our businesses lack traditional network effects, but because they exist in the real world, there's some sort of network effect, right? It's like, You know, guys go to bars, they have their wallet on the table. Oh, that's a rich wallet. I should buy that. Like, that's helpful to my business. So the more customers you have, the more customers you're going to have. But also, if you can set up your business to spend a 2x MER, you've just set a floor for the industry you're in at a 2x MER. It's like, it's how is someone going to take market share from you if they're not, if they're not going to be able to have a 2x MER? And we're seeing that play out to the extreme where companies are trying to run it like a 1x4 MER., right? Because Hims loses $800 every time they acquire a customer, but you're gonna take medicine forever. It's why insurance companies will lose so much on lead gen, right? Or, or SaaS companies, um, our wonderful sponsors.
It's kind of the reverse of the predatory pricing model. It's like one way that you can put pressure on your competitors is by like making your price point so sharp that it is hard for them to compete. But what you're saying is you can also invert that idea where you're just paying so much to acquire and you can run it such a low,, MER or ROAS that your competitors can't compete. And so you can kind of use your capital and you can kind of price people out of the market going the extreme other direction.
The problem with that advice is it's very difficult to do and it's, it's very rare business that can do it. So I just wanna like, in the cookware space, there are, it's amazing. So many people have raised awareness, right? Spent hundreds of millions of dollars. But, um, most of them run at lower margins than us. And I, and I'm, and the health of those businesses are, is not great. You know, they're not great. And they're, but there's, there's a strategy, like we're just going to spend, spend, spend. So, you know, the, you, you can run at a low MER at Ridge, right? Um, but other businesses, so like people do need to be really careful with this issue, with this, what we're talking about here.
Well, dude, it's hard because there's only one Uber. You know what I mean? Like it's, if you're going to win a category, like you, there's gonna be a lot of dead bodies. Um, to, and also going with Jason's point, you have to be able to do this and not lose money on acquisition, right? Um, we were talking to a banker the other day and they're, they were looking through our numbers and they're like, look, your guys' CACs are high, but you still generate profit per order. They're like, they're like, you guys are really good at this. And it's like, yeah, 'cause it's, it's very, it's very easy to scale revenue. Without scaling profit, right? But to be able to do both those things at the same time, that is, that is the magic. And that's when it's unlocked. Can you scale revenue? Can you scale CAC but then still generate a profit per order?
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How are—
how do you compete then? There's got to be— there's got to be ways that you can. Like if HexCloud is not spending the way that these other guys are and you're not willing to give up the margin, which we know you aren't, right? You guys are very bottom line focused. What do you think, what do you think the reasons are that HexClad can actually make those choices? It's like to not play the same game. So like Sean's arguing that somebody is setting a lower MER floor in your category, and that's the rules that you all have to play by. And then you're sitting there saying like, well, no, I don't, but I want to, like, how? Right? So like the peop— the people listening should know.
To me, everything is simple. It's like you have a better product or a better, better value proposition for the customer. And then you don't have to lean in as far. Uber, this is a category definer, category creator, you know, it's sort of different animal. But in general, like to think the message here is like there's always a sweet spot, right? I'm always looking for the sweet spot.
What I was gonna say is Jason just outlasted the capital in the industry. The industry's not attractive to venture capitals at scale. That's the reality. And the capital isn't there anymore. Like, let's— there was a time in 2020 or 2018 or whatever where 5 cookware companies raised collectively $300 million and they burned that money. And Jason was able to build a better business longer and he's able to— those people, those people weren't good enough at acquiring customers to do the strategy I'm talking about and they just burned money and they couldn't, they couldn't switch to acquiring customers at scale profitably.
I think the key point that you said, Sean, is listen, if you're listening to this podcast and you are in any kind of hard goods, you're insane if you, you're not first order profitable. Like if you've gotta run first order profit, I think. And, and like, I think a lot of, there's probably a lot of people running consumables that are like getting themselves into trouble betting on the future. It, it's like you, you need to be able to see, everybody we have talked to has been really, everybody who's been really successful has been very disciplined about the LTV to CAC, like payback ratio in consumables. Space. So it's like, if you're in hard goods, you better pay it off in the first order. Sean, you generate a ton of contribution profit first order, so you can just spend more, which is awesome. And I would also make the point, Sean, you're not competing against other wallet companies or other power bank companies or whatever. You're competing against everybody. And so that's the other reason this strategy is hard is that you're in an open auction against everybody in the world. And there's just not that room for that many people to be successful at the strategy. But if you're running consumables, Also, like, you should really veer towards, hey, I know I'm gonna pay these customers back in, you know, the first 3 to 6 months because if you don't, very good chance you, you don't actually ever pay 'em back.
And whoever can spend the most money is going to win, right? Like, you need good products, you need good creative, but whoever's gonna spend the most money will win. With that being said, we are going to watch about 95% of consumable companies crash into a wall this Q4 and go out of business because because everyone is building their model off of 3-year CAC to contribution LTV, right? That is what Chad said on our podcast. That is what bankers talk about all the time. It is like the golden number. We are going to watch CACs inflate to a point as the category gets competitive, as Meta understands they could take more money out of the ad auction, that the math will not work and it'll— it won't work. But they won't realize that until they've already spent the money, and then you're just gonna get a bunch of zombie companies. It's like every time there's a boom, there's a bust, right? And like, we're still waiting for the AI bust to happen. Maybe it keeps booming for a while, but supplements or supplements, gummies, everything we're in right now is for sure a boom. There's gonna be a bust. It's gonna come down to people are taking capital, they're pumping it in and hoping customers come back. And the only certain thing in life is profit on first order. It's like, I don't have to wait for Walla customers to come back in 3 years or 5 years or whatever.
Ever.
I can make sure I can turn a profit right now. And I'm just worried that a lot of these cohorts are way weaker than people think.
Well, what's the playbook then, guys? So like if you're listening to this and you are a supplement company or consumable company, what, what, what advice would you give them right now?
The only way that I, the only way that we made it work in, in Trevi is I'm like, I have to find a way to affordably acquire as many customers as I can through paid. And then I need some organic inflow so that my balanced CAC is acceptable. For me. Now, if I told you guys my, my balanced, you know, my, my all-in CAC on Trevi was $4, what would you say? You would say that's pretty good. Um, and that's an example of like, I used my particular skillset to do that. If you're gonna do D2C on electrolytes, you probably need to be ready to pay $60 to $100. How do you make that work? I don't know. I can't, I'm not smart enough. So like, I, I took the one place that I could find to do it, but this is where I think if you're just in a straight up, if your only course of action is to say, I'm going to launch and I'm going to do paid acquisition, I don't know how you can make that a winnable model right now. I mean, I think IM8's interesting, but they have a unique asset with David Beckham. And I think there are some outlier examples, but you have to have some kind of alpha there. You know, using Meta is not alpha. Having 1,000 creatives is not alpha.. And if you don't have a clear point of view of what that is, then you're probably not gonna make any enterprise value. You're probably not gonna make any money getting into supplements, consumables, any of this stuff. For me, I just had a clear idea that mine was, I'm really good at Amazon and I can build around that.
Dude, thank you for grounding us back in the point of what's working this year, Mike. It's, it's Amazon for me. We'll, we'll get to points 2, 3, and 4. Don't worry. But I wanna answer Bat's question. Mike deserves to win in the electrolyte category because he has two very unique skills, which is he's amazing at Amazon and he can get real-world distribution, right? What we're seeing, and I'm glad you brought up IMA, is because CACs are going up, people are launching luxury supplements, right? Like we're seeing, uh, AOVs go to 100, 150, 200 per month because that's how you can make the CACs work. So Mike said, if you're gonna be electrolytes on D2C, you better spend $60,000 to $100,000. I have a brand doing that. It's above $100,000. It's very, very hard to acquire customers on Facebook ads, right? Like, and we're really good at Facebook ads. So like we've been able to scale a brand from nothing. Like we don't promote it. Like we don't want cross-promotion. We wanna see what it looks like in a bubble. And we've been able to get it to basically $100,000 CAC in 3 months or whatever. Um, and this is where people talk about, oh, you need a great product. Great product really shows up in churn data. Let me just say that, right? Like, so what were, like, you either need to have an amazing product that nobody churns from, right? I think Mark's Men's in this category, right? Or you have to have unique attributes like Mike has, being able to sell on Amazon, being able to sell into wholesale, right? Or you have to have capital as a weapon, be like, hey, I'm going to spend $200 to acquire customers because I have the backing to get that done. But what I'm saying is most right now everyone's trying to launch every sort of supplement on earth. The people are putting creatine in gum, right? They're like, we're going to launch every single product category. And I just don't think it's going to work long term. We're going to see a lot of— and this isn't even a hot take, it's just the facts that always play out. Like, like Thrasy raised billions of dollars to buy Amazon brands and like it was the hottest thing ever. And then Amazon brands became yucky. I'm telling you, Amazon's still really good, right? Like, it just— the facts don't change, like, economically. What changes is, like, what gets hype. And right now, it's just there's too much hype on the category.
Well, what's funny about the Thrasio thing is that some of the things they bought were real winners. Like, I won't say the number, but I have heard what the Beckham Hotel Collection pillow does in basically EBITDA, and it is, like, mind-melting. And they just had a brand they sold for several hundred million, if I remember right. Like, actually, Thrasio didn't buy all crappy assets. They I mean, part of it was they overpaid. Part of it was that they didn't run it well. So like, I think the Thrasio story, if your takeaway from the Thrasio story is selling on Amazon is a bad idea, like that's the wrong takeaway. It's that an asset bought at the wrong price is a bad purchase. You know, just like an acquisition at the wrong price is a bad acquisition.
I, I, I actually, Mike, to me, the Thrasio thing isn't that they overpaid for assets. The reason they overpaid for assets, the underlying cause is they tried to go at a speed that is just unnatural.
And they bought during a period where we were in ZIRP and there was just, there was helicopter money everywhere.
You can't buy a company every 3 days, guys. I'm sorry. Like, just not fucking possible.
Well, listen, my brother, I, I've, I've told this story. I think that I can share this publicly. Thrasyo came to me when they were going through bankruptcy and they had quite a few things that were available. They, they didn't have the one thing I wanted, which was that pillow, but they had a bunch of things that were available and I wasn't in the mood to buy it. But my brother's really good at Amazon and he was, and he bought several brands and has crushed it. With the things he bought from them, which just emphasizes that it's the same assets. It's just like, what's the price you paid for them and how do you run them? And so like he took those exact same assets and it's been great for his family and so good for him, you know? But anyway, Amazon is still, it's the biggest retailer if you look at non-grocery and there's no reason to think that's going to get smaller. Like guys, the amount of Amazon boxes on my doorstep every day is just ridiculous.
Well, there, there's TikTok memes about that, Mike. You and your wife gotta have a, for sure.
After Black Friday, I took a picture one time where it was just like, you couldn't even get outta my door. It was like I was boxed in, you know? Anyway, so like betting, betting on Amazon, Sean, I just want to go back to kind of like try and steer us back to where you, you were trying to take us because I think your questions are good ones. Like, listen, betting on Amazon is the easiest bet in the world. It's, it's just like the surest thing. Betting on Amazon, betting on Walmart, like Listen, you know, like I've made the point before that like in 20 years when I tell somebody the Simple Modern story, they're not going to be impressed because they're going to be like, oh, you sold a bunch on Amazon. Makes sense. Yeah, you probably did well. Probably didn't take any skill. You were just on Amazon in the mid, you know, in 2015. And it's like when you bet on these really big platforms and we, this came up several times during our operators event. We've just seen more and more people gradually come around to, Uh, we actually had in one of our Titans interviews specifically, somebody was like, I waited way too long to get on Amazon. What you basically said in this, Sean, is I waited way too long to put my full assortment on Amazon. You know, and so if you're listening to this, I think it's a very, it's, it's maybe the most practical takeaway for most D2C is that you're leaving money on the table if you're not really, if you're not really taking Amazon seriously. And I'll, I'll reiterate advice I've given before. Amazon is part organic discovery and it's part your second website. And that's why no matter what you do, you don't have to engage in the organic discovery part of Amazon. Maybe your price points don't justify it, whatever. It doesn't matter. But like, people are going to see your ads. They are going to hear about your product and they are going to go to Amazon. And if you're not there, some Chinese consonant soup brand will be that'll take that demand.
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And not only that, Sean, it'll be on shelves until Q2 2028. You're like literally planning years out when you do wholesale. It's crazy.
Yeah. And I, and I'll get paid at some point in 2030 is what it sounds like. Well, I wanna just talk about, like, I, I, I've talked a lot on wholesale, but it's like really how big is the opportunity? And we, we know Isaac, he runs Content Forge now. When he was running Campai, he told me that like the average candy sells 2 pieces per store per week, and that if he could hit, if he could hit 4, he'd be like the best-selling candy of all time. And then I'm like, okay, well there's like 2,000 Targets. So if you're in every single one of them and you're crushing it, let's say you're selling 6,000 to 8,000 bags of candy a week. I'm like, that's a lot of candy. It's not that much money, dude. Candy's like $2 a bag. I'm like, you could be the best-selling candy in a Target and still only do like, you know, mid-eight figures. And then I'm like, oh man, maybe I've overestimated the opportunity in wholesale. So anyway, it's something we continue to dump money into. We continue to try, but my Amazon is up literally over 100% year over year. My wholesale might be up 30% this year, right? Like that's like the world we're dealing with and it's a way smaller number. So, um, any sympathy for me guys?
Sympathy for you? No, you're having a great year. Like, absolutely not.
Uh, it is interesting that you, I mean, we've been seeing this for a couple years now, right? When CACs got higher. When CPMs got higher, everyone wanted to go into retail. And look, I think ultimately you want to be where the customer is and be omnichannel to a degree. And I think being there, you know, doing wholesale or being in retail, there's a halo effect, you know, that hits on all your other channels. But yeah, this is a this is old school, you know, this is hard. You know, you talked about how long it takes, you know, it'll literally take you a year to get into one of the big 3, like from the time you start talking to them, right? It's just, it's hard.
It's a lot of times it's 6 months from starting to talking to them to they're serious about making a buy. And then it's like, hey, our, our timing for our reset is in 3 months. You can come to our line review and then you're setting in 9 months from then. And so it's like, it's, it's, I, the thing I would say about wholesale is that you can't be greedy for growth in wholesale is kind of like my advice. Like every time we've screwed up wholesale, it's 'cause we've been greedy for growth. It's more like a structural growth layer where when you take things that are already working and you know they'll be working in 3 years and you can put 'em into physical retail, it adds this like kind of recurring revenue to your income statement that it's predictable. It's predictable and it, it really stabilizes your P&L. Like we had a crappy year last year with Simple Modern, but it could never get that crappy because so much of our revenue is now structural in nature. It's like either coming from branded search online or it's coming from, you know, physical retail distribution, which I appreciated last year. So it works both ways, right? Like if you're like, hey, wholesale is how we're going to drive, you know, massive growth. It's like, I don't know, man. It's like, I think it's more like a thing that you, you just kind of can gradually layer in, but it's also the same other way, which is like, it's not going to, you're not going to experience the big drops in your business that are possible with the fluctuations of Meta because you now have a stable level of recurring revenue that's spread across thousands of stores.
The Jason also hit on a point that I want to highlight because Sean, my second, my, my, the same answer as you, like retail for Pela has always been a struggle, but it's because of what Jason said. Like I sell a design-first product to like 20 to 28, 30-year-old women. The biggest channels in mobile in case are carriers. If you've ever stood out front of any carrier, a Verizon, a T-Mobile, an AT&T, there are no 25-year-old girls going in those stores. Zero. Like they are not interested in going into a telephone carrier retail shop. They're going into Lulu and Alo. So like those channels for us have never actually been that big. Nor will they, although I know like, man, if you sell like a black, big chunky case that's like meant for a dude who's gonna go hunting, that motherfucker's an AT&T. He's, that he's crushing. Uh, so I, I think the like, be where your customer is, Jason, is great advice, but like, don't assume that just because Walmart has as many doors as they do or Target does that your customer's there. They might not be.
You know, I like this idea of not being greedy for growth because I almost think it should just not be, if you're a fast-growing D2C brand, And you're like, I'm just gonna bolt on wholesale. It's like you, you should just hire somebody and let them cook on it slowly over 2 years because that's, that's what the bolt-on looks like. It's the, the fastest retailer I've worked with is Best Buy. Like they'll give you a PO, but they expect you to be in store next month and like that could be a bolt-on of revenue, but then you will get zero prebooks. Like Mike, you, you probably operate on a world where you know what Target needs 6 months from now and they've given you a prebook of what they're going to buy and what they're gonna purchase from you. Best Buy gives you forecasts and then the month after they're like, yeah, actually I want twice as much as that forecast, so go ahead and ship it right now. And it's just, that's, that's what a fast wholesaler will look like. And, and maybe your business isn't set up for that.
Well, and especially usually what happens to, to companies, Sean, is that the retailer gets overexcited and they're like, hey, we need X. And then, you know, a month later they're like, we bought too much, we don't need anymore for 6 months, you know? And like, so anytime you're going in with new products, you're going into a new retailer, there's a ton of, uh, a ton of risk of like finding product channel fit. Somebody said this at the, uh, the event last week. I keep referencing 'cause there's just a lot of good stuff said, but they mentioned that they went out and paid for a real professional and it had been the best, best thing that they had, had done. It was Huckberry. I think that the best thing they'd done is just going and getting somebody with like 20 years of, of wholesale experience. I do think this is one of those where it's like you can figure it out,, but man, pay for a good broker, you know, uh, pay for a professional that's been in the industry and then learn with them. But this is not a place to cheap out. If you're going to do wholesale, you better go in eyes wide open and knowing what you're doing. Yeah.
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All right guys, well, we'll move on to my third thing, which is what am I doing differently in the second half? So what's, what's my focus for the second half? Second half of the year. Um, like, what is, what is the winning play? And our big focus is going to be throughput. I've tweeted about this a couple different times, this concept that, um, you know, a lot of what we do is increasing surface area. So like, if you make a new color or a new style or a new license or whatever you're going to do, um, you're increasing the surface area of who could be your customer, right? Which is good. It's a good way to, to capture sales in the moment. But the real way to double or 3x your business is to get more people to buy more of the thing you're already doing. I think, I think Mike's talked about this. The easiest way to make more money is to do the thing you're currently doing at a higher scale. And this is throughput. Like, how do I get— if I'm selling 1 black wallet a day right now, how do I sell 10 black wallets a day, right? Um, so we've nailed down new launches. We did chains with this, this year, and they super crushed. We have like a whole tech lineup that's crushing. We have travel products. So like, we have totally figured out going wider, and now it's just getting us more depth. And I think that's actually the next 3 years what I'm focused Um, I think we could 3x the business in 3 years just by selling 3 times as much stuff that we are currently have. So that is more channels, more ads, and just getting deeper at telling that story to more people. So that's, that's my focus right now. You guys gotta focus.
I am just so excited to launch new product. Like, it's, it's not that hard. It's just add more stuff. That's really it. Um, we're, we're a few years back from like where you are today, Sean. It's just like we have to expand categories. That's obvious.
My big thing here is like finding ways to expand horizontally in places that the market is telling you it wants you to expand. So like I was talking to somebody about this yesterday. I think that there's this dance between you and the market where you're saying kind of like, here's where I think I want to go. Here's what I think I want to do. But the market's your dance partner and you've got to listen to it. Because ultimately the market pays you to serve it in the ways it wants you to serve it. And so like bad entrepreneurs are like, I'm gonna go this way and the mar— their partner isn't dancing with 'em. And so like, yeah, you're gonna end in failure. So I always kind of like have my ideas about how I think the company should grow or to develop, but like I'm listening to the market, my dance partner, and letting it tell me if it's, you know, gonna follow my lead. And so where we've had the most success and what I think we're gonna continue to be focused on is like, we, we want to expand our offerings in areas where the market is really telling us it just can't get enough of our stuff. And right now for us, that's kids. Like, it's kind of funny. It's like we're more focused on adults, which is a much harder business to run, I think. And almost sometimes, like, even if we neglect kids, it just grows 50%. Year over year, you know, it's just, it's just crazy.
It's like, and it's the same buyer, Mike. I think that's the interesting part.
It is interesting. Yeah. So it's like sometimes we'll lose that buyer, an adult, but they'll keep buying kids. They'll pound kids. And so like, I still haven't like kind of figured out those dynamics, but it's crazy. You know, like if you go on Amazon and you look, our backpack is like twice what the other backpacks are on Amazon and we're outselling them at twice the price point. So like our kids thing is super interesting too, because In adult, it's much more price sensitive. And in kids, like our buyers have shown to be price insensitive. So it's almost like we've got two different businesses, but we had a couple, we went into, we went into toddler stuff in Target and just, and Walmart just destroyed forecasts. We launched a new bento box. I mean, the graph just looks like, it just looks like a 45-degree angle, you know, it's just like every week, bing, bing, bing, bing, bing. And so, So I'm, I'm, I'm really, that's what I'm enforcing my team is like, yes, we need to launch more stuff, but the way that we launch it and, and what we launch into is the entire game. That's the judgment piece and that's, that's where the money's found. So, uh, same thing, Sean, like I'm, I'm, as opposed to you, I think we've got really good throughput on a bunch of our stuff. And then probably like adjacent to that is back to school is the one time when we can really be a D2C company., and I want us to really be a D2C company during back to school. I want us to be, uh, not, not exclusively, but I want us to be awesome at, at scaling up our ad spend and doing that well. And, uh, I think we've got a real opportunity over these next 2 months to, to just blow it out.
I, I got 3 things here to address, 'cause these are, these are Sean's questions and I actually prepared to discuss them today. So, um, the first is like, what, what do we botch? I want to hit what we botched. I want to hit what we did well, and I want to hit like the future. We actually made a major mistake on Amazon this year. So it's so funny to see how Sean is just, just windmill dunking on Amazon right now. And we've been crushing on Amazon for so long. I mean, we're the number one cookware set on Amazon BFCM 2025, right? Number one cookware set in Prime Day. Like we absolutely destroyed Amazon for years. And then, um, we somehow sold too much and went out of stock on a product on Amazon. And I didn't know this, you know, um, you know, we're a pretty big company and we have like really great people, you know. And so when, when like 3 of the best people at the company make a mistake, right? It's like, whoa. And this is like a, you know, this is, this, this is painful, you know? And like, it's painful because mistakes are always going to happen. But like to make one of these, it's like so fundamental. It's like, how do we not know like how screwed you are? Like if you, if you botch this, right? So we spent like 3 months fixing this. So. It's don't be just because you're selling a lot on Amazon or you think you're really good at Amazon. Like, don't, don't you really need to understand like where the mistakes can happen and, you know, it's like, it doesn't matter that we're number one. Like if, if we botch something, we're no longer number one. And it's like, whoa, we're paying, playing major catch up there. So that was, that was a great lesson learned.
For us, I just wanna let the audience know that Amazon is a momentum platform. So the, if you were number 1 in 2024, the odds you're number 1 in 2025 are very, very high. And the only thing that screws up your momentum is running out of stuff because then you drop all the way down the rank back to zero and you have to spend the next 2 years building that momentum up again. So I'm sorry that happened to you.
Yeah, insane. What do we do well? We've been launching in new international markets for a while, and some of them have done well, some of them have not done so well. And in general, our international business is great. We launched the UAE during a war. Like, they were literally getting bombed, like, when we launched the UAE. It was like, you know, the ship has sailed on this. The train's leaving the station, and we just, you know, the product is there. You know, we were like, well, do we, do we hold off? Like, is this just wrong? Is it wrong? Like, should we, should we not do it? Should we wait? Blah, blah, blah. And we're just like, product's there. You know, it is what it is. Like, we're going to launch. And, and, um, and we blew through like every single projection that we possibly could have had. And we're like, how could we have kind of screwed up like what we thought the demand was going to be? There. But yeah, so, you know, war, no war, we launched it and it was like, it was a huge win for us.
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And then what's the back half of your year look like? Like, what are you most focused on?
You know, this is something, it's amazing, like how long it takes to do stuff. Everything, when I was an M&A lawyer, I always used to say everything takes 3 times as long as you think. And I think it, I thought it was just in deals, but it really applies everywhere. So all of you guys going to sell your company, realize that everything takes 3 times longer than you think and act accordingly. But, um, we, we did a big supplier visit to China last year in March, and we were like, you know, we really need to ramp new products. This is, this is, we were very lucky for a long time because it was like, we just do the next cookware piece that we didn't have yet in our line, right? We were a young company. You know, there were a lot of pieces, you know, we did knives, we did the pepper mill, and these have all done really, really well for us. But like, eventually, how many stovetop pieces are you are you gonna sell? And so, like I said, we were just like very fortunate for a few years. Like we just go to our factories, hey, here's a new piece, get samples and go. We realized that, you know, once that well starts to dry up, you need to actually be professional at product development. And it's funny 'cause Sean and I had lunch a couple, a month ago maybe, and we were talking about this issue and I've been sort of, frustrated with the pace of launches here. But then when I did the math, I looked at the numbers, like, we really actually are launching a lot of stuff. It's just kind of small. Um, but the good news is that we have this massive, massive pipeline of, um, of really, of products, um, that really move the needle over the next 2 years. So it's kind of like one of those things where we're waiting, we're waiting, we're waiting, but I'm so excited. Like, we're We're doing bakeware this year, right? And HexCloud has not sold bakeware. And it's actually, when you look at our category, like you, there's cookware and bakeware. Bakeware is a category and, and we're not even in it. So, and, and we're doing it properly because we actually created a great product, which is why we haven't done it like until now, because we wouldn't do it unless the product was great and performed great. So, you know, we're launching bakeware. This year. And, and like, we're just like, we're just loading the fuck up on, on bakeware. And then we have a bunch of things that are even bigger and transformational for the business to come in like the next 24 months. So yeah, so I'm just like super stoked about that and it's just executing on that and spending time, spending time on that right now.
One of the, you know, one of my, my big focuses is throughput. And I think nobody does throughput better than, than HexClad. Like the fact that you guys have, you know, 8-piece sets or 10-piece sets or 12-piece sets, whatever they are, and you can just move those units consistently. You have no colors, you have no variations. You're just, you're, you're the throughput king. So I'm gonna try to be more like HexClad when I grow up.
Yeah, I think it's patience too, Jason. I think the thing I admire most about you guys is like, you're, you don't rush into anything. Like even your retail expansion, you know, like how many, how many years has, uh, all of those big retailers been begging you guys for product, and you've just been like, why? Why? Like every year, why?
Yeah, it's funny, we have that conversation a lot. You know, the conversations are around, you know, do we do retail? The conversations are around, you know, premium versus good, better, best strategy. And, um, there, there's like, there's blessings and curses in all of our businesses, right? Like we We have the blessing of, yeah, we don't have colors, we don't have like different product levels, but we're blessing that we have a very, very specifically identifiable look to our product. And that's great. But then, you know, at certain points, like things just need to change and you need to react. And that's actually the fun part, right? And what's really fun is just like selling tons and tons of product and being like, wow, this is sick, right? But then, you know, that actually can get a little boring, right? And then all of a sudden, I mean, you can just kind of kick back and like let it happen. But when you have to start really thinking like strategically about, okay, what are the next levels here? You know, I think that's where the rubber meets the road and you get to really shine.
All right. Well, hey, I have some lessons. That I, I wanna go through. I hope everybody brought a lesson that you learned this year to share with everybody. And I'll, I'll, I'll start with mine. You know, Jason just said sometimes your business gets boring and really what I want people to do is just not get stuck in their ways. I want you to continue to try different things to change your business, and that is new product launches, which is an obvious one. It is new ad ideas and concepts. We're doing that every single day, but also it's new channels, it's new pricing strategies, It's whatever it takes. You know, we launched a new product this year, Chains. Dude, I think it'll do $60 million next year. And like, that's $60 million to like, we weren't projecting for, but the demand is just there that people want our product. So I'm like, great, that's what we're gonna do. That decision was made on a whim maybe 8 months ago that we were gonna get into this category. So the line I'm gonna tell everybody is we are all fishing. You just gotta keep casting and casting until you get a bite. Right? Um, you want to stay flexible and in motion because like you, the worst thing you want to do is just be rigid and be like, this is the way it's always been. We, our products are $29.99 and that's what works on Amazon. I think there's ways to move up in price, down in price. There's different channels you should try and no one has it figured out. You have to continue to try everything. That's, that's my lesson from this year. I learned it every single year.
Sean, I want to, I want to just tack onto that because I've, and we've seen you do this, right? You've got, you're just always You're not precious about what you're going to do, right? You're just like, we're going to try it. We're going to try this. We're going to try that. We're going to pivot. And, you know, there's— if you've got products that you didn't think would be that big and have been like an awesome, awesome success. And like, this is what every— you know, everyone has a plan until they're punched in the mouth and everyone wants to be like super strategic. But like at the end of the day, you need to be able to just try stuff and see what happens. And then, you know, being precious about it, about price point, about market. Are we premium? Are we not? Are we this? Are we that? It's like, uh, we at the Mastermind, we had some really great conversations about a lot of that, you know, and, and one of the things came up was cannibalization and, you know, are you worried about cannibalizing your business, et cetera. And one of the guys there is like, you know, listen, if you're worried about cannibalizing, like you're just your business probably is going to suck at some point, right? You just like, you can't even, you just have to do it. And I found that to be like really like releasing to me to like the kind of things that you're talking about is to say like, don't just kind of get boxed into where you are and think that it just has to be that way. There's so much randomness to it and in what's going to hit and what's not going to hit. But like, you, if you just sort of stay, like, look at Lululemon, you know, like if you just sort of stay in your, in your lens and your lane, like you are going to get outcompeted at some point, your competitive advantage is going to erode at some point. So what are you going to do to like maintain that competitive advantage? You just need to keep taking swings. Uh, you know, that's, that's, that's it.
For me this year, Sean, I would say it's like an extension of what you're saying. I've leaned way more into, because I'm with Mike where like I got my hands in a lot of things, I've had to relearn this lesson of like, I'm probably best to just spend my time on things that I'm exceptional at and nothing else. And like, stop going really wide and stop dabbling in shit that I'm like, I am not uniquely suited to do.
To do.
So like, I'm a hammer and I'm in search of nails, and I'm just going to keep doing that, and I'm just going to find more and more places where I can have leverage. Uh, and I, for some reason, I need to relearn that lesson this year. I think the first like 2 months, 3 months of the year, I was just in too much shit that I was really not great at. And now I'm much more focused, so things are going far better for me.
I'm gonna get super meta here for a second. Um, your life will be better if you set constraints. And this is counterintuitive because we think that a lack of constraints means freedom, but it really means being imprisoned to the endless set of options and possibilities. And that actually, so this is one of the reasons, by the way, where you think, I want a ton of money. If I had a ton of money, I could do anything. And then people that get tons and tons of money aren't as happy as we think they are because Having constraints actually helps to frame things and helps you to make decisions. So you need constraints in your life, and there's a lot of different ways that I have found that you can take this principle and, and apply it. But I'll give two really practical ones. One is, if you're listening to this show, you are likely, you wear the kind of shareholder cap and probably the majority shareholder hat cap, and also like a CEO C-suite hat. Simultaneously. And I think over the years I've probably not, I think my CEO hat has been on a lot more than my shareholder hat. And now I'm starting to wear the shareholder hat probably about as much. And I think that's healthy and good, and I wish I'd done it earlier. And one of the ways I'm thinking about this as the kind of shareholder hat, more kind of like chairman of the board, is that I need to create an environment where the people who work for me, have freedom and autonomy, or I won't get the best people. But I have expectations. I should have expectations about what I'm paying them to do and the results that I expect to get. And so the way that I do this is I think about it like I'm a coach. And it's like, hey, we're going to go play soccer, whatever. And before practice, I am going to get out the little paint gun and I am going to paint the sidelines on the field. And I'm gonna review the rules for practice, and then I'm gonna roll the balls out and I'm gonna be like, do whatever you want. If you're within the sidelines and you're within the rules, you can do whatever you want. You have absolute freedom. These are just my constraints. So, uh, I've, I've gotten a lot better at that as a shareholder where with my executive leaders, hey, here's what I wanna see. Here's the kind of distributions I want the business to be able to produce. Here are the things I want to be true culturally. Here are like my expectations in a couple of other areas of the business. And then outside of that, you have total freedom and knock yourselves out. Do lead however you see fit. Uh, another kind of corollary of this is challenge the people that you lead. Challenge them. Like, I've got a son, he's 14, and one of my favorite parts of my life right now is he is at that point where I'm really raising the bar for him. And he is rising to meet it. And I've been doing this a lot, uh, with the people that I work with where I want to be really high support and really high challenge where I'm just like, hey, you know, here are the constraints I'm giving you and I think you're capable of being way up here, but you're not. You're down here right now. This is your gap and I need you to make up that gap, but also I'm gonna help you to make up that gap. Because I've really found that when instead of calling people out, you call people up, that they rise to the occasion. So those are the two things I'm kind of applying is like I'm setting better, clearer constraints. And so it's me spending more time thinking about, hey, really, uh, what are the non-negotiables for me in the business? Uh, what, what has to be true? What do the incentives have to be? Um, and then trying to challenge people and have really direct conversations that are not always comfortable. Where I'm calling them up and, and, and as a result, I'm really enjoying this phase of running the businesses.
Well, hell yeah, guys. That is, that is the, the, a great episode. What we talked about for recap for everybody, maybe this is gonna be part of the trailer, who knows? We talked about 4 good things we learned this year. What's winning, what blew up in our faces, what we're focused on the back half of the year, and then a lesson for everybody. And I wanna thank Jason for being here, Mike for being here, Matt for being here. This is an OG app, guys.