“It Was So Hard”: Operationalizing Scale With Spot & Tango’s Founder

The company went from 1 to 5 to 10 to 20 in 6 months. We're now on 95 year brand profitable. And it was so hard. People love telling stories about growth, but no one talks about operationalizing a skateboard. What I've read, what I've seen, you're like built and allowed. You could have run a distance. I would love to unpack that. Dog food, balls night category of things, so I can get caught flat-footed with it. And that's why I'm seeing on a subscriber and say from e-com makes a lot of sense. We're now three years in. We've got a hundred people in that facility. It's been transformative from a P&L perspective, adding 30 plus points of contribution margin, fully loaded. We had a very sh-- office. I didn't wear shoes. We had all the second hand furniture. Me and Connor were 23 years old. He's like, look, it's just never going to get there. He probably took like four years after that. But as soon as it happened, I called him up to like, got your mother. We did it. My confidence in the early years was really high. And as I looked back, I had no reason to be that confident. But I had to be, we would have never got where we got. We should never went through this hyper growth period. We're an older business than both our guys' businesses that I'm a lot younger than you guys. We just got to leave 14 years old this year. And every year, it's just 50% growth. That stacks up to be a really big business. But it's taking us a lot of time to get there. Our CAC is lower now at $5 million. We spend than it was at $1 million. Just think, boom. The reason for that is conversion rate wins, audience targeting, team, technology, and creative. Welcome to the operator's podcast. My name's Mike Beckham. And we are proudly brought to you by Fulfill Aftersell, Rich Panel, NorthTheme, Sarah's Analytics, and PostScript. We are a community for entrepreneurs that are building things. And if you want to be a part of this community, you can listen to the podcast. But you can also go sign up for our newsletter. A ton of awesome information in there. We also partner with e-commerce fuel, a forum for you to connect with other entrepreneurs that are building businesses where we can learn from one another. So without further ado, onto the pot. [PHONE RINGING] Dealing with Big Box retailers means EDI connections. And that's often a trigger for needing an ARP system. We've been using EDI connections to Costco forever, and the only way that we really solve that problem and make it seamless is through Fulfill. EDI adds complexity to everything you do and fulfill solves that complexity with their connections to their systems. You need Fulfill to move from being just a D to C brand to being a true multi-channel brand. Because Big Box retailers are going to require you to connect to their systems using EDI. Let me tell you, it's way easier if you do it with Fulfill. [PHONE RINGING] Yeah, so Russell, I think there's two ways we want to take this episode today. So one, we want to hear about you and your background, because from what I've read, from what I've seen, you're built in a lab to be good at running businesses. So I would love to unpack that. But let's start with actually just pet as a category. We're doing this podcast. And over the past five years, six years, really since COVID, pet has been consistently the hottest category. There was a big push into fitness, and fitness had a total low from 23 to probably 25. Fitness is back now, and fitness companies are doing good. But they went through the trenches. Outdoor had an amazing 2020 and 2021. I know outdoor brands that are still 50% below. There's 2021 revenue. So it came in waves, but pet was consistent there. But grows over a single year. I know a lot of friends who made a lot of money selling their pet companies. There seems like there's strategic buyers in the category. So why is pet such a bright spot? You talked about it's fast growing. But maybe unpack what you've seen. You were pre-COVID. What was that experience like packs six, seven years building this business? And what were some of the tailwinds you experienced? So all the questions. So we started as a fresh frozen business. The OG, I give credit to my wife and my mother-in-law. They were cooking fresh human-grade meals for our mini golden-doodle jack. This is going back 10 odd years. And so the story is studio apartment in New York City, cliche but true. And mission driven people believe that health and wellness is a right, not a luxury. It turned into this thing, this business over time. The original recipes, it was like a lean cuisine for dogs. Fresh ground turkey, ground lamb, vegetables, fruit, et cetera, balanced with that nutritional advisor's frozen, shipped to consumer. We still have those that product in our portfolio. For us, the feedback was-- and then I'll kind of with Greg Rennie-Ler, just your question. The feedback from our customer base was, we love fresh, but it's really expensive. And where do I put it? If you're in urban city center with a German shepherd, like your freezer is small. I live in the suburbs, but it's 80% smaller than it's the urban freezer. So you're choosing whether to keep your meal frozen or the dog, so it's not convenient. You have to defrost, serve. It's messy, portioning is confusing, et cetera. So that led to what's called unkibble. We launched unkibble in April of 2020. And the mantra is the convenience of a fresh food diet and the convenience of kibble. So it's shelf stable. Take all the original fresh ingredient inputs, human grade, human grade suppliers, number of our suppliers, work with whole foods, restaurants, et cetera. We take the water out. The technology is freeze dry. There's a fresh dry process we use, which is trade secret. We take the water out of the ingredients, which makes it shelf stable. When it's shelf stable, no cold chain, no dry ice, no insulation. So we removed this huge cost layer from the business and passed those savings along to the consumer. So when kibble is 30% to 40% less expensive than any of the fresh frozen brands you may have heard of the marketplace, we launched that in April of 2020. So right as COVID took hold, we were a five-person team, fully remote. We all had COVID. So we were all laughing because we couldn't smell them. We're like Googling. Is that a symptom of COVID? Who knows? Let's launch unkibble. We are a fresh frozen business at the time. And so we had very little cash on the balance sheet. It was honestly a full-send moment where I always share the story. My co-founder and I, he's got him, Dylan Monroe. He's been doing the business since the beginning. We debated the first purchase order. And it should be a $70,000 purchased order, which will last three months, or an $80,000 purchase order, which will last for a month. We debated this because those are material dollars for any company, even now that that's the age in particular, it's kind of like chips in. It's like an all-in moment, yeah, for sure. Right. And we launched, we sold out in three days. And that has been our story. We then followed up with a purchased order for half a million dollars with a come manufacturer. We didn't have half a million dollars. I mean, we didn't know where to get it. We had ideas, but we, and that has been, so that launch was concurrent to spiking pet ownership. And then a lot of these consumer behaviors where people aren't home, I mean, look at the hybrid working model now. People aren't going to the office five days a week. Wall Street is, but most like CBG brands or other industries, there's a balance between home and work. And so e-commerce purchase behavior had to change out of necessity. The work life balance changed. That was a reality pet population spiked. And then I think over that, there's been this general layer of health and wellness as we discussed. And we've been in the epicenter of those thematics with this DDC, Out the Wellness brand. And the company from April 2020 over the next six months, we were honestly, we were doing probably a million dollars of Rev round at that stage. The company went from one to five to 10 to 20 in six months. We're now a nine figure brand profitable. But that was amazing and unbelievable. People love telling stories about growth. Like, that's a headline. That's insane. That's insane. But no one talks about operationalizing scale. And it is, and I would love to pick your brain too, because you guys have been in the trenches. Still are. It was so hard. Customer service tickets, you know, day zero, five, you know, day 30, 500. Who's responding to the customer? I mean, I was trying to, is it, is it you? I mean, we're looking on the room. There's only five of us. So it was this story and I can get into some details. I'm getting one winded, but how do you, how do you keep up with that demand curve? Because in COVID, you either, you either lost on the demand or supply side of the equation. We had demand and supply was brutal, right? And so that's been our journey of, of how to build a business around that demand signal over the past, you know, five years since launch. It's tough to when it's a food man. I mean, quality control, obviously, is the thing that gets so difficult when operations have to scale. And I think when you're adding in the food element and a perishable element, that just takes it to a whole another level. You know, the hack though is that the dog can't tell you the taste difference. That's right. So yeah, so dog can't say it tastes bad. Yeah, as long as dog looks adorningly into mom or dad and consumes bowl like check order again. But I would say there's the picky pet population exist smaller breeds like having a picky and we get testimonials of people saying like in tears, oh my God, thank you so much. I've tried four or five different brands. I've gone to the vet. Either my dog had an allergy. We've on ingredient elimination to kind of pinpoint and diagnose causation or my dog just won't eat. We found Spontango because again, it's just like wonderful aroma like amazing ingredients. I'm like no surprise the dog likes it, but it for folks that have dogs that are picky eaters. It's a challenge like I'm thinking about it. If you like under the office, your dog didn't eat breakfast. It's like, oh my god. What's the dog going to eat later? I hope the dog eats and the dog is eating is survival. So there is this like very fundamental emotion that we're pulling out of consumers, just given product market fit. But to your point, Mike, yeah, it was it was hard. We, they got to catch up the rest of the story. We scaled at our peak to six come in your factors across the country over from one from when we launched the next 24 months. We had factors all only the US not overseas. We had 18. We were trucks going from California to Indiana from Ohio to Texas. It was like a three dimensional Sudoco puzzle in real time and it just kept getting bigger. You know, trucks are breaking down. Where is it going left right? We had a very small team. And so it was this puzzle. So was a puzzle, but we we eventually said to ourselves like we have to control the supply chain. And we decided to insource and builds our dedicated factory weaned off third party. And I can share some more details about that, but that's been a game change for our bit very contrairing because building a factory is expensive and it's hard. Like it was eating glass, break bathroom trailer, break trailer, office trailer, hard hats, steel tell boots. You know, let I'd be on a phone talking to like a TikTok influencer and like our team in New York. And the guys like, Hey, brewer, get over here. Where do we put this freeze dry? I'm like, Oh, I got put it in the corner. Like, Oh, it weighs 30,000 pounds. Like we need both corners. Like, okay, so it was lots of vertical learning, I would say. Yeah, so go mesh those early days, you know, you're doing a million dollars a year. You launch this new product, COVID, COVID spike, you get to $20 million in six months. You had one line where you said you needed $500,000 and you didn't know how to get it. How did you feel that growth? We state, well, we like stage the purchase orders. And honestly, the supply was not overnight. Our, our only supplier at that stage get like, we two weeks after we had received the first purchase order and we stocked out and we sent them an email with this new volume. They called the they, they, they literally wrote back and like, well, that's just not, I'm not sure what you're ordering, but there's no way you need more of this stuff because they were kind of legacy, going to brick and mortar player and didn't fully appreciate what's possible, like, velocity online. And so the answer was in reply, like, well, we can't do that fast enough. And so because they were unable to operationalize that level of growth, it was a dripped feed. So that it was a staged PO. So they would ship us product. The candy was kind of once every two to three weeks, and we would just run through it. But which by the way is, that's not, that's not good for retention. Right. So again, back to original thesis, if a dog runs out of food, that's the worst case scenario because a dog has to eat. And then transition, if they have to buy a new food, that's, that creates friction in the lifecycle of our customers. So we had to really govern how quickly we to ensure that we're meeting the demand of our existing cohorts and our subscribers. And we're all growth guys. So we're sitting there going like, oh my gosh. And I know you guys remember this, you know, metacepyans, I know your row as was killing, cack was low. You know, for those businesses that had like a treasure chest of cash, they were very few and a supply chain and high product market fit are probably, you know, well, exiting from their respective businesses because they would have absolutely made a mint. We had no cash, no supply chain, high product market fit. And low cack. So there's like this giant button, it was like hyper growth, you know, they use like the Star Wars analogy is like, you want to go into hyper speed and it was like flashing. And we're all sitting there like, tempted to press the button. But without inventory and knowing that if we press the button, we would just stock out. It was not we had to really be patient. And that's paid off in the long term. But again, this was not this story is not overnight. Oh, this is not like, oh, yeah, great. You've you've solved it all in a few weeks. So it was it was patients and staged delivery, which enabled us to actually afford those early purchase orders. Yeah, you know, Russell. And I'm sure every like as soon as COVID, you know, subsided slightly by, you know, Q2, Q3 of 2020, I'm sure everyone and their mother was trying to shove money into this business pet was such a hot category. You're this huge growth. So did you did you guys take investment? Did you think about taking investment or what was at the bait like? We did. We we partnered with our equity partners. And they actually were incredible. Our partners in helping us breathe life and bring our downtown factory to reality. That's what they do. Not only they investors, they're like, have the operational expertise. But yes, out of necessity, we could not keep up with demand. Again, I think I talk about this with other entrepreneurs. Everyone asked this question of, should you raise capital? What is ownership? Is it better to own 80% of a $5 million business or 10% of a $500 million dollar business like you do the math? But there's tradeoffs for sure. And neither path is, there's no right answer. It's all up to the individual or the management team in terms of how they want to build that they's this into what the long term your opportunity is or their financial needs or spiritual beliefs or personal beliefs or otherwise because there's tradeoffs, right? For us, given the stage of company and the signal of the decision was, we collectively have energy and enthusiasm to growing. And to do so, we have to enable that growth with not only a factory, but CapEx and CapEx equals cash. So yes, we wouldn't do that process. 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That makes, I think that's worth emphasizing that you sold a part of the company, but that you had a really clear use in mind of the capital and that there were expertise that came with that capital. I think it seems like to me when I talk to companies that sell a piece of themselves and then regret it, it's because there's not a clear heuristic about why, other than like, hey, we've got a big valuation and so we should take some of this money. It kind of seems like to me that there's kind of three paths. And one is that you just continue to bootstrap it. You say, hey, we're going to grow as fast as the business allows us to, and as we can pull out money and reinvest, when we get to a certain level of scale where people want to invest in this, we're going to take money because it helps us to unlock capabilities or to do things that we just would be literally unable to. Like you said, building vertical integration was going to be probably impossible due to the capital and the expertise that you would need to do it. And then there's the just like, hey, I want to get off the marry, go around and I think I'm going to throw up, you know, kind of exit route. But it makes a ton of sense what you guys did. I'm curious as you look back on that period, Russell, because I've now been through, I don't know, maybe three of those, like hyper scaling periods. What are the emotions and reflections that you take from that period? What did you learn from that period? How do you feel about that period when you think back about those those years of your life? It's such an insightful question. I refer to the early days, like the early early days as like the dark times. I mean, my wife and I actually started this thing out of our part. She now works in finance and she's not directly involved in the business. But, you know, I have three young kids. They were helping me. Our distribution center was like the basement of our house. We move the suburbs. And so it was very much like a bootstrapped homegrown story. And even at my co-founder, I'm not talking about that quite often actually, even in kind of like year, you know, zero, one, two, three, those were the science experiment days of like, can you actually get product market fit and escape velocity on these fancy words that we use in hindsight. And I didn't know it at the time, no, nor did I have the emotion. With a fair wind, the business could have blown over. As in a few missteps, the left of the right and you're off the tracks and there was an enough capital to rehabilitate. So you had to be very careful of decision making. Right? It's like that's what's that Netflix show where they're walking across the bridge and there's like the glass panels and if you step on the wrong glass panel, right, you fall to your to your to your death or in the game show, you're you're eliminated. You have to be very careful and walk the bridge. I didn't think that those thoughts were not of present mind when I was in the moment, but in hindsight looking back of when we both the factory, we were a much earlier stage business. That was bold. There was a big bet. It was like, okay, this is like this is a smart decision. You know, it took us a year. We've been we've actually been in operation now three years. We've scaled. We've automated the facility, but at the time like risk was on for sure. Finding location, hiring a team, installing infrastructure in the CapExP. So if I if I knew then what I know now, I probably would have been more the emotion would have been more. Probably the higher anxiety or stress, etc. And I would say we've as a team, we've always had like blinders on. We are like we were very head down folks. We like to build and we're very involved in the company. I go to Alentown every week. You know, I always joke like New York City is like the kind of headquarters office, but in Alentown, it's still toe boots and jeans and like, that's an amazing team, but they are the enabling factor of our of our business. And then I would say the other emotion is there's always you guys know this. There's always a lot of uncertainty and ambiguity. I think I talk to our team about that a lot. A lot of people don't like ambiguity and role or direction. And as a business, you can out, there's like strategic direction. There's like the tactical at the end of these three things today, but ambiguity is like roles do change also. You know, in the early days, we used to hire kind of all our own athletes. Now we have functional expertise. You know, some of them may be a supply chain expert or nets who demonstrate or sometimes those roles change too as the company grows and the needs change. And a lot of folks, ambiguity is an emotion that I have also experienced. And you guys know this is my role used to I used to cook. I used to be the head chef, you know, what the leak ends in account. So as my role is shifted, there's moments and I'm like, wait, okay, where should I be focusing my time? You know, so it's interesting. There's kind of different stages and different feelings as these companies to grow. So to share a story from my life, we recently had our 10 year and first year as a company. And a fairly similar story, you know, I was all the initial money in, I had two co-founders, hyper growth, you know, like we went through many of the pain points that you did. But I've made the observation before that to be an entrepreneur, you have to be optimistic, really to the point of almost being intentionally naive, that it's like, you know, it's like the kind of Harrison Ford and Star Wars never tell me the odds thing. It's like if you really think about the odds too much, then you just would never do it because you'd realize that the deck is stacked against your success. But so I just always believed we were going to win. I always believed it was going to be successful and that helps me to help me to launch the product, it helped me to scale the product, helped me to recruit people that I probably had no business being able to recruit. So anyway, we're at this dinner, this 10 year dinner. And I think it was one of the first times that it really hit me. We were doing toasts and my toast was something to the effect of. I now realize the amount of risk and the improbability of this working the way that it did and a way that I didn't at the time. What came with that is I said, guys, I really appreciate the belief that you had in me and the company when really we didn't deserve to have that level of belief or faith that, you know, this would work out. Because in my mind, it was like, I didn't even feel like people were really being that flexible or leaning in that much. I'm like, of course, this is going to work. But now looking back, like you said, it's like, oh man, it could have easily not worked. People could have easily left their jobs and then this thing puttered out after, you know, a year or two. And so it is interesting. I've had the exact same emotional reaction that my confidence in the early years was really high. And as I look back, I'm like, I had no reason to be that confident. But I had to be or we would have never gotten where we got. That's it. Sean, what about you? We're curious your experience. Well, look, I love all the Star Wars references. I think both of you guys made one independently. So that's pretty cool. Do you know what Star Wars is? Sean? Yeah. Yeah. No, they've made recent movies. They've made recent bad movies. Yes. That's right. You know, Ridge Ridge never went through this hyper growth period. Right. We're actually we're an older business than both her guys' businesses that I'm a lot younger than you guys. Right. So, you know, Ridge is going to be 14 years old this year. And, you know, and every year it's just 50% growth. So that stacks up to be a really big business. But it's taken us a long time to get there. And we we always like no one thought it could be this big. And I always tell the story Connor hates it. But like, so I didn't start Ridge. Ridge was a client of my ad agency doing five million dollars a year. And we decided to merge their their business came into the ad agency. I sold off their all the other clients as a book of business. I'm like, we're just going to do this. And I remember Connor being like, Ridge would not do it. He's like, there is no way Ridge will ever do a hundred million dollars a year. He's like, it's impossible. He said that. Yeah. I don't think I've heard you heard this quote. Wow. That's it. Yeah. Yeah. We're sitting in. We had a very office. I didn't wear shoes. And he's like, we'll mean Connor we're 23 years old. He's like, there's not the many walls to sell. He's like, you know, this isn't the right team to get this business to go to a hundred million. And it probably took like four years after that. But as soon as it happened, I called him up and like, gotcha. Like we did it. I had a similar, I had a similar conversation with RCFO. I remember very vividly. We were sitting there looking at a profitability model. And this is like 2018 or 2019. And he was just like, listen, I've looked at the numbers a lot of ways. I don't know how this business ever makes much money. And, you know, probably since that point, we've primed about a hundred and twenty million dollars in EBITDA. But it's like it, that's the push and pull. Maybe that's the push and pull. What makes you and Connor great me and my CFO, a great pairing is that you got to have like the pessimist kind of realist and the end of why almost like the optimistic ambitious, you know, person driving and that that partnership makes it work. For sure. You don't have the game. The CFOs keep you grounded. Right? Yeah. And you know, a good CFO will only tell you what's on the field. Right? Like, let's see if I was not going to put in their model. Like, yeah, and actually maybe there's a magic fairy that comes with this 50 million dollars in the future like that. But that just it could have. Connor could have never seen rings or power banks. For example, you know, like, I think one of you guys stories is just like the amazing success you have had into jumping into categories that are not even obvious that they would be really great categories for you. And you guys have done that amazingly well. And you've grown the timid your business in a way that's very unexpected, I would say. Oh, yeah, and great way. And Connor was right. The wallet business is very much a hundred million dollar a year business, right? But he didn't he didn't think though, like, yeah, I'm going to make you sell every possible thing, maybe even dog food. Long time sponsor Northbeam is launching incrementality later this quarter. This means that you can now have the trifecta of marketing measurement all in one platform. That is multi-touch attribution, medium x modeling, and incrementality holdouts all inside of Northbeam. You can automate that lift testing end to end, unify results with your MTA and your MMM. This is a lot of letters, but if you know, you know, and you can start to cut what doesn't work and you can scale what works and you can do this all with confidence. This is why this is such an incredible ad to Northbeam. Northbeam's incrementality measures what results marketing is actually generating not just what they're claiming for. As a CEO, that's like music to my ears. I side up now and you can lock in 50% off unlimited tests for the year. I want to go back to, you know, your guys just rapid growth over the pandemic. And I brought up this in the beginning of the podcast that like, had to be a category that has not had a down year. Now, there's been some hard spots, right? Like, I think pets, smarts, the publicly traded company worth like less than you. It's like maybe $500 million, right? And then there's, you know, the chewy, chewy IPL, which is like kind of rebounded. But it seems as a category overall, pet continues to have, you know, strong double digit growth. There is dot com adoption, the caxing to work. There's lots of acquisitions, there's strategics. Is this just me projecting on you guys that it's all awesome and roses or was there a difficult period over the past six years where you're like, hey, you know, building a factory is hard. We're going to talk about that. But like really from like a revenue generation from a sales channel generation, like, did you guys see any of those challenges industry wide or has it just been smooth sailing? No, this journey is never linear. You know, the, the, it took us 18 months to get to the million dollars of Rev Run, you know, in the old days, I think the website, I built on square space with like, template photos. We offered like small, medium, large plans, you know, then we put it on a headless Shopify store. We built a personalization funnel that reduced cac by 50%. So for the first 18 months, it was like bill. It wasn't like, turn the lights on. Everyone buying our product on subscription, it was like, okay, foundation of the tech and website UX UI experience, you know, how to figure out customer acquisition costs. And then some of these are success criteria along the way has been like how we use data to inform decision like LTV to CAC, LTV contribution margin to CAC and like really thinking about the math of how to scale this business. I think a lot of companies do figure out paid performance marketing like, okay great, we can grow like yay, here's a revenue figure and you can sell that if you're raising money or otherwise, but they don't really understand how to build the EBITDA in the profitability piece. That kind of comes never in some cases, which is I've always, that's like my greatest paranoia that I wake up one day after whatever 12, 15 years doing this and go, oh my god, no one's, no one's interested in the company because we don't make money, right? And that's happened. You've seen that there's a number. That's happened to a lot of companies where it's like, oh, you know, we're going to pay this back in 24 months and you're building everything off that and then you get the month 24 on some of these cohorts and it's like, uh oh, you're wrong. Like our projections are wrong. The math doesn't, doesn't work. And so like, you know, we've talked to a lot of subscription businesses. I'd love you to actually get kind of granular here about like, how did you figure this out? Like, did you use the kind of the three ratio that's pretty, that's being talked about a lot? How did you think about the ratios that you needed to hit to really grow? How did that impact your user acquisition costs? What have you learned through? You're now several years into it. So you've seen some of these cohorts play out. I think anything you could share here would be really helpful to anybody that's in there. Yeah, I've got to share. So our whole company thinks about this word payback. And yes, there's kind of the three metrics, LTV, contribution margin and cat customer acquisition cost. So in the, the really simple terms, if we spend a million dollars on marketing, I'm minus a million bucks. How long does it take to get to zero? And then how long does it take to generate a million bucks? Right? And the, the math, we look at the 12 month LTV. So average revenue for customer at 12 months times contribution margin, right? So if you're LTV, I'm making this up. If it's a thousand bucks of 12 months and your margins 50%, your contribution margin LTV is $500 at a year. You divide that by customer acquisition costs and you can look around the curve as far as how quickly you pay back. So how quickly you get to zero. So from minus a million to a zero. And then how quickly you double and get to plus a million of pure contribution margin, we teach that to every single function in our company to new hires on day one. And the reason for that is the marketing team is required to maintain a cap on a customer acquisition cost. They can't spend frivolously in breach certain cat thresholds. If it doesn't meet the payback status of the, in our payback, significantly less than one year, they can always spend dollars up to a certain ceiling. Okay? So let's talk about just a dive in on specifics. Is it six months? Is it nine months? Where is that comfort point for you where you say, if payback goes beyond this point, I am uncomfortable and I want to pull back. Sticks are less. Okay. And by, do you see really dramatic differences in what you can acquire customers for per channel or a better way of saying it is, do you see very different LTV curves by channel so that you have different acquisition costs by chance significantly different acquisition costs per channel or is it generally you can paint with the same brush? Yeah. So we, we look at every channel LTV by channel, cat by channel, we have our own multi touch attribution model. We use post purchase survey as the primary driver at completion rates are very high by 85% actually complete a PPS survey after check, which is like shockingly high but, but true. So you get good signal on like mid funnel channels. Do you incentivize that in anywhere? Or is it just the type of customer you have? Okay. All voluntary. So we use that to inform, cat, but yes, we look at all the LTVs and all the cats, we look at in platform, we're not dogmatic about, you know, one model or the other, like ultimately we're using that to inform budget decisions, right? And yes, like cat goes up, cat goes down, but we've been able to reduce, we actually are cat is lower now at five million dollars or spend that it was a million dollars or spend per month. And the reason for that is conversion rate wins, audience targeting, team, technology and creative. And there's a lot of like super basic stuff. I'll give you a couple of examples. Team who's buying the media for us, it's all in house. We've had positive and negative experience, it's hiring agencies, the buyers, the buyers oftentimes will set a campaign or a keyword strategy and like check under the hood two days later and cat, if cat goes up five or 10% for us, like it impact my payback window. So having a team in house that's watching it every hour, I'm not, I wake up and look at the data. It's like, it's like one of our obsessions, right? Yeah. My kids know a customer acquisition cost is it's like it's the discuss. It's the closest thing to a crystal ball of what you're going to make in the future. You know, like when you're in a subscription business, you really can, if you have a good sense of what that ratio is and your marketing is not just all over the place, then the PNL actually becomes fairly easy to predict, right? Exactly. And and audit creative is a huge one. So having like creative and design systems, we like to say that we're in the entertainment business. So, you know, all of our brands don't compete, but we do compete for the consumer's attention, right? And so if you don't have provocative creative, whether it's Jeff static video, like whatever the case may be to draw the attention in, like we've spent a lot of time thinking about that in terms of what works, UGC, etc, testing that on the website. We've seen conversion rate wins. There's been this years-long battle. I always encourage brands oftentimes folks think cats getting high, it only goes up with higher budgets. I can't stabilize or go lower. So I'm capped on spend and I have to diversify growth by going either omnichannel or a new paid performance channel or changing markets, international, etc. I'm not taking those things that's not the right decision. We're doing some and actively considering other of the others over those examples, but I always encourage folks like take a step back. I'll give another great example. Last year we pushed up meta budgets as a test. Like, okay, let's see how, like where's the breaking point on paper formats in the CAC and CACs spiked really high. We learned in like the post-mortem, you know, a week odd later that meta was sending most of the ads to age 55 plus with the highest click-through rate and the lowest conversion rate. Now that's an audience targeting issue and you think after doing this for years that of course that would never happen. We know the audience, but like something somehow, algorithmically, started shifting those those ad sets to the wrong audience and it only took us asking the question of where those ads were being delivered, which seems so obvious, but it was a problem. We actually weaned off that audience and CAC then came way back down. So that's one comment and I think I'd increase spend. Were you able to do it? Were you kept spend? Yeah. Yeah. We've heard and CAC came back in line back to the payback that I've alluded to. And the other I think really important point is I always talk, you know, the the marketers should be home slices with the ops team. Like get together because if ops can get you higher margin, you can spend more at higher CAC and still hit the same payback, right? So back to the math is like if your 500 turns into $600 of contribution margin in that example at 12 months, the marketers can go off and increase budgets at higher incremental CAC by hitting and hitting the same payback windows because there's more so the so the ops seems as it guys sourcing, cost a good soul, picking pack, three, like wherever the wins are, go get that stuff because it helps. So again, and you know, think about retention and LTV, LTV is retention, AOV, call the customer service team. Like what do you guys doing to over serve on the experience to boost retention? Retention, you have to help my LTV, higher LTV, higher contribution margin that helps CAC. So marketers can spend more dollars. So it's kind of the, and again, this is not like rocket science. A lot of brands like these words and metrics have existed kind of forever. But I think for us, it's really doubling down culturally speaking with how we train and talk about it internally and use that to govern to just making as one of the reasons we've been able to grow at this rate profitably. Sean here, tell you about Sarah's analytics and Sarah's pulse. Ridge is profitable every single day. And we've taken that super seriously since we built this business. We track contribution margin by day. We look at the skews. We sell every single day. And we have to do this manually up until Sarah's own experience. We take all of our skew level data. We build it into the data warehouse. Everything that goes into making a true PNL, I get on a day to day basis. Sarah's pulse gives you clarity. So your CLO and your CFL and your CMO start speaking the same language. Contribution margin shifts teams away from hoping profits survive the season to manage them in real time. Book a walkthrough with the Sarah's pulse team today. Click like the description and thank you Sarah for bringing you this show. I think it's a it's a consistent theme that I'm hearing from the operators who are doing the non-first day payback model, which is like you're a I'm guessing you're not first order profitable that when you're doing that model you have to be disciplined. This pretty much might take away and that you said it it's like your kids know your payback ratios like that if everybody in the company doesn't understand and respect those payback ratios you can get in trouble really quickly and so like everybody we've had on here who has run that model successfully I think you're echoing some of the things they've said and and that's the reason why I think it's everybody it's great for everybody listening to this to hear it because it's not sexy but that like knowing your numbers inside out and knowing them up and down the organization and having discipline is sticking to them these are these are the things that are just prerequisites you know they're whatever like the starting point of being able to build the tech business that you've built. Is there anything else you would add there like have you seen a lot of changed your LTV over time as you've scaled up the number of people has LTV come down some I've seen that in some businesses that as you get into less qualified people your LTV compresses some for us LTVs gone up it does change like different cohort their seasonality if you're running like deep discounts or GWPs get with purchase like obviously higher discount could attract a different quality of customer which has a higher propensity for churn but overall I can on the aggregate we take those averages the LTV does go up and that's we've never pushed price we've never taken price a lot of brands in the category do I'd say we probably could have been smarter about that historically but we've just never done it because we've been able to offer this affordable health and long solution we're quite pure tanical that we don't want to push price onto the consumer but we have ancillary product supplements treats and that helps boost the AOV and that's one of the reasons why LTV has gone up over time the only thing I would add for for earlier stages is it's do you understand how to measure this stuff like are you actually calculating cat correctly question mark what's how are you loading cat what's an example of how you might do that incorrectly because it seems like I just take my meta budget you know how much I spent on meta and divided by new users so like what are what are some ways where I might be some things you might have learned about cat sometimes folks will load or not load in like agency spends commissions like how does your top of funnel your brand budget impact that so like at the end of the day like you can do any of your team like your internal team that's focusing on marketing and cack we uh not on that's opx we put on the opx line item um but and but the measurement point also is on like the behavior of the cohorts and we learned this early there were a couple of channels um I won't name them but in the early days you could grow these businesses quickly because they was uh you know with the make the app universe let's say and you partner those brands some it'll be in a gaming environment and want like the bigger sword and then there'll be a host of brands you could choose from if you buy the brand then you get the sword and you can continue playing the game those cohorts were awful I remember like second order rotation and it was like I think the churn rate was like at least 90 of not higher percent so every 100 customers 90 churned out thankfully in the early early days you know we are using tools like looker like a bi tool which then google acquired segment and using that to tell us about cohort behavior and oftentimes I think early early stage businesses like zero to one they're not thinking like data is like this kind of foreign concept and it's too expensive and I shouldn't do it that's a later stage thing but let's focus on like just getting revenue as high as possible and I would argue that as much as you can build in like data data systems or bi tools to help you understand what the heck you're doing or like how how the business is performing I think is really important it just helps you avoid some of the landmines along the way kind of to the earlier science experiment conversation it's like as much information that you have of your disposal will help inform the right decisions yeah and with AI everyone has a data analyst you're in their pocket right so you don't have to spend crazy money on any bi tool it's like look throw your data in a google sheet and throw that google sheet in cloud and you'll get some good answers if if you're doing five million dollars a year and you can't afford it that that's rich just a lot of that right now um well I'm going to add a point to that churn because this obviously isn't an an episode about AI but I think that the the thing that's going to be interesting about the future is that increasingly that's going to be everybody's behavior just like hey I'm just outsourcing all my thinking on the subject to AI what I am finding is that really where you want to live is that you have put in thought to a subject you've done work in it you understand what the number should be what's normative what's accurate and then you kind of earn the right to outsource a lot of the lifting mentally when you just outsource it from day one what you get is people that will just blindly follow whatever the model spits back at them even if it's nonsensical and that's when sometimes your team will say things that you're just like that's clearly not right from like first principles from what I know about the business and so anyway I I think that obviously the AI stuff is going to be incredibly disruptive and incredibly helpful but if you outsource all of your thinking on a subject then it's it's really it can cause really bad decision-making so I always encourage people to do things manually themselves first to have an understanding of what's true and how things work and then to really look to how do I automate this how do I you know how do I outsource this in some way anyway just a thought for for the group and honestly and we with our with the Allen Town factory it was all manual for the first like 12 months right some folks even that started working on the cool how why is this process automated it's like well we have we have it's a like a semi automated process but we don't know like we don't know like whether it's you know equipment efficiency preventative maintenance or downtime or the labor model like let's just feel our way through the move for the next 12 months let's make a bunch of mistakes and once we know the right way up the mountain then we can resource against that with the appropriate level of CapEx but you know it's this expression like suck it in C-Mins English expressions I've been in London for a long time but it's like let's just do it for a little bit and that's I think that's true I would echo that sentiment Mike and it can turn to me it's like let's just like do first you know it's like this AB mentality just like test it first then once we figure out the way then let's let's dial it in and invest if you're scaling any commerce brand today adds alone aren't enough after self focuses on the one moment that every brand already owns after checkout and turns the post purchase moment into more profit monetize every order with post purchase offers and thank you page experiences without disrupting checkout or hurting conversion enterprise grade tech used by gap ticket master macy's and target now driving results for brands like true classic hexclad ridge and jones road I would know this is the reason I ended up buying three pans from hexclad instead of two after cell is already generated over one billion in additional revenue for e-commerce brands revenue that doesn't require more traffic or higher cap so checkout after cell and tell them that the operator sent you yeah and it's kind of like um you can't outsource marketing until you know how marketing works right like everyone who's ever had a horrible experience with an agency it's because like they don't know Facebook ads and it's very easy for someone to do something horrible to your ad account that you just don't right miss and then circle him back to uh you know people are not understanding what what a cat is warbu parker went when they went public there were like here's our marketing spend here's every order we've ever had this is our cat and it's like so that was just you know cost per order like it was not new customer acquisition by any means because if somebody bought four times they would be counted four times in that data and just shows even public companies for stuff um Russell I want to talk about omnichannel your space has a big amazon like competitor in shui but it also has a lot of these um you know brick and mortar retailers are you yeah doing stuff in omnichannel now is that like a red herring should people avoid that if from the pet space um no i mean it's still a huge opportunity um ultimately customer shop in multiple places whether that's online or in pet or or in brick and mortar um for us couple of things one is we are primarily ddc we also do sell on amazon um we sell our treat supplements and pup gum which we can talk about if you guys should our newest launch is on amazon as well we haven't felt an urgency to go on shelf um it's just a different business but but given kind of payback and the economics and our ability to scale efficiently and profitably direct to consumer we haven't felt a business need to diversify channel it's also a very different business i mean as you guys know brick and mortar is different payment terms different implications on working capital inventory cash, merchandising strategy, plan a gram scale. You need a lot of, to build true scale brick and mortar, you need a lot of doors, you need the expertise and the man in power to help manage that. So there's considerations there. Chewee is a different interesting case study. I mean, Chewee is a, you know, a retail platform. So we don't, I see Chewee is, you know, we compete with Chewee for maybe ad space and competing for attention on their wise, but they're not really, they have some Chewee branded product, but generally it's a retail platform. Well, we be on shelf one day, absolutely. I think it's really a question of when and meeting the consumer in the customer where they're at. But to date, haven't pulled the trigger. We're talking about it, we're thinking about it. And there are brands in our category that have been successful, they've done it, they have kind of on the channel brands as well. And like, I would say there's always mixed experiences. That's interesting. There's either like legacy brick and mortar businesses that go online or try to do the D to C thing. And it's hard because the culture is brick and mortar and all of a sudden it's like CPCs and CPAs and Cax and all the things we're discussing. Then there's the inverse of that of like, digitally native brands that go retail. And there's a delta and there's some D to C brand that try to replicate even like the brand design system on shelf in retail and it falls, it doesn't work. Like it falls flat. So I think for us, we want to be prudent operators. Ultimately, we stage our decisions. Like we have our factory at this growth rate to be able to support digital and brick and mortar as another entire consideration. We talk about operationalizing growth. I think if we do retail, it's not going to be launching one city or a regional, be a national play. So like, OK, cool, great. Let's do that. Who's going to make the widgets? We've got to go back to the ops in the execution side of like, OK, we've got to scale inventory. How much inventory do we want in the balance sheet? Because inventory eats cash. What are the inventory terms? What's to sell through? So we start, we're going to go back through that decision logic and the arrows and the-- the-- to use the green button analogy, the green button is not like, go, press the button. It's like, OK, it's like yellow. Let's hover and assess what we're doing at the moment. OK. So to add just a little bit of commentary to what you said, it is very difficult to make a business work across a bunch of different channels and a bunch of different contexts. Because when you start the business, you really highly contextualize it for your first primary channel usually. And if you haven't started with OmniChannel, it's difficult. And that's everything from the packaging. If you knew we were going to sell 100% of our products online, then you're going to make different packaging decisions. Then if it's like, well, we might sell some online. We might sell some in stores, for example. And another one that I'm convinced of-- you have your team, obviously, you mentioned this, but the expertise you have on your team is different based on how you contextualize the business early on. Another really big one that's sneaky, I think, is P&L. That your P&L construction-- how you think about pricing, how you think about margins-- it is actually really difficult to change people's thought process about those things. I mean, somewhat you can get to get stuck in a particular pricing model and then say, well, if we're going to go into physical retail, we're going to have to change our whole pricing model. And that's not going to be optimal for online. But then we can be in both places and is that better. And so it's really disruptive. I think this is probably my advice here as somebody who's done a lot of Omni Channel, is that if you really want to do Omni Channel well, the earlier in your business, you realize you have that aspiration and are starting to try and think about it the better, because there's a ton of pain and channel conflict and difficulty down the line. If you're a very mature business in one channel or one approach of acquiring customers, and then you try and just stack another one on top of that. Some businesses are able to do it, but for the most part, it's really challenging if you haven't started. And you said this, but this is another theme that keeps coming up again and again. The really good operators don't do things just to do it. They don't say, well, other people are in physical retail. We should be in physical retail. They ask the question of, does this make sense for our business? And they have the security to not necessarily do the hot thing or the thing that other people are doing just because other people are doing it. So a luxury answer, you know, like you're looking at it if it's right for you and your business will do it. But also you're not rushing into it. You're not blindly chasing growth in that way. You're being pretty intentional about it. Yeah, thank you. And there's other considerations like assortments. Do you launch all skis or one skew? Absolutely. Actually, and we also personalize the product. So how do you offer that level of personalization? Aren't you? There's some brands that have done it really well. And then there's others. It's hard break. I've seen a number of DDC brands go live and target in a number of different categories. Some have been wildly successful. And then some you see in the deep discounts or the $2 aisle on the front. And they're just trying to push that product. And that's a signal. It's like, OK, did you draw an analogy here? If you-- I had my sister-in-law, her twin sister, lived in LA. And we visited her out in LA. And while we were out there, she was telling us that something like 40% of Los Angeles turns over every two years. I don't know. Sean, you probably know the number. But there's this insanely high turnover of the actual population base in Los Angeles. And the reason is you get a lot of people that come in and they try and get on with Hollywood or with something kind of talent-based as a model. And they don't. And they turn out. And there's no cohorts that are coming in to replace them. So it's not like Los Angeles is declining in population. But here's the parallel. When you walk into a target and you see 10 brands that you've never seen before, what you should process is that means that there's 10 other brands that turned out. And you don't see that. You only see what's on the shelf. But what you don't see is the graveyard of hundreds or thousands of brands that took their shot and target. And it didn't work just like the person who went to LA trying to get into a movie and it didn't work out and then moved back home. And so like you said, it's tough. It's tough to-- it's not about selling in in retail. It's about selling through. And it's about staying in. And that's one of my big things. I've said this before. When I hired our chief sales officer under the role, I said, you think this is about-- this job is about selling things. But it's about making the right sales. And my advice is like you do not want to be in physical retail unless you have what it takes to stick for multiple years. Because otherwise, you're just not going to love the economics. And it is going to be a little bit of a downward drag on your econ business, which you kind of mentioned. One of my-- I'm very close with the guys running baseball lifestyle. And it's one of the better growth stories. But they're starting to see-- they've got this amazing growth. But they're also starting to see that like, hey, all of this 300% year-over-year physical retail growth does actually eat end to e-com a little bit. So it's like, it is additive on the whole when you get into physical retail. But it's not all additive. Some of that is taking customers that might have converted online and it's moving them over. So anyone. And there's less margin in physical retail. So I'm obviously a big proponent of OmniChannel. I just think people need to be aware that there's definitely trade-offs that come with it. That's it. And then the other amount of final found on this is, how do you support that remarketing side? So it's not meta-ads. Are you doing billboards? What's your top of funnel strategy? Are you pushing Gradio? Are you pushing Podcast? Linear OTT, CTV. What's your playbook of stuff that's really measurable versus stuff where you're going to get an impression? And maybe in-store sale? There's that gray area. So there's also some trade-offs there, kind of even support retail launch. So anyway, I think it's exciting. At the end of the day, like, I think for any brand being on shelf, is it a wonderful moment if you can get on shelf? Has like a credibility builder, but that it's-- it's the grime, I think, to your point about like staying power. So we'll see. I will let you know when we press the green button. Every SaaS company says they are AI-powered, but very few can explain what it actually does for the revenue of my brand. This is why Post-Scripts approached it out to us. They don't just build AI for demos or buzzwords. They built it to drive real, incremental revenue. Post-Scripts AI called Shopper. It shows up inside of SMS at moments with real buyer intended when Shoppers are likely asking questions, hesitating maybe even about to drop off. Shopper can answer product questions instantly, answer questions about fit, availability, recommendations, order issues, the kinds of stuff that people usually bounce for. This means more conversions, higher-a, less lost demand, so you are driving more revenue and doing it more efficiently. Check out Shopper from Post-Script. We use it at Pelo, which is why I am telling you to check it out. [VIDEO PLAYBACK] All right, so let's talk about this factory. You've brought up a couple times. It's never easy to launch something in the physical world like that. You have permits. You have hourly employees. And you also have to-- the downside of a factory is you're all the demand. So you have to keep that thing running. at 99% up times or whatever, and you also can't make too much or else now you have a perishable food problem, right? So what was the driving force to be like, we have to open this factory? And how long was that process and where are you now? Yeah, so launched on the kit on April 2020, the business grew very rapidly as I mentioned, and our peak would outsource the six co-manufacturers across the country and it was trucks driving from east to west coast up and down. Again, I refer to that as kind of like the three-dimensional Sudoku puzzle, which was like unbelievable difficult to manage with a supply chain perspective. So we sat down and decided, okay, let's insource and then the question was like, what does that actually mean? So let's own supply, let's build a factory. We actually built what's called a box in a box. So it's an existing shell and we built walls infrastructure inside. We made that decision in kind of late 2020. We went live with this facility in October of 2022. I mean, it's been a long journey. The first was identifying the where. We looked in Connecticut, looked in New York, old infrastructure as far as like existing shell is concerned. We looked in the meta lens as well for like warehouses, you could build a factory inside. We almost pulled the trigger, obviously, it's like close proximity to Manhattan for all the obvious reasons since headquarters there. We came close on a couple of facilities there and I'll never forget we were standing in the parking lot. It was raining that day. I swear to God, there's probably three or four feet of water, like rushing into the parking lot and we looked at the agent, the broken, we're like, is this normal? And the agent started laughing and said like, of course it is. It's the meta lens. It's built on a swath and like, we're like, these buildings flood and like, well, maybe. I'm like, okay, let's flip that. All right, let's go west. So we ended up going to Allen, Tenth, Pennsylvania. Amazing road infrastructure. There's a bunch of other big businesses there. FedEx is there. Amazon, Chewy, the list goes Ocean Spray, Dr. Fabricure, the list goes on and on and on. Lehigh Valley is thriving. Great labor pool. So we planted roots there. The process was hard, expensive, you know, we were in bathroom trailers, break trailers, office trailers, you know, talking influencers and our marketing team at the same time is like, you know, the jackhammer or bringing in equipment. And so that was a process for sure. You know, we've got a hundred people in that facility and we are physically there. A lot every week we talk every day and it's it's this balance of building inventory, what skew to your point. How do you like verticalize and bring products from upstream suppliers all the way through to the factory, to packaging and then out to warehouses for last mod distribution. I would say it's in transformative from a P and L perspective, you know, adding 30 plus points of contribution margin fully loaded like contribution margin, cost of goods sold, picking back, shipping delivery. It's been a big game change for the business. And I'd say crucially, we control the supply when you rely on others. And again, I'm not suggesting that everyone should go build a factory. It's obviously difficult sort of reasons, but you know, for a business, I would throw this very important stress to be able to own that supply chain piece. So it was a very difficult, but it's paid off for us, ultimately, and like we've continued to scale that facility and we've continued to automate that facility in the fine and fine efficiency. And again, it's it's contrarian. I mean, most, most brands don't do factory and certainly in the pet space, most people in this outsource outsourcing is easier. I would say the most important purchase consideration is the ingredients in the product. Like a consumer will look at an ingredient panel to inform whether that's something they want to feed their dog. And they ask our customer service team constantly, well, where, where is it source? Where is it made? It's like, well, we make it. We source it. We control the supply chain. No other brand can make that statement. And any other brand in the cohort or category, though, I don't know that guy makes it. Whereas you get the pro, I don't know, he sources it. So I think inherently there's this big disconnective of brands that are very good at marketing, but don't understand fun and monthly the product versus the spot and tango. And don't get me wrong, it took us years to do this. This is not like, oh, we have the magic wand. And here we are. We've built in muscle over time, but I'm a big believer in asset. And it's many ways how companies used to be run, right? You own your manufacturing and you know, you prudent operator, PNO management, et cetera. So it's been a really cold. I've learned a ton about equipment and building all the rest of it stuff, things I did not bring to the table, but some actual fees that have been along the way. So one of the observations I would add here, Russell, is that there is a flywheel of competence in many areas of your business. And it turns out that you being way better in operations makes you way better in marketing. And that the better you get marketing, the better you get in operations, the better you get in data, the better. So it's like, okay, we we find product market fit and we use this volume to build out vertical integration. And so our cogs is whatever 15% 20% less than it would be otherwise. And that means that our LTVs look this much better, probably even more than 15 or 20% better. And because our LTVs are this much better, we can spend this higher number on CAC than if we were just buying this from somebody else. And because of that, we can get a lot more volume, which makes our factory more efficient. And we acquire more customers and we have more data and we have more momentum. And it's it's a positive feedback loop. It's a flywheel. And one of the reasons why I wanted to highlight this is that the kind of the worst of our industry is the kind of TikTok drop-shipper mentality that you see sometimes on Twitter of like, well, I knew it was spin up these three ads and like, I'm on a $5 million your run rate. And like, that stuff never makes any money. And it certainly doesn't last. What lasts is being good across multiple areas. This idea of skill stacking, I think is the way to think about it. That when your business, to build a business that's resilient, especially in years ahead, you're going to have to be good in multiple areas that are complementary to each other. So that your business can do things that other people can't really compete with. And my guess is you're very, very difficult to compete with. It's possible that I don't know, I'd love to hear if you think this is true, but it's possible in the dog food space that nobody has your particular set of skill stacking that you've developed. And so when you talk about the combination of marketing and operations, you're an end of one that nobody can quite do the combination of things you can do because of the competencies you've built, that wouldn't be true if you guys were just great at paid ads. And that wouldn't be true if you just ran a dog food factory. You know, it's what makes it special is the combination. And so this is a thing that I'm thinking about constantly with our businesses and things that I'm building is how my building complimentary skill sets that stack on top of each other where I can just do things that nobody else can do because it's great to compete with people and to be able to outcompete people. But you know what's better is to compete in areas where nobody wants to do the exact thing that you're doing. They either can't or they won't do the exact thing that you're doing. That's a lot easier way to make money. And that's how I want to make money. And that's what I take away from your story is that you guys have kind of built that type of a business. Yeah, and we call it competitive mode. It's hard to replicate what we're doing given all kind of the reasons and some of the background that I've provided. And you know, that's been like an incredible asset for the business as we've kind of like thought about the ops and the marketing piece. And then other comments that make is you know the expression like you don't know what you don't know. And I'm always the first person to raise my hand and say like I don't let's say I don't know go figure out I have a question. Here's a dumb I have a dumb question. It's when you understand supply chain you know when and how to ask either a 3PL partner or last mile delivery carrier or your trucking company or otherwise like well hang on a second like we shouldn't be paying ex-propout store or why on price and like you've we've gotten very but again that's that's taken like time that's kind of the skill stacking but if you don't know to ask the question is the point by seeing you're doing you won'ts and I think with a lot of these companies there are so many margin wins along the way. Some like super like tactical ones but even like more strategic where you start actually building this higher contribution margin kind of the earlier plan paybacks. But but see I just getting the reps and the scar tissue it's like oh that's how it works. Okay, I had no idea. Let's go ask a bunch of questions about that and the hope being that Shed's light on maybe a new opportunity where your team can say oh let's keep exploring and all of a sudden there's a positive outcome. All right, Russell. Well, we're going to go towards the end of the pod. Now it's the plug section. Tell us about all things Pubgum. This revolutionary new product that everyone's going to rush out and buy. 20,000 sales on Pubgum we expect from the audience. What is it? So popgums.com. we launched in May of last year. So what is it? It's the newest, it's innovative. It's like first of it's kind. It's a dental chew categorically. It's called pup gum. Of course, that's provocative because dogs can't chew gum. In fact, we encourage consumption. That's how it works. So what is it? Firstly, a new product development phase. A lot of people have like a dental stick in the pet space. It's all made by the same co-man. It's elongated. It's star shaped. It's kind of a bland color. And people call it literally like dental stick. It's like an AOV put it in the box. You know, enhancing the economics. We kind of start on that process. It's like, "Well, hang on a second, guys." Like, what can we do differently here? Is there a way A to improve the ingredient deck and B, let's have fun with it. And so there is this like, pliability aspect of the product that kind of led us to this concept of gum because it's chewy. I think half our team that it was like a really dumb idea. It's like, whatever you do, don't launch a gum for dogs. That's like bad for business. Our view was like, our core businesses food. We're launching outside of the sponsor ecosystem as pupgum.com. It's playful. If it works, amazing. And if it doesn't work turn it off. Right? It's blue. Our primary competitor, their product is green. What's novel inside is a hard clinical claim postbiotic. It took two years to develop on the R&D side. The postbiotic removes the biofilm and a dog's teeth. The biofilm leads to plaque. Black leads to bad odor. This reduces the biofilm and eliminates that. Imperial dental disease affects 90% of dogs three years of age and older. So is there a problem? Yes. Is it a big category? It can be. Is there a lot of innovation in that category? No. We launched pup gum. It's growing faster than our on keboblq product in the early days. We've stocked out. It's been a fun ride. You can buy it at pupgum.com. We actually, I will just share quickly. We're running out of time. We launched an internship for a dog breath sniffer. We launched the product and we had over 500 applicants, mostly MBAs. I think the New York Post picked it up and said it was the worst internship in history. Like snoring dog breath. It was playful and fun. Seth Meyers picked it up. It's been a really fun brand to launch. At first time, it's been outside. You can also buy it as a spontaneer.com customer, but it lives outside the ecosystem. There's some reasons for that. But you can pick it up at pupgum.com. It's been early days yet, but so far going. Dude, I love it. I'm in. I'm going to be a customer. Some of the address afterwards. We've got the dogs, some on keboblq, some pup gum, etc. I love to because it is interesting that you're continuing to see innovation in the space. My dog had his, I guess, his update and his vaccinations. We could go on it. There were two different things that came up with the vet that I was like, oh, I didn't realize this existed. I bought a different product because I didn't even know it exists, but pupgum sounds even superior to it. Like this idea of, instead of brushing their teeth, what you do is you add a little bit into their food. You add something that kind of like when they eat it, it works kind of like a greenie or whatever, but it's like, it's just naturally a part of their food, which sounds like what you're doing here, but you're doing even more than that. That's it. Which is awesome. Such a cool innovation. And then the other one was this, he loves being around us, but when he's away from us, when we put him in his crate, he just goes ballistic if he knows we're in the house because he just doesn't want to be in his crate. And I was asking the vet and they were like, well, there's this dog pheromone thing that releases a dog pheromone like that they, that's similar to what they smell when they're nursing as a baby pup. And it calms them down. I'm like, so I've got a, I've got a dog pheromone releaseer. And although it's you guys know how that goes. Does it work? I haven't, I haven't tried it yet, but I mean, it was just interesting to me that I'm like, wow, okay, those are two new things that I was not aware of. You know, I've had dogs before most of my life. We just haven't had them for the last couple of years and so. But this is, this is a really cool product. And like you said, it's innovation and it's solving a problem that everybody has. Like my dog's breath is, you know, terrible. So, yeah, and I would say, you know, the expression, innovate or die, like we need to stay ahead of the curve on product innovation. And honestly, we see ourselves as being like we offer highly differentiated products. And we're staying ahead of the pack. Forget the operational piece like just on the product side, there's more coming. You know, we have a very strong product development team and new product development cycle. So new stuff is coming out. I mean, we're obviously focused on the core of the business, but, you know, it's there's a lot of opportunity yet within pet is given that I think I read a stat, pet category is larger than coffee and razors combined. Okay, just in juries of like scale. So you think about that. It's like, wow, well, what else can we do? Well, I love it, man. I want to see you win. I love the new products. Thank you for coming to tell your story. You were transparent. You're an expert. You're all all over the place. And hell yeah, brother. Spontane, go to the moon. Awesome. Thank you so much. Really fun chatting. I appreciated the dialogue and feedback. Really enjoyed it and look forward to keeping in touch. Well, I did there. Thank you so much.