Chad, you're interesting because you are somebody that's coming from the investment world into the operator world. >> Thanks for having me on the pod. Grüns is killing it right now. >> The biggest unlock for me was like, why hasn't somebody put this in a gummy? >> Yeah, I remember the first time I got your product being like, this is different. >> And so I started thinking about like, how do I take comprehensive nutrition and put it in a format or some habit that people will look forward to and enjoy? A lot of people that want to start a business, they haven't seen what you've seen. So when I see how successful Grüns is, I'm just like, well, of course. Like this seems totally natural to me. >> Sometimes even the specific skill set is not as important as just like a willingness to try something. What's up, everybody? Welcome to the Operators podcast. This is going to be a great episode. You're in for a treat. You're getting to hear from Chad Janice, who is the founder and CEO of Grüns, a company that is absolutely blowing up. There's a lot of great nuggets in this episode. But before we get started, want to say thank you to our sponsors. Our presenting sponsor, Fulfill, North Beam, Saris, Rich Panel, and Postscript. They're the ones who make this pod possible. And without further ado, on to the show. Hey guys, this is an ad for Fulfill, one of the partners of the pod, and you're going to get to hear from one of the best operators, Chad Janice, talking about his experience implementing Fulfill with Grüns. So Chad, you mentioned like scaling operations has been a huge part of your success. How have you scaled? What partners, softwares have you used? Fulfill's a partner of the pod, I think that you use. Tell me a little bit about your experience scaling with them. Yeah, we It's probably about 6 months ago, 6 8 months ago, we realized that we needed a ERP. Um you know, we built the business off of like Google Sheets and primarily like Google Sheets, and then we had some like internal engineered solutions that were helping us out. And we were deciding between NetSuite and Fulfill. And frankly, when I was an investor at Summit Partners, we had encouraged I don't think we were aware of Fulfill at the time. I mean, this is back in 2021, 2020. And so all of the brands that we ended up investing in, we would tell them like, hey, we're going to onboard to NetSuite. And it would take a year. We had a person at our investment firm whose job was ERP implementation. Like literally, who would spend a year with the brands helping them with ERP implementation. And it was a slog. And it was we'd always come to the end a year later after we invested in this business. And they'd pop up and be like, okay, it's mostly done correctly. Here are some things. But literally, all this guy did was helping brands with ERP implementation. And you know, we're growing so fast, that wasn't an option for us. Like I don't know we're doing that year. I can't I can't take a year to put in ERP into our our systems. And so we we were chatting with the Fulfill Fulfill team. We onboarded with them. I think it took less than 2 months. So speed was highly critical here. Our COO sat down with them. He spent most of the time onboarding and going through that process and felt really compelled with our ability to do it. And it was a precursor for us to be able to do some of our own fulfillment. So historically, we we've used 3PLs. We now do a lot of our fulfillment in house. So absolutely critical part of our system. As I mentioned in in the pod, I we also do production in house now, part of our manufacturing process. And so Fulfill is critical for all of that. You know, every system has like little things here and there, but the speed at which the Fulfill team, when we have an issue, pops in and solves it, I can guarantee you're not getting that from another solution. So they they've been great partners, critical to our growth, and and will continue to be critical to our growth into the future. Yeah, I think you nailed it. Great partners help you go fast, and they help you open up capabilities that make your business more valuable. Chad, we're pretty free-flowing here. There's a lot of room to breathe, and I guess I'll just kind of kick us off with the way that this interview started with Chad Janice today, and the way that it started, at least my introduction to it was we were talking in a text thread that several of us are in, and we were just basically marveling at how Grüns is just killing it right now. So I reached out to Chad, got to know him a little bit. Jason's got a relationship with Chad that goes way back to sounds like 2020, which seems like a a lifetime ago. And Chad, I guess to kind of start things off, you're interesting because you are somebody that's coming from the investment world into the operator world. I don't feel like I've heard a lot of those stories. I guess Jason, that's kind of your story on a much lower Jason's the only other one. We've got both of them on on this podcast. But let's kind of maybe start there. I'd love to hear your story, share your background of how you you came to to Grüns. Yeah, thanks for having me on the pod. First of all, obviously a weekly listener. Gathered a lot of the last couple of years as as I've been building Grüns from you all and the insights that you share. I I've actually always been more of an entrepreneur, but in an effort to sort of leave optionality open in my career, I went down the path of investment banking and looked at consulting for a while and was an investor. Um Yeah, I I graduated back in 2017, went out to New York, did investment banking at a firm called Lazard. Um I hated it. Um I found I found it it's not from like the the amount of hours that you work. Like that was totally fine. Obviously, I work a lot of hours now. It was like the management style of not knowing where your work was going. This is more probably a problem at like the analyst level. You just don't know where your your work ends up, like the impact of that work. Um and so I ended up leaving it a year in to go start a business, ran that business for a year, sunsetted in 2019, joined Summit Partners, an investment firm. And spent all my time investing in in consumer. Um And spent I was there for 3 years, ended up investing in about 12 different direct-to-consumer primarily e-commerce brands. Some of those were on the fringe of launching into retail like Dr. Squatch. So I was there at the time when they were deciding between Target or Walmart as their launch partner. And having those discussions at the board level. And then in 2022, I left to go get my MBA at Stanford. And you know, I had this problem in my life of always committing to too much at once. I just there's I I can't say no, and so it's like I'm always doing too much. And I remember going to Stanford being like, look, I'm just going to like enjoy this this experience. Like be a student for once. I didn't have that experience in undergrad. And it was like even before getting to Stanford, I was in my dad's office um in um Utah. They moved to Utah back in 2011. And I I'm sitting there drinking a greens powder. Day two of drinking this greens powder, just looking up at the corner of my office being like, there's no way I'm I'm keeping this habit past 30 days. It's gross, it's messy, there's like weird frothy sediment at the bottom. And um And so I started thinking about like, how can I take comprehensive nutrition, not greens. I think there's this terminology of greens that probably does a disservice to comprehensive nutrition. It's a lot more than greens. And how do I take comprehensive nutrition and put it in a format or some habit that people will look forward to and enjoy? And that's how I had the idea for Grüns. I ended up spending a year working on it. And at that point, I wasn't really looking to start something, but it felt so obvious to me and and a real opportunity that you know, this is back in 2022. So I don't think that greens were getting hated on the way that they maybe do today, the green powders. Maybe we're part of the the reason that people have come out and started talking more about it. But there's just this hunch that like everybody else is having an experience like me where it just wasn't as fun of an experience. It's hard to stick to. You get these ads that are like, it's delicious. I you know, I for the green powder, it's delicious, it's so easy. But then the actual lived experience wasn't that way for me. So I figured, you know, more people are probably experiencing that. So to come back to your question, I think you know, I did this stint as an investor, but I think even as an investor, I was pitching some of our portfolio companies like kind of wild entrepreneurial ideas. So it's always sort of been a need, but I I did have a stint where I I I think probably had really cool access to understanding like proprietary data, right? Like LTV to CAC, growth rates, board level decisions that these brands are making, literally 300 plus brands that I talked to during that period. Yeah, I think that's super interesting. Chad, I mean, you had you had the most incredible education in building consumer businesses, right? You you probably talked to hundreds of businesses and as an investor were involved in in sourcing you know, probably a couple of dozen investments. And it's incredible how much you see then. And then you went to business school, which is also really an amazing experience, which which I did as well. And then you were like you had the idea in a great space. And you managed to create a product that was a good product, right? Like we've all tried it. And like this is this is like a really like this is like checking all the boxes. It's not typical, right? Like that a lot of people that want to start a business, they didn't see they haven't seen what you've seen. So when I see how successful Grinds is and when I see everyone talking about the brand and and you, I'm just like, well, of course. Like this seems totally natural to me that that you like the harder you work the luckier you get. You work so hard, then you had an idea and work, you know, and it's amazing. So congratulations. One question I'd have Chad is how much do you think all of the proprietary data that you saw helped you to filter through these entrepreneurial ideas that you were seeing? Was it you started to kind of pattern identify the most successful companies you were looking at and that helped you to think about the type of company that you might want to build someday? Yeah, I there's this moment. It's probably like a month into working at Summit as an investor that consumer clicked for me. Like back in 2017, the group I was in at it in investment banking was industrials. Um so like all the boring like machinery type stuff. Um and we sat next to the consumer group and I I literally remember saying to my friends in the investment banking class like I do not understand how consumers buy, how they purchase. I was a self-proclaimed minimalist at the time. And then it wasn't until um like a month into Summit, you know, you don't you don't get like a an industry where you're investing in. Um I stumbled upon consumer. Nobody was really covering it at Summit. I and and the whole LTV to CAC equation clicked for me. Um and and I would even say like it's not just for consumables. Like you know, I hear a lot of people talk about LTV to CAC's not real. To me it's real. Like even if you get 90% of that LTV to CAC on day zero when someone orders, like great. It's still a real equation that results in a P&L EBITDA output um depending on how fast you're going. So I I would say that for me I I have a very vivid memory and I would hop on the phone and my primary objective when I was calling into I mean frankly like probably a lot of them 100 million plus dollar brands that are in the space. I've chatted with the founders and CEOs of those companies. And I have a very vivid memory. So like I know their margin profiles. I know their LTV to CAC curves. Um I and and I think over time it became really clear to me um how that plays out, some of the mistakes people were making and my primary objective was just be friends with these people. Like it didn't really matter if I knew it was a great business if these people didn't like me. Um like you got to have them like you first for them to for it even to be a question if you know, they want to take your money and partner with you. Um and so I I would say to to answer your question I wasn't really looking for a business. Like I would I I definitely wasn't looking to start like in the consumer space. But it felt very like native to me um at that point having seen so much. And then I would say like being able to leverage all those experiences, all of those insights, the LTV to CAC curves, like all of that that's in my head and knowing what's good um you know, what's best in class uh has allowed us to scale really quickly because I I know contextually is this good? Okay, should we push on the gas a little bit more? Um and so I would say it's been really it's been really critical from a scaling standpoint. Maybe not from like a you know, I wasn't necessarily sitting over there saying like oh, it's got to be supplements, you know, maybe I should pick this category over here. I was just a guy who tried a green powder and thought it tasted disgusting and figured I could I could do something better. It's interesting because literally I was having a conversation about lifetime value to customer acquisition cost yesterday with the CEO of our Trevi brand. It's one of those things that uh good operators actually talk a lot about. I'm curious Matt, Jason, with the businesses you guys run how early did you start thinking about, hey, what what really are these numbers and how how is this going to impact the way that we think about how much we're willing to pay for people? I mean on on Peel the Case, it's it's like ridge it's zero. Like we eat what we kill on day one. It's like we got to go out and hunt thousands of customers every day cuz our repeat like the time frame in which somebody comes back and buys from us in that brand is like two years, three years. So we really try to ignore it uh even though it it like now we're seven years into the brand, it's actually super important, you know, cuz like the the brand value and the customers coming back matters quite a bit. It's a big chunk of the revenue that comes in every year and we're old enough now that we can actually count on it. You know, to what Chad is saying, like we can model out. Like we know every year now with a lot of confidence how many people are going to come back and buy from us in that company. In Lomi, it was day one. It was built on a device sale with a back-end filter subscription. And we kind of math like everything was just math'd out right away. We're like, all right, we know what we can buy a customer for. We have a sense for what they're going to stick around. Like we can see usage of device. Um so it's the whole business is modeled off of it. I don't it's not in a like not like what you would do Mike with Trevi or Chad with Grinds. Like it's not the same cuz we do have a large front-end purchase with that one. Um but I would say it's probably like in that kind of business where it's like high repeat rate or in our case subscription, dude, it's it's I don't know what you're doing if you're not doing that. Like I honestly like why are you here? LTV to CAC um is it's a metric that's been used in investing for decades and it I kind of come out of software investing um and then it it's been applied to subscription um mainly, right? Because so we don't think about it LTV to CAC. Like we're AOV to CAC, period. LTV is nice. We look at LTV because people care about that. But we we have to make like a real margin on on our very first customer. It started because no one would give Danny and Cole any money at the beginning. Um and then, you know, when I came on board, the reason why I joined frankly when the company was like Well, the reason why I got involved when the company was under 20 million in revenue because I just saw that every sale was profitable. Like pretty profitable. So that was that was exciting to me. But I think LTV to CAC is a lot harder to get right, you know, because you are you just there's there's more time involved and so there's a lot of things that can go wrong and I you know, I'm very interested in in what Chad is doing because I'm I also like I look at the powder companies, you know, there's a big one out there that's raised a ton of money that's done a lot and I I have to say like it's I've always felt that there was a lot of risk there because how much marketing you're underwriting, you know, how much you're willing to pay uh to acquire that customer. Man, if you're wrong, you're right? >> You're definitely wrong you're you're screwed if you go long on that payback. And I think Chad, that was actually one of the things that stood out to me. You and I had a a private conversation, but my probably number one takeaway from it is this is somebody who's really disciplined about the uh his customer acquisition costs. As a result of what he knows about customer values, he's really disciplined. And I think that makes sense. I mean maybe you could comment on this. My perception from the outside is that the investment community really soured on D2C type businesses in large part because they banked on these future LTVs that never showed up in a bunch of brands and that it it kind of became a little bit of an uninvestable space. There are obviously some real winners. You've you've actually like been involved with some of the really big winners that came out of that era, but there were a lot more stories of things that didn't work out. Uh so I I don't know. I think that might be something worth talking about is like um how how when you run your team, you obviously do need to really care about being disciplined about what you're paying to acquire. How do you prevent yourself from talking yourself into going an extra two, three, five months out to get payback to grow faster? I you're totally right. I think most of the D2C darlings that um have had trouble in recent years, but were doing well, putting them in quotation marks on video here uh during you know, the 2018 to 2021 era um they didn't have discipline around CAC. And so there is this like if you don't know what your LTV is, you shouldn't you shouldn't be like guessing what your CAC should be. So when I started the business our we have a CAC ceiling. You can ask anybody at Grinds. They won't tell you cuz we had a very like uh closed off, internally transparent, externally opaque culture. You can ask anybody at Grinds what our CAC ceiling is and they would know. CEO, CSO, yet CMO, everyone knows exactly what that that's that ceiling is for our CAC, the gospel around it. Um and that ceiling was very different when I first launched. I picked something very low. Um and then as month two came in, I was seeing the retention said, hey, let's bump it a little bit. As we launched Amazon and I needed to factor in a little bit of a runoff into Amazon from the D2C spend, bumped it a little bit. And then, I think it was in April of last year we set a CAC ceiling um based on at that point 7-8 months of data from our cohorts and didn't move it. Now, I run the business, have always run the business, and I would encourage everybody to run their business as a minimum three times LTV, fully burdened LTV, delivered to the door gross profit to CAC. Um that is a standard for investors that they love to see. I I would say strategics see that as best in class. And if you just play out what the like EBITDA margin output is of a three times LTV to CAC business, it's great. For anybody listening who's like just to make it really clear what we're saying, you're saying, "Hey, if you run your calculation and I guess start here using about lifetime value, you think about what period of time?" Three years. Yeah, not the heat death of the universe, right? Like we're talking like three years. So, in the the next three years, we think this customer will be worth, let's just say we think they're going to be worth $300. If that was our number, then you would say the kind of gospel best in class is that you're paying $100 or less to acquire that person. >> Correct. And and I would say to be clear on the 300, that's not revenue, that's delivered to the door when the when the product shows up on your doorstep, how much profit did you take out of that? >> post refunds. This is post And that's really like a huge huge point that I would like triple click on is that there are all these little ways that you have money go out the door that you it kind of erodes at your margins. And if you don't account for those, you can be really really wrong in your estimation of LTV. So, you have to kind of sit there and say like, "Okay, like you used the word fully burdened, but just again trying to make that as accessible to anybody listening to the podcast as possible. That's just saying you're you're scraping every part of your business and saying where are all the little ways that money goes out where the margins get kind of eroded. And anyway, so I think it's great points. You're saying you need to be at three or more of of that ratio. Yeah, and I and I think I you know, things will make it complicated as you launch Amazon, that makes it a little bit more complicated cuz you're probably not spending enough on Amazon like direct marketing. I And so, a lot of what's happening on Amazon is runoff from direct consumer spend. So, what you're what you're spending to drive demand on your D2C site. And then similar with retail, right? Like uh we have really good retail velocities without needing to like put a ton of retail marketing into it as we try to keep up inventory. And so, there's there's some excess capacity over there to spend, and the three times LTV to CAC equation gets a little bit um muddy. I think last month we made some real strides in how to actually look at LTV to CAC on a retail customer and on an Amazon customer and blend it so that the blended LTV to CAC across the business is at least three times. Um but it does get complicated as you start to scale out operations. Jason, do you guys Matt, do you guys I I guess Matt, you guys don't have physical retail. Jason, you've got you've got some, but we all have omni channel of some sort. How much do you try and track customers across different channels to try and understand what Okay, Sally comes in on the website, she buys this. How do I pull in what Sally's doing on Amazon or what she's doing in Costco? Or do you just not even try to do that? I mean, for Costco, it's super hard. Yeah, I mean, it's it's super it's opaque. >> That's our big channel, retail, but I don't know, Jason, if you guys have cracked that. We have we don't even try cuz that's like we get you get PDFs. We have some very rudimentary tracking um because we have a warranty on our pans um and through like post purchase survey data, etc., we can get like some directional information that is useful. I do I do want to go back to what Chad was saying about the the Amazon halo effect, right? You spend money on meta, and people are just going to go to Amazon, spend money on Google, people are just going to go to Amazon, like and so, how do you think about that, Chad? You Can you Can you expand on that just a little bit? Yeah, I mean, it I probably raised back in January of last year, 2024, when we launched Amazon, I think I raised our CAC ceiling by like 10%. It was more of a a gut feel. There was cushion in there in terms of what like we were running above a three times LTV to CAC, so I felt like, "Hey, like let's let's just use this as a proxy for now." Um and then as we've launched retail, right? Like we launched Sprouts back in December of 2024, um Target in February of 2025, and Walmart in April. Um that's a lot of doors. Like we're in over 4,000 doors now. We're on end cap. And I think I you can look at you know, we're just now getting some of this like Spins data back. Spins is a platform that shows you retail data, so you can actually track the consumer's LTV on retail specifically. And I and I think for us it's a little bit different than maybe Matt or Jason here. And Mike may be it's a little bit different for you, but you probably have some repeat nature that Matt and Jason don't uh as much. I don't I don't necessarily care whether Mike bought on Amazon and then he bought on D2C and then he bought at Target. Um because if I take the aggregate view of what the the customer is doing on Amazon, that like messy noise will be in the LTV of the Amazon customer. Right? So, they may look like, "Oh, the Amazon customer is like worsening, but we're acquiring somebody over in D2C really well, better than usual." Well, that's really just Mike and all of the Mike look-alikes coming from Amazon to D2C and then over to to retail. And so, all of that's in the LTV LTV data. And so, it's up to you to look at that and say, "Okay, let's let's forget about all that noise. I don't necessarily care whether Mike's bought in three different channels. What I care about is, you know, our retail consumer is going to provide this blank LTV in a three-year period. Um I'm I'm I'm open to spending a a CAC that's a third of that." The reality is is you probably can't spend enough in retail to hit that that three times specific retail LTV to CAC. So, you might have a 12 times LTV to CAC in retail and make up for some of that with D2C spend. So, your D2C LTV to CAC may have been a sub three, but you're able to right, blend it in the business whole. >> what's awesome about retail. Retail, that ratio just blows out. You know, you just the numbers really work your way. Okay, it's no secret that margins are getting squeezed and profitability is a challenge for brands in 2025, not a secret. That is where North Beam's profitability benchmarks come into new feature, you could check it out. This is a tool from North Beam that tells you the exact targets that you need to hit to get to profit inside of North Beam. So, no more guessing, no more month-end financial surprises. Hitting these targets helps you ensure that your ad campaigns are actually driving the right behaviors to make your business profitable. That is wonderful. The brands that track this stuff probably already doing Google Sheets. I know I do. I'm going to be checking out this North Beam new feature. And North Beam is kind of is a big level up from this. And here's what sets kind of what I have seen, here's what sets profitability benchmarks apart. So, instantly you get to quantify your goals into clear benchmarks. Every ad gets measured against those targets right inside of North Beam. That's kind of cool, actually. And you see and you can kind of at a glance see which ads are doing well, which needs to go against profitability benchmarks, not just ROAS or whatever else you're using right now. You scale up the winners, you cut the losers, you know the drill. It is hard to argue that this is not great for brands. Profitability benchmarks from North Beam is like having a speedometer on all your channels, campaigns, ads. You can kind of see everything at a glance against profitability, not something else. So, stop leaving money on the table, fuel your creative performance, make every ad dollar count in every channel, hold them all to the same standard. If you want to reach out to North Beam, just let them know the operators sent you, and they will take good care of you. Ultimately, what's making your company just blow up and and so successful is that you've crushed it on product. Tell us about how you did product development because like you said, you really started with, "Hey, I think this green powder, you know, getting greens in in some kind of a supplement form makes sense, and I think there's a better way to do it, and you guys have obviously found a really effective way to do it." So, how did you How did you go about actually bringing the product to market? And then you've also done a lot of interesting things in subsequent product launches. We'd love to hear how you guys are approaching product dev. Yeah, the I it was actually harder than I thought getting this off the ground. Um when I when I had the idea, I started calling around to co-mans and packaging partners, and I would I would literally had probably like 50 conversations that I would ask the first one, "Hey, if I was talking to gummy co-man co-manufacturer who produces the products, who are the best packaging partners?" And then I go talk to those people, and then I'd ask them who are the best gummy co-mans, and I I slowly whittled to who I thought um were actually the best. And what was crazy is like I would talk to these gummy co-mans, and every time they're like, "That's not going to work. It's going to taste disgusting. No way we're going to do that. You're just another like starry-eyed founder." Um it's not going to work. I found one finally who was willing to to give it a go, but they also said like there's there's no way this is going to taste good. And I said, "Look, just do it. Here's the formulation. Here's what I want in the product. Let's all taste it, and then we'll say whether it tastes bad or good. All right, like let's let's actually produce it and see. Um and the first iteration was pretty good. Now, um I spent a year from like August of 2022 to August of 2023 when we launched going through dozens of iterations on this. And not just testing like formulation, the science of it, also testing like is should it be a gummy bear? Um or should it be a gumdrop? Uh how many gummies should be in a pack? Um what's the color? What's the smell? What's the taste? Um all of those things were tested, and they were blind blind sample surveys I was doing. So, I I it was actually at Stanford campus. I, you know, probably half of my class were part of the guinea pigs on this, and I thought it was a good place to do it because you don't, you know, Stanford's interesting cuz you have a lot of people from different backgrounds, a lot of ethnicities, a lot of nationalities, and so you get a lot of different opinions. It's sort of like a weird place where, you know, if I went to the D2C community, we might have a bunch of chats um trying this product, and we can kind of get in our own bubble of like what a good product looks like. And I got some good feedback from that. Um and so that, you know, spent that year formulating. It became really clear what the product should look like. So, the product you see today is it is highly intentional. Um but but I think the biggest unlock for me, you know, a year back in August of 2022 when I had the idea was like, why isn't somebody put this in a gummy? And I think the world that gummy represented back then is a 60-count bottle, one to two gummy serving size. And so for me, the big unlock, you know, we all look at it today, and we're probably like, yeah, yeah, like it's a sachet, it's got to eat gummies in it, whatever. But like that's new. That's not like a that's not like a format that really existed at the time. >> remember the first time I got your product being like, this is different. Like I've never I've never seen these kind of micro packets of gummies before. And here's the crazy part. The infrastructure to do that didn't exist when I launched. >> Well, that maybe that's why maybe that's why I never seen it cuz it literally didn't even exist. It works for pills. It works for powders, but the machines gummies is a hard technology cuz it's a little sticky, and so it get it can get stuck in the machines. And so for the first like 8 months of this business, this is going to sound crazy, but this is what you do when you pave the path for a new a new format to exist in the world. Our our first co-man, we now have three. We're probably on boarding a fourth soon. Um that first co-man, they had 20 bodies with gloves standing around a table taking eight gummies, sticking them in and the sachets, and clamp sealing them. Super manual for the first 8 months before we got machinery. And it pioneered how you do this with the gummy format. Uh but it it was a slog for the first like 8 months of this business. It's like have any of you guys read Apple in China? If If you haven't, it's it's great. I I got put on to it. Um I'd recommend it to anybody listening to this podcast. But one of the things that they talk about there is the way I mean like Foxconn. And a lot of the reason why Foxconn becomes Foxconn is just their raw ambition and willingness to be like, we will try anything. And this it's interesting when people go and like think about their supply chain and who do I want in the co-man or who do I want in the manufacturer. Man, just like ambition and willingness to try things is so valuable. Like where it's just like, yeah, eight gummies in a package, never seen that before. Let's figure it out. Most co-mans, like you said, would just be like, no, that's not what we do. No, not going to do that. And some of our best product ideas have been like us going to our our one of our manufacturers and saying, hey, we want to do this thing that we've never seen before. You want to help us try? And they're like, they get excited about it. They're like, yeah, let's try it. I don't know if we can make it work, but like let's try it. So, I'd recommend that to everybody. It runs counter to what manufacturers are though, Mike. Well, yeah, exactly. Like their entire business is replication, not innovation. So, to find a manufacturer in any category that's willing to try something. I mean, we saw this with Lomi. We had to build our own manufacturer. Like we had to we went to a factory. We said, look, we know you don't want to do this, so we'll do it. Like we'll pay for it. We'll design the line. We'll figure out how to assemble the whole damn thing. We threw our engineers at their factory. And all we said was like, you just need to provide the bodies, right, and the building and the power and everything else that you have. >> And that the Apple in China book, like that's kind of one of the stories is that the Foxconn and then more generally kind of China and and Taiwan realized like this is a great way to get our people trained if we can convince these American companies we're willing to try all your crazy stuff if you'll send some of the intellectual capital. And so I also think like on the manufacturing side, it's a great customer acquisition. It's it's just got to be like an absolute uh beatdown to try and compete on margins in a commoditized category with a whole bunch of other people. Do Do you know I don't know if I've told you guys this? Chad, you might hear this for the this is the first time. Our initial factory for Lomi was a toy factory cuz they're the only ones psycho enough in China to make anything new. Like the entire toy industry is like you have an idea? 6 months later, we're going to put it on a shelf in Walmart. Every single appliance company or like device company we went to was like, not a chance. Like we do not know how to make those. That's not a thing. It's not it's a new category. Chad, similar to what you were doing with like this pack for this type of thing. Everybody kicked us out. They laughed us out of the room. The toy guys were like, sure, you know, somebody showed up with one day with a drone, we'd do that, too. But I mean it kind of gets to that point, Matt, that like sometimes even the specific skill set is not as important as just like a willingness to try something. Like you were able to build a pretty revolutionary product with people that on paper don't have the skill set to make that product, but they had the willingness to try to do something. So, like as you're I I think one of the interesting questions like when you're whatever like hyper scaling, whatever word we'd use for the way that Grüns has grown because it's I, you know, like I don't I like you said, you're kind of externally opaque. So, I won't ask you to like share any numbers other than they're really crazy, they're really big, really fast. You did take a round publicly that's a big round with a big valuation attached. There's a very small number of companies for sure in the D2C space that have ever gotten to that kind of valuation that quickly. It might be the fastest I've ever seen. So, congratulations on that. That's awesome. But with that like the scaling that comes with that has all kinds of operational headaches. What's been one or two of the most challenging things you've had to deal with operationally, Chad, as you guys have scaled at this amazing rate? 100% inventory. Um and more specifically, you know, if you double in the course of 3 months in your an early business, it's not that bad for a co-man to pick up that uh that demand and say, hey, I got you. Like we'll just run you an extra day here. But when you when you start doubling at larger scale in a quick period, um you got to onboard a new co-man. All right, like you got to and if you're a reputable brand, you have to have good quality control in place. So, it's not like you just like onboard a new co-man. Like you got to be planning on that 6 to 9 months ahead. So, I'll give you an example. Our our third co-man, we started the process of onboarding when we felt so good on capacity. It was like, oh my goodness, the second co-man's on. We've got great production here. Uh it feels like capacity is going to last for a long time. And it was like, no, no, we we know our forecast. We know where we're headed. We got to get working on this new co-man right now. Otherwise, in, you know, 6 months, we're going to feel some massive pain and have to turn off the marketing engine. Um so that's been that's been the hardest thing, and I would I would add to that, you know, we talked a little bit about that process of putting gummies in sachets. The hardest part is every time we onboard a new co-man, we have to teach them. Here's how you do it. Here's the machine you use. Here are the things to watch out for. And there's a good sharing happening across the three, potentially fourth co-man soon. Um but like uh we're actually taking a lot of that packout process in house. We have a Dallas facility we just opened last month where we receive gummies in bulk, and Grüns in house will be doing a lot of that packout, right? Because it's a lot easier to scale a new co-man to produce gummies than it is to go in there, produce gummies, buy this machine. Let me train your people who know how to produce gummies in how to now put gummies in packages. >> Yeah, it's totally separate thing, really. Yeah, you Jason kind of reminds me of Hexclad. You guys obviously have been hyper scaling and over a long period, but then you also have a kind of a really proprietary thing with your pans. Uh have how have you dealt with just the inventory headaches? I know you've talked about it some, but you'll you'll post sometimes in chat like how many containers. Like I and I don't know if you you're willing to share this publicly, but just like he'll he'll post how many containers that they are shipping, and it's just this absurd number, you know, like 20 >> Hexclad armada. Yeah, 20% of the containers on the ocean are somehow carrying Hexclad. Our head of ops did this awesome like AI image of an of a container ship like literally filled with Hexclad, and like that's what shipped in Q4 of last year. It's like crazy. Now, we've had months of 150 plus 40-ft containers coming in on a ship cuz our boxes are just big. But in terms of inventory, you know, we're very we have kind of Foxconn it's interesting how Foxconn talk about Foxconn because like they scaled alongside of Apple. I think I didn't read the book, but I think that's the case, right? And so our factory, our main cookware factory, they they produce you know, 95% of our cookware, and we're 95% of their production. They're our partner. Like we have been together from the beginning when they were doing like 10 a month. So, like every 2 years they build a new X-Dri factory and we go see it and there's a new sign that says X-Dri and they just keep building new factories for us down in southern China. And so, like there have been times when they haven't been able to scale. Um like in 2021, 2022 we had difficulty scaling and we were out of stock and I remember like right before Christmas literally being at the warehouse in South Anderson for a container of pot sets to come in so that we can ship them out with the pan set so that people would get their 13-piece set in time for Christmas. And like the whole senior management team was unloading a container and slapping a label on it and putting it in a UPS truck. I did that. >> Yeah, I just basically cross-docking inventory. It it goes Yeah. You know, we did all that. So, you know, it's just that's that's like a high-class problem of of scale. And uh the the problem the other problem is cash. You know, like if you have the like Shawn keeps a ton of inventory. He's He's also his inventory are very very small. Doesn't take up a lot of space, but I've heard him say like he's got a year's worth of inventory. That I don't think that's good like uh inventory turn management uh from a financial reporting perspective, but >> It's also easier when it's aluminum as opposed to like a gummy that's going to like, you know, you you don't want a year-old gummy going out to to Target or something. It's amazing how I mean it's amazing how Chad has scaled and the ability to produce all this. I mean, it really is uh it's it's incredible operational um Shout Shout out to our ops team. Um like you know, it's never become more clear to me as I've talked to some big gummy players in the market um who are just like baffled at what we've done in 2 years. It's never become more clear to me and I've never had more appreciation for what the operations team is doing than hearing like experts in the space like genuinely surprised at our ability to stand up these co-mans. But it But it's it's because we start scaling them up or standing them up, onboarding them you know, well in advance of needing them. Um it's not like, "Oh, we need them. We'll get them on board in 6 months." No. Man, two things this makes me think of. One is like I I just You've said it a couple times, Chad, but I want to like reiterate it for people listening to this. I've now been a part of businesses that are scaling for gosh, 15 years and if you wait until you have to have something, you're dead. You know, like you really do have to get in front of things and that's the hard part about scaling. It's kind of like uh the exponential growth with technology and a lot of people have written about this that like the human brain is just not able to really kind of comprehend it. And so, it'll catch you really off guard. And you you you tend to think like, "Hey, what's happened the last 3 or 4 years? Okay, if that happened the next 3 or 4 years ahead, where we going to be?" And then it's like, "Wait, we're like 10 times that level of advancement." It's just because the exponential nature. Scaling a company is the same way. If you try and say like, "Okay, what did we need a year ago? Okay, what do we What do I think we'll need a year from now?" You'll always undershoot it when you're growing at these really rapid rates because your brain just can't wrap it around. But one of the things like that I've noticed about myself I don't know if you guys can relate with this. One of my more toxic traits is that I can tend to think like the hard part is getting uh to sales and getting like the kind of the model established of like, "Okay, we're acquiring customers well. We're acquiring at good economics." And now it's basically just execution and kind of easy stuff of like just filling the orders and keeping the trains running. And the reason I think it's a really toxic trait is like it gets real hand-wavy that like a lot of times that actually the keeping the trains running is the hardest part. There's a reason why, you know, to use the Apple analogy. There's a reason why Tim Cook ended up being Steve Jobs' replacement that like the operational side of things I've talked about this with my CMO several times. What sucks about being in operations is that you don't get a lot of uh pats on the back when things go well. You just kind of get people's attention when it's like, "Hey, where was that shipment? Hey, why why are Why is the factory screwing things up? Why were there defects on this order?" You basically just hear about it when things aren't going well. And then when things go well, it's just like, "Yeah, you did your job. So what?" So, I don't know. Like I just want to emphasize what you said that like everybody listening to this like go hug your ops person. I don't know, but it's a it's a tough job. Our ops department is incredible. I mean, they're the unsung heroes of X-Dri. I I When I just look at all of the operational situations that they're dealing with and um our ops were like terrible for the first couple of years that I was here. And so, it's we were we were always major We always had major issues and major mistakes that cost us big money and we we finally figured out that we needed to get better. Took a while. Took a lot of meetings, but we built out an incredible, you know, best-in-class ops team and that's a that is a very like that investment is just like reduced so much stress in our organization. So, highly recommend that like I always say invest in understanding your numbers really early and invest in your ops really early. Like don't be cheap about that if you really think your business is going to succeed and scale, invest early there. Well, and if you're going to partner with the Targets, the Walmarts of the world, you have I mean, they value predictability in your supply chain and operations. I I'm not going to say they they value it more than productivity, but it's pretty close. Because their model is all about being able to kind of make this promise to the customer that, "Hey, you show up and we're going to have stuff on the shelves." And so, you can be wildly productive, but if you're also wildly inconsistent in your supply chain, that's going to wear thin really quickly and they're going to kind of sharpen the knives for when your performance drops off. So, like it's it's just a really big deal that your your partners are going to care a ton about as you scale. >> Yeah, the precision thing with retail, huge. Like when they give you ship windows, you hit them. It's not negotiable. >> Like Walmart's Walmart's big thing is OTIF, on time and full. And it's like that's their gospel metric. >> have a choice. When you get started as a new brand, you don't realize that they'll send in a PO and expect it to be like turn around immediately. So, you need to be doing the job on your end forecasting, producing inventory that you're ready for when they say ship, you can ship. And I'd say that's why a lot of brands probably have trouble when they launch into retail is they're not doing that. They're not building up inventory for these retailers to be a good partner. >> Yeah. But if you looked at our OKRs, it's the number one. On time and full 100% we got to deliver to be good partners. And And And I do think that's really critical to your point uh Mike. Like you got to you've got to deliver on that. You actually have to be the forecaster. Like you're doing your own demand forecast for the retailer. 100%. Like they're they're not going to do that for you. >> give you Well, they'll give you a number, but that number is like I mean, you know, my cabochon puppy could probably come up with about a good as good a number cuz you know, you're just kind of grabbing something out of the sky initially. And so, and if you think that that, you know, they giving you they gave you a number and you, you know, prepare for that number. If you don't hit that number one way or another, like they're not you're not going to get a pass on it. If you're doubling that sales rate, they're going to expect you to be able to support it. And if you're half that sales rate, they're going to say, you know, it's going to be like, "Sorry, you're heavy on inventory." You know, like it's just the way it is. So, I I I think we're absolutely on to something. I mean, my my observation about the the D2C kind of community, the e-com community is that the worst version of it is all you think about is marketing basically and and product. And there's no operational backbone. One of the best things we did in the history of the company and it sucked so bad. Uh we went from the marketplace to 1P with Amazon and the I kid you not, our switchover date was March 15th, 2020. And it was literally like 3 days before COVID went bananas. And so, we had to basically grow this entire organizational operational backbone to now We we we went from like just shipping containers directly into Amazon in California to like having to fill all these POs. And it was incredibly painful and there was a lot of tension in the organization from it. But then because we had grown those capabilities, as we started to layer on all the retailers and we started to grow, we were able to support it because we we developed those muscles. Operators, Black Friday Cyber Monday's coming up. Is your SMS list ready? If not, get on Postscript. They are helping us drive 14% more email sign-ups through their better opt-ins. They're helping us get 6% more SMS subs every single day because they have perfected the art of pop-ups. You need to build your list. You have to nurture your list. You have to take care of your list. Postscript is the best at that. They're the number one name in SMS. 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You want serious gains, you want Postscript. Thank you for supporting the podcast. Thank you for being here. Hey, I chat real quick, man. On the growth. Like cuz your speed has been insane. I want to ask the dumb question of why go so fast? Like why why the extreme up into the right? You know, we've talked on this show in the past about how like in consumer, there are rarely winner-take-all, if any, right? Like I think the the biggest brand in the world might be Coca-Cola and they have like 18% market share on Coke. And they had to buy every other category and every other brand to get to like 48 of drink of beverage. So, what's the Is the speed thing uh just a personal style or is it strategic? It's about competition. It's about category. I'm impatient. So, that Okay. >> Probably like the number one thing. I'm a very impatient person. Um and I think a lot of the concern that people have about growing fast, you know, like I'll I'll point out a a brand that pumped really quickly and then fell off a cliff. Um Goli, right? We all know that. Apple cider vinegar brand. The reason why that business fell off a cliff is because they were acquiring too many customers. They don't have a lot of LTV. They're they're churning through the universe of customers way too quickly. Uh contrast that to us, right? People like to compare us sometimes because Gummy Gummy. Uh but it's an easy comparison. Um we're not growing fast because we're we're acquiring a ton of customers. Yeah, like we're acquiring a lot of people, but that's not really the reason we're growing. We're growing fast because Matt, if you bought it if you bought from Grüns today, you're going to spend like I don't want to say exactly how much, but like a lot more in the following 365 days than you did on day zero. So, what's happening here is we're stacking all these cohorts together. All under a disciplined three times minimum LTV to CAC. And so, the way I thought about it from the beginning and you know, we've raised a few rounds over the course of this business, it was always the same thing I would tell investors. I'm going to I'm going to grow as fast as the world lets me at that CAC ceiling. Because I know that I get at least a three times LTV to CAC. So, if that means that there's 50,000 customers in a month that I can go get at that efficiency, I'm going to go get them. Cuz that's what the world's telling me I can do this month. If it happens to be 5,000 this month, no problem. I'll go to get 5,000 because that's what the efficiency says. I don't want to acquire somebody if they're unprofitable to me and I'd set my profitability metric at three times. Um and so, the output of that is our growth, right? Like it's not like I chose it and I I got to grow and hit these targets. Our investor group isn't telling me to hit these targets. They mostly let us tuck. Um and and it's because we have a lot of discipline around here's the efficiency. The P&L's an output of that. Yeah, that's great advice, man. That's that's kind of why I asked. Yeah. There also is um this thing called first mover advantage, which in some businesses like really makes a difference. Um and in in this space where where Chad is, you know, AG, I think they were really successful because they they they went out and they grabbed a big lead. And they kind of created the the idea of it. >> created it, right? And so, I think it's to some extent that's what Grüns is doing. And so, like stepping I think stepping on the gas as long as you can have the LTV to CAC discipline that you do, um you definitely wouldn't want to leave anything on the table. Like because you just that first mover advantage and being, you know, we're the first hybrid pan. Like no one ever talked about a hybrid pan before HexClad. Uh there are lots of people talking about a hybrid pan now. But we are the real, true hybrid pan. That that that does matter. That it matters at times, Jason. I mean, like look, if anybody creates anything that looks like HexClad, that's like HexClad knockoff. I mean, we've had people try to create put gummies in sachets, these little packs. And even if it's a completely separate formulation, has nothing to do with Comprehensive Nutrition, they're like, why you ripping off Grüns? That's exactly what we want. We want any business that takes that like new format, we want to own it. We want people to see that and say, that's Grüns. Like why are you taking their their I don't know, why are you stealing from them? Like why are you ripping them off? Even if it literally is a different needs to be a different product, uh just because it looks similar, we got to own that. Yeah, it's it's interesting uh if you if you look at trade uh like a trade dress and and trademarks, it trademarks is basically like anything that a customer starts to associate with a brand. And really the standard in in trade dress lawsuits is is something confusingly similar. But what you learn when you study trademark law is that it can be anything. It can be a color. It can be a sound. It can be a a slogan. It can be the packaging that if you're if you were able to kind of associate, hey, yeah, this little gummy packet, like that must be by Grüns because they're I Grüns I keep saying You know, it's so funny. I keep saying Grüns and instead of Grüns. And I'm doing the thing that all of us as founders hate the most. I don't know if this has been true for you guys. >> Well, it bothers it bothers me because like it it's it's nails on a chalkboard when I mean, people will say Simply Modern to me and it's I'm I'm like, I'm going to lose my mind. I've been I've been introduced for like speaking like they're asking me to come up on stage and they'll they'll call it Simply Modern. And so, it's like I think it's the curse of when you start something. I don't know if HexClad can be mispronounced. >> HexClad, there's no way HexClad gets mispronounced. >> Yeah, but I mean, there's got to be Matt, you have to deal with this, right? >> and Pella. Like in America, everybody calls it Pella because of the Spanish influence and then we call it Pella cuz we're stupid. >> I feel like that's just like a dumb influence. In the US, if you go abroad, everybody calls it Grüns because they know it's German. It means green in German. And and and they know that that U sound and basically every other language has a U uh sound to it. But for some reason in America, you get this like 70/30 split where 70% of people think it's Grüns. Uh and it's like look, I don't I don't really mind what you call it as long as you're buying. >> That's cuz Americans Americans think that Americans a language. That's why. >> My my brother and I had Quibi's. I mean, we'd hear it all. Quibi's and you know, Quibids and we'd hear we'd hear every variation of it. So, I just think that's when you create anything, you just you have to release the the pronunciation uh of it. But uh so, you mentioned this uh Chad. I mean, I think it's really interesting with consumables. You don't necessarily need tens of millions of people. You don't need tens of millions of people using your product to have an awesome business. You don't even necessarily need millions of people using your your product to have an an awesome business. But you do need people to be super fans of of the product. One of the things we've talked about on here is like you're in health. And the downside to kind of health can be the faddishness. Uh the the kind of the bone broth effect of like, oh, everybody's excited about, you know, getting their greens and you know, and how do you protect yourself against that aspect of the category that you're in? Yeah, we we only play in categories that are permanent. Um so, we don't like I'll give you an example. Everybody talks about creatine and creatine gummies right now. Uh I would be so scared to run one of those businesses. Yeah, the the science behind creatine's phenomenal. Um but from a fad standpoint, people don't always follow science perfectly. So, like there's there's some risk there that it's not going to be in vogue in a couple of years here in the way that it is today. So, like how does that impact your business? That's hard. Comprehensive Nutrition, like that's that's fundamental to us living, right? Like I'm not if what you're talking about is like putting salads in a powder and chopping it up and throwing it in a blender, like yeah, that might be faddish the same way like juicing was, you know, like 15 years ago. Um but that's not what we are, right? Like we're Comprehensive Nutrition. It's it's the nutrients your body needs, the foundational support. And if science shows that there's something that we're missing from our uh formula for that, then we'll insert it into the product, right? So, it's not um and then I'll give you like nootropics. Like these are growing categories. We're not we're not attaching ourselves to an ingredient like L-theanine. We're going to be the the first gummy that puts off L-theanine in the gummy and we're just going to absolutely own that. There's businesses that do that so well, right? Like you guys are all friends with Mary Ruth Organics. I've chatted with them several times. I think what they're doing is very different than us. And and that's exactly what they have to do. They have to find those trends, get there first, do clinicals behind them, own that ingredient, and it's always finding that next one that's going to be the big thing. For us, we play in big categories that are they're not going anywhere. Uh but we insert a new format, a new uh a new like lifestyle into that into that uh category. Yeah, so uh one of the things you mentioned, the creatine thing, I'd be really curious to hear your take. This this kind of uh thing about the supplements you get online might not contain what you think they contain. It has become a thing. It's become a thing with Amazon in general. Um but it's really becoming a thing in the creatine gummy space. Like, hey, actually when you test these gummies, they don't have what you'd expect in them. Uh how have you responded to that or thought about that in terms of like, how do we give people confidence that it you know, it's not just like a placebo gummy that we're giving people that this really is, you know, trustworthy? Yeah, it's interesting. Creatine degrades really quickly in gummy form. So, you might see a brand that clears NSF has the required or stated nutrition labels dosage on it at production. But does that mean that we're eating it all fresh off the line or are we eating it 3 months later or 6 months later off the line? Creatine degrades quickly and so you'll see um with stability testing and I don't think any of these creatine brands do stability testing. I.E. how much creatine is in the product 6 months later or 9 months later? I would even argue like I haven't seen anybody talk about stability testing. I'll talk about it now. We do it. So, what stability testing is >> even heard I haven't heard of stability testing. So, this is great. So, what stability testing is is you're you're testing both immediately post production to ensure and you'll send it into Eurofins to ensure did your product meet all of the label claims? The FDA requires that you every batch I think you rotate through the ingredients on it. You only have to test like two at a time. And so over the course of like, you know, 10 to 20 batches you're testing the whole formula the whole label. But you're not getting a comprehensive view on on the batch all together unless you go send it Eurofins electively. So, we'll send it Eurofins. It's Eurofins is a third-party lab that tests your product and ensures that it actually meets label claims, is free of toxins, all the contaminants. What you'll see is with a creatine stuff that you brought up, Mike, they'll they'll send all these brands into Eurofins. It's possible that some of those gummies are 4 months old, 6 months old, 1 month old. So, there is some like issue with that. Creatine especially degrades quickly. Um and so stability testing would be what we've done at Grüns, which is we'll test it immediately post production. We've also tested the product 8 months post production. Does the label claim are we still meeting label claim 8 months post production? And and you can see it on our site. We've we've showed those COAs that we've gotten from Eurofins. But again, I don't think especially in the gummy category, but also more broadly like you I know Mike, you buy supplements. I don't know if you do, Matt. Oh, yeah. Well, my wife does and I take them religiously. Yeah, but like the have you ever heard the stability testing thing before? Probably not cuz you're probably taking pills and powders and actually don't know the stability of like a powder, but in pills it's encapsulated. I'm sure it really doesn't degrade, but gummy that's a real thing. You have to make sure that the gummy meets label claims months later. I actually did I've got a friend who's in supplements. We actually have a lot of friends in supplements on the show, but the stability thing in powders and pills I think is not talked about because it's just a given. I think there's like an assumption that it's pretty stable, but I think that's a great call out on gummies. Like that's a that's awesome. The bummer to me about this space is like it's a new consumer thing and you've got a lot of bad actors in supplements, right? Like there there are very few that I look at um in the space and you know, obviously I'm not going to call out names, but it's just like there it's so it's so tight the people who are like good people trying to do the right thing. >> Supplements are shady. I mean, I graduated college in 1993 and I knew guys back in Arizona who were like starting these supplement businesses and they were shady and it's like you know, you that's another that's a great selling point for Grüns, right? Like having people understand your commitment to your quality and the integrity of your business. Yeah, I went you know, when I go I very rarely use supplements, but but I just recently started to look at out of looking at a couple and I'm scared to buy anything. I seriously I I don't I don't do a lot of research for a lot of purchases, but this one is like I really I even tweeted about like creatine supplements cuz I'm like, if I'm going to do it, I might as well make sure that I'm happy to pay for the one that I know is going to be good. Like I will pay more for quality, for safety. And you know, creatine's an interesting one because I would say the powder like I you know, I I was working out at the gym back in 2010 when it was like the acidic like it tasted like battery acid and I don't know what's changed since then, but like that's how you know it's working. Chad. Exactly. It tasted so bad. But like today you can get a powder that like doesn't really have a taste. You can throw in a smoothie, you know, your pre-workout, whatever it is and so it's um that that needs state is it's hard to you know, like people have asked like are we going to put creatine in a gummy? I think we'll have an interesting innovation that you'll see at some point and it'll obviously have stability around it. Um but that's not why people buy Grüns. Like that's that's an important aspect that gives you reassurance. Like people buy Grüns and our products because they're like part of the lifestyle. Right? Like it's fun for them. They get to share it with friends. Oh, by the way, it works. We did a clinical study. We do all this testing that makes it really official, but that I just think the space is so um it's a lot of like weaponization of like, oh, I did this study. We're better than you and I don't know. I don't think it's the right place to be in versus I you know, like kind of like what Dr. Squatch did, right? Like we're going to make it fun. We're going to relate to the consumer and it's a good product by the way. It's natural. But like this is the first time you're going to enjoy the shower. Yeah, it's interesting when you're in a category that is experiencing real adoption and growth the way that gummies I'd say more generally are. And obviously you guys have been a pioneer of that. One of the the things that it brings is it brings the grifters. You know, the the kind of like, I'm going to just throw something up on TikTok. I'm going to drop ship. I'm going to try and you know, hit something easy and quick and that unfortunately you've you've got to deal with that. You you know, there's a when we were doing the Quibids thing, we had a competitor. He ran a he ran a website called Swipe Bids and it was literally just stealing people's money. And I I for years were like, this dude is like literally like he's just he's not shipping product. He's just stealing people's money and it took a couple years and it was literally a situation where he got arrested on the tarmac out of a private jet with $15 million in cash in a briefcase. It was like literally one of one of those stories, but you just when you're in a really high growth category, it's just going to be like uh bait like a a homing beacon beacon for that type of personality and unfortunately you've got a you've got to educate people and you've got to stand out. You got to deal with with all that crap. You might remember that Ridge switched to Richpanel about a year ago. Since then, our orders are climbing, get support tickets are. Richpanel's self-service portal now it's 47% of our shoppers solve their own issues instantly. We used to answer every single ticket with a person. Now, that one change is on track to save us $500,000 in support salaries just this year. Our customers satisfaction is at an all-time high. It's above 96%. 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Hey Chad, I'm I'm curious like the financing journey that you've had and I and I know you guys are very private. I don't want you to mention numbers. I'm not asking you to mention any actual numbers, but like you've done a couple raises. Like you got this thing started. Like what what did that look like? What like cuz I know we know a lot of people that want to be like you, right? And I want to be like you, but like the um I want I want to be like you, Jason. I'm I'm my best to get to your scale. Yeah, I want I want Chad's valuation 2 years in or 3 years in, whatever it is. How do I do that? Can you just tell me how to do that, Chad? Well, clearly you had an I mean, clearly you had a great idea and you executed on it well. You have got you have a a great product. You know, the there's there's a lot of trendingness around this space and um I think the jury is out on any business how sustainable it is long-term, right? We've had a dozens of people tell us about us that about Hims like, can you really keep this up? Can you really keep this up? I don't think any of us know, but I think you have a good chance of keeping it up. But like how did you get it to here from from a financing perspective? Can you give us like a high-level overview? >> Yeah, of course. And I would say I you know I see people trying to figure out the operations that produce our product. And I think what folks miss is it it's not just a product. Like that that's like one of the 20 things that's going right for us that make the LTV to CAC and the growth work. There's there's just like so much more to it and and I genuinely do feel a little bit bummed for these folks cuz they're going to years of their life. There's already like three who have done it before, credible entrepreneurs who have tried to rip it and it didn't work for them. Um and so I like I I don't know like this is actually a really hard category. I don't think people who know when they look from the outside they're like, "Oh man, they're they're doing so well. Like must be easy. Let me just go like figure out their operations and I'll do it myself." And it's not. It it There's a lot going on in in this category to make it work. Um but yeah, to to your question, Jason, we uh I you know, people ask me like what was that I got the question like how much of the growth of Crowns would you say is due to your experience as an investor and being on the board of all these awesome brands versus like Stanford. And the reality is like from a knowledge standpoint, Stanford's like 0.1%. Like I did not learn There's like basically nothing in how I operate this business that I got from that MBA experience. However, um I didn't grow up around wealth. And that early round that we raised to get off the ground came from friends and family. And my friends at Stanford's families. And so like would we have a business today absent that experience and those friends putting their confidence in me? No, Crowns would not be here today if I didn't have that that ability. So like I'm I'm happy to share. Like we raised um a little over 300,000 of cash to get the business started. Half of that went towards the initial PO. I'll tell you my first comment was like, "I'll never see this guy again. It's a big PO. So we'll take it." And that's probably why they ended up doing the the hand pack out, right? Cuz they were like, "It's just a one-time thing. Yeah, we're not buying a machinery for this guy. Don't don't worry about it. He'll be gone. We're just going to do this really quick on a table." Um And so I but basically every 6 months after that raised a round. So like none of the VCs, the hardest part about consumer is none of these institutional investors, venture capitalists, none of them want to put money in to a business that hasn't launched. Unless you're a celebrity, you've got some like interesting take, which I didn't have any of that, right? Like In fact, I would say investors look at other investors and they're like, "Look, I know my experience is is as an investor, there's no way you could do this, right?" And I do think my experience as an investor was different than theirs, but that doesn't matter. They have their perception. And so it was it was hard pre-launch to get any traction with VCs, but you know, week into launch we're doing like $5,000 revenue days. And and I literally emailed all these investors and said, "Hey, you got a week to close on this. I'll let you into the round that I raised on friends and family, but we're closing. So if you want in, then you need to put in." And we got 1.25 million um in like the second week of the business, third week of the business, which ran for another 6 months. Then we raised in February of 2024, um I believe it was 6 million. Uh and then in August, that was last year, August of 2024, we raised um and at that point we were break even. So this is more of like cash buffer and other needs. It wasn't like from a burn standpoint. Um we raised another I believe it was 11 or 12. And then the most recent round that you all have seen in uh April, May of of this year, the $35 million round. But you're you know, look, you had a lot of experience in this, right? And so you you kind of knew how to get that quick raise done. You're like, "This is the deal, guys. We're crossing it. Come in." That that's um that's well executed. That's not like not just every the average entrepreneur um probably couldn't do that. Couldn't execute that. Like execution is 50% of the battle when it comes to raising capital, right? I mean it's let's just be honest about that. It's so hard. It is so hard in this market to raise money and you know, I feel fortunate that we'd gone four for four on it. Um but it's not easy and I'll tell you this last round was particularly hard. I I would say that I our valuation is a really good valuation. The the 500 million is a really good valuation for the recent investors. Now, that's hard to believe. Um but looking at multiples, it's it's a really good valuation and I think there's an important reason for that, right? We need to leave upside for um you know, whatever whatever the future looks like, whether it's a strategic, whether it's an IPO, those people need to make their make their return. And so we intentionally took a valuation lower than what I think we're worth to leave that upside. Man, I just want to stop there and say this is a one of the things that is somewhat counterintuitive about how really successful people think. They intentionally think about how to help other people win. And that's part of the reason that they win. Uh less moderately successful people, I think, tend to only think about how do I maximize my outcome? And I'm going to constantly just focus on maximizing my outcome. And so they never hit the real home runs because the way you hit the grand slams, I'm convinced, is primarily by not just winning yourself, but by helping a halo of people around you win. And that was that's a great illustration of it. You're actually thinking about not how do I get the maximum valuation here or, you know, the most money for the least amount of equity, but how do I actually make sure that the investors who are involved in this round crush it. And that's going to lead to opportunities in the future that you don't know about. I mean, we can't even We're sitting here. We we don't know what those would be, ways that that's going to come back to you, but it but it will. Sounds like your plan, Chad, is that this is probably the last round that you do that that in the future like there's there's probably We're nicely profitable. We don't we don't need additional cash for anything. I'll tell you one thing that I um probably should have mentioned that matters a lot to me is I think the debate around whether to raise or not usually focuses on like, "Oh, you're like the VCs now have control and they're going to like tell you what to do and you need to hit these targets." And you know, we're growing really fast. Like that's not really a concern from like, "Oh, we need to like put out numbers." Uh and we're nicely profitable. But what I would say is I I tell anybody who comes to me and asks whether they should raise is you should If somebody wants to give you money, take it. Unless you're giving up voting control. Unless you're giving up control of the destiny of the business, then don't take it. So like again, you know, you see one headline in this this recent round of 500 million. Deal terms on that? Super clean. People people don't necessarily see that part. Whereas I can tell you a competitor of of ours back in 2022 raised at a 1.1 billion dollar valuation. Ridiculous. Yeah, nobody nobody understands that that top line number means almost nothing. We talked about that on the last pod. We talked about different kind of, you know, I don't know if that that that launched today like structured deal. So your deal that deal didn't have a lot of structure, Chad? No, I mean that was I was super clear from the start. I was like, "We don't need to do this round." Um and so if we're doing a round, like we want a good partner who's going to help us strategically scale. And two, it's going to be clean. It's going to be like a one-time lick breath. Well, and when you don't try and get super aggressive on the valuation side, it's easier to do that as well. That's another reason why you don't try and get every penny on the valuation side because there's always going to come with strings attached on the liquidation preferences or, you know, board seats or a whole bunch of other things. So but it still is interesting to me. I mean, you guys are profitable. Do you actually have like line of sight to how you're going to use that money or is it more just like somebody wants to give me a whole bunch of money, I might as well put it on the balance sheet? No, I mean there was always intent with every single round we raised. Historically, you know, in the first couple rounds it was uh back to what I was sharing with Matt here is the uh you know, if the world lets me capture a certain amount of new customers in a month, we're going to be unprofitable. And so we're funding some of that unprofitability from a P&L standpoint, but not unprofitable LTV to CAC economics. Um Now that the business has scaled, I would say there's two reasons to raise. Number one is um you know, if you've got $1 million of cash in the bank and a $10 million revenue business, that feels comfortable. Yeah. >> But if you're running at break even and now you're doing 50 million of revenue with 1 million of cash in the bank, that's not good. You should cushion that up. And the way to cushion that is either slow down growth or put some more money on the balance sheet to create that buffer. Um I would say that's more of like what we were doing you know, last year. Now it's you know, we're funding massive growth of growth in retail. And that cash flow terms of 60 days, you got to like you got to finance that somehow. Um We're building out this facility in Dallas. So there's like real cash needs that Yeah, don't sit on the P&L. They sit on, you know, cash flow statement or other areas where we need to need to create some cash cushion. You know, something you said, Chad, that I think is important for founders on the investor side is I got this advice from a guy in the Bay Area years ago when we were raising money. Um cuz I was always scared of control. Right? It's like, "Well, what if they get control? How much equity do I own?" And this guy who had sold his company for three and a half billion dollars, he was like, "Oh, no, no, no. You don't understand. You have You You as the entrepreneur always have control." He's like, "There's no venture investor that's showing up to run your company." No. He's like, "At very late stages, like in the many, many billions, like the Instacart situation, you hear these war stories of like hostile investors that kick founders out. I mean reality is anybody listening to this show like most people aren't going to be in that seat. You know, so even the voting control thing is actually great call. But like this idea that you own less than say like half of the company at some point and that you lost control. No, you didn't. There's the profits interest and how much of the profits interest you have and how is the board structured and >> Totally. the Very different things. >> It is counterintuitive to people. Like I know a founder who owns 75% of his business. He doesn't really control the board. It's five people and he's one and I would say it's a friendly board. So it doesn't matter and the business is doing well, but I've I've kind of privately told him like the moment that you feel like you can you should you should change the structure because if you if things did go really badly, you are actually vulnerable here in a way. And it's one of those things that like the way your board is structured, it's not a big deal until it's a huge deal and then >> Chip Wilson's talked about this his Lululemon story. Like he's been pretty public that that board control ultimately bit him in the I don't think I would want to run a company where I did not know that I controlled the board. And I there's other people that can do it. I think it's a different mindset to be able to do that. But when when you're in that situation, you just need to know that now a significant portion of your mind share needs to go towards optics and towards politics because there are now people that can vote you out of your seat and you have to manage perceptions. Whereas you know, when you're when you're in a position where you know you have the board control, you don't have to worry as much about perception and and you can run the business the way that you think's best. >> Yeah, it's great call out. It's interesting. I had um the I had less than 50% of Simple Modern and but I was like I'm I actually put in a provision. It's I don't think I've heard of anybody doing this cuz I had two co-founders, but the provision I put in was that I had 50% exactly of the voting interest and it was kind of symbolic in that I'm like I don't need to know that I have control. I need to know that I can block anything that I think's antithetical. So it's even like there's a spectrum of like it's not like you need to be authoritarian or you need to like be able to control everything. But if you can't stop things that you think are kind of against what the company's intended to be or you know, your removal or something else. And my thought was always like the the thing I liked about 50% which like I said, I don't think I've ever heard of anybody intentionally voluntarily doing this was that it put me in a position where I knew I had to convince at least one other person to see things my way. And if I couldn't convince at least one other person, then probably I should you know, look like well, why is that? But I just couldn't have anything crammed down my throat. >> It's so critical, but it's it's hard. You got to leverage like a lawyer legal counsel to help you with that cuz there's so many terms that if you're not in the investing world, you're not going to pick up on. Um Well, it's totally asymmetric and and you know this Chad, but like if you go and raise a round, you're doing it for the first, second, third time maybe, right? This is their 50th. This is their 50 their hundred the whatever and so like you're going to get waxed in that transaction in in terms of like just the the the information asymmetry is really big. So you have to walk in knowing that and there's there's some great books about like kind of bringing yourself up to speed on some of the basics, but then kind of to your point Chad, you really want advisors. If you're going to take money from anybody, you really want advisors that have done it before that are helping you like look over the terms because uh you can you can very easily make a bed that you don't really want to sleep in. Jason, what what do you like about Saros? You were gone for the past week in Italy. Were you checking Saros dead dashboards? >> I wasn't checking anything in Italy, but I will say this like whatever anyone on my team's like growth team or or anywhere else like sends me data anymore, it's likely coming out of Saros. And every once in a while I'll get something from them and it looks really slick and I'm like, where did you get the is that Saros? And like yeah, and I always feel really good about our investment. I do get a daily email of some metrics out of Saros that comes through, but one of the things that I've been thinking about a lot lately is AI. Um I mean duh, right? Everyone is. Duh. But like I finally woke up a few weeks ago. I finally woke up a few weeks ago. I was like, I got to get serious about this and I was actually talking to the to the Saros guys and they launched a next generation um an AI powered stuff in there in the platform, which I'm excited about. It's Saros IQ. It's invite only right now. If you mention Operators podcast, you can probably get access hopefully. But you know, the next level of all of this is have you first with AI, you need to have all of your data uh somewhere. I mean you can it's going to be really messy to just drop stuff into different AI platforms. If you have your data in one place and then you can leverage. You can really leverage AI. So the way I thought about our investment in Saros analytics was getting all of our data in one place, understanding our customers better, understanding our marketing metrics better, but then being able to layer AI on top of that is I think the really exciting next level here. You brought up bringing Costco, Amazon and Shopify. The ability to have all sales channels with the same data is so important. If you're listening to this and you sell on Amazon, you know how painful that platform is. You have to wait like a couple extra days to pull your reports. Like the SKUs aren't the same as the rest of your SKUs. Like the titles are different. So like to get actually like clean data to compare, it's very manual. Using Saros analytics, they mashed all that up for us. So like they cleaned all that data. So I can actually look at what is the true margin profile of an Amazon sale, what's Amazon return rate, what's Amazon customer frequency, like all the type of data compared to our dot com and have like a comprehensive overview. And now with their new AI tool, I don't have to look at it. I can just ask it. It can just tell me cool questions. So doing that across our five Shopify stores as well. We have an EU Shopify store. So now I can compare EU ring customer cohorts versus Canadian ring customer cohorts versus Amazon ring customer cohorts. So now we're getting into different functions of my business across different channels, different categories and actually looking at the margin, the repeat rate and like is it worth investing in these different things. So if your business starts to feel like a spider web and just like keeps going and going and going, it's just like this non-stop proliferation of different channels, maybe it's time to check them out like Saros analytics. I remember Shawn at the very beginning. This is the very typical Shawn thing. Shawn was Shawn was like, what is this? Why do I need this, right? And um I'm actually really happy that you've you come to understand like how important having a data warehouse is and and what it does for for managing your business because you were not like a true believer from the beginning. No, I was I was angry when when you tell me I needed to pay for something new, but Jason was right. I he convinced me. He got me on board. I'm using it. So a rare Jason W. So thank you Jason. Very rare. I'm on Saros analytics. He's on Saros analytics. Proud sponsor of the Operators podcast. So if you want a data warehouse and you want an AI powered data warehouse, tell Saros about the Saros IQ feature and then you crave it. You're demanding you get access to it. So all right guys, talk to you later. Hey Chad, let me ask this question. We're kind of getting to the end. What's one thing that you learned through the experience of scaling so far uh that surprised you or what's what's one of the ways that you've grown that you wouldn't have anticipated? Team. I like it's not lip service. You'll see me saying it everywhere. I think some people read that and they're like, oh, he's just like saying it. No, like no good brand long-term long-standing brand is built off of five to 10 people. No. Period. And and there's so much hype in the D2C community around well, how efficient are you? I can I can almost guarantee you that our payroll and external agency fees lumped together as a percent of revenue is lower than anybody else. We've almost got a hundred people on our team. We're basically all in-house. That should be the measure of efficiency and I think everybody gets so held up around like you see it everywhere. It's like, oh my goodness, this brand's doing blank and they got two two full-time people. I'm like, that sounds like to me somebody who doesn't know how to lead. He doesn't know how to manage, doesn't know how to build a team, can't find the right people and and they'd rather lean in on this moment of time where we're all hyping it up how great they are that they just use like 20 agencies. And so what I've learned and and it's funny. I would probably put myself in that category. I I was pitching back in February of 2024 that I could get this thing to a hundred million of revenue with four employees. Um and it my chief of staff at the time Katie, she's not president of Grinds. Promoted her about six months in. She's phenomenal. Um she made a comment to me like a month into her her role. It was like May. She was like, hey, I think we need to like hire people. I'm like, I don't know. And she's like laid it out for me and I was like, you know what? You're right. And then that's spurred what we've done here where we've brought so much in-house and and we have a really good hiring function and good culture, but like that need I need somebody to to wake me up to that. And I think there's levels where people start to realize it at like 28 million of revenue. They're like, we're just not going to build this you I be curious if anybody could point me to one single brand that's doing over 100 million of revenue sustainably, planning to grow for the long term, that has like five people. >> No, you're moving physical things around the world. No. >> I think there's smaller teams. You can do it with a smaller footprint than you used to. We had Will from IQ Bar. He's doing it with a with a pretty tight group. Um but to your point >> Yeah, but but to your point, like there's some uniqueness that makes that possible. I think I think consumer where you're in really big channels and and and maybe if you're not doing like tons and tons of R&D, like there's ways to make it work. But generally, like we just get way too hand-wavy about how important team is and uh I think at the end of the day, business is primarily about organizing human capital. I'm convinced. I think people focus a lot more on the other aspects, the financial capital and the other stuff. To me, like financial capital is mostly a commodity. You got a lot of people offering it. There's not a lot of differentiation. But human capital is a a massive piece of success and if you if you're superior at being able to gather and organize human capital, you're inevitably going to be successful. Organize is the really important part there. I think, you know, you might ask, now that we have all these wonderful humans here at Currans, like what do I do? I see my job is set the vision, make sure that everybody's very clear on what's going to drive growth. And two, I set the connected web. I'm I'm I'm the one that needs to ensure that communication patterns and uh street streets, avenues in the company are very clear so that we function correctly all together and um that's not that's not easy to do, right? Like it's actually kind of hard to do that stuff and it's a completely different skill set than when uh Jordan our um she does influencer here at at Currans. She was employee number one back in October of 2023 when she and I were the only two running it for six months. But like I did a lot of different stuff back then that I don't do anything with that. I would I was telling the team like I used to look at look at Shopify like 20 times a day, like the Shopify admin. I look at it like three times a month now, maybe. Um yeah, it's completely different world. Yeah, it's funny like I've I've actually kind of realized that there's a negative correlation between how often I'm checking our numbers and how well I'm doing and leading people, typically. Like the more I'm in spreadsheets and the more I'm I'm looking at dashboards because they're just very different parts of my brain. Well, hey, uh Chad, this is awesome, man. Uh thank you for joining us. Congratulations on all the success. It's really fun when you see such a successful product that's great for people, but then also you see like just excellence in operating. And so, we admire what you've done there and and know that you're going to be continuing to scale and do great things, but really appreciate you especially with a culture where like you said you are externally opaque, really appreciate you being willing to share some of your insights from running the company. This is invaluable. So, thanks for being on the pod, man. Appreciate you guys having me. It's a looking forward to giving back more. We're in that period of externally opaque, but I think you'll you'll see me try to share out more. I have no desire to be an influencer. If you look me up on YouTube, my wife and I did that for a year and actually built a pretty good YouTube following. I This is for no other purpose than to help people and help them improve their business. So, I appreciate you guys having me on and let me letting me have the chance to do that. That's awesome. All right, guys, that's the pod. All right, thanks for making it all the way to the end of this episode. Wherever you are in the world, it is awesome to have you here. If you do not already subscribe to this show, that is my one ask. Is please go to whatever platform you are watching or listening to this on. It could be YouTube, it could be Spotify, Apple, I don't care. Just go hit subscribe button. Please pump our egos up. It helps. And before we go, one more thank you to the sponsors, Fulfill, Postscript, Northbeam, Saris, and Richpanel. Awesome guys running these companies. We all use them. These are our vendors. That's the only reason they're sponsors of this show. So, thanks again to those people.