E083: Curtis Matsko: Operators X Portland Leather Goods

[00:00:00] All right, welcome back to the Operators Pod. I don't know what episode this is. It doesn't matter.

[00:00:04] We're going to jump into an interview with Curtis from Portland Leather today. This is a

[00:00:09] mind-blowing episode for me. You know, we sometimes talk about supply chain. We sometimes

[00:00:13] talk about domestic manufacturing. We talk about marketing, but this guy is just doing everything

[00:00:18] at a high level and my head is still reeling from the conversation. I hope you enjoy it. You are

[00:00:24] going to see some just some crazy and hear some crazy things. Oh, also get ready for the energy

[00:00:29] level. He's taking it up a notch, like maybe a few. As always, thank you to Fulfill, Northbeam,

[00:00:35] and Postscript for making this stuff happen. It doesn't work without them. So let's do this.

[00:00:53] It's so easy to talk about how hard it is to build proper ERP. It's such a conundrum too, because

[00:01:02] usually implementing an ERP is so difficult. We're starting a new, you know, vertical. And

[00:01:08] as we're starting it, one of the questions we're asking at the beginning actually is,

[00:01:12] when do we need to integrate with an ERP? When do we need to start thinking this way? Because it was

[00:01:18] so incredibly painful when we finally did it with Simple Modern. And so usually the integrations on

[00:01:24] these things are just an absolute bear because like you said, Matt, it's just a mess usually.

[00:01:32] Well, it's also the funny thing is there's been multiple times in our business history where we

[00:01:39] actually weigh the decision of do something based on the level of difficulty to make it work with

[00:01:44] existing integrations. That's where it's really frustrating when accounting is stopping you from

[00:01:50] selling things. And those are the things that'll just drive you crazy as an entrepreneur.

[00:01:55] I have literally lost my shit because of this type of stuff. I'm like, we're sorry,

[00:02:02] we're not doing it for what reason? It's like, oh, it's because integrations is going to take forever.

[00:02:07] This is why I don't want to own a company anymore.

[00:02:10] Yeah. So what do you guys think the highest score you could give to a NetSuite is? I think both

[00:02:14] you guys are a NetSuite. What's the highest score you could possibly give them?

[00:02:18] One to five.

[00:02:20] One to five?

[00:02:21] It's really hard to get above probably the high threes, three point something. The other problem

[00:02:27] with it, Sean, is that you can't just implement NetSuite usually. You have to go and get all of

[00:02:33] these extra contractors. This entire ecosystem of people around NetSuite just to help build integrations.

[00:02:41] The problem with that is that the mileage really varies there and the quality level really varies

[00:02:46] there. That was actually where we had some of our problems is that we hired a contractor and we

[00:02:50] spent a whole bunch of money. They were supposed to be building integrations only for us to get

[00:02:54] integrations that sucked where we had to go back and redo them ourselves internally over the last

[00:02:58] couple of years. Yeah. So it's not even just the NetSuite thing, although I'm not going to give

[00:03:04] it a five out of five or anything. But it's also, it's so complicated and you need so many other

[00:03:09] contractors that that really drags down the score as well. I think ERP is like telcos, Sean.

[00:03:18] They're basically in the business of managing dissatisfaction because they're all so difficult

[00:03:24] to use. Yeah. So famously, what Matt's referencing is that Comcast has like 10% of people like Comcast.

[00:03:32] Yeah. It's a $100 billion a year business, right? Right. It's like, it's like, nobody likes their

[00:03:38] telco provider. Like when was the last time you're like, man, I love AT&T. What a great day to be on

[00:03:44] AT&T. Right. So said nobody. So we just released Sean's vendor list where I give one to five scores to

[00:03:51] everyone that we currently engage with. For Phil, my ERP of choice, I give them a four out of five

[00:03:57] stars. And they were like, you know, if you do not know about ERPs, maybe that you'd be bummed out

[00:04:04] by getting a four out of five stars. That's an incredible score. Yeah. I think the theoretical

[00:04:09] limit for an ERP should be a three. No, nobody is happy with it. It is like going to the dentist.

[00:04:15] That's what I, that's the, it's like, even, even if you have the best dentist on earth,

[00:04:20] even if they're so kind and so sweet, they're still going to put a drill in your mouth.

[00:04:25] Yeah. Like that is, that is, that is the ERP business. So if you're looking for a four out of

[00:04:31] five ERP, which if you grade on the curve is like a 1 billion out of 10 ERP check out for Phil.

[00:04:41] In Mexico. Yeah. I read that that's where your factories are.

[00:04:45] You know, I actually bought a house down here. It was a former soccer player's house. And I walked

[00:04:53] into this thing. It was just magical, right? It's just like four floors. It's got a 50 foot

[00:04:57] tree in the middle and everywhere you look is beautiful and glass. And he told me the price

[00:05:02] and I literally just like shook. And I ran to my people like, we got to buy this house. And I bought

[00:05:07] it just for like one week a month when I come down here for us and our employees. And I came down and I

[00:05:13] never went back. I just didn't go back to Portland. I drew a story. I called up my friend, a realtor.

[00:05:19] I said, have people go pack everything up, put it in storage, sell my house.

[00:05:23] Dude. That's amazing. Cause I hate Portland. I hate the Northwest. I'm from there. So yeah,

[00:05:28] dude, you, you, that's, that's the American dream. You escape the gloomy Northwest and now you're in

[00:05:33] Mexico. I hear, I hear Leon, Mexico is like the, as the best leather manufacturing on earth. Is that true?

[00:05:41] It is a 2.5 million people and it's manufacturing, but it's actually a very small town. I know everybody.

[00:05:49] I cannot go to a restaurant or a place where I am not known because there's people who run all this.

[00:05:55] So there's factories, everybody's here. Um,

[00:05:59] I'm not going to go to a restaurant or a place where I am. But the people are so kind and wonderful

[00:06:03] that it's different than Portland. Portland is, if you want to see a friend of yours

[00:06:08] and you're like, Hey, we should hang out sometime. They're like, yeah, maybe in a couple of weeks on

[00:06:11] a Thursday, I have some time. We literally one day I said, we should do karaoke tonight. And that night,

[00:06:18] 38 people showed up for karaoke nine o'clock that night, everybody brought something and they stayed

[00:06:24] till four in the morning singing. It's just like, it is a thousand celebrations. They're always doing

[00:06:29] something. They're always being active. They're always in each other's lives. And that is not

[00:06:34] Portland. Portland is, I already have a friend. I don't need to know. I'm busy in my freaking life.

[00:06:39] I don't need you. And they, it is semi warm, but it is not a connection city and Mexico is connection.

[00:06:46] It is all about, it is all we got as people. Let's be great to people. Wow. Yeah. Let's,

[00:06:52] let's talk about the move down to Mexico. Um, we've had a lot of friends who've moved close to

[00:06:57] be with their factories and we had a friend who moved to Mexico to be with his factory.

[00:07:02] When, when did you make the move pre COVID during COVID when?

[00:07:05] You know, that's the great story. You guys actually were at a party

[00:07:09] and you met a guy named McCoy. You may not forget him. He's my chief marketing officer.

[00:07:14] And he raved about you, Sean. He's like, oh, you got to meet this Sean guy. You really like him.

[00:07:19] Whenever anybody says that, I'm sure that's not the truth. So I'm like, I just want to avoid this

[00:07:23] Sean guy. He met you in Vegas. And then I started watching your stuff and I'm like,

[00:07:29] damn it. These guys are really, really good. Maverick. I call them Maverick. McCoy was,

[00:07:34] uh, when COVID hit, we were making everything important, but I had a 24,000 square foot building

[00:07:40] and we were hiring everybody in Portland to hand make everything there in Portland.

[00:07:44] And a month later, we're out of business. We don't have any products, right? Like what are we going to

[00:07:49] do? And he said, books will be written about people who got afraid and people who excel.

[00:07:55] And I put on double masks, flew to, couldn't even fly into Leon. I flew into Guadalajara,

[00:08:02] had somebody pick me up, come over here. And I got this guy, gave him $10,000.

[00:08:08] And he said, give me a place to plug in some machines and I will make your stuff for you.

[00:08:12] And it just so happened that all the best artisans, there's over 600 shoe factories in

[00:08:17] Rio and Mexico. They all went off. So we just chose a thousand square meters, 10,000 square foot.

[00:08:24] We've got pictures of it with like five little machines over in the corner and started up and, uh,

[00:08:31] went from a thousand square meters to 2000 to 4,000 to 8,000. And now around the world where we use up

[00:08:41] to somewhere around 700,000 square foot. And that's all happened since COVID. So this,

[00:08:47] this factory behind me is, these are the best artisans in the world in leather. They're,

[00:08:53] they're absolutely fantastic. It didn't exist three and a half months ago. We were spread out in this

[00:08:58] city and all these little small locations. And so this is just a small part of what continues on,

[00:09:04] on the other side. This is just some of the stitching mines. This isn't really what you see

[00:09:09] behind us is not all what we have. Do you look at yourself more as a, like a manufacturer than you

[00:09:17] do as a brand? No, like that's, that is an operation dude. Like most brands would puke if they had to.

[00:09:24] Well, man, I'm a little crazy. I am a little bit crazy. And so I need a huge project every

[00:09:31] three months or six months. And so I'm a marketing guy. I just, we set this up and we say,

[00:09:37] we are a marketing company. We're going to figure out what sells, what we're going to do.

[00:09:41] And that's what we do. So I control in the offices next to me. I have all the design. I have all the

[00:09:48] samples. I have all the logistics. I have all, everything is in this big building that I have.

[00:09:53] I created this offices here for me. Plus we have 80 people in Portland. I'm a marketing thing,

[00:09:58] but we found out that if you want to market perfectly, create the perfect marketing plan,

[00:10:04] you got to have the exact right product at the exact right time. You know, those algorithms are

[00:10:10] tricky. And if you start running out of things, Google does not know if you just ran out of that

[00:10:16] particular product, they just think, oh, your ad fatigue. We have some of our ads have been running

[00:10:21] for three straight years and they're still killing it, right? You better not run out of that particular

[00:10:25] leather, that skew, all the peripherals, all the other things that work. So we're a marketing company.

[00:10:31] We have a 22 person marketing team. It's run by McCoy Merkley. He's the best there is out there

[00:10:36] in the world right now. He kills it. I is brilliant. And he's like, Curtis, just go make sure I have

[00:10:43] all the product at the right time. And so I started spending more time down here and more and more and

[00:10:49] more. And now we got it. You're a man after my own heart, man. Everything you're saying is things I

[00:10:55] say all the time. So yeah, Maverick was right. We would get along. Let's talk about the business. So the

[00:11:01] high level strokes are, I know you're a nine figure, mostly e-com seller, but I want to hear

[00:11:06] the actual heart of the company. I know you guys do bags. You guys do a bunch of great leather stuff.

[00:11:11] How'd you get into it? What's the passion behind leather?

[00:11:14] There was no passion behind leather. There was passion. And I don't believe that people like,

[00:11:19] I have a passion for this. When you do something, you get good at it and you work with great people,

[00:11:24] you get more and more passion. My girlfriend had a bad job and I said, quit your job.

[00:11:31] And she said, what will I do? And I said, I'll start up a company and we'll make a hundred

[00:11:34] million dollars. She said, oh shit. All you do is do yoga. You don't even work.

[00:11:39] And I'm like, no, I'm an internet marketing genius. You don't know that because we just met

[00:11:44] and all you've ever seen me is be lazy. Right? And she literally quit her job. And she said,

[00:11:49] what are we going to sell? And I said, this little leather journal is back in 2015, 16.

[00:11:55] And she goes, oh, I'm in trouble. I'm an idiot. Right. And we literally started at art festivals.

[00:12:02] And we went from 10,000 to 20,000 to 30 to $40,000 weekends. Went on to Etsy in, in 2016, 17,

[00:12:12] and became a top 10 all time seller at the time within about a year. And then we moved off of

[00:12:21] that on Shopify. And as I always tell people, we had a 2017, we had one black Friday order on Shopify.

[00:12:29] And then this last year we had three seconds. And so we just build really, really fast. So Matt,

[00:12:36] you asked like, who am I and where's the heart? What is some of this thing? It's just like,

[00:12:39] you have to change your company every single year. Right? We went from this and we were making

[00:12:45] everything we had. We were hiring Reed College liberal arts graduates in Portland,

[00:12:51] whose mother used to have a sewing machine to come over and we teach them how to hand make something.

[00:12:56] Right? Well, now we're a little bit different company, but we're able to do things better,

[00:13:02] better quality, better leather, better prices, better efficiency, everything. So we've had to build

[00:13:07] that up over time. The reason that I'm down here with our manufacturers is I don't actually run this.

[00:13:14] We have amazing people that do, but I'm working with marketing every day to come up with where the

[00:13:20] designs are. Where's the next thing? I have next year's plans. I have tables outside of over 30

[00:13:27] new designs that we have all for the next 10 months already laid out. And the marketing team has

[00:13:34] analyzed each one to determine is this a hero product? Is this ad set? Are we going to be

[00:13:38] doing video ads? What type of ads are we doing? What type of stock do we need? What type of refill?

[00:13:44] So we're working on all of that stuff. It's just a big game and it's a lot of fun.

[00:13:47] I have so many questions. Uh, so what's the channel mix today? So Sean hit on like mostly DTC.

[00:13:54] Do you start at Etsy and, and basically like you're a fair seller. We're just a Shopify seller.

[00:14:04] We'll do 90% of all of our sales in the U S direct to consumer online. It's all through our website,

[00:14:11] Portland leather, Portland leather goods.com. That's everything. But it just gets killed.

[00:14:16] We set up a store on a bet. Another bet that I basically had with somebody. I asked my people,

[00:14:22] do you want to set up a company to do a new product? Like let's do this. Or do you want

[00:14:26] to have a retail store? They're all like a retail store. I'm like, guys, that's stupid.

[00:14:29] I don't want a retail store. We set one up. It killed it in Portland, just a little TV store.

[00:14:34] So we put a factory outlet store in Portland, just in on my building in the basement.

[00:14:39] You have to like go through bad neighborhoods and try to find this thing. And it's going to do 5 million

[00:14:44] this year. People line up around the block before.

[00:14:48] That was one of the things I wanted to ask you, like how much of the, because the brands,

[00:14:52] the name Portland is in the brand. How do you weigh over index in Portland and Oregon from like a

[00:14:59] percentage of sales? Like on a per capita basis.

[00:15:03] Only because we've been there a long time. I truly believe that. It's only because we've been

[00:15:07] there a long time. And Maverick always says the best marketing we have is our products in someone's

[00:15:12] brand. Right? Like they just like, wait, this is real. It smells like leather. It feels after a

[00:15:19] year, it looks better. No, the day after you leave, you know, the store, it looks worse. And so, yes,

[00:15:26] they do really, really well important. That's just because we set up the stores and people have been

[00:15:31] buying them for years and years and years. But yeah, number two is Seattle. Number three is Dallas,

[00:15:38] Texas. Number four is Chicago. Number five, of course, is, but we're all over the country.

[00:15:45] What would you, uh, so I know you say you're a marketer, but when you, man, your product catalog

[00:15:50] is what blew me away. It's like the variety of stuff that you make is nuts. Right? So what I want to

[00:15:57] know is when you guys look at product, does it start with, do you actually start with like, this is the

[00:16:02] product somebody comes in and says like, I think we should make a product that looks like this.

[00:16:05] This is like the thing. Or do you start with like, there's a market for it?

[00:16:09] It's all always a market. I'm a marketing guy. Right? So you're, you're so guys, okay. I, I,

[00:16:14] I have to tell the story before I answer that question. Now I was at the commerce round table

[00:16:18] in San Diego and everyone's like, Oh, it's the operator's podcast. I'm with 10 guys. And I said,

[00:16:24] who the fuck is the operator's podcast? And they're like, Curtis, you really are a loser.

[00:16:28] Like everybody knows these guys, right? Sean wasn't there, but I went in like, ah, these guys are okay.

[00:16:34] They're fine. And then I went on and I watched and it's the conversations truly that you have

[00:16:41] of what you get when you get nine figures and you're, you're working toward that 10 figure

[00:16:46] and you're running the company and you're making these decisions.

[00:16:50] I led this company poorly every year of its existence by saying, do you like this product?

[00:16:57] Right. Which means nothing. If people like it is, is there a market? Is it a hero? A hero product is

[00:17:05] something I can spend five to $8,000 a day on advertising. Otherwise it's not, it's just going

[00:17:11] to sell to some of the people that come into my existing products. We seek for a 50, 50 blend on our

[00:17:17] website, right? 50% return customers, 50% return customers. We always are somewhere between 46,

[00:17:25] 54, 48, 52 and 50, 50. If you go at the end of the month, Maverick has kind of guided that to be

[00:17:31] right at that 50, 50, right? So that hero product is seeking new customers who are going to be coming

[00:17:37] and buying. So when I look at 30, 40, 50 different designs, I'm looking for the hero product. What can we

[00:17:43] do ad sets on what is going to bring new customers into the mix? You've got to have that. I look at

[00:17:49] some and say, yeah, we can make 5,000 of these bags. They'll all sell. 95% are going to be our return

[00:17:55] customers. They're going to be in fun colors. They'll sell out in a month. It'll be nice and

[00:18:00] we'll make a little bit of money, but it's not the growth of the company. It's just easy money

[00:18:05] to bring in because you're selling to them. So we don't, we have a lot of SKUs. And the reason we have a

[00:18:11] lot of SKUs is last year we made 144 different leather colors because the people are craving that.

[00:18:17] Our return customers want something new, something fresh, but I always put marketing in the mix when

[00:18:23] we're designing. Curtis, that's exactly what we think about it. Like, so we call it CAC products and

[00:18:28] LTV products. And if anyone's listening to this, the one thing they can do to actually grow their brand

[00:18:33] is make new products that new people want to buy, right? Because like you said, you can make cool bag

[00:18:38] colors. That's how most brands get stuck because that's what their customers want. And they never

[00:18:42] ask what the next new customer wants, right? How do you get the next person in the door?

[00:18:47] So that was rings for us. That's luggage for us. Like we're launching a big like tech package.

[00:18:52] Like those are things just to get net new eyeballs in that I can't sell them wallets, right? I'm going

[00:18:57] to sell enough fucking wallets to pay for all my lights, all my bills, whatever else, but it's not

[00:19:00] going to grow the brand forward at a meaningful cliff. So that's probably the most impactful tip

[00:19:06] to people that get away from this. Also, dude, you're a badass. You're doing the hard thing.

[00:19:12] Like most people just go on Alibaba, type in leather backpack and then order one. You're like,

[00:19:18] no, we're going to make, we're actually going to be in the cutting edge of this.

[00:19:22] It's a personality flaw, Sean. It really is a personality flaw that I've been able to excel

[00:19:27] because of that. When I wanted to sell leather goods, my girlfriend said, just go on and buy,

[00:19:32] yeah, go on to Alibaba and buy some from China. And I tried to look at that. I'm like, this stuff's

[00:19:37] crap. And she said, you're right. You would never be happy selling something that you didn't love.

[00:19:44] Right? So I spent the first months in my garage, not one of those fancy two-car garages, a one-stall

[00:19:51] garage sitting there putting together leather goods and figuring out how to hand make it,

[00:19:56] how to do all of this myself, because that's literally what I love. So I wanted it to be

[00:20:02] great. I didn't want to do it. And then as we tried to hire people to do new things,

[00:20:07] I find out I don't like how they do it. I tried to find people to manufacture our goods and I'd go in

[00:20:14] and I didn't like how they're doing it. So I created my own manufacturer. I would go-

[00:20:20] There is like an element of this though, that is making your company,

[00:20:22] like that's actually, there's a pretty significant moat in your supply chain. Like you gotta say,

[00:20:27] man, it's yeah, it sounds a little crazy, but my guess is that your inventory position on any skew

[00:20:36] relative to competitors is pretty low. Like you're, you can, you can stay in stock because

[00:20:42] you own the damn supply chain and you can move things around. First of all, I can stay in stock.

[00:20:47] Number two is I can do things faster. Yeah. I could literally come up with an, have an idea,

[00:20:53] have the samples made, the photo shot, have it in our 3PL in Dallas, Texas in five weeks.

[00:21:00] If I'm ordering it from the China, Cambodia, the Philippines or India, I'm hoping that the amount

[00:21:06] that I ordered is going to sell in five to six months when that fricking boat breaks. Right.

[00:21:12] If they add, if an ad really takes off, you know, that if you're selling, okay, we're going to sell a

[00:21:18] thousand of these a month. Oh no, we're going to sell 4,000 of these a month. Oh no, we're going to

[00:21:22] sell 10,000 of these a month. Those numbers are staggering the different in manufacturing and

[00:21:26] filling that ad back up. So I can tweak that. So we never have to take that ad down.

[00:21:32] We can literally be pushed that manufacturing through and get it up there. Maybe delay by a

[00:21:38] few days, how, when that's going to be shipped out so that we can keep those algorithms hot done.

[00:21:42] Yeah. I created a moat just out of stupidity of me not wanting someone else to do it and me trying

[00:21:48] to be controlling because I'm not a manufacturing guy. I'm a full system guy. We actually buy the best

[00:21:55] leather hides in the world. And we buy the trucks in the United States from the best hides that they can

[00:22:02] have, have them brought to the tanneries so that they can make the right leather. We pick it up at

[00:22:08] their door and follow it through the entire process until it's customer service and returns and we do

[00:22:12] it at all. Yeah. It's wild, man. It's, it's, uh, Sean has talked about this too, that like his luggage,

[00:22:18] he just mentioned his luggage business. Um, but like one of the things that like it came out of the gate

[00:22:24] and just crushed for Ridge. Like it's the perfect category for Ridge, but then supply chain is,

[00:22:30] it was the thing holding them back. Like getting more fricking product, like making more of the bag

[00:22:36] was the actual issue in scaling that category up. The thing that shocked me is I know I make

[00:22:43] something difficult. I have teams right now in Brazil working with the best tanneries in Brazil to make

[00:22:49] sure we don't run out of the right leather. And I mean, it's a pain in the ass. I didn't want to have

[00:22:54] a thousand people making my stuff, right? I didn't want to do that. I'm a marketing guy,

[00:22:59] but it's kind of cool when you realize what the other side of that is and how you can,

[00:23:04] how you can be screwed. I was at the commerce round table in San Diego and I was talking to

[00:23:09] a t-shirt guy that, you know, of course, who runs a very famous men's t-shirt brand. And he was saying,

[00:23:16] I was like, well, I make really hard stuff. I've got to get natural product,

[00:23:20] real leather hides tanned perfectly. It can take four months. And when they're delivered,

[00:23:25] you can have a hundred thousand that's wrong, right? That's horrible. And he was saying for

[00:23:30] every t-shirt and every product he has, he has like five backup factories that he has to have

[00:23:36] because one, two, and three are going to fail it. That's a t-shirt man. That is like the easiest

[00:23:42] thing you're ever going to make. And there's problems. We've had manufacturers from around the

[00:23:47] world come in and they're like, we can make your product. And I'm like, some of these lines that I

[00:23:52] have right here are making the same product every day, all year next year, right? You can't get

[00:23:58] more efficient than that. So by the time I pay a tariff by going to the Philippines or Cambodia,

[00:24:03] by the time I pay the slow just on the boat, by the time I pay for their profit and their inefficiencies

[00:24:09] and getting it up and running, I'm better off just doing it myself.

[00:24:12] Yeah. They'll also choose lower quality leather and going back to what your mode actually is.

[00:24:17] It is the fact that because you own the manufacturing, you could have

[00:24:22] a bunch of fucking skews on your website in a bunch of colors, right? Like there's so many hero products

[00:24:28] on your website, like you were saying. And if you had to order each one of these from a different

[00:24:32] factory in China or whatever else, it will never get done. Right.

[00:24:38] We absolutely use North Beam and me specifically every day. I'm constantly in there building out

[00:24:44] reports. And I remember when we brought it on a couple of years ago and I got to meet Austin,

[00:24:50] who is the founder and he is fabulous. And he was selling me on the idea of, you know,

[00:24:56] not using in platform and really using a separate platform as like our source of truth, which is what

[00:25:01] we needed. And I mean, it's, it has been a deal breaker for us. It's helped us scale in areas and

[00:25:09] on platforms that we didn't even, you know, weren't getting good read on. And it's helped us optimize

[00:25:14] for our channels that we really had a lot of high spend on. And their team is great. My favorite part

[00:25:20] is taking the calls with them where they, you know, dive deep into the insights and they've always got

[00:25:26] really great information for us. So yeah, I love North beam. We wouldn't be where we are at today

[00:25:31] without them. Now what's, what's the end goal Curtis. Cause you're, you're, you're really

[00:25:40] pot committed at this point, right? Like you're, you're making and selling everything, right? Like no one,

[00:25:46] no one wants to jump in on this. It's such a large scale operation. So are you, are you,

[00:25:52] doing this the next 50 years or what's the goal here? Well, the great news is I'm a little bit

[00:25:58] crazy and incredibly obsessive. And I have, I just love exactly what I'm doing. So about three years

[00:26:05] ago, we got a pretty big, even when we are just very small, we got a really large offer for our

[00:26:12] company. One of those, like you can't turn it down type of offers. And then I watched a basketball

[00:26:17] game that night and my team lost. And I was so upset. And my girlfriend said, if you retire,

[00:26:22] what are you going to do? Like you're, you have no control of anything. You'll just watch football

[00:26:27] and get up. You'll be upset all the time because you're in control of it. Right. And I'm like, okay.

[00:26:32] So I turned down this offer and then we just took off. Like we're growing, growing, growing.

[00:26:37] What is the plan? Our plan is we're opening up 10 new stores, retail stores next year.

[00:26:42] We'll be opening up 20 in 2026. Our retail stores are literally just absolutely destroying it.

[00:26:49] And so we've hired some of the best people in the world. And the reasoning for that is

[00:26:56] I would pay for a, people pay for billboards. I'm going to basically have 30 new billboards

[00:27:03] that people can walk in and buy our product and make a bunch of money. And I couldn't believe it.

[00:27:09] At the end of last year, when we did the math and I said, how much did our stores make?

[00:27:13] And they told me how much they made, how much profit. I'm like, that's impossible.

[00:27:18] This shows you how dumb I can be. Sometimes I'm like, no way did it make that much money

[00:27:22] because the D to C is so easy. And they're like, well, wait a second. You have no shipping cost.

[00:27:29] You don't ship it to them. Oh, well, okay. You don't have it. You don't have any marketing costs.

[00:27:34] We don't market our stores. Oh, we don't have the market.

[00:27:36] You know, and all of a sudden your margins are 30, 40% on the stores.

[00:27:41] And you're like, okay, that's a lot better than the online. And yeah, it's a new industry,

[00:27:49] but I believe that they'll work together. Our people are, they'll have leverage. There's no question.

[00:27:54] And we can supply the stores. We can supply it because we're, we're working with this.

[00:28:00] And I really don't call this manufacturing. I literally, we're still makers. We're still

[00:28:04] artists. It's like, I still walk out and the people that we have are the same people I hired day one.

[00:28:10] And we follow this from the leather. So we have the difference that we have to deal with that most

[00:28:15] people don't have to is it has to go through 50 hands to make a product. Every leather has to be

[00:28:21] taken a look at. Then it has to be looked at the next. It has to go through this because every

[00:28:26] height is completely different. There's a million judgments you need to make. So what's the overall

[00:28:30] plan is the question you had, Sean, I'm going to run this thing like fun for the next three to five

[00:28:35] years. This is the, as much fun as someone could hope to have. And I started this in a garage and I

[00:28:42] love it. And I love the people I work with every day. So why would I not want to continue to do this?

[00:28:48] Yeah. Look, let's talk about some amazing things about your business. Um, you know, I think you're

[00:28:53] definitely a contender to be a 10 figure operator pretty soon. It looks like you can get that scale.

[00:28:58] Um, I'm looking at your phone cases, 14 pro max, you get it for $22. It's just so competitive of

[00:29:05] price for real leather. Like nobody else can do that. I'm buying real leather phone cases in China

[00:29:10] for 14 bucks a pop or whatever. So like, there's no way I'm going to sell this for $22. So you,

[00:29:16] I think because you own and control the supply chain, you can just deliver such great value.

[00:29:20] And like, if I was a customer, I'd probably buy from you. You know what I mean?

[00:29:26] It's in, it comes again from my weaknesses as a human being. When I started doing art festivals,

[00:29:32] uh, I hated when people would walk into my booth and say, I love this product and walk out and not

[00:29:37] buy it. Right. I'm like, Oh, why didn't they buy it? It would hurt my feelings. So I kept lowering our

[00:29:44] price down to the point where everyone felt like they could buy. And I'm like, well, it's just my hand,

[00:29:49] my work that's going into this. Our prices, I, people cannot go at our prices for the quality

[00:29:56] that we have because they don't own this. We follow, as I told you, we buy the hides.

[00:30:00] We follow the best hides all over the world and go to their factories or the tanneries,

[00:30:06] wherever they are in the world and say, you buy the best hides can you make for us. And what

[00:30:10] they're telling us right now is of all the major leather bag companies out there, there's no one

[00:30:16] between us and people who are doing to build, right? All the ones, you know, are at that one

[00:30:21] or two billion mark. There's no one just drifted in that four or 500, 500 million. They're just not

[00:30:27] there. Right. They just disappear. And they also said, everybody's going down other than Tory Burch.

[00:30:34] Tory Burch is doing great. They're like everybody in the world right now wants to work with us from the

[00:30:39] chemical suppliers to the hide suppliers, to tanneries, to the hardware. You know, we've had all the

[00:30:45] hardware. The best compliment I ever got was three years ago where someone said, I've never seen this

[00:30:49] since coaching the nineties. I've never seen growth trajectory like you guys are doing.

[00:30:54] Wow. And like, how the hell do you do it? And I'm like, I don't know. We're marketing people. We just,

[00:30:58] we sell and I'm going to need to say something else. We love our customers. It started at those

[00:31:05] festivals where you're dealing people face to face and I'm a people person. I literally love the joy of

[00:31:13] when they open it up and they're shocked as hell at the quality of something they get. So when I say

[00:31:17] I'm not a manufacturer, I know this is my background. I'm really not. We are marketing. We are people

[00:31:23] person. And we still feel like we're artists. You know, Sean, it's like the, this is like a 10,

[00:31:28] 10 difficulty business to build, which I think there's something to be said, Curtis, that like,

[00:31:34] that's probably why you have a chance at getting so damn big. Like, it's a very important part of it

[00:31:39] is like the, the number of things that you have to execute on really well. Like if you look at it,

[00:31:46] like all of the things, right. That make your company work, that's a 10, 10 level difficulty,

[00:31:51] man. Might even, it's like doing, doing brand building on God mode.

[00:31:55] Dude, Maverick's right. They're gonna, they're gonna write a book about it, right? During COVID,

[00:32:00] sure. You getting this done because like, I'm looking at the heart patch right now and I know about

[00:32:04] stitching. I know about hardware. And if you got this heart patch made in China, you're looking at,

[00:32:10] probably $12 worth of materials and, and the zipper alone. Zippers are so expensive.

[00:32:20] Yeah. Yeah. And you're selling it for $21. And I'm like, yeah, there's no way someone will compete

[00:32:26] with you. The reason you can do that and you can do it in fun colors. You got it in 12 different

[00:32:30] colors on your website right now. The reason why you can do that is because you've built a supply chain

[00:32:35] to be able to deliver the highest quality, the lowest quality, the highest quality, the lowest

[00:32:39] price. And that is 10 out of 10 difficulty, right? And you, you, you bring up coach, right?

[00:32:45] Coach will do 6 billion in, you know, leather sales this year, right? A billion of that's men's,

[00:32:51] five billion of that's women's. And I always bring up that I'd never meet anyone who's excited about

[00:32:55] buying coach products. I think women's handbags a little bit different. They have like three or four

[00:32:59] iconic women's handbags, but they are going to cost 15 times what you're going to cost.

[00:33:07] You know what I mean? Like, or at least 10 times what you're going to cost. So I think a lot of

[00:33:12] people will opt into yours because you can still have iconic designs and probably higher quality than

[00:33:17] what coach is pushing out. Right. Yeah. Especially the leather, the leather is, you know, we went,

[00:33:21] I visited 21 tanneries in Italy and we showed them our leather and said, can you make this? And they're

[00:33:27] like, this is too, we stopped making good leather products 20 years ago. We love this.

[00:33:32] Wow. Everybody's moved into what they do now where it's so covered. Every bag looks exactly like

[00:33:38] every other bag, right? It's just one of those things. So Matt, something that you meant on 10 out

[00:33:43] of 10 on difficulty. The reason that we did that is because I always did this as I went to school for

[00:33:50] a long time. I got like nine college degrees. So I'd look at everything in semesters, right?

[00:33:55] It's from September 1st until Christmas. It's Christmas until, you know, summer. And then you

[00:34:01] have three months in your summer. I always look at the world like that. So I always figured, what

[00:34:07] are we going to do in the next four to five months? If I had thought, what are we going to do in two

[00:34:11] to three years? What are all the steps we have to do? That's scary as shit. I never would have done any of

[00:34:17] this. I could see the next two moves, maybe three, but I could not see this far ahead.

[00:34:24] Because in 2017, 18, 19, I was doing the construction work in our building that we bought

[00:34:30] because I didn't want to pay someone to do it. I'm knocking down walls. I'm scraping floors.

[00:34:36] I'm painting things. I'm in every single interview. I'm doing every design. I'm reviewing

[00:34:43] every marketing piece, right? You know, that's crazy. And when you look back on it, when people

[00:34:50] say, could you do this again? I'm like, I would never do this again, knowing how hard it is.

[00:34:55] But because I didn't know how hard it was, I was willing to do all of those steps.

[00:35:01] Curtis Woods?

[00:35:02] Curtis Woods?

[00:35:02] Go ahead, Sean. Sorry.

[00:35:04] I was just going to ask you the importance of Leon, Mexico, because I think the audience needs

[00:35:08] to understand that it's like going to Napa for wine. It's like, that's where the people who,

[00:35:17] like the actual artisans actually live. There's a huge cowboy culture. There's a huge leather culture.

[00:35:23] All of the best cowboy boots on earth are made in Leon, Mexico. So there's a reason why to go

[00:35:28] there and do that work. So was that, was that a random discovery or you were already doing business

[00:35:34] with vendors there? How, how did you end up getting on a plane and going there?

[00:35:38] Sean, everything in my world works off of magic. I don't want to tell you that I truly am a wizard

[00:35:44] and I deal off of magic. One of the young ladies we hired was a sorority girl at Auburn University

[00:35:50] and her roommate married a guy from Leon, Mexico. And she says, I think I can call them up and see if

[00:35:57] they can get ahold of somebody. And we started to come down here when the U S couldn't provide us

[00:36:03] enough leather. And we came down. I remember the day I arrived here, I said, why do you live in

[00:36:09] Leon, Mexico? And they said, quality of life. And I said, that's so dumb. Why would anyone want to live

[00:36:15] in an industrial city in Mexico? That's just stupid. And well, because it's awesome and the people are

[00:36:22] fantastic. So I met on a fluke. And then once you are in that leather group, then you all of a sudden

[00:36:30] know people from all around the world. Because now I know all the tanneries. I know all the tanneries

[00:36:35] in Brazil. I know all the tanneries in China. I know Italy. I know the major producers. I,

[00:36:41] they know us, they fly in twice a week. Somebody from around the world is flying in trying to get our

[00:36:46] business and walking in here, trying to sell them something. Right. And they flew here to Leon just to

[00:36:51] meet us. So it was a fluke. And then we looked into it. We looked a little farther and a little

[00:36:57] farther. Sean, I, I remember at an art festival, this one guy, I had found two hides that I made

[00:37:04] like eight bags out of that. I was really, it was really beautiful. And there's this very fancy guy.

[00:37:09] He looked like he was like a investment maker. And I pointed out, I'm like, that's a really great

[00:37:14] leather. Oh, you're going to love that. I'm like, I can't get that leather anymore. And he scoffed at me.

[00:37:19] He's like, yeah, leather's so hard to buy. And in my small minded thing, buying from a little

[00:37:25] leather store in Portland, Oregon, I was thinking, yes, this is really hard. Now I realize, yes, there

[00:37:31] is hides all around the world. There are tanneries. The production is out there and production of leather

[00:37:37] is low. So I can actually get my raw materials cheaper now. Right. Because all the tanneries are going

[00:37:43] out of business because everyone wants to work in synthetics. Synthetics are easy. Put it in a

[00:37:48] machine. The machine can cut the entire piece. You have no wasted materials. Your product cost is

[00:37:53] right on. You never have variabilities in that thing. So what we do is just because we're stupid

[00:37:57] enough to do it. Like this is not easy. Let's talk, let's talk about vegan leather, right? Because

[00:38:03] that's the biggest psyop available now. It's just oil. It's plastic. Yeah. It's plastic.

[00:38:10] It's plastic. My, uh, my pride thing is one of the biggest, uh, vegan leather people out there is

[00:38:16] Stella McCartney and she lost $10 million last year. And we did three times more in sales than her.

[00:38:23] And we sure did lose $10 million. So yeah, it's people talk about it. That's totally beta thinking.

[00:38:32] They're just like, oh yeah. The first thing that comes to their mind when you talk leather is

[00:38:35] vegan leather. No one actually buys it. I just, I don't believe in it at all.

[00:38:39] Well, yeah. The whole thing is it's not, it's not more sustainable with leather.

[00:38:43] No.

[00:38:44] You get meat out of killing the cow. You know what I mean? Like you can use regenerative

[00:38:48] farming, all these types of stuff. What people don't know is right now,

[00:38:50] Brazil has 20 million hides that they're throwing into landfills because they have no use for it.

[00:38:57] Wow. So we're the ultimate recycler in the world, but we won't get credit for that

[00:39:03] because it's not a quick, easy story to say. And I don't go into those stories. I feel that in

[00:39:09] marketing, you can only tell people one or two things and I don't want to go into a long story

[00:39:14] and have our conversation be about recycling and sustainability and all of those catch words that

[00:39:20] everybody has to do when you're trying to sell a new product. Our marketing is our

[00:39:24] shit is really, really good. Once you get it, you fall in love with the stuff and the cost is so

[00:39:30] crazy. You can buy 30 of our bags for the cost of one of somebody else's.

[00:39:35] Yeah. Yeah. There's almost no reason to buy a Chanel bag, right? Like the leather is coming

[00:39:39] from the same factories and the Chanel bags are five grand. Um, dude, also let's talk about,

[00:39:44] you know, people fucking up marketing. We did six figures in phone cases the first month we launched

[00:39:50] them. Right. And it's because we just do leather phone cases and Apple stopped doing leather phone

[00:39:55] cases. So all of our reviews are people being like, yeah, this is better than the Apple case.

[00:39:59] The Apple case sucks. And like, there's just a massive opportunity to be a real leather brand

[00:40:03] right now. So I'm glad you're leaning into it. Uh, and I think, go ahead, Curtis.

[00:40:08] Curtis. No, no, no. I, I was, uh, out at a Mexican restaurant in the United States a few years ago.

[00:40:13] And this guy that we used to know came up and was talking to my girlfriend and, uh, he was showing

[00:40:18] him his wallet. He walked up and I'm like, why is he showing you her, his wallet? She goes, well,

[00:40:23] you own a leather company, dummy. And I'm like, oh my gosh, I think I own a marketing company. It

[00:40:29] never occurred to me. He was showing it because of the leather, right? I just wasn't paying attention.

[00:40:34] We truly are a marketing company. Marketing first. We were at an event one time and somebody asked

[00:40:41] Maverick, like, how do you do this? And he says, I get to talk to the guy who owns it, does the design

[00:40:47] and all the manufacturing three hours a day, seven days a week. He gets to tell me exactly what he

[00:40:54] wants to fill that spot right now. I need more of this. I need this. We're showing what we are.

[00:41:01] Here's our return customers. Here's this. He runs all the numbers and says, how do we plug that hole?

[00:41:06] What some people do is they make a product and they hand it to marketing and said, sell the ship.

[00:41:10] Yeah. Good luck. If you're really good at marketing, you'll figure out how to sell.

[00:41:14] Marketing are like one org.

[00:41:16] Oh my gosh.

[00:41:17] Like a good modern brand. They're one org.

[00:41:19] They should be, and they can be.

[00:41:22] Yeah.

[00:41:22] It's not common that they are. And so with all of you guys, and I'm going to tell you,

[00:41:27] I've, uh, I've watched your, your, your podcast and I really enjoy it because you,

[00:41:32] you get to talk about those things that I don't get to talk to everybody about.

[00:41:36] Like I don't get to tell all my employees, my real thoughts.

[00:41:43] Because it's usually not a good idea.

[00:41:45] No, very, very much not a good idea. I have a personal assistant who I have for a girl,

[00:41:50] just has to take it all. I just talk to her all the time. And so I don't take it out on everybody else.

[00:41:55] Yes. And you guys talk about how you build this up and what it's like to truly run that,

[00:42:02] you know, a hundred, 200, 300 million dollar company. And it's a different beast.

[00:42:06] I mean, I thought we had it figured out at 10 million. I thought we had it figured out at 30.

[00:42:10] I thought we had it figured out at 64. And we're just starting. Like we literally slowed down this

[00:42:16] year because what you see behind me, and this is very important, did not exist three and a half months

[00:42:23] ago. I built this. We used to be in 25 locations around the city. And this is just part of it. It's,

[00:42:33] this is not even half of it. This is a small percentage of what we have. And we put it all

[00:42:38] in the same building so that we can control everything. So not only to me, I visualize it

[00:42:45] almost like a video game. I sit up here and I look and I can see where things are in the process,

[00:42:49] what's being made, how it is. We have screens up at the end of everything that I can see by color.

[00:42:55] If the numbers that we're doing, I can pull up on my, my Mac book exactly where everything is in the

[00:43:01] entire process. I know what it's going to hit our 3PL. I know where the sampling is. I know where the

[00:43:07] photography is. I know if the video ads are being paid, it's just starting to hit the point that we're

[00:43:13] getting good. And now it's being patient enough, not to screw it up while we run it out for the

[00:43:18] next year to two. Cause being me, I want to go tinker with it and bring something. I want to

[00:43:24] totally. And right now I'm just being told to stay out. Matt, you do your own manufacturing up there

[00:43:29] in British Columbia. Is that correct? We do. But, and it's for the same reasons you do. It's speed.

[00:43:34] It's straight up. Like we want to be able to respond to culture and trends when they're happening.

[00:43:40] And I don't want to wait for Asia. Like, I don't want to wait for that supply chain to work.

[00:43:45] Um, skew variety is also a big issue. Like Sean just got into phone cases. The first thing I

[00:43:50] texted him was like, welcome to the inventory shit show. Right. It's like Apple and Samsung and

[00:43:55] Google are going to make your life a living hell every year with phone models. Yeah. And our,

[00:44:00] our competitive advantage is like we sell, I st we sell, we have 58, 59 active phone models right

[00:44:07] now, tools like pieces of steel. And we had to build like our facility is built to be moving these

[00:44:14] months, like these fricking pieces of steel around constantly so that we can make inventory on demand

[00:44:19] for what people are looking for. It was like, most of our industry is just focused on iPhone 16,

[00:44:24] maybe iPhone 15, maybe the 14 and then that's it. Then they're out. Yeah. I'm just doing iPhone 16.

[00:44:32] Yeah. Cause it's a nightmare, man. So like owning your own manufacturing is it's honestly like one of

[00:44:39] the things I wanted to ask you. Cause I want to know what's scary to you now. Right. Because like

[00:44:44] what you're talking about, like, I can tell you, most people listen to this do not go anywhere near

[00:44:51] what you're doing on the actual physical, like how we make things. What, like when you were running,

[00:44:57] I'm looking at this factory behind you. Like when you're running this kind of operation, what's,

[00:45:01] what's terrifying? Like, what would, what would you like to change that keeps you up at night?

[00:45:08] Anything anymore? You know,

[00:45:10] I should steal the basketball and football games. I mean, literally that's the highest.

[00:45:15] Yes. No, it's for us. It's the raw materials. It's having the right leather at the right time.

[00:45:22] If I have, I'm my plan next year is we'll have two and a half million square feet

[00:45:27] in our warehouses, what we call studio eights down the way that's connected up at all times.

[00:45:34] Because if I can pull the right leather into inspection, into cutting, into matching,

[00:45:40] into stitching at all times, then I can have what I need when I want. When there's a block up from the

[00:45:46] raw material side, you overproduce something because you have nothing else to make because

[00:45:50] you need to keep your lines busy. Right? So that is one worry, but I think we've got that settled.

[00:45:55] I, we're, we're big enough and good enough and we've negotiated enough and we've got it down.

[00:46:00] Um, and I'm not too worried about that. I'm going to be honest with you. My biggest worry right now

[00:46:05] is what do I do to keep myself busy next year? Uh, when everything's working because I'm used to 12

[00:46:11] hours of being my hands in every single aspect of this. Now I have a senior leadership teams, seven

[00:46:18] people and we've really worked at getting them and they're all great. I feel so confident that

[00:46:25] every one of them does what they do better than I do it. I still have that overconfidence, but when I

[00:46:31] talk to Maverick every day, when I talk to Marsha every day, when I talk to Adriana every day,

[00:46:36] they're just like, I'm like, what about that? And they already got it. Yeah. They're like, Curtis,

[00:46:40] you do this enough. I just will give us a few more days. We're killing it. I don't have a lot of

[00:46:46] worries. I did until we moved in here. I did. Now it's all coming together. Now it's just moneyed it out.

[00:46:53] The stores are going to keep you very busy doing, doing 10 stores and then doing 20 stores after.

[00:47:00] I mean, I don't think so. I don't think so. I, we, we did something that we've never done before.

[00:47:06] Everybody that works for me, like Maverick started with me, uh, at $12 an hour. He was a

[00:47:12] photographer before I hired him, right? Like the dude walked in, I want to work 20 hours a week for $12 an

[00:47:20] hour. Right. And I hired the guy and then now he is who he is because as he said, Curtis lets me work

[00:47:27] with $30, $40 million of his money every single year. And I get to learn how to do this well.

[00:47:32] Right. Which is amazing to have a person who can do that. Well, I put an ad out for the head of retail

[00:47:40] and put a bunch of money behind it. And I was shocked at the quality of people that we have.

[00:47:45] Now in DTC everyone, we're really talking to industry. Yes. I, I wrote one of the world's first

[00:47:51] internet marketing books back in 96, 97. So it's been around the current state of e-commerce has

[00:47:57] been around for about four to five years, maybe eight, if you're really thinking about it. So if

[00:48:02] someone's got a lot of experience, they have three to eight years of experience taught. Retail people

[00:48:07] have been doing this model for 50 years. The woman who came in said, I have personally opened up over

[00:48:13] 500 stores. I'm like, yeah, yeah, yeah. What were these little stores? Well, that was in jewelry.

[00:48:18] What did your average jewelry store bring you? $8 million. I, and I'm like, oh, she's like,

[00:48:25] I ran 300 of like Zales and K and this chief. And she has a network that builds them, designs them,

[00:48:33] runs them, does this. And every time I try to get involved in it, she very calmly says, Curtis,

[00:48:39] thank you so much for your advice. And then she shows me how she's already got it taken care of.

[00:48:44] I got two words for you. You're not going to like them.

[00:48:46] Yes. And I mean, I love her. She is so sweet and she is so talented, but our top five potential

[00:48:53] people that I got to interview to hire, I would have hired them all. And then I realized, well,

[00:48:58] retail is kind of a, it's a little more of a given. They can have 20 or 30 years experience

[00:49:04] in what they're doing where it's not the same e-com. So when you figure out e-com, I don't see it

[00:49:09] as the hard thing. The hard thing at the store, Sean, is going to be the logistics of getting everything

[00:49:13] exactly there at the right time. What do they have for storage and how can you turn the inventory

[00:49:18] into what people are looking for in person compared to online?

[00:49:22] Because if I want to...

[00:49:23] Every market's super local now, right? Like that's the hard part. The hard part is

[00:49:27] that your, especially in your business, the product mix per store is going to be different

[00:49:33] if you're going to do it at a high level.

[00:49:35] We've already found that out. And shockingly, it's already happening, but we, you know, it's

[00:49:41] four meetings a week for me is all right now on retail and that's nothing for my day. I drink a lot

[00:49:47] of coffee.

[00:49:48] We don't. I'm looking forward to the store openings and like the design conversations.

[00:49:55] All right, let's take a quick break and we're going to thank our sponsor, Postscript. Okay,

[00:49:59] here's what I want to talk about. There's been this trend in e-commerce where we're trying to get to

[00:50:04] like all in one solution. So like SMS, email, everything's in one place. And I think there's

[00:50:09] a bunch of weird arguments for this. I think this is all BS. Like I would rather have a solution that

[00:50:19] is like point built and is great for that one thing. This is why I like Postscript. This is why

[00:50:24] we use Postscript. They do SMS. They do it really fricking well. Right? And I hate to say,

[00:50:30] I say, I told you so, but a lot of brands have gone to like all in one thing to try to

[00:50:34] integrate email and SMS and they've just moved back and they do it for a bunch of reasons. Oh,

[00:50:39] it's easier for attribution. It's easier on my marketing team to log into one place. I think

[00:50:43] that's all BS. Um, look, the, the reason we like Postscript is all they think about, they eat

[00:50:50] and breathe SMS, which means my team is constantly getting access to new features before anybody else.

[00:50:57] Um, they're, they're, they're actually consulting with us and helping us get better at SMS. I think

[00:51:03] this like, Oh, you know, email and SMS need to be integrated to make SMS more effective is a lie.

[00:51:09] Um, you know, the reality is most of us aren't sending enough email and most of us aren't sending

[00:51:13] enough SMS. So trying to like trigger one off the other is likely just a waste of time. And I don't know

[00:51:18] too many brands personally who can tell me straight faced that this has been a big benefit to them.

[00:51:24] Um, so in my view, in my experience, like the reason we like having Postscript as a sponsor is

[00:51:30] because we use it and it works really well. And the team is great. Their support's awesome.

[00:51:34] Their pricing is awesome. So that's my shout out to Postscript. It's wicked to have them as

[00:51:38] a sponsor for the pod. Let's get back to the show. Curtis, I want to go back to being a marketing

[00:51:45] first org. I've often described bridge in the same way, right? My background is marketing and

[00:51:52] that's really, I think the biggest unfair advantage, uh, us and true classic. And I think yourself,

[00:51:57] you think about like, how, how can we invest more money in marketing? Because that is the megaphone.

[00:52:02] We are an intention economy. So let's get a little tactical about marketing. What are you excited

[00:52:07] about with marketing right now? Like what is, what is the alpha? Like where, where do you think

[00:52:12] you are outperforming everybody else on the marketing front? I'm going to tell you that we're

[00:52:18] still doing a lot of static ads. We spend 94% of our money on Google and Meta, and we see no cap to

[00:52:28] what we can capture with the right product. The problem is when something spikes of running out of

[00:52:33] that product too quickly, which we're not going to do next year. We are literally have just bulked up

[00:52:39] any type of hero ads with way ahead. We don't need to chase every single little thing that's out there

[00:52:47] because we don't need it. It's what Maverick keeps coming back and saying, you don't need it.

[00:52:52] Just give me more product, keep it in stock and let me run this. Our acquisition costs are down.

[00:52:59] Our retention is higher. Our lifetime value is skyrocketing. Stop screwing around the edges.

[00:53:06] Don't tell me I need to be on TikTok. Stop talking to me about all these other things.

[00:53:11] Let's, let's see what the mix of the stores do where we are. We are going to triple our EBITDA from last

[00:53:20] year, next year. And we will have scaled up immensely at that time because we literally cut out the bad

[00:53:29] stuff. And I realized that our cost of goods was the biggest inefficiency that we have. So you

[00:53:36] literally took, and I took care of the cost of goods on the tactical marketing. We have an ability right

[00:53:43] now, Sean, that may not be for men's wallets, but it, or some of the other things, but people who buy

[00:53:50] our product get obsessive and they buy 10 and 20 and 30 different bags. So how do you get them to buy that

[00:53:57] first one? How do you get that customer acquisition cost to be profitable? And then how can you fill the

[00:54:03] fun things into that 50% we're buying to get it again? And we joy of being in a large TAM category.

[00:54:10] Right. Also, it's like, and I, I used to think we had to go wider and we don't.

[00:54:15] Not when you've got that big. We do not need to, we do not need to.

[00:54:21] Well, dude, women's handbags are a trope in media for a reason, right? Women do buy and collect

[00:54:26] handbags is it is so true. And that's why you're like, yeah, like the, all of the greatest fashion

[00:54:33] houses are led by a strong women's handbag division, right? LVMH, Gucci, Chanel, everyone

[00:54:38] we've talked about that's where that's like the flagship product because women buy them and they buy a lot

[00:54:43] of them and they collect them. So yeah, that's, that's the secret sauce, man. Not, and here's

[00:54:48] the thing. There's very few DTC women's handbag companies, right? Like most, most people stay

[00:54:52] out because it's too difficult. You found a wedge and a way in where, yeah, I could totally see my

[00:54:57] wife buying literally 20 of these a year and then storage is the issue. Like we got to start getting

[00:55:03] rid of them. Well, we will, we'll make a million dollars off secondary market this year.

[00:55:09] We'll make literally a million dollars off secondary market, which is fantastic.

[00:55:12] People reselling your product. Like, yeah, we get the cut on. Yeah. So we, I was,

[00:55:17] How does that work? So is that like, do you start, did you stand up a peer, like a peer to peer

[00:55:22] marketplace where people can? We use something called treat and I, my people looked into it and said,

[00:55:29] we're going to do this. And I'm like, I do not believe in this. I do not sign off on this. They

[00:55:33] did it anyhow. And it just literally kills me. Just literally kills me. It's, it also, I'm going to tell you

[00:55:39] this. I think it works on the buyer's mindset too. If I don't love it and I use it for a little

[00:55:47] while, I can always sell it on the secondary market. So it gives them that extra out in purchasing

[00:55:52] something. Do you, and we just set it up like seven, eight months ago, but it's staggering what

[00:55:58] that particular one is too. And again, it wasn't me. I was against it. I was 100% against it.

[00:56:05] I've not heard that yet. Like, I don't think we've had actually somebody on the pod yet or Sean,

[00:56:10] I don't even think I've seen it in a chat that we're in where people think about secondary markets

[00:56:15] for their products. And like, um, most people just like, yeah, that's just going to happen on eBay.

[00:56:21] There's a, there's a law in California that by 2027, you have to have a secondary,

[00:56:26] like a, like a way to buy or sell used products. So there's like a couple of startups who are doing

[00:56:32] it. I know. I know Steven from Cutton ended up doing it, but I've never heard of anyone actually

[00:56:36] singing its praises. So Curtis, you just got a plug in here for the first time. We'll, we'll,

[00:56:41] we'll check out. It's called tree.

[00:56:44] Tree. Yeah. I think it's two E's. And again, I was completely guessed it and it's absolutely killing it,

[00:56:49] but I do, I did want to mention something from earlier, uh, about the, you mentioned the

[00:56:54] Mote map that I have. And Sean, you mentioned the, the having your own manufacturing. You could not

[00:57:00] find me on the internet a year ago. If you typed in my name, there was zero. Like I, I'm a big

[00:57:05] personality, but I'm bad in life. I do not, I do not be online. Right. And I was at some awards

[00:57:11] that we wanted a place called the Whaley's in Boston a couple of years ago. Oh yeah. And I met some

[00:57:17] people, my people won some awards. So I talked for five minutes and got up and I met some amazing,

[00:57:22] one of my best friends, a guy named Adam Robinson was just starting up this little LinkedIn thing,

[00:57:27] selling things. I said, yeah, go forward and see if you can actually make a name for yourself.

[00:57:32] Good luck, buddy. And a guy came up to me about a month ago and said, I want to thank you for what

[00:57:38] you did about manufacturing. I'm like, what are you talking about? And I only know it because you had

[00:57:43] him as a guest. His name was Isaac and he has a candy cup. Oh yeah. He said that I met him there

[00:57:49] and said, dude, if you're going to do a business, own your own manufacturing. I don't even remember

[00:57:55] saying that. And I told him about what we're doing and he set up his own manufacturing and it's killing

[00:58:01] it. Literally killing it. Curtis, I think that like, I agree with you for most, like for many categories,

[00:58:07] but like that would be considered really bad advice in like modern, modern D to C circle.

[00:58:17] That's super contrarian. Like if you met somebody at a, at a, any of these events and the first thing

[00:58:23] out of your mouth was you should build your own manufacturing. Most of them would probably,

[00:58:27] they want to stab you. Create an idea, an unproven idea, and then create a manufacturing

[00:58:32] factory behind it and throw all your money in there and hope it works out. Of course,

[00:58:37] that's just terrible advice, but I did it out of necessity in our area. We had to, and to get the

[00:58:45] quality we wanted, we had to do it. And now that we have it, I sure am glad that we have it. I really,

[00:58:51] really am. And you know, I was a friend of mine, Ruben called me into his office years ago,

[00:58:57] and he's the one who took to Cobus and started manufacturing to Cobus, which is a great,

[00:59:02] great brand right now. And he said, this guy came into me a couple of years ago and knew nothing,

[00:59:07] said, I want to sell online, but I don't know anything about manufacturing. And Ruben

[00:59:11] literally sent him across the street to somebody else and said, you're not good enough for me,

[00:59:14] right? A year later, he comes back and says, Hey, we're actually selling some of these. Do you want

[00:59:18] me now? And he took to go and said, Curtis, with your marketing, I think you could really hit the

[00:59:23] shoe business. And I set up a shoe company called patina.com and we sold 439,000 pair in a year and

[00:59:32] half. Wow. And I shut it down because first of all, I had to work with 11 different Makilas

[00:59:39] who were actually making that work. The quality was always up and down. The online return sucked.

[00:59:46] Do you know what the online, online return rate rate is 3%. Yeah. Yeah.

[00:59:51] Shoes is really high. Stupid, crazy, especially real leather boots that they want to put on and fit

[00:59:59] exactly perfect. The second they put them on, it was terrible. And Maverick's like, why would I spend

[01:00:07] a, and then lifetime value sucked? You know, it was absolutely horrible. And Maverick's like,

[01:00:13] why would I spend a single dollar on a boot that I could be sending on a bank? Why would I do that?

[01:00:19] I know if I get them to buy this, they'll do this and they'll do this. This is the unknown. Hey stupid,

[01:00:24] shut that shit down. And so we literally set the entire, and people were like, what are you talking

[01:00:30] about? Nobody goes to 40 million in 18 months and shuts it down. And it was the smartest thing that we

[01:00:37] Well, sometimes it's actually the right thing to do. It's like, if you just get something can sell a lot,

[01:00:42] doesn't mean it's a good business. One Curtis, you should have sold it. You shouldn't have shut it down.

[01:00:46] You should have sold it. That's, that's the only, that's the only fuck that we had there.

[01:00:50] That's the only mistake. Somebody would have bought that.

[01:00:51] You probably, you probably walked away from 30 million dollars. But besides that, I, I understand

[01:00:56] where you're coming from. The efficiency is, I'm, I feel really good where we are. Uh, tactically

[01:01:04] on selling online, I believe our marketing team has it. If I can provide them the right, the right product.

[01:01:09] Uh, it's all retention. It's all just running the numbers. And the thing that a lot of people don't

[01:01:16] know about business that you guys know is now that you've made the right decisions, you have to play

[01:01:20] it out for one and two, three years as you modify it. Cause the money is not made by making a decision.

[01:01:25] The money is made by running that out or month over month, season after season, year after year.

[01:01:30] Yeah. Because when you start up a company, like, like we did, uh, we went to a bank and said, Hey,

[01:01:37] can you give us some money? And they're like, what have you done? What sales have you done in the

[01:01:40] last three years? We're like nothing. Cause when you're doubling every year, three years ago sucks.

[01:01:46] Hmm. And I didn't want to take equity to go in the future. So we did the impossible. We just did this

[01:01:54] ourselves. We have to make enough profit to build, to grow, to pay for everything, to make a bunch of

[01:02:01] profit, pay our people. Well, create the vision, create the dream, and then keep the entire company

[01:02:06] going where it, where it needs to go. Well, Curtis, we can end on this. Obviously you've built an amazing

[01:02:12] brand. It seems like you owe a lot to that girlfriend. Is she still your girlfriend?

[01:02:15] She is. You know, that's the craziest thing. Now the fun part of that story is I used to brag,

[01:02:22] she quit her job. She just told me last month, she said, I actually took a leave of absence for

[01:02:29] three months. Cause I didn't believe in you. I really didn't. I'm like, really? She goes,

[01:02:36] yeah, I was back in that restaurant a year later. And the manager came up and said, obviously you're not

[01:02:41] coming back. But she was just a college graduate, had went up and got a job as a waitress. Why she's

[01:02:48] figuring out what to do with life. And now she is, uh, works with me in this company and she's a head

[01:02:54] of all the leather. So she gets to purchase 15 million square feet of leather next year.

[01:03:01] Super cool. Dude. So she's a little bit different than a part-time.

[01:03:05] I'll screw it up.

[01:03:07] Well, Curtis, uh, I'm going to find my way down to Leon, Mexico sometime soon and we can hang out

[01:03:13] and I'd love to see the factory and thanks for coming. I tell your story. You're obviously a

[01:03:17] hell of fun dude. So we got to hang out. You, you are a big ball energy and I love seeing that.

[01:03:22] I'm like, you fly around a lot and speak a lot and do a lot of events. So when we're off of this thing,

[01:03:27] let me know some of the places that go and I have a pretty flexible lifestyle. I get to do a lot of

[01:03:31] things. And I told you Leon is a industrial city. I bought a place in a place called San Miguel Allende.

[01:03:38] It's on a vineyard right there. It's this travel magazine called the number one small city in the world.

[01:03:43] So I have a place that can sleep 24 out there in San Miguel. So when people come down,

[01:03:48] they get to see here and they get to do this. And then we drive two hours to my place up in

[01:03:53] on the vineyard in San Miguel. It's just pretty awesome.

[01:03:55] Oh, that just sounds awful. We shouldn't do that.

[01:03:57] No operators party. Let's get it done. Curtis, we appreciate your time.

[01:04:02] The podcast is amazing. I continue to grow. This is really fun to hear from all four of you guys.

[01:04:07] And I'm glad that that two people that I got to speak to today are my two favorite of the four.

[01:04:12] So thank you so much.

[01:04:13] Yeah. The other make sure that we replay that for the other two. That's, that's what we want to hear.

[01:04:19] Thanks guys. Right on. Thanks Curtis. That's the pod.

[01:04:23] You made it an amazing episode of the operators podcast. Thank you for being here. Thank you for

[01:04:28] listening. Thank you for subscribing to the newsletter. Thank you to fulfill the best sponsor

[01:04:32] on earth, North beam postscript. They're tied for two of the best sponsors on earth. Love them.

[01:04:38] Love what they do for us. Thank you for being here. Subscribe, like share, follow me on Twitter,

[01:04:44] follow the other guys on Twitter. Talk to you later. Goodbye.