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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Founder CEO Guy Founders. Field Guide is a series of conversations with founders, CEOs and operators building great businesses. I believe we are all builders in our own way and this series is dedicated to stories and lessons from builders of all types. You can find more episodes at Investor Field Guide dot com.

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My guest today is Carlos Cashman, co-founder and CEO of Thracian and acquirer of third party Amazon sellers. In a surprising departure for a high growth company, Diageo has been profitable since its founding in eighteen and was most recently valued at more than a billion dollars. In our conversation, we discussed the full spectrum of the Amazon third party seller ecosystem, the effects of global commodities manufacturing and the terms of Thrasher's acquisitions of Amazon businesses. I hope you enjoyed this great conversation with Carlos Cashman.

Let's go to the origin point of Thracian. Tell me how you and Josh conceived of this idea, the very first conversation that ultimately led to this business.

So I had this fantastic Facebook marketing agency called Orion Skype. My team was really good at customer acquisition, marketing, on Facebook, Instagram, all that. We started in twenty, thirteen, twenty fourteen. And we're grown from there because we were so good at customer acquisition. So we had a lot of e-commerce businesses and great ones that was watching them all grow and they were largely growing on what we were doing. They're like super happy going out and getting 50 million hundred million dollar valuations.

And we were getting paid our monthly check, which in some cases was nice and sizable, but it was still just a monthly check. And I'm an entrepreneur. I'm always looking for that lever. So I started thinking about more than we do. And I think everyone loves to sell stuff. I've always loved e-commerce and we were starting to mess around with Amazon potentially for some of our clients as another performance marketing medium, let's say in twenty sixteen or so, twenty seventeen.

And Josh had been a friend for years and he had done some deal work for us. He's one of the most amazing financial minds I've ever seen. So he and I were talking about what we could do with what opportunities might be out there. And again, I had a great team at Orion, so I had no day to day responsibility. So I had time to focus on stuff that was getting these leads. Literally every single day I coming to Orion of a two million dollar DC site, running on Shopify, our commerce probably 20 percent to twenty five percent margins that we wanted advertised and our clients, we would only take a client that was spending fifty thousand a month and commit so we couldn't take them on.

They weren't going to spend that. They were like, well, we want to try Facebook, but we only have ten grand. And I'm like, well, that's not good enough to test it. No, if it works, first off, we can't take that as a client. But I was getting it all the time. So Josh and I were talking about I said, you know, look, I got ten of these and I look at five when I know we could turn it from two million into ten million, maybe twenty million, maybe more.

I knew we could do that. And the other ones, I said, you know what? We might spend a hundred grand. Maybe we lose it. They're making four and a grand. We could spend that on the ground. They're afraid to they need to pay their bills. Whatever taxes we've got. We had that business. We could spend it and we could do so. We could see if it worked. And if it doesn't, it's still making money.

We have that. We were talking about this and Josh said to me one day, I see commerce stuff sounds interesting. I think we can raise a fund and just buy all these guys and you go put the marketing team together and we grow. We actually started off thinking we were going to roll up, see e-commerce players and started looking at that. And it's a much more complicated task. There's some interesting companies trying it. And for everyone you look at, you've got a different tech background or I might be shopping.

I might be commerce, might be big commerce might be Magento, it might be any of a dozen other things. Then they all have their own three relationships. They're shipping differently all this stuff. So you would have had to do a much heavier lift on the back to do it. But we actually started putting together the teams to do that, started looking at that whole opportunity. So we got connected to some different people in the Amazon ecosystem through my network and connecting with people and ended up needing Casey Gousse, the founder of our launch.

Fantastic, one of the three top platforms for Amazon sellers to learn where to launch, how to launch all that kind of stuff, and just learned about the Amazon ecosystem there with Casey. And so Josh spent some time with Casey mentoring, helping his business, putting some professional structure around, bringing in some investment and all that kind of stuff. After he'd been doing that for a couple months, he came back to me one day and said, forget all this general e-commerce stuff, don't we try this on Amazon.

We had a couple of other of our early people around that. We're kind of in the orbit of what we were doing, that waiting for us to come up with something here and just said, yeah, let's go look and see if we can find any of these for sale. We literally just Google it on Internet and found these business brokers who sell all sorts of fascinating businesses and found a couple of Amazon FBA business sale. I mean, I bought the first one just personally before we even knew we were doing.

What is the business itself? It's funny. It's my favorite product. I just used it a minute ago to make my bulletproof tea and I use it for bulletproof coffee is everywhere. So it's a handheld blood mixer. We call it frothy. Now, it was called Cafe Cossa initially. I think it's still sold under the cafe has a name, but it's battery powered handheld mixer. I literally have a drawer full of mixers. I bought Amazon because a blender is too big to blend a bulletproof coffee cup of coffee.

As I said, butter and oil is the hand mixers that plug in. You don't want to go plug something in and do all that? No, too big generally too. I tried that shot coffee all over my eyes.

Like this thing's a little battery powered thing and you just stick it right in, blend it up perfectly. Turns out it's also fantastic for opening wine. If you've got one that needs effort fast, parents, you can scramble eggs with it. So this was the first product we bought. It was very small, doing a couple hundred grand in sales and stuff. So it was fun.

It got us into the game. So talk us through. You can use that or any other transaction. What one of these businesses that is living mostly on Amazon looks like our one hundred percent of their sales on Amazon. What is this universe of companies? What are the ways that they're most distinct from, say, a Shopify or some other back end style business? Pretty much they are one hundred percent on Amazon, I mean, that's what we look for and that's our kind of ideal case, although now we're largely looking at businesses that have more off Amazon business additionally.

But it was important early on for us to just look at that. They're not a business in the sense that you think of a business where you get a bunch of people and start doing things and have some raise money. This is the thing that Amazon has done with the third party seller program, the most unbelievable entrepreneur creation machine the world's ever seen. I mean, they've got three million active sellers around the world now at two million, but there's a couple hundred thousand that have produced sales of six figures and up and there's half a million or a million.

I think they released these numbers every now and then, but doing 50 grand in sales, let's say, which is not insignificant. And if you're living in Asia or some other country, 50 grand a year, 20 percent margins making 10, 20 K on, that could be fantastic. And as a side hustle, it's great for almost anyone. What they enabled was an individual to be able to sell products for one thing. And then the other big part of this is the way the manufacturing has been commodities in the last 20 years by China.

Just it's stunning. I think everyone says it and talks about it. We don't really understand or appreciate the extent to which that has happened. So an individual can get an idea and just say, hey, I want to sell these things, go on Alibaba and decide to find a manufacturer in China, a bunch of them, and arrange to have samples sent over, pick out a product, tweak it a little bit, and then ship it directly from them to Amazon's fulfillment center and start selling.

And the cost to get started is almost nothing. I mean, I remember reading a BusinessWeek article where the reporter had decided to try this out and it made like pink jeans or something and ordered like five hundred pairs of pink jeans or so. It was really it was funny, but they ended up selling them all, but they just showed how that process was. Just the gears have been greased across the whole spectrum of things you need to do. Amazon sourcing the product is one thing, but Amazon took the rest of it out of the equation.

The hardest thing for these businesses that I saw, like I ran traffic agencies, I've done Google and Facebook, like getting the traffic is the hardest thing. Turns out, as the agency, I was seeing this value created by fewer people shipping product from Asia to guys and stuff, and we would come and create all the value by building their customer base on data. See, Amazon brings the customers, they're there. So if you understand, use one of these tools like Helium Ten or or viral and tried to help you understand the space and understand where there's opportunity and how to rank on keywords and what keywords you'll be looking for, then how to pick a product.

OK, I need to pick spatulas because I can get on the first page there. And so they make everything else so much easier. So you have to procure and produce a great product. But that's easier and easier for everybody to do. So these companies are really just they can be oftentimes just an individual doing it on their own. Or maybe it's a couple of friends from college that knew each other and launched something or retired executives. We've met a number of them.

It just weren't done. They retired early and said, I want to try something and launch products on Amazon and or maybe bought into a small business and grew it. These aren't sophisticated company builders. What you're talking about shares and asset purchase agreements and all this, that they don't really understand all that. And it can be a little daunting. This is an asset that represents probably ninety nine percent of their net worth. You're speaking a language. It's like real estate.

Think about it. When the first home you buy or sell can be terrifying, there's a lot of stuff to learn and whatever. It's the same thing in business, but it's something even less people know about. Everybody owns lots of people at home. We all know people who own homes. Very few people know people own businesses and or sell those businesses. We have made over 80 millionaires in the last couple of years since we've done this thing. We're going to make a lot more I love to see to hear the stories of what they can do with that and to watch it.

So there's this enormous, fascinating ecosystem just on Amazon. Like I know obviously there's a big ecosystem we could talk about off of Amazon, but just countless people with little small businesses selling some product that they care about. And then you guys enter the picture at some point in the funnel. So pretty far down the funnel meeting. Obviously, you need businesses that are of a certain size for it to be worth your time. So talk to me a little bit about the specific challenges that you see these smaller entrepreneurs face.

Where do they start running into a scale and a size that they get interested in selling to you because it's just getting too much to manage, like you said.

The interesting thing is the challenges have changed and multiplied in the last few years, last couple of years since we've gotten into this early on, it was enough to just get a good product and ship it to Amazon and be smart about selling. Almost all of the early sellers we spoke to had taken an online course on doing selling on Amazon. Some of these things that seem cheesy or whatever, but there frankly have a lot of good information. You spend two to five K to learn and most of them had done that and learned.

So they were doing the basics and that's all you needed to do. This really all started to explode. I think the third party marketplace really in twenty fifteen around that time period. So we got into that there had a good product pick the right category, it starts to take off. Where it starts to get difficult is when you start growing, you're getting two million, couple million a year in business and you're starting to order a lot from your supplier.

Amazon's got prime day. There's deals. All these things start to happen and you have to. Keep up with that, but the more Amazon has released in terms of flexibility and power to the third party seller, the more complex it gets for that loan operator and the more it really favors bigger operators or people like our company or medium sized sellers who have a team. Because two years ago, advertising on Amazon wasn't much. Now they've had the fastest growing advertising ecosystem ever.

Google grew so fast, we were all amazed that Facebook came and blew that away. And Amazon has blown Facebook's growth rates away. So now you have to be a fairly expert marketer and advertiser if you want to advertise and keep up and you're not going to be able to compete with my team. I mean, I ran a performance marketing agency. I've got those kind of people that are fantastic. I know what they're doing. Focus on that. Now, you also have Amazon has released multiple different advertising options and things you can do year, year and a half ago, they introduced a supply chain score.

You get scored on the quality of your management of your supplier. You didn't have to do that necessarily before you just shipped the products to Amazon. They figure out exactly where to put them and how to get them out to people. But now you get scored a based on that score. Your fees change. You might be paying more if you're not doing a great job of that. So that starts to get really hard. And these weren't things that a lot of these people signed up for.

So it was like entrepreneurship in a box. And now suddenly they're having to do all this stuff, have this particular expertise, and then it's getting very competitive. I mean, you hear about the competition on Amazon and there is a lot and there are a lot of unscrupulous competitors. Mostly, I'd say those are overseas firms. You can attack them in 10 ways, the sun, your listings get attacked and stuff. That's just crazy. And Amazon just can't keep up with that.

They're trying, but can be very difficult when you're an individual and you've got this asset that represents this huge portion of your total net worth, maybe your entire earnings for the year. And you're worried about it being at risk of just drop off the first page. You're not selling anymore. You're used to making 20 grand a month profit for yourself and live a happy and then suddenly you're down to one. That's a big deal. So I think where we start to see that's particularly true when companies have most of these people will have one killer product that drives most of their revenue or profit and then a handful of others.

We love that. We love to acquire that. But I can see why that's scary to individual right. So their mantra is always launch new products, distribute your risk and all this stuff. So they're doing that. But then there's still single point of failure with Amazon on their account and they're worried about that. And you hear all the nightmare stories about random shutdowns. It's not quite as random as the stories would have you believe, but it does happen and you can get shut down because of an attack, something you have nothing to do with someone fix something against your account.

So that's where I think they start to, as I said, get a little bit out over their skis. People start to worry. And when you get to something that represents seven figures and value or you can walk away with a million bucks plus, that's life changing money. So I think that's when people really start to think about it and look at that risk reward equation and make the decision.

Talk to me about how the transactions have evolved, both in terms of their size. You said you probably don't call it six thousand deals or something like this. So a lot of reps now acquiring these companies and I'm sure a lot more reps of stuff that didn't get done, that got initiated. There's something or companies you looked at talk you through the change of the size, the multiple you're paying the competition. What are the most notable points of change from when you started a couple of years ago to today?

We look at a lot of stuff, but we have closed fully ninety four percent of the deals that we have gone into, although we've closed deals that have had reviews, scrapes in the middle of the deal and got just hammered down or some other change that caused their product to drop in revenue. When we know it's not the seller's fault, it wasn't malfeasance and it's possible to fix. We move ahead and we don't even let it impact the terms that much.

We know what we're doing here. We know we're getting into we were better at that now than we were early on. I would say early on don't necessarily know what is great, what isn't and how to look for warning signs of things like that. But again, when we go into Loai, we closed. It's rare that we don't. And it's usually, like I said, something that was discovered that they were doing bad or wrong, which can happen or change your mind.

You're there. But it's very, very rare. We have seen multiples expand, but not a whole lot, and it's mostly due to covid. So the massive ecommerce bump that everybody got this year who was selling online and particular on Amazon. So I'd say multiples were in the low 2s range and now we're in the high 2s range of revenue of Iida VB to my WOW.

But they call seller directed earnings in the space. We've paid more for many businesses. At times people get to have got it in their head that you only pays this. They have a formula. That's what it is. And that's not the case at all. We look at every deal, the larger you are generally, the more you money or multiple you can command. We do earn outs most everybody does on these deals to some extent. We've paid ninety seven percent of our accounts also.

We're very good at that. We've become fantastic operators. And I might add this is all my team. I mean, they're just great and it's just amazing. I think we're a world class at Amazon operations now. So when we say here's a turnout and based on these numbers, here's what you're going to get paid, we hit that and pay it more than 90 percent of cases, which is fantastic also. So being able to do that and.

We say that that's changed. We didn't have the track record before when we first were starting, and that was harder. So to see that change a little bit, other than that, I haven't seen a massive change. There's more people who are willing and interested in selling all the time. They're starting to learn that they can. That's interesting. There are other competitors, right? There's a lot of people now who are copying the Thracian model saying we're going to be Thracian for this or that or do three asiel in this vertical or that.

But we haven't seen a large impact on pricing there yet. I imagine you will at some point, but that remains to be seen again. There's a decent number of these businesses out there. If I wanted to just go full spok like about this whole exercise, I would think about your cost of capital, the mix of equity and debt that you've used to acquire the businesses, the multiple you're paying. It kind of boils down to a simple formula that my guess is working quite nicely so far.

How do you think about the capital sourcing side of all of this and the strategy that you've employed there? What's worked? What hasn't? What would be most interesting to those out there learning about three years ago for the first time on the capital sourcing side?

Well, so I'd say two things about that. First, you're talking to half of the thrust of your brain here. The other half is just that. Half happens to be the CapitalSource account. And the fact that he is a savant when it comes to capital strategy and debt and equity and all that. I've never met anybody smarter. Unbelievable. So we've talked and you've learned about me, like when I have someone who's great at something and better than me, I hand it off the lazy lazy about it.

I'm sure much to Josh's chagrin at times he really runs a lot of that for us. Now that the things that we talk about it, I understand the stuff. And you're right, there is something going for him. And I couldn't give you everything because part of that is our secret sauce is how we've done it and being smart about it largely done this with debt. That's no secret, because when you're buying assets that are fairly low, multiple, and, you know, at some point if you're a reasonable operator, you're going to come out with a higher multiple.

And where that tops out is it depends on how great you are, what you do with it, then you can follow that formula. Look, threatening has never been just about assembling Amazon assets. And a lot of people out there say, well, how can they be worth that? This is crazy because that's not what is in our pitch to explain the scenes that it's not the only story here. It's a much bigger story. And this is step one.

Phase one.

Can we talk about those subsequent chapters? So let's just say chapter one is kind of what you described at this point. So this really neat kind of Win-Win situation where you bring expertise and scale and operational excellence and all these things and drinking to entrepreneurs that have been really successful and sort of everyone comes out ahead. But it's really focused on Amazon in the single ecosystem. Now, it happens to be the biggest ecosystem, I guess, in commerce that we've ever seen.

So you could probably stay there for a long time. But as you think about chapters two through X of the Thracian story, what has you most excited? What is interesting about this ecommerce space deeper into Amazon or beyond Amazon?

A lot of people are kind of using this line and we aren't the first and we're not the last. We talk about the consumer products company for the next century. Right? Then some great folks talk about this for a little while. So what does that mean? So what's most exciting to me, and it's a combination of all these things coming together in no small part, the commoditization of manufacturing globally and particularly in China, the simplification of moving goods around the world and then selling them both through marketplaces, whether it's Amazon or Rakuten or so Londo or whatever it is, and other places like these have all built up all over the place.

Makhado Library. Right. The ability to go to see you can have other Instagram shops, all that stuff. So all this stuff has been going on. And if you've looked at that and you were to start a company which many of us have used to, to sell products to consumers, nowadays, you wouldn't go build a factory. That's the last thing on your mind. You don't do that. Nobody does that anymore. But we're talking with just twenty years here.

I mean, this isn't that long ago, certainly not to me. I remember distinctly what I was doing, getting crushed by the dotcom boom and bust before that. Like you couldn't have done a lot of the stuff even ten years ago. It's funny, we talk about the scale of our company. You don't get a feel for that till a team all the time. We're shipping over a million goods a month to people every month into people's hands.

And that's growing dramatic is probably going to happen. I've been in that number for a few weeks now, so it's all ten, fifteen years ago we would have had a humongous warehouse. We might be based in Ohio or something so that we could have a million square foot warehouse to bring in that stuff and get it out and do it ourselves and have one hundred warehouse workers and our company based near that. We'd see trucks going in and out all the time and you'd have a sense for this scale.

We started this somewhat remotely in three different cities, Boston, New York and Houston. We don't see these million products getting shipped out and shipped around every month. We don't see the hundreds of storage containers on the ocean leaving China coming into the various coasts. You don't necessarily get a feel for, but that's what is going on. That's the consumer products world today.

There's just so many people have made it easier along the whole spectrum. Where I look at this, what's exciting is, well, how do you get good at this? What would you do if your advantage is not going to be in a factory and your advantage is not going to be in building a huge sales force that goes out into every Safeway in the country and repositions products? Because now Safeway has got their own data and they're doing. On their own, thank you.

These are the things that the big consumer products companies of the last century did. So now what do you do? How do you get position where it matters? How do you get position on Amazon? That's what we are experts here. How do you get position on Wal-Mart.com? How do you get position? And what kind of leverage? What do you do? How do you move product? How do you do it directly? We've got to see sites launching our extremely rapid pace.

What does that mean? The most exciting me is sitting at the nexus of all that, what you learn and what you do with that. So there's an enormous amount of data flowing through all of this stuff. And you start to learn a lot about products, what's popular, what isn't, where it's popular, how you can move it, where the most cost effective places to move. When I think about what consumer products company can become, we can become oftentimes I talk about Zara.

The company is a fantastic story in fast fashion. Right? Unbelievable. See a trend happening in Paris. I have it on shelves in 60 days or something like that, 60 to 90 days. Well, no one's quite done that in consumer products yet, but is there an opportunity to do that? Yes, I think there certainly is. Doesn't encompass the whole opportunity there. But it's an interesting analogy to look at and to think about. So for us, I think the Amazon you mentioned, we can keep doing that growing people like, well, what does Amazon think of you?

And I still if we're doing a billion dollars next year, Amazon doesn't even think of us, we're going to be less than half a percent other third party seller revenue. By the time we're 10 billion, we'll still be half a percent because they're going to be so much bigger. They don't really it's a huge marketplace, but you have to know how to sell them. And they're giving you more and more tools and putting more and more of a third party seller over time so it gets more complex.

But that plays on our strengths. I think Amazon, we can grow fantastically. There will always be kind of the foundational piece, if you will. Like I say, in some ways, the cash machine. Right. It's kind of like Google. Google has the ad sense is their cash machine, which has funded everything else that's ludicrous profit margins and drives most of their profits, but it allows them to do a lot of other stuff. I mean, you could pull a lot of stuff away from there and it would still be a massively powerful, probably more profitable company.

But they keep out that there's a baseline here and we can do it by delivering fantastic high quality products really efficiently, pricing them well, getting them into consumer's hands and making them happy and doing that through marketplaces around the world, Amazon and others and directly where it makes sense and who knows where that's going to go. But being positioned to always take advantage of this, we have to be nimble by definition, because I don't know what's going to be the big selling thing in a year, telling you I do it, be freaking crazy.

We can't do projections and doing a five year vision for this business. We've been saying you can look at China and say what's going on there? So live commerce is huge in China. It's larger than any other means of doing the largest e-commerce economy in the world. And this shop in a discovery fashion with live commerce in many ways you think about. So that's more like watching Instagram or Instagram stories or Snapchat and then buying something because it knows you so well.

It knows you're about to travel to Ireland and it shows you an umbrella and you're like, Oh yeah, I need an umbrella. Both in the West, 70 percent of product searches start on Amazon now, and it's very search and intent based. People go to Amazon and say, I need an umbrella. They find umbrellas. We happen to have an umbrella. Hopefully you buy it and you probably already own one. Frankly, I actually discovered I own four of them after we bought the company.

So there's different modalities of purchase. Like how is that going to evolve? I don't think that you're just going to see us pop over to live commerce in one year because the Western consumer is different. And we didn't grow up with that. They didn't start with an Amazon. They started with that kind of system. It'll be different around the world. And so you have to be prepared to look at all these things and take advantage of them quickly.

And the faster you can take advantage of them, the faster you can exploit these new channels for selling, the better return on investment we get. I think of my Joshes primary job is capital allocation and is producing the highest return on our capital. We can otherwise if I can't keep producing fantastic returns on it, I should invest it in your fund or something like that. We can and we think we can keep compounding an extraordinary rate. But to do that, we have to build an exceptional company.

The foundation of that is unbelievable execution on Amazon. And frankly, I can't take all the credit, any of the credit for this. I mean, it's a combination of skill, meeting opportunity, which in many definitions is luck. There's a little bit of both those things in there. We do that. But once you build an execution machine, then what you do with it and how you keep it vibrant and alive is important. And that's what we're thinking about all the time.

This is what I spend almost all my time thinking about as an organization, is how we interact with each other, how we experiment, how we try things, keeping everybody open minded to new ideas. I dedicate a ridiculous amount of time and people think to reading books and listening to podcasts. That's all generally learning about this stuff. And who knows when one of these ideas becomes the thing that makes a difference for us. But lots of times it's just got to percolate for a while.

But that's where I think the opportunity is.

I love the idea that the competitive frontiers, which were factories and logistics and the physical kind of infrastructure of a consumer that CPG business kind of last century is now the competitive frontier of data and marketing and platform management. Completely different game, given that you spent so much time, especially on Facebook and now and Amazon. So. Two of the major five platforms or whatever, what would interest people about those platforms that they might not really respect or understand that makes them so powerful for GTK companies or anyone else using them to reach customers?

I don't think people probably realize how powerful Facebook could be for their business or Google could be for their business.

Can you say a little bit about that? To most that probably have no idea.

They don't realize the power. And I'll tell you with a little anecdote, a story. But like in the story, it plays out almost every single weekend where we're hanging out with our friends or neighbors. We start talking about cutting boards, let's say. And then my wife the next morning wakes up and the first ad of her feet is a cutting board. And it's always looks like they're listening to us. They're listening to our conversations. And a year ago, I was I was like, no, they're not.

That might be going on now. I looked at those terms of services. So it's not like as a person sitting there listening, but there is a system that can sit there and can understand what you say. Frankly, I think less often people don't understand the power of the data these companies have and the power of predictability of people. Frankly, we'd have this debate when I said it's an my wife would say, oh, they're listening to me.

And I'd say, no, they just know that you live in this zip code. Your income is this you're married to me. You're interested in these things. And they know from your credit card receipts, you last bought a cutting board 18 months ago and they usually last about 18 months. That could very well be what's happening. And it quite often is people I don't think want to believe that we're that similar and that some system can find out where that some women.

When Facebook introduced the like audience feature, at first it took twenty thousand emails. You'd say, here's twenty thousand customers we have. You upload the emails and you say, go find me. People like these. And the conversion rate from that group would be twice what it was from just advertising on Facebook, maybe three times. And then Facebook soon said, Oh, we only need ten thousand emails, oh, we only need five thousand emails. Now I think you can give them on the order of hundreds, a couple of hundred.

And they have so much data, they're so good at it. So this is one hundred of your clients, you load up said build me a like audience and they can build you a custom audience, that stuff like that. And here's the people who are ninety nine percent similar. Here's the people who are ninety eight percent similar. This is what my Facebook agency did. When you break out those groups and you advertise differently to them and you optimize your conversion on each one of those, that's what people call it, creepy advertising sometimes.

How did they know that I was talking about this or needing this? But it's just data. The more they get, the more places they're plugged in, the more tools you're on WhatsApp, you're on whatever. You have an apple into Android. Google's got their fingers in Android all over the place, whether you're texting or whatever. Who knows? I don't know what they're using, but no one reads an 80 page terms of services. We all just click OK through it when we get a phone.

Right. That's what these companies have built. That's why they're so effective at getting the right offers in front of the right people, the right time. And I think it's fantastic. I always tell people I'm happy to do that. But I think most people have this idea. Well, there's a person sitting there listening to me and going, oh, let's advertise cutting boards to Patrick. But that's not it could never happen that way. It's massive, massive computer systems crunching through enormous amounts of data and then putting it all together and then having this marketplace where other people can come in and put offers in front of you.

And if you happen to need a better car insurance or you happen to need an umbrella for that trip, I mean, I think it's great personally that they show that to me. I've watched them get more effective over time using Instagram. Early on, the ads were OK, like the or whatever. I see things that I like. And then pretty soon I found that I bought twelve hundred bucks worth of stuff through Instagram and like six months. And I was like, but there was stuff that I really loved.

They knew to show that to me. So if they get better and better at that, I mean for me it's only exciting. Everything's a risk and reward. So that's what these guys have done. And Amazon has a slightly different I mean, obviously can do this to an enormous degree because we're all buying so much there and they know what you're buying because Amazon is so search driven and so intent driven. Still, it works around that paradigm. But Amazon has many other places where they're they're working, where they buy enormous amounts of Google advertising.

They're buying advertising on Facebook and Instagram. You look at my umbrella, you may get an email tomorrow from Amazon with the saying if you didn't buy it with that umbrella in it right now, if you don't buy it tomorrow, you'll get an email with a different umbrella. So I've been fascinated to see there's the boycott Facebook. Everyone goes after the big advertiser and says, hey, we're going to get them. If we get to stop advertising on Facebook, this much revenue barely takes a blip.

There are a lot of people who figured out that this works and those are not huge businesses, the local pizza shop who could use it effectively. But you need that expertise. The big companies have to do a better job, and they are over time of making it easy for the small guy to do. The more they do that, the more they increase their revenue and throughput and I think the more utility of value they provide.

Everybody thinking about your dual expertise as a capital allocator and an expert at reaching the right customers on these digital platforms talk a bit about how edX erodes and returns on spend fall over time as more people crowd a platform or a marketing strategy.

How quick is the halflife? I assume if you were the first person on Facebook making use of these tools, you made an absolute killing and a. Very high return on your spending that that comes down over time, like any edge in any market, say what you've learned about that, the evolution of edX and return on spend and how you need to stay evolving.

And you're absolutely correct. That's how it happens in any marketplace. Without having a unique ad, you're still making money, just maybe not as much. I've never been fortunate enough to be the first guy in one of these systems. I don't know whether my team just missed it or I didn't have the right business, but like SNAP when they started launching it, because it's funny, most of these things will launch the pricing. It's always market based pricing.

You need technology to interface with it. We use some fantastic technology to do our automated bidding and things like that. Right. A bit management, but you have to understand that. So you're bidding on Google a key word and Facebook an audience person their attention and Amazon combinations of those. And yeah, look, early on like Amazon advertising was phenomenally effective for the people. First started, let's say, a couple of years ago. They didn't have to spend much and they were crushed when we saw that in a number of the businesses we looked at.

And they're more upset because they were getting a 10x return on their advertising early on and now it's three. But they still make money at three. But you can see life is about directionality, right? If you've gone from 10x to 3x, you're kind of poj you're not super happy. But if you enter the market at three exit, I can still get my profit margin. I'm perfectly happy. It's great as a marketplace. These things will settle out to a place that makes sense for the bulk of the advertisers where it gets weird.

During elections at my Facebook agency, we would actually pull back advertising for many of our customers. And actually towards the end of the year Christmas, we pull back advertising from many of our advertisers because the prices just go ridiculous. First off, in elections, they're not trying to make money. They're just trying to get it in front of a ton of people. So it's a market distorting element. And sometimes the end of the year, a lot of our products weren't holiday products.

So why waste your money when prices double for everyone else who makes a lot of money selling in the Christmas season? So we would pull back. But those are just market distortions that you just got to be aware of because it is market based pricing for these things. The advantages aren't going to last very long and you can't build your business counting on that. You might get lucky and walk into that, but you certainly can't plan on anything like that for that long term.

How much of your time do you spend thinking about the Thracian brand in sort of like an analog to Shopify where everyone had bought something on a shop five store probably before they knew what Shopify the business was tragic, probably has a similar quality, which is a lot of people listening have probably bought one of your products and learning about you for the first time. But at some point your scale reaches a stage that you have more options, you have more optionality to build a brand or create your own products with the data that you're gleaning from all your customers across the different businesses that you've bought.

So how do you think about that piece of your future? That's obviously very different from what you're doing now, but the more successful you are, the more optionality you create.

First off, when we talk about the screw up, you never really screw up like the ratio is the worst name for a company. I think just about certainly with the URL threats that I owe their investors of ours today who still call it threats. And I don't know if it's just because it's fun and remembering, but they didn't know it was the ACA, but it was never intended to be a consumer facing brand. The story of it is kind of funny.

I don't know if you know the history behind the name, but I've worked in one of the highest end strategic branding and design agencies in the world that can buy New York. This learned at the feet of Giants at a company called Frankfurt. All kinds fantastic people who are legends and branding and advertising. We did these naming studies. People pay us millions of dollars for to name something they named Adobe Acrobat, great name, whatever. But at the same time, then you see Steve Jobs go, let's call it Apple.

I like apples. And everyone would say, oh, that's a crappy name, but it turns out to be great or Google, I. I remember seeing them hang that sheet out the window in Palo Alto back in ninety eight. And I was like, that's the stupidest name I've ever heard. And who needs another search engine. I mean if us said that right. We got excited and told me and Alta Vista they're all crushing it. No one needs Google.

I've been very dumb in my history also. So when it comes to a name like I don't get tied up in it anymore and certainly not one that wasn't meant to be a consumer brand, Josh thought about it for a while. My partner Josh called me up one day and said very early and said, What do you think about Thracian Thrasher's? And he said, Thoracentesis Amazon Queen Sham's. I'm a warrior. I know. That's awesome, he said.

And it means boldness. Your confidence in Greek, it actually means borders on cockiness. But let's stick with boldness because I don't want to be thought of that way. Nice kind of low times. What we do is I just have five. Great. So let's do a hour start. I thought I was cool, so I said fine registered. The damage wasn't even a discussion. It wasn't worth me spending a minute of time thinking about that or debating it because I was like, look, we're going to Choire stuff and whatever.

So here we are. One hundred and fifty translator and thousands of products starting to think about this and look at it another way. And there's a couple of interesting dynamics here. One is that brand on Amazon serves a very different function. So when we talk about all the products are just starting on Amazon. Seventy seven percent of those I think are unbranded people are going there and they're typing. They're looking for umbrella or cutting board. They're not looking for Patric's or.

Barella or OKso cutting board. What does that mean? What has taken the place of Brand today and I think we all could agree. I was looking for a set of arming them the other day. And you can imagine it wasn't for me as for my six year old, but he's looking at the picture with me, trying to pick him. And I said, how about this one? He goes, No, don't buy that one by that very point.

Another one. I said, Well, why? He goes, it doesn't have enough stars. No one has more stars to read. But he can see the stars and he knows this. And I said, well, there aren't enough reviews. You didn't get that part of it. But he got that brand is now represented in so many ways by what the intelligence of wisdom of crowds has said. There's a lot of reviews and good ratings. So if you go to buy a spatula or something and you land on the page and OKso a brand many people know is there, you might buy it because you know the brand at that point.

But you didn't go there looking for it. And it also happens to be there on the bottom of the page with three star reviews and eighty two of them. At the top of the page is Carloss Great Spatula with eight thousand reviews at four point eight stars. Which one of you buying Brand can serve a function at the bottom of the funnel converting there. But it's not a top of funnel. It's on Amazon. We have also entered the world in the era of thousands of micro brands.

This is what the explosion in DC has done in Shopify in no small part, right? What a fantastic company because of this great supply chain. And and then you factor in commoditization, all this stuff people can launch products they're passionate about. So now we've got a passion project and everything from razors to skateboards to whatever. People can create micro brands around there and consumers are getting more comfortable with buying, but they don't demand. But Nike has great branding or whatever, and people still buy Nike shoes.

But there are other No-Name shoes that people are buying, our small brand shoes that are getting throughput because of the world of social media, of all of these online marketing channels and Amazon, frankly, all these things and non clothing in particular. It's an opportunity brand didn't mean that much in travel, coffee mugs, things like that. Yeti has done a phenomenal job. They're building a brand. Other than that, people want functionality and reviews and ratings.

And when we acquire business, you acquire a brand. We only buy third party sellers who are selling their own brand, not a reseller. But what these brands mean is something very different on Amazon. There's some crazy names to them, AMZI stuff for Hercules tough and things like that, which may or may not be good consumer brands long term. But again, it's not important in that ecosystem. But I want to start looking at data. See, when I start looking at building a direct effort, brand can start to mean something.

So if you think about the consumer product space that you're familiar with, the smiling curve. Yeah, you look at a graph. So value is on the Y axis and product life cycles across the X axis. So if you look at the very left on the X axis, what's the high point there in the lifecycle? A product, that's where the value lies. So that isn't patent's. The idea for the product of the squatty potty is not a complicated product, but is a great idea and they sell it.

Pardon my French, they sell a shit ton of them. So there's value and design patterns, things like that. So there's a lot of value in that. But then you move along in the life cycle and you move you're getting closer to manufacturing, which is the nadir of the value curve manufacturing has become. Know that eye building your own factory and making these things is not valuable. It's amazing to me that China has figured out how to drive value out of that and make money.

But even look at Apple. You get your new phone. What does it say inside? They're designed in Cupertino. Doesn't tell you it was made in China or Indonesia or wherever. Foxconn has a factory. Right. And power to Foxconn for doing what they've done. But there's less value in that manufacturing and certainly in a space like ours. And then you keep moving along the curve. It's about selling it and marketing it, getting into people's hands and brand that can exist there also because that helps you sell.

That helps you build a defensible moat. Yeti's a fantastic product, but it's a brand that represents a lifestyle that people buy and pay three times the price for a cooler than you really need to because you associate with that. I look at that smiling curve and look at the places there's value and I think about where we need to be and where we need to play. Brand is obviously someplace we really need to think and think about it intelligently. But while we're moving so heavily in the Amazon ecosystem, it's reviews and ratings, right.

Starz and a number of reviews is the brand. But what do we do with that for this? We've had products grown from a couple of million dollars. You want to talk about hitting earn outs for people with brand we bought that was doing less than two million and it's going to be a twenty five to 15 million dollar brand this year, less than two years later. And it's going to keep going from there. It's fantastic. We've got some that are one hundred million dollars.

So what do you do with that? The opportunity to sell in other places? I feel like our product should be available anywhere the consumer is. That could mean retail also. Then you need to have something there. So there's opportunity to understand how brand plays in this ecosystem. We've also thought about how Brand works across all these products. In today's world, people are a little worried about what they're buying sometimes on these sites because is it some random overseas company that has faked the reviews and faked the ratings and my battery's going to explode.

And Burma, which has happened. We have a brand that goes across our products called Zarba. It's just trust what you buy. We only buy great products and we ensure that whenever they say they have a certification, something, we've got the certification we do that. We make sure it's there to make sure the product is good. High quality products and a good value. I think you'll start to see more of that across the board. So that serves a function also and all that is separate to Thracian, who is a threat to your brand need to mean something to.

I'd never intended it to be in front of consumers and hopefully it doesn't end up there because it's just not a good consumer brand. But it could. But the first question is to represent something to the selling community, to the investment community, to possible employees and things like that. And I think we've done that, but not massively intentionally yet, just by being who we are, being good actors and the ecosystem.

But it's the story starts to get distorted. And I hear sellers in Europe who think of us, oh, you guys are cheap. You're the cheap company with a formula. I know that's not quite the case at all. And I'll show you a lot of people who have done very well with us. So we have to start to be more intentional about how Brand plays a role there. I think it's evolving. We're always learning. We're going to be learning how Brand interacts with all these various channels and how brands can play in this new world.

And I've got to continue learning. There are a whole team does, and figuring out how all these things will interact. But looking again at that smiling curve, I think that's a hugely important part of what we do. We are building brands. We are doing a fantastic job. The person who started that loves to see that they walk into a store now and they see their products on the shelves and they're super happy now. We couldn't do that with everything right away as quickly as we wanted to.

But we are moving in the direction of a building. I mean, we're barely two years old, I guess two and a half years at this point. So we've got a lot to do, a lot we want to do.

How many businesses have you personally started and sold you out of the sold qualifier? Which is a good one, because I started a number of them that didn't quite get there. Some of those were really small. I mean, I've started over a dozen companies and it really depends how you count. I got two people. I started a company, had them focused on something for a while, and then it didn't go anywhere. But I did lose some money on that.

I sold, I think, six of last count, and that includes the one we took public in two thousand and then later sold what, united?

Maybe all twelve at the very beginning. Like, how did you alight on the original idea for each of these things? Is there any common thread?

I've always found there's not necessarily a common thread and see an opportunity. I'd become very predisposed to things that can very have a very clear path to making money or are making money right away. I'm the poster child for the dotcom boom in the bust. The bust in particular is the part I remember you remember feeling that slammed into the ground. That was when you started the company raised fifty million with the idea that you might be successful or not. And that's that whole venture Silicon Valley mindset of startups, which I feel gets too much attention in the world of startups.

Given that we have a couple million entrepreneurs in this country at any one time that are starting everything from a corner store to a taco truck to the next Facebook. So for me, when I did that and when there's so much risk in building a company that you don't know, we'll be successful, right? Market risk, execution, risk technology, risk, stuff like that. You can only do that a couple of times and get kind of burned.

I think it's tough to do. So I started leaning towards things that really had a clear path to make more money. So like on Facebook advertising agency, we were profitable from the minute we launched it. We had clients before we started it. Really.

What did you learn about getting customers early on in those businesses? Life cycles were even before the thing actually existed.

A friend of mine who went through Y Combinator, he said in his class, there are two really types of entrepreneurs. There are the tech people that just create jobs and go build stuff. And then there were the MBA types who could build anything but could talk. A good game wasn't just MBA type because I'm not a big fan of MBAs. We can get into that another time. It was more about an execution focus and a customer focus on the people who weren't so tech focused.

So that's that group would often want to lock down in a closet for eight weeks and build something great and then release it to the world and said the other group would go out, pretend they had it, find customers and say, oh yeah, we've got this in the behind the scenes, just do the work with spreadsheets and a bunch of people, you know, and then figure out what the customers really want, how they're really going to use your stuff.

And that just stuck with me because that's so, so important through Y Combinator. He said that latter group, the ones that went out, faked it, pretended they had something and then built it for the customer, were invariably more successful and could come out with something better. What did you learn about when something was going to fail? You mentioned six were sold, so have failed. How did you know when to shut off the lights?

I mean, sometimes it's painfully obvious. So I had a company, the our primary business was selling event tickets. It had gone great for the last ten years until March. That was very obvious. The revenue literally went to zero overnight and it just couldn't keep up and keep going. And the company actually still is around. I just I sold my interest in it, but it's a shade of what it was and hoping for things to come back. I think that is one of the biggest challenges for entrepreneurs.

And I see this a lot. It's this weird dichotomy you get of the messaging that's always the entrepreneur has to believe more than anything and barrel through all the things that get in your way and the people who tell you, no, that'll never work. But then sometimes you got to know it's just, hey, that's not working. Maybe the people are right. And knowing when to listen to that and how I wish there were a very clear rule to put in place for.

And I don't know if there is that's why I like that customer focus. I've looked at small businesses and someone's all worried. I had a business, not them, like when we got started with our preventive maintenance software company that had access database product. It was not anything sophisticated. Yet every nuclear power company in the country was using the software, this data to help them do maintenance. We had company paying us. You know, we went out and sold it somewhere.

I put have fifty thousand dollars. Any time anyone's willing to write a check, a fairly sizable check for what you're doing, you've got a business and maybe it's going to be a five billion dollar business. Maybe it's going to be a two million dollar business, maybe a five hundred billion dollar business. But you've got something. And that's, again, that goes back to that customer proof. If you don't have that, if no one is willing to write a check, you can give it away, then people don't value it.

You don't necessarily know if it's useful. You want to know that someone's going to open their wallet and cut a check for what you're doing. And that's when you know you've got success. That's easier to see if you've been at it for 10 years and no one's paid you and somehow you stayed alive, maybe it's time to hang it up.

What's the downside of MBAs? I know some terrific MBAs.

I think my partner has an MBA. But it's this thing that you don't learn entrepreneurship from a book. Frankly, I think college is a waste of time, too, and that's a whole other thing would go on for a while. But for most people, almost for anybody, I don't know anyone who's really needed their degree, certainly not a four year kind of thing. So, you know, an MBA, I think it's quite often it's just it teaches a rigidity in thinking entrepreneurship as a class.

And the way it's always taught, I find, is just that it's the Silicon Valley kind of mindset. How do you start a company? Well, you write a business plan, you pitch it to some people, get some friends and family or go raise money from DC in that boom, you're successful. That is not at all success. I mean, the businesses I've seen are successful at a much greater rate are the ones who bootstrap, who get customers, who raise the money from their clients, who pay and get revenue right away.

You'll get something going. That's not to say that Facebook will be out there, businesses without revenue to grow phenomenally well and are fantastic businesses at some point for your day to day entrepreneurship and you're better odds of success. And it's really more about building something that makes revenue. It doesn't have to be the next one hundred billion dollar company. I feel like people with MBAs are much more at with regards to entrepreneurship, much more geared towards this. Just tell me the steps and I'll do them.

And that's just not how it happens when you get out there in the real world and build the company so they can get flustered or lost when they're faced with crazy adversity. That takes to build something for the companies that did work.

What were the most common, painful periods of the growth of those businesses?

Building the company is just about people. That's all it is. Whether you're building the next great biotech company or you're building an enterprise software company or an agency, it literally is all just about people and getting a bunch of people excited to do something together, to go after the same goal and making sure you all know exactly what that goal is. The challenges that I've always found are the big ones are always around people. Scaling is a particularly unique challenge around people.

I always find that the first kind of breakpoint in scaling an organization is around 30 people. For some reason, somewhere in there, that's where you the first time you start to have to have regular management structures and meetings and communication because there's just it's larger than the number sitting around the lunch table talking about what we're doing. Some people have trouble at that point. It's just this weird inflection point companies go through when you've had to hire a lot of people.

So we'll say it gets well beyond thirty. What have you learned about doing that effectively, like seeing far enough around the corners so that you don't get caught flat footed when you need twice the number of people?

I've scaled teams twice. Once in the late 90s, we got about 300 people with over 360 and free account with a big chunk of that came through a large acquisition and I learned some stuff there. But then Thracian has been unlike anything I've ever seen. I mean, pace of growth here is unbelievable. And I got a sense of it early on and I think I learned a ton from listening to podcasts like yours and other places. Also, people have done it because very few people have lived through massive scaling, 600, 700 people in eighteen months and whatever and growing from there.

I've been saying this to my team all along. You want to grow, you've got to let go. It's this thing like you can't do everything. It's more important to find people to do your job. I always say my lazy manager theory, which I thought was my kind of unique theory until I heard Bill Gates has a very similar version of it. But what I'm hiring a manager, someone's going to manage people essentially and manage essentially delivery of something.

I want them to be lazy and mean that in the sense that I want them to hire fantastic people to do their job because they will always find something else to do. And if they have that extra time, they can focus on something strategic for growing the company. So you want to hire the best people you can that'll do the best work they can and get it done. So I always tell our managers I was always say, look, you should be striving to work twenty hours a week and if you get there for like a month or two, great super quality of life.

It's also my hunch is you just never will. But if you keep pushing in that direction, hand off your stuff that is so super important.

As the leader of those businesses, what do you keep? So. Obviously, you need to set the example of being the lazy manager to some extent. What are the things that you think is important to stay at the founder CEO level?

I'm a huge fan of the book The Outsiders, and this isn't the old story of Pony Boy and the kids in Tulsa, Oklahoma. The movie, This is The Outsiders, but the eight great CEOs. I know you know the book. It's fantastic. What great lessons in there. And I think it was Terry who said, I don't give myself any day to day responsibilities, so I'm not in the loop on anything day to day that has to get done.

First off, that I can focus then on the things that I find, add the most value of any one time to me, thinking about businesses like thinking about a whole handful of levers you might have in front of you, the right level at the right time can give you the greatest possible gains. But to have the freedom to think about those things, you can't be doing something every day that has to get done. Oh, it's just an hour of the morning where I got to fill in the spreadsheet.

Well, that's taking a valuable time in mental space of yours. The example I try to set and I think every one of our senior managers can do this is don't give yourself anything that has a day to day, week to week responsibility that has to get done. Let yourself sit on top of ticket when you're managing people. And it's even more important because you've got to spend a lot of time on those relationships.

What other areas of e-commerce and maybe extra points for somewhere that you probably don't even expect to participate in. But I'm just fascinated by the evolution of e-commerce, where I think for a while now we've sort of thought like Amazon just sort of won this or Wal-Mart or there's a couple of dominant major players. My guess is there's probably room for a million different kinds of businesses to be built, especially post covid and sort of with this new way that consumers think about getting their stuff.

What else intrigues you in the world of e-commerce? Where else could people that are interested in this topic go study?

eBay is still a humongous company moving one hundred billion plus of goods. I mean, they're doing a lot. I mean, that's an amazing place to work to. And it doesn't quite work for us in our model. But it's fantastic. And what they're doing. Etsy is another phenomenal company that has created an incredible marketplace. And then Shopify is making phenomenal moves. Toby's brilliant. I love the story of that company and how they built it and what they stand for and where they're going.

And it's going to be fascinating to watch because they're building a network of shipping centers. They're going to have something that's more competitive with Amazon over time. And look, Amazon, you could say it's one in the US, perhaps, but it certainly hasn't won everywhere else around the world. And this is a global world that I mean, 20 percent of our sales are outside of the US. There are other marketplaces and overseas and in other places and people shop differently.

There are, as we talked about earlier with China, it's discovery based. It's live shopping. So many people have thought about and tried to get QVC, your home shopping network for the Internet in the US hasn't worked. But maybe it's because we have this legacy of those things and we have an Amazon in China that's in many ways what does live shopping is all about. And these live sellers, I mean, it is unbelievable what they can move in a twenty four hour period.

So the top Chinese live sellers have moved nine figures of goods in twenty four hours. It's incredible. There are many businesses. I think the space is evolving faster than anyone can think. Instagram finally integrated Apple Pay. It's one click shopping, right? It's what it was what Amazon now on Instagram. And they show me something that I think is awesome. I can just double click and I've got it. The reason I didn't before was I didn't want to go type it.

All my information on my phone again and again and again. You've got people who've created Shopify pay Amazon pay, Apple pay where my information is stored and can be reused quickly and easily. So that's just taken out friction as you do that, it can increase the ways and places that people sell. It's fascinating. It's not something that's very easy to predict.

I will listen to a podcast and stuff all I can to try to get a sense for what's happening and what's coming. But I also think it's going to be different everywhere. Latin America has four percent e-commerce penetration and it's got 650 million people with average incomes in the ten thousand range across the board, vibrant, rich market waiting to happen and it hasn't yet. So who's going to own that? How are they going to win? And what's that going to mean is going to be fascinating to see.

Huge opportunity might be kind of a strange question, because one of the fastest growing companies, maybe ever, certainly fastest in terms of valuation growth that we've seen. So you're probably managing a lot of your time is just figuring out how to remove growth bottlenecks or things like this. But what keeps you up at night from a risk factor standpoint? Like what are the things that most worry you about competitors coming in or the multiples going up on the companies you're buying?

Like, what do you think the big risk factors are to Thracian?

So as you can imagine, I've been asked this by every single firm and whoever we've spoken to and investors. And it's always funny if you won't like my answer is I sleep like a baby. Oh, it's not.

So Josh will be awake all night. So this is the better. One of us can worry and freak out and is much more operationally focused. You know why? And I don't think he needs to either. Look, I've done a lot of companies and a lot of different spaces. Things move on a grander scale than you think. I told my team this early on, I said, I've got faith in this team. I've spent a lot of time building a team of this great team and how they work.

We cannot predict what's going to happen. All I can do when I hire people in the startups and early, all I say is look like. Jante was a bit of chaos, hopefully a lot of fun, lots, some good people, we don't know what's going to happen, but I can tell you that it's going to hit the fan at some point. But I've got faith that will recover, that will react to it intelligently and well and move ahead.

And if you've got that, then you don't really worry about. Now, I remember the first time I had some situation of one of my first start ups. And I mean, I lost sleep for weeks and were freaking out. We missed the delivery day and everyone's losing it. That does nothing for you then. Not worrying about it and just working. The problem actually has the right people in the room focused on that problem. And he's just.

All right. See you later, you guys. Solver, my team is way closer to all these issues and we've got a supply chain issue. I had a supply chain is a genius. He's brilliant at supply chain and I've never seen anybody able to do all that. He's been two steps ahead everywhere. But when he's got a problem, I want to make sure he's got the resources he needs and the right people in the room to solve, because I'm not going to solve the I don't know first thing about what he's doing.

That's my job as a manager is to do those things. It's his job as a manager of his team to do that. I've been through enough shocks and enough different businesses that I just a while ago just said, screw it, don't worry about it. They're going to come. And as soon as you let go of that and don't worry about it, then you're not surprised by you're not freaking out, but and you just work through it. So that's why I sleep well at night.

You brought up Brian's quote about action produces information. I'll certainly remember this conversation as a great example of that, that a lot of entrepreneurship is just getting going. Don't study or think too much. Go do and learn by doing. I'm bummed to have to turn to my traditional closing question, but thank you for such a fun and lively conversation on building a business. I think you probably know my final question for everybody, which is to ask you what the kindest thing that anyone's ever done for you.

As I just said in my head when you started getting this, I said, oh, shit, I forgot to come up with the answer to this because I know you're going to ask it. And I haven't gone there, so I have thought about it. I mean, there are so many kind things that people have done throughout your life and what you do. But I have to say, like, my mom did something for me. So when I was young, I was a computer geek.

I just loved computers. And growing up in Oklahoma, there wasn't a lot of outlets to learn about them and stuff. And I got a VIC 20 where I learned to do programming, but I wanted something more. When the first Mac came out, I was just enamored and I had to have one and we couldn't really afford something like that. Is twenty five hundred bucks for the Mac one twenty eight K with a printer and an external drive because you needed to drive because they were floppies and you had to swap the operating system on the floppy and whatever you're storing.

So I needed that. So I was like twenty five hundred bucks and she said, you know what, if you can make half the money I'll put up the other half. Both incentivized me to work and then helped me produce value. And I tell you that computer is an enormous amount of life for me. Afterwards she did it. I made a bunch of lawn's, I got halfway there. I think I probably didn't even get halfway there. My mom put up the money and got it done for me.

And like, it's easy to say your mom or dad have done the nicest thing for you. They have for a lot of us. But that's the thing that jump to mind. The first time I think I heard you ask that question of somebody, that's what jumps to mind. That's my answer. I'll stick with.

I love it. It's so cool.

I love the dual kindness, but also incentive to get you working and understand the value of work and reward and feedback loops. It's awesome. Well, this has been so much fun. I really appreciate the time. Have been looking forward to it and delivered as I knew you would. Thanks so much for teaching us all today.

Yeah, thank you. A million. I've been very excited to talk to you. This is fantastic.

This episode was brought to you by Cliffview in this four part mini series. I sit down with Clavier customer Nomad and discuss their origin story, why they chose Clearville for their business and how your brand can grow online sales with Clairvaux E-commerce Marketing Platform. In this week's episode, Nomad co-founder Brian Hahn and I discussed the origin of Nomad and how the business got started.

So, Brian, I think a neat place to begin would just be with the origin story of Nomad. What were you doing immediately prior? What was the spark of insight that led to the formation of the business?

I was actually living on a boat in the harbor and working in commercial fishing, so I was not thinking about entrepreneurial activities much at all.

Honestly, I was thinking about going back to grad school. And so I was thinking of this whole path and how long it's going to take.

You know, I thought it was going to take six years before I get my master's and then really get into a job where I'm actually producing results. And I just felt like this eternity. And then my friend Noah, who became a co-founder, came down to the boat and kind of had this wild idea for this credit card size charging cable. I just kind of thought for a moment, like I could wait six years to kind of start my life or we could start it literally next week.

And we just went nuts, you know, made Kickstarter video and just got going and launched on Kickstarter. And before you knew it, we were on Kickstarter and we did pretty well the time it was so new. This was like in the days when Pebble Watch was the biggest thing on K, remember. Yeah. And we raised like one hundred and fifty thousand and at the time that was big, big and we thought that was all the money we needed in the world.

That was it. We're going to. It's going to be so easy to produce this, we have one hundred and fifty thousand dollars, what could possibly go wrong? And quickly we realized that we had no idea what we were doing was way more expensive than we thought it was. And we were out of money so quickly and we had to just get into that cowboy entrepreneurial hustle.

What did you do in those early days after you burned through the money? How did you design it? Who did you work with? What are the nuts and bolts of getting from nothing to, I don't know, your first hundred thousand dollars in sales or something like that?

So the sales was actually the easy part. We hustled hard and a lot of it was about talking to press and just being really organic about that. I think a lot of people, especially at the time, thought you needed to use an agency and there was no way to actually access press writers. It's like TechCrunch and the Verge and everything. And we said now we're just going to literally, like, find all relevant writers and just reach out and keep reaching out and keep reaching out, keep reaching out.

And it worked great for us. Somehow we were able to convince them all that we were we're on to something. I think that is something that's important to remember. You really do have to hustle. And even if it sounds like there's no way you're going to get through to The New York Times, we got a New York Times article before we shipped our first charge card. Really? And if you just hustle hard enough and you really care and believe in it, you can cut through.

To find more episodes or sign up for our weekly summary, visit, Investor Field Guide dot com. Thanks for listening to Founders Felgate.