Michael Duda – Investing In Brands - [Invest Like the Best, EP.117]

I know firsthand how complex the tech stack is for asset managers, and seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk. Ridgeline offers a better way forward, one unified platform that automates away all that complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more, all at scale. Ridgeline is revolutionizing investment management, helping ambitious firms scale faster, operate smarter, and stay ahead of the curve. See what Ridgeline can unlock for your firm. Schedule a demo at ridgelineapps.com. Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast. My guest this week is Michael Duda, and the topic of our conversation is the role that brands play in business and investing. Michael has worked on and invested in a wide range of brands, including Birchbox, Casper, Harry's, Citibank, DirecTV, Google, TripAdvisor, Under Armour, and Vineyard Vines. His background in advertising made this a unique and interesting conversation. Please enjoy. So Bullish is an early stage consumer investment firm who really focuses on the consumer and the power of the brand to create superior returns. And probably the most telling thing I could say why we exist is we're a bunch of ad guys for the most part. I spent my many years at Deutsch and most people listening think like Deutsche, no, Donnie Deutsch and Deutsch advertising. I just remember seeing a lot of Wall Street people and reading the reports saying like, well, and you kept getting the sense that marketing is an expense. And I was like, why is that? That's wrong. It's ridiculous. And as I'm huffing and puffing about it, then I look at our business model. It's wait, they're right.

Agencies like law firms get paid for the time that it takes to create ads or outputs, but no correlations to the outcomes. And I said, why isn't there a more premium marketing company that believes in its recommendations and implementations that literally put its money behind where its marketing is? So we created this because in a publicly traded company, it just, there wasn't. that kind of appetite to do it. And we decided to start helping entrepreneurs who had a chip on their shoulder and brand mattered and putting in some money. So how does that process work? So you could pick a portfolio company or just talk about it in general terms. So you make an equity investment in a business like a standard venture capital style investment, but I think that it then comes with more. So there's sort of a creative component to what you bring to the table. Maybe just talk about the typical relationship you have with the company. We invested such early stages, seed series A rounds, and now pre-seed, which has become a thing. But as I have to say, money is the least valuable thing we bring to the table. We bring a school of really accomplished marketers and strategists. And to tell you about the makeup of our team, we know how to build brands. We can do marketing campaigns. We can do strategies. So it's not just the cute ads you might see on TV or on Instagram, but it's also the strategic rationale in terms of why you're targeting that person at that moment with that message. And that's what we do. Very cool. Let's get into it. So I'd like to spend as long as we can, almost like teaching like a masterclass here on building a brand. So the best way to do that would be to define what the hell that word means to begin with, your take on it. And then ideally, we can use as many real brands that people might know of or be aware of or can go look up as examples of the points that you'll make. But let's start at the high level. What does that even mean? In the most simplest terms, the way we look at it is brand is the net result of what a brand does and how people feel. And so a case in point, it's like take a Coca-Cola. I mean, I guess they're $45 billion, $46 billion revenue. The market cap's $170, $180 billion. I don't know what it is, something like that. What's the difference to that? What's the value of that Coca-Cola recipe versus like the actual Coca-Cola sales? One of the things we use in our decks is there was a quote from the chairman of Quaker Oaks in 1900 saying that if you gave me the brand,

And I gave you the bricks and mortar. I will fare much better than you. And it's just the power of like what the Coca-Cola label says. And it's just, it's a hard thing for a lot of people to truly get because in a world of Excel sheets, it's like, well, you want very rational answers. It's a logo. It's a this, but it's more than that. I'd be curious since you represent the quant people listening. What is your definition of brand? I always come back to, I think it was a Buffett quote, something like one of the best businesses in the world is to buy commodities and sell a brand. So you've described it with Coke where they're buying cheap inputs and putting a label on top of it and selling it at a premium. An enduring brand is what's interesting. A brand that allows a company to continually earn high returns on its capital through time, that could be a sign of a brand. I don't think that there's really an interesting way. We were talking before we started recording about an episode I did with Ryan Kaldbeck where maybe there are ways to quantify the strength of a brand. And maybe it's the visual, literally the visual thing itself. I think it's really difficult. And I think we can only pick up on it through residual stuff like operating performance of the business that seems like it shouldn't exist. If Coke's formula can be really roughly approximated and you know the studies, right? Like the blind taste, no one can tell the difference between this stuff. And same thing in wine, same thing in a lot of... these things. If you can't actually tell the difference without seeing the label, that means that that's valuable and that is reflected as high returns on invested capital or something like that. But that's the best I can do. That's pretty good. Out there you say like the colors, the logo. No, those are elements of a brand identity, but it's like great brands have a soul. Great brands are polarizing. Use sports as an example. The New York Yankees are the most loved and most hated team in baseball. The Dallas Cowboys, most loved, hated team in football. Politics get into that. Then you get into something like wine. Why do people choose what wine? It's like they'll go to the store. Okay, that's a cool label. The price is all right, but there's just a lot of unknowns to it. So great brands are polarizing and they have their fans and their advocates, which done well. Those advocates can be the best marketing done. And then you have your detractors.

which can help brands too. It's squishy, but we practice both the strategic and the ethos side, and then we put into practice. So back to kind of the two-part framework you said, so it's how it makes you feel and kind of what they do. So talk a little bit about both sides of the equation there. So maybe start with how it makes you feel. So emotion being a key part of a brand, like what emotions, what does that mean? How should a good brand make you feel? Those sorts of things. And it depends on, I mean, I think Goldman Sachs online, there's 553 consumer categories out there. So I don't know if people are going to love their toilet paper versus like a basketball, like a Nike versus Under Armour and that set. But it's like, I'll describe two people only by brands. Heineken, Mercedes, American Express, and then another person, Sam Adams Beer, Visa, Volvo, L.L. Bean. in your head, you probably got two different looking people altogether. You picture like maybe for the first one, a suburban New Jersey dude. And then for the second one, someone in Vermont or something in like plaid and at a bar, right? And it's just like, I didn't describe any people. When I've given this topic speeches before or whatever, and there's some of the audience is like, well, the best brand is the best product. So really? You think Microsoft was that much worse of a product than Apple when Apple started catching gear or when a Sony PlayStation leapfogged a Nintendo or a Coke versus Pepsi? We laugh about it. It's like attributes are one thing. In this world where the democratization of information, there's more information now than there was 20 years ago. We've quantupled in the past six or seven years by what the data says. There's something that's going to be better, faster, cheaper, longer, smarter on that side of it. The phone wars back in the day. All the minutes you can eat, $19.99, go down to $9.99. So there's always going to be rational elements that go away, but a great brand endures because of what it means to someone, and it's a sign of trust. Whether it's Johnson's Baby Oil to Dreft, which if any of you listening have had kids, you wash all your stuff in Dreft and you don't want your kid, versus private label on that side. So different people put different emphasis on brand and what that might mean, but it's a fun topic for us, but something that leaves a lot of people.

Especially quant people imagine like, what am I talking about? I've heard this from venture capitalists, from others that in the consumer world, let's say the non-luxury consumer world, I'm curious what you think about luxury brands, but in the non-luxury consumer brands that it matters less and less because it used to be a trust and search cost thing. Yeah, Tide was a little more expensive, but you were aware that it was good, probably in big and safe. There's a safety component related to that trust in that brand. And that with this... information deluge, that's no longer as relevant. So one, do you agree with that, that maybe brand is less important on the consumer side? And for what kinds of company is it more important than it used to be? With certain elements, it maybe matters less. But I'll say this, when I say I Googled that versus, oh, I'll go to Yahoo or I'll go to Bing on that. Who does that? In the case of Tide, Tide's interesting. I mean, Tide only started losing market share really in the 2008 crash because of price and that. But who's come up from behind to steal share from them? Not really too many people. So if there's any entrepreneurs in the detergent business, we'd love to speak to you. We've looked at a few. But there's a certain point in time where you go, like, I love Tide as a brand, but you know what? My paycheck's gone down a little bit, so I have to make some sacrifices. Where do those sacrifices come in? Will it come into, like, baby Tylenol? Or will it come into my laundry detergent? Will it come into, like, a Pepsi? That's the thing. Like, when people look at trade-offs, what will people absolutely not trade off? I remember walking, dating myself to 2010, walking the floor of a... Dick's Sporting Goods in Jacksonville, Florida with Kevin Plank, the founder of Under Armour. And we watched this mother and her child looking at stuff in the Under Armour section, Nike section. And this kid went up to this red sweatshirt, mom, I really want this one. And she was looking at sort of name brands, Russell Athletic, which was like half the price. And she's like, well, dear, how about this one? Like, no, I really want this one. Why do you want that one so much more? And he literally said, mom, because in Under Armour, I can do anything.

So what do you do? Tell your kid, no, buy this one because it's the same cotton or whatever. It's just, no. That's the power of the Under Armour brand to that kid, but to people in general. It's hard to say over here, there's strong brands and how that's done, but to different people, there's more meaningful ones. And it comes out based on the category, the use case, so many different dynamics come into play. I'm curious how you said you're good at building brands. So let's walk through that process. So a company comes to you, they've got some product. Let's assume the product is good, but that it's undifferentiated from a brand standpoint. What does that process look like? How do you start to tease something out? How do you actually build one? I'll focus with the early stage as we look at the asset class of upstarts looking to upset the strong brands like a P&G of the world. A lot of this stuff starts with a founder. The great thing now, and especially CPG, legacy CPG, it's like CPG companies, as great as they are, have never had direct relationships with their consumers. Their customers are Walmart and Kroger and Wegmans and Amazon. With new direct-to-consumer companies, which isn't totally the question you ask, it's just the soul of a brand can come through a lot more because you can have direct relationships. And often in young companies, you have to look at the ethos of a founder. For instance, we were meeting with Jeff Rader and Andy Katz Mayfield of Harry's before Harry's launch. We were assessing their smarts. They were both Wharton grads and in private equity. But also, what do they want to accomplish? And I said, they want to give people a more fair shave because there wasn't one. The main competitor at the time is this Voltron-like character, 1980s. Five blades, seven blades, the quattro. Priced through the gills. And at the time, Gillette had, I think, Gillette was 9% of P&G's revenues, but 34% of their profit. And the fact that he had to buy them behind the glass case was just a little bit weird. And they didn't want to just like, we're going to do something cheaper and sell more stuff and take market share. It's like, they were building something soulful. It's like, we want to give a guy a better shave.

and be more empathetic to that. And they literally, there was a big ethos behind the brands. I mean, the name of the company is called Harry's and it's a shaving company. That says something. The mascot was a woolly mammoth. Before they launched, we helped them with this campaign that you had to figure stuff out. We acquired 120,000 users before launch. And we just had a certain kind of tone and attitude that was much more empathetic and endearing. And at the day, whether you look at politics or the brands we choose, whether it's a car, a gum, we all make irrational choices. More than we'd like to think. One of the things that we look for is that and a founder. And then there's a full process that goes through that I'll certainly make more smart sounding than it might be, but out of passion. Yeah, let's do that. I mean, I'm literally interested in like someone's in your office and you've got X amount of time with them. And the idea is at the beginning, they don't know what it's going to look like. Like what are the elements of marketing and brand? At the end, you've got a plan. What is that literal process? Maybe step by step. Sure. Okay. The first process would be an immersion. The good Lord gave us two ears and one mouth for a reason, and it's funny as investors that we don't always use that correlation. We sometimes rely on the computers and things, but we do a lot of listening and ask a lot of questions. Who's the target audience? What's the competitive set? What are other people doing? What are the objectives? So we ask a litany of questions. Then we take a look at the category landscape. Say, what players are out there? What does it look like? How's it sold? Who are the consumers for this? And is there a different kind of consumer for, say, Mercedes versus a Lexus? And unpack that. And really try and dig into who we're for. It's not millennials. It's not adults to 18 to 34. I've never met an adult 18 to 34. We try and come up with a persona. A great one is Trader Joe's. Trader Joe's has a great center of gravity in terms of what they do. Trader Joe's designs all their products and services. around a substitute teacher who drives a late model Volvo. And that drives everything they do in terms of the products they make and that stuff. And that doesn't mean if we're in Grinch, Connecticut, you don't go to Darien to buy this stuff, but that's the mentality in terms of value and being empathetic to what that customer goes through. And that's a very strong point.

And then you go through and explore, like how can we differentiate ourselves to the consumer audiences we're going after? And certainly there's a graphic explorer. What is the logo? Look, what is the name of the company? Or what's the name of the brand? What does it stand for? In today's world, transparency is a big deal. You can't fake it. So if you're Xerox, and I'm not pointing Xerox out, and you make paper, but you're burning down the Brazilian tree forest, you're going to be toast to a lot of people that find out. We live in a voyeuristic world that you can't hide or can't hide for that long. People want to... have more of a belief system in terms of the products they buy and the brands they support, which is more of a millennial thing, but it's spread much, much deeper than that. It's a long iterative process that involves strategy in terms of who we're targeting, look and feel, what does the brand identity look like, color schemes. There's deep meanings behind every color, like yellow is a color for creativity. Red, you see that in a lot of global brands because red is a powerful, especially in China, red's a very powerful, pretty neutral color on that side. And so we go from every firm strategy to picking colors in this stuff, but to do everything in a 360 level, from the values of the company to the mission, to what the ads look like, to what partners you should have or you shouldn't. I can give examples and we can go back and forth on that about different ones, what brands mean, and then... pick across colors, but it's more deeper than people think. It's certainly deeper than ads. What has changed most in terms of its relative importance when building one of these plans? So what would pop to mind for me would be the role of social, right? Like Instagram, all these kinds of things everyone talks about are key channels to distribute a marketing message. But I don't want to assume that that's the answer. If it is the answer, I'd just love to hear more about like how you think about that. So what has changed the most? The rapid ascent of what can be successful and equally the decline. We did something in our last investor letter where we found the data point that from 1923 to 1983, in the top 25 CPG categories, 20 maintained number one share the entire time. From that point on, only like four have market share leadership, and most have lost that since 2003. The one area, golden metal flower, has just owned that market. It's amazing. And part of that is modes of distributions have changed the internet.

Choice. Whole Foods wasn't really a big deal. Costco. So where we get our food isn't just like the one place in the store corner. There's so many different places. We think on some level, and food specifically, just immigration. The amount of like between the Hispanic populations, Asian populations, if you go down to grocery stores now versus 10 years ago, there's a lot more spicy and flavor and almost like, dare I say, like exotic stuff when you go through the salsa aisle or different elements there. It's just really interesting. So people's tastes have changed and they've widened out. Even private label has become cool. Instead of just something that's black and white and whatever, it's like private labels become a brand. If you live in upstate New York, W Pop, the Wegmans brand is something. 365 by Whole Foods. 365 is a separate brand and something that they use. So it's really interesting, the points of distribution, the internet. And on top of that, with the internet, Instagram, it just, we get sick and tired of things quicker. And this goes into the consumer side too, which is weird. But we're noticing the consumer side, we're seeing with iPhones and smartphones. we're seeing people have midlife crises at 28 or 29. And it sounds silly and I'm old school now that, but it's like literally the amount of talent that we've seen that like graduated school, worked for six or seven years, said like, you know what, I got to take a year off and just do that. And the reason why it's like we are in an always on culture. Back in the day, it was like FedEx was like the fax machine and FedEx and these things. Now, if you don't respond to a text message in like five minutes, it's like, where are you? It's crazy. It's not cool to put an out of the office message. thing on. So as consumers, that's going on. And our relationship with brands, what serves? Trends are going bonkers. We see stuff go up and down. Fashion, especially. We're in an era of fast fashion. And companies like Zara and TJ Maxx are killing it. Why? Well, Zara, it's like women in 2010, we did this massive study of how women shop for a brand. 2010, women were still buying $2,000 dresses. Now they're buying $200 dresses. And a big reason why? No one wants to be caught on Instagram twice wearing the same thing.

And it's a crazy thing. And even men's suits, men's clothes. It's like there's something about going, if you live in Granchett's Richards or just getting that $5,000 suit and you feel good for the custom tailor that might have come to a hotel because you saw his ad in the Wall Street Journal. Now there's companies like Not Standard, wherever you can get a custom-made suit for $600 or $700 and it fits real well or a suit supply. So it's part of the reason brands have gone down. Pricing pressure. People are able to make stuff cheaper and faster along those things. So there's still great brands like a Lexus or Mercedes, if you will. But there's a reason why a Lexus has a $30,000 car and not just the $90,000. That said, you can't launch with the $30,000 and go to $90,000. It's the other way around. To stay relevant in the consumer's mind is more and more challenging for everybody. And that's an opportunity. It's also a... why a lot of back to this hedge funds are involved with consumer right now. How do you square that with like your investing strategy? So you're investing in upstarts trying to basically take share from these big long established brands. You know, the VC investment cycle is long. It's 10 year funds or whatever. It takes time to do this disrupting and tastes are changing fast. So like how the hell do you underwrite a siege stage business? With probably no revenues or low revenues, you basically got a founder and an idea. How do you underwrite that in a world that's changing that fast? And why is that an exciting investment prospect to you? It's amazingly human. And as smart as I'm going to say all these things we do in Diligence, just so our LPs feel good, which I hope they do, it's like we don't have these computers running these quant things left and right and everything. And we probably should at some point. But quite frankly, the things we look for are NPS deficiencies. So where is there just not a lot of love in the category? You look back at Kind Bar. Kind Bar, I'm dating myself, like three years ago, had an NPS, which is a net promoter score, which is basically what is the likelihood that you would recommend or be an advocate for a brand to someone else? So they survey people. Exactly. And Kind Bar had a 51 NPS. Everyone else in the category, it was like 14 or negative. So utility companies like a Con Ed is at a negative. And Apple is at like a 95. So what we look for is where there are low NPS categories where there's opportunities.

Some of our best performers of early stage brands over the past 70 years have an NPS score north of 80. So that's one of the things that we look at depending on what we're investing. Where's there a journey in efficiency? How hard is it to get X or Y or Z? What's the journey? What was that called? If you're a consumer, it's like, how easy or not is it easy for me to purchase a product or do a certain service? So bringing back the Gillette example, wow, that's really expensive. There's got to be a different way. We don't know any better than here comes Dollar Shave Club or Harry's. Warby Parker. Lens Crafters and basically Luxottica had a monopoly over the market. Luxottica of Italy owns Lens Crafters, but they also bought Ray-Band and Oakley. And if you're wearing Tom Ford glasses, guess who made it? So here comes Warby Parker along. And it's just like high margin category. And they said, you know what? We'll take a little less margin and just offer much better service. Try five pairs on at your house and we'll ship them to them for free. That was something that could be ripped off. It took, I think, Lens Crafters five years to do it. But that's inside the mindset that the fact that they led with that means there's more innovative thinking going on. So where there's companies not doing innovation, it just shows up in the NPS scores and the journey inefficiencies. Where's an opportunity to service the consumer better, whether it's physical or online? Is there a branding opportunity? What is like, oh my God, this is a billion dollar category that has just always been that way. Why is that? And so again, we don't have computers going X, Y, Z. It's these four or five categories. The X factor, literally the exponential factor on top of that is the entrepreneur. Who is the jockey as much of that stuff? Because we could find businesses with that and find someone with a great pedigree, with all this great education. But is this entrepreneur have the leadership capability, the drive, the hustle to deal with? crap when it goes bad? Because it always does. And do they have the ability to build a great team? And part of that is what have you done in the past? Although we don't like doing serial entrepreneurs as much, we want someone like uniquely dedicated to solving a problem in X market and factor all those things together. What would be like the largest things that you have a deviant or different opinion on? Like if I had the 10 closest guys or girls to you in the room here, where would you differ the most in terms of your opinion on some of this stuff?

It'd almost be on a case-by-case basis, but look at what some other firms do. And I'm not saying we're the smartest firm, but it's just like we don't look at things like as intently as like CAC or we don't put as much word out. Cost for acquisition and that's some of the rational things. We go out and we do surveys. We talk to consumers. So it's like where we differ is we actually look at the consumers and LP in our fund. 38% of our entrepreneurs are female founders, which is above the status quo. And I'm not just saying that champion ourselves, but guess what? Women make 83% of the consumer purchases in this country. So they're a much better consumer than you or I. So why wouldn't I want to know what they're feeling or whatever? So when we see something that's interesting, whether it's a bra category or chocolate, and if it's a consumer audience, it's a female, we go find them in Enid, Oklahoma, Syracuse, New York, and Boise. Is a $12 juice going to sell in Boise? I don't think so on that side. So where we differ is like we had one, Birchbox was our first investment, and they were talking to a very significant Silicon Valley. company for investment. And the partner said to her at the end, it's like, well, we tested and just, you know, my wife would get bored of this after three or four months. And I've worked on Revlon in the advertising side of my career, which is weird for a guy maybe, but it's in the investment world. But we shot back, the consumer doesn't have a seven car garage in Palo Alto. She's a 27-year-old mom of two in Cleveland that subscribes to New Yorker. And that's the thing. It's just like we don't look at like male, female, millennial, adult, 1834. We actually try and get some of the human elements of it. And I'm not anti-New York or San Francisco, but just sometimes as investors, we can't unsee what we know. The focus obviously of the fund and your background is in a very specific kind of company, right? Consumer companies. I mean, it's obvious what brand is. It's packaging. It's the ads. It's all these things. These are obvious. What about advice that you might give to? companies outside of that industry. So trying to apply some of what you've learned, I'll be selfish, to our company here, right? We're about as unrelated to all the companies you've described as you could possibly be. But of course, this idea still matters. So what advice do you think you can port out that's more universal than just...

kind of CPG type companies to just companies in general that you think people could put to good use. Oh, yeah. And so listen, we do stuff beyond CPG. KKR brought us in to help GoDaddy. And we did a Super Bowl campaign on the marketing side of our business in 2017. And to this day, it was the number one revenue day they had after any Super Bowl campaign. They did 19. And they did an investor alert afterwards. So it's brand, but it's also marketing. We believe marketing should drive an ROI. The fun we have with early stage companies, funny enough, is that if you get the brand right early on, you can spend less money in advertising and marketing because you can create a flywheel effect and build advocates and zealots to build remarkability in the things you do and say in the partners. So I'll interlace brand and marketing a little bit. So if I were going to look at O'Shaughnessy and everything, what does the brand stand for? And part of it is, listen, it doesn't matter what we look like. We just have to post great returns and everything. Well, is it? What happens when you have a down market and everyone's indexes look the same or what have you? Or what really differentiates the world where there's so much private capital and so many options? This podcast for you is helpful. The fact that you've had a history of it and everything, and then you've taken this over and created some more modern elements of it too. It's getting the word out. It's brands that kind of convey how they think, how they feel. And funny enough, their generosity. The more generous the brand, the more potent it could be. Look at REI and Patagonia, for that matter, in terms of when a retailer says, we're going to be closed on Black Friday so you can spend more time out there. Well, guess what happened? Their online sales went up much greater than they had year over year, year before. Was it a PR move? Yep. But it was also a cattle call and like a stake in the ground in terms of here's what we stand for. We're for the great outdoors. Don't spend Black Friday in shopping.

go with your family on that side and that's a great stuff so for we could riff on your brand i want to hear more about your brand what what do you think this this company stands for if you want to stay outside of it but it's you know from a golden sacks where i've done work for or whatever brand management has it's like a general practitioner like a doctor you might diagnose a flu and then the next patient is like a broken leg or whatever but it's the diagnosing process of the brand not just oh this only works on consumers on that and sometimes it's tough for b2b side like xerox was like we just have the best sales force Well, if you have the best sales for it, then that's part of a brand. You have the best sales for it. So use that to recruit the best people, for instance. Maybe talk a bit more about advertising and marketing and maybe advertising specifically, like how that's changed and how you view that with social and everything else, whether or not it's still valuable, how you measure something like ROI and advertising. Like I have no clue how that works. That's been an ongoing battle. There's so many. presentation start in 1980, there were four major networks. Now there's channels on our cable or TV or YouTube TV streaming that we have the clown channel had no idea on that. So measuring advertising has been through the years, a very inefficient science. Nielsen only pulls a certain amount of homes, whatever. The great thing is now that no more excuses on that side of it between data in terms of attribution. We now with a bunch of our companies wherever we can. Another reason why I like DTC is you can control. based on what marketing message were put out and what was the activity on our site and when did we sell. Something like a huge chocolate bar might be very quick because that's a relatively not costly purchase. Something like a mattress that might be $1,000 is a little bit more and you're not always looking for a mattress. So you're looking at certain funnels of like what messages at what time produce what results. A-B testing is a big deal. You can put things on Facebook relatively and test different messages to different cohorts and get live reads pretty quickly. Very cost-effectively on that side.

But a big part of this comes we have to do data because guess what? People don't trust advertising. Advertising people, I think, are right there with used car salesmen and politicians on the trust and respect meter. And so maybe that's why I came into finance, which has had its own issues. But that's the truth. People don't trust advertising, but they trust what they find out about brands, what brands that you can't hide from that stuff, as I said earlier. So advertising still works from an awareness standpoint. How that gets manifested now, there's so many different ways. But right now, Instagram. They have to do more, especially as Facebook goes down a little bit. Instagram is a great proposition to sell stuff. If I were a CPG company, I'd take almost all my money out of Google for the most part, put it into Amazon. 63% of searches in the US are not taking place on Amazon for consumer goods. That's amazing. That's the equivalent of marketing the six feet around the store that your product might be. Depending on who the consumer is, if we're talking about a 20-year-old urban kid that devours one way versus a 47-year-old suburban woman, there's different... things, different motivations, advertising still works, but you have to get smarter, more calculated and market to the differences at the same time. I want to come back to some of the criteria you've got for screening for potential investments. You know, you've got a good, a healthy number of portfolio companies. It's not like it's five companies, right? So you're selective, but it's not insane. You're certainly seeing a lot of businesses. You mentioned some of the ideas and sorry, I can't help myself with this quantitative type stuff, but a low NPS category is an interesting quantitative marker of something that might be. worth considering. You mentioned the journey, a crappy journey, a buying journey that you go on might be opportunity for a new market. I'm always interested in the VC dynamic between thematic investing where they develop a thesis around a theme and then they look for a company to fill that theme. I'll call that like top down versus like the bottom up approach was just like, no, no, we're not thinking about any of that. We're just letting founders come to us with ideas and then we're running them through these filters. So back to the original question is like, which of those two camps do you think works better in your world?

And any other filters, they can be qualitative, of course. They don't need to be quantitative like NPS. But what other filters do you return to as you evaluate these companies? There's so many, and I'll try and bucket them in a little bit. But to dimensionize journey inefficiencies, why does it take me 12 weeks to get furniture? So Ikea went after it one way. Bob's Discount another way. Furniture, why can't we do it? Tough now because it's like drop shipping. But one of the things we'll study is like what's the cost of goods and all the financial metrics and what makes sense in this category because it might be inefficient, but that's the way it is. From deal flow to assessment, it's funny. If you have a good friend, the reality is you might want to meet other friends of his you don't know because they might be good people too. Same way with entrepreneurs. Our best deal flow and our best assessments come from the Jeff Raiders of the world, the Katya Beechamps of the world, the Craig Eberts of the world. Our founders, but also they're from the Wharton networks and HBS networks on that side. So the founder quotient is not unimportant to us. So I'll start with the last thing I did the last time. But we're also doing a lot of survey. Every year we do something, a panel called The Why. And we take 1,500 people across the U.S. of various age. It represents what the U.S. population looks like. And we do a series of questions that just get into what their behaviors are. So it's not the Gallup poll or the Michigan Confidence poll, but we do that. And we're correlating. And we just started doing this is why. people do and from that we've realized like early adopters are great but it's also the petulant slow movers are actually the best consumers to have because once you got them you got them and they don't they don't go to something else whereas early adopters will move on real quick on that stuff. So we look at different cohorts. So as we're looking at different businesses across that, it's like, we'll look at like, what cohort is this best for? We have 16 different cohorts of different minds. And again, we look for stuff that's going to sell in the US. Is this something that could be in middle America? What are the defining variables of the cohorts? If you've got 16, what are the dimensions along which they're segmented? Along the same things that Meyer Briggs has done on that side of it. And the name of the study escapes me, but it's a personality types and it's defined different personality types. So we started with like demographic.

and geographical mix and that stuff. And then we try to pour those out. And what we're getting from that is interesting data points. 60% of Americans in the past year have gone to church. 59% have looked at porn and things like that. So what are you going to do with that stuff? Researching things, like it's interesting when we looked at Facebook and Google. If you look at the top Google, Facebook things about the husband, it's like, my husband is great. My husband is loyal. My husband is wonderful. And then on Google, Those same people are Googling, my husband is a jerk. My husband is a liar. Is my husband gay? And that. So it's one of those things. We just don't do polls and things like that. It's the why. And consumers are wonderful liars. I don't have to remind people that the 2016 presidential election happened. We were doing consumer surveys then for the women shopping. And it was amazing that time we found, by accident, we interviewed. hundreds of women in teaneck new jersey atlanta and los angeles about the women's shopping habits and then even what some of their beliefs were and a few times we're getting like i don't want other women to tell me what to do and other things or people that were like very claus about saying who they might vote for in a very polarizing election and so people don't speak the truth So we're trying to dig deeper into the why into that, the motivations, the values, and what does that mean? And we're still in the process of we don't have it all figured out, and we're correlating that against the actions of our different portfolio companies than things like the cost to acquire customers on a month-to-month basis. But it's really interesting stuff because if you look at this on paper, the pornography business and the sex toy business are great businesses. But do you want to invest in them? Because what's your exit going to be and what will your LPs think? And that's a very real thing. That said, one of the most explosive categories gone right now is actually there's companies like Hymns and Keeps and Roman, erectile dysfunction. Like a key Propecia patent went off label in December of last year. So a few companies came in, saw that, and basically marketing is number one expense, have gone after showing like ED is something that could rob your door. So taking something, and we're seeing a lot of consumer advertising for this. Some of the most unspeakable things that you want to talk about.

Well, that's a great thing for the internet to do. And so we're seeing companies on that and we're investing in what could be good, but also what could be the financial outcome of that? What are some other examples there? So you've mentioned some of the obvious. Hearing aids. Think about hearing aids. There's not like an apple for hearing aids. There's a dominant area where the average hearing aid costs like $4,500 to $5,000. And we saw a company attacking it like we think we could do this for less and it's using those same plants. And all they're doing is the same manufacturing around the world because there's only six places around the world that manufacture hearing aids. That's interesting. Plus size clothes for women has become in vogue. And I don't mean to take a shot at companies, but when the number one category leader is called Dress Barn. If you're a woman, it doesn't matter if you're size 14 or 16. You're a woman. You want to look good. And yet the solutions we've given are things like dress porn. And then we saw things like D&Co come out. And a great cultural thing, Ashley Graham covers Sports Illustrated as a size 16. For years, women who are size 14 plus have been shamed in the shopping experience. Well, direct-to-consumer is a great place to do it because you can do online, you can do that. And also, who's also wisened up to it? Kohl's. Kohl's is now shooting up the charts in plus size because they're giving due. Amazon is the number one retailer for like women's clothes right now, believe it or not. So there's a lot of different things that are almost past that categories that people don't want to talk about that their online world they can go in and do and then get those brown boxes shipped to them very discreetly. But it's not all of them make great investment propositions, but part of those do have check the boxes, inefficient journey, or there's a shame to them. the dress barn example, and in some cases price. Instead of getting an expensive thing for a Propecia, now people can do that for like $20 or $30. So one of the things we do look, what's going off patent soon, but those tend to be big marketing plays. So we're intrigued by those categories, but it is an arms race of marketing capital. I'm trying to be disciplined in these conversations to always ask people about how they think about valuation because...

You can find all the best companies in the world, and at the wrong price, it's a crappy investment. So what impacts price in this world? How do you think about it? Do you have a specific discipline around it, or is it a case-by-case basis? In general, what everyone's saying across any asset class is everything's expensive. Everyone is saying. We're saying our asset class will be the first money in to a new company, to the $18 billion buyout funds. We're hearing that across the board. The way we look at it is, what's a likely outcome? Is it going to be an IPO? More and more, we're thinking it's probably not. Most of our entrepreneurs do not want to go through the compliance issues that go around, but they just don't want to go through it because you just get crushed. You get celebrated until you get crushed. And VCs, we do a pretty good job about celebrating entrepreneurs. And then Wall Street says, okay, when are you making money on that? So that's probably when you get ninth place trophies, it breeds that to maybe an entrepreneur or something like that. But valuations at our asset class are like high, but they're like... And what we're seeing is people taking less money early on. It's something reasonable. It might be even a convertible note. And then showing some proof of concept and then raising bigger rounds. And if you try any rational metrics like a PE firm or like a public equity would, it's like things aren't going for two to three times earnings. It's going much more on the potential. And the things that factor in at the very early stage are how much do you bet on the proposition of the founder? What's the path to profitability? We focus on that. I don't think that's focused as much on companies in the first six to 12 months as we focus it on. Because at the end of the day, if you don't make money, the music stops in the musical chair, there won't be a chair standing. And if 2000 didn't teach everyone that, it's like we're going to learn again soon. But we're also seeing big, like I said before, 18 billion plus investors, assets under management, coming to meet us now because they want to see companies earlier. So private equity funds that maybe have invested in stuff that were at a 50 to 100 million EBITDA,

They're trying to take that expertise and go to 25 to 50 because of that. So a lot bigger players are coming in earlier. And then you have the soft bank phenomenon where all of a sudden you have a 12-digit fund. You have a $100 billion fund coming out of nowhere, which is raising all the stakes. But listen, we have a lot of capital out there. All the investors are complaining about the valuations. We're also the same ones increasing the valuations because we don't want to lose that deal. What are some non-obvious or even unusual traits that you've liked in founders? Everything they come from liberal arts schools to in interviews where they talk more about the team than the product. We don't fund great products. We fund great businesses. That's the goal. And anything can have a one-off product. Like Angry Birds was a great thing. I don't know what we've heard from that company since. And now you have Fortnite. And now Fortnite's company is worth $15 billion post Kleiner Perkins and that side of it. So we look for... Is this person capable of repeatable success? I played point guard poorly in college or tried to. It's just like I was a non-scoring point guard, but my job was to make the other four players on the court better. We want to see that from founders, like the leadership of it. A chip on the shoulder. Like someone who's like, this is wrong the way so-and-so is doing it. I'm going to write it. We invest in a company called Function of Beauty. And it's a shampoo company and conditioner company. They literally have 29 trillion different combinations of shampoo and conditioner. It was founded here in Stanford, Connecticut. At the end of the assessment process, I said, what's the win for you? Is it an IPO? Is this? He's like, I want to see Unilever and P&G burn. And I was like, yeah, I want to see that. And that's a different thing versus I want to sell for a 10x multiple. If someone says they want to sell for a 10x multiple, it's like you can do it for financial things. It's like we're shooting for a higher ceiling. And if you run a great business, The finances will come on that side of it. But it's just that edge. It's not an SAT score. It's not a GPA. Certainly going to a very good school is a mark. But the best businesses we fund, I point to Warby Parker. I point to Peloton. I point to Harry's. I point to Casper. I point to Karev.

they are relentlessly and statially focused on customer service and serving the consumer to the point where a founder will email or take calls like, I'm sorry for that happening. And they tend to have higher NPS scores. Because when something goes bad, people will tell 11 friends and now the internet about it. But if a brand does something like, we are sorry and do something, they'll evangelize for it. It's amazing by the power of the apology. As humans, we make mistakes. But when brands make them, it's just like, oh, you're the big faceless corporation. When those upstarts actually humanize, like, we're wrong, we give your money back, that's amazing. There's a famous brand case, J&J at Tylenol, and there was a cyanide poisoning back in the early 80s. It was awful. They killed people. And they weren't necessarily at fault. They went above and beyond what the government requested to do, doing the child poof cap and things that added one cent per bottle that they didn't charge to their customers, and they abided by the credo. And after that incident, well, they certainly had a dip in sales in that. they actually skyrocketed to marketplace performance after that. It seems stupid in the short run, but gaining trust takes forever. Losing it's very quick. What do you think are the categories today that are the most ripe for young companies to come take share from them? Not necessarily individual companies. It could be anything. It could be individual companies, could be industries, anything. We're seeing it in media to some degree. It's like the destruction of whatever the cable business is called these days because of Netflix. Netflix is now the operating system for our televisions. And yet television is enjoying a bit of a renaissance. There's still nothing as impactful to all five senses than a great television commercial. Because you feel it, you hear it, it sounds weird, and that's a power video, but that's become ubiquitous. So the media business is going through a reset on that side of it. Have you invested in any media businesses? It's not to our thesis, our core. We want paying consumers, and that's advertising-based. Although we're seeing journalism, we used to get newspapers for cheap because it was subsized by advertising. Now these things called paywalls exist. We hate them. Guess why? That's how they're going to make money. I've banged this one to death, but... The amount of sell ratings we see on CPG companies for a reason, all these companies have the wrong food and they don't have direct access to the consumer and it's painful. And when you're at the mercy of as the publicly traded companies are, I was just at a Citibank, Citigroup disruptors event, and they had five publicly traded companies out there talking about the shareholders king. And then there was the founders of Daily Harvest, Casper, and they were saying the consumer is queen.

And it's like, you better soothe the consumer. Now are they under the same, are private companies under the same constraints? No, not publicly traded. Yeah, we might have a lot of that VC money, but it's like they're building powerful businesses that are taking share away from the big companies. So CPG related things. There's obviously in gross categories like esports. Esports is not the future, it's the now. There's an 18,000 person stadium being built in Dallas, Texas dedicated to esports. Have you invested in that category? We're looking. There's one that we really like, but there's a lot of noise out there. And I think some of the players now that are number one won't be, you know, first mover doesn't always make the best mover on that side. Very long on esports. And related to that in a separate is with all 50 states now go nuts on gambling, what that's going to mean. So it's given new life to a draft kings of the world. But how does esports come play into that? That's something we're looking at. And then even something less like bras. The brawl market is still massively underserved in terms of Victoria's Secret. The millennial, the younger doesn't resonate with Victoria's Secret in that style. And Victoria's Secret is the market leader at 30% market share. But we saw a bunch of business plans 2014 or 15, but we had a lot of entrepreneurs that didn't understand the supply chain. Now we're seeing actually a few more that are getting it and doing better designs to it. And we just invested in one recently that's taken on Spanx. And they're profitable in the first three weeks, which was amazing. Cannabis. Cannabis worries me just because of the legal issues and that, but it is a thing. CBD is a thing. It is probably the most prevalent thing we see right now from so many different sides. It's all brand, right? It's a commodity product. And there isn't a Pepsi and Coca-Cola for that right now. And there's a lot of money. Unless it's going to be Pepsi. Or Constellation Wines. But funny, on a recent earnings call, Coca-Cola got lauded because they're doing something in CBD and cannabis. And then Pepsi didn't, and there was a couple of headlines. price goes down because pepsi doesn't have a plan for that and it's just like wow and these are the same people or whatever they're feeding like the quant based stuff in the metric it's like no it's every decision is emotional irrational why certain companies have a higher p ratio than others but my linear thinking my non-linear thinking side like cannabis and cbd is a thing and our friends north of the border in canada are doing it and there's some stuff and there's a lot of money going into it we're seeing the power of the states too

So it'll almost be like a March Madness bracket. Okay, if we could become the one dispensary in Connecticut, then we can take all New England with capital. There's a lot of private capital. There's also some reticence. The reason you're seeing some higher valuations to your earlier question is some people are like, let me wait another round to see how this goes and I'll just pay up because I don't want to be wrong. You mentioned Instagram earlier as like the ideal way to sell maybe CPG. What is like the most interesting off-the-radar marketing channel that you think is worth considering for direct-to-consumer businesses? Wow, that's a great question. If it's a direct-to-consumer, it's like the power of activations in events. And it sounds weird because that may not be a national thing. What do you mean by activations? It could be something at Union Square in New York City that gets a lot of attention to it. It sounds so analog, so I apologize for that, but it's like real-life things that cause it. Or Twitter. If you see what brands like... What Wendy's, the burger company is doing on Twitter is absolutely amazing. What bravery from a company that is a big company out of Columbus, Ohio that has this sassy tone and it's like winning over people and it's correlated to sales. The most overrated stuff to almost answer your question is influencer. Stop. Influencers are the thing, but it's become such a predominant thing that. people are getting like, oh, you got paid to do that or whatever. So now there's micro-influencer. What the hell does that mean? We did something recently for a Fortune 200 company. So instead of like the Kardashian level or Kanye level, it's like, well, maybe there are people there like for painting. This woman might be the most talked about person in painting, but she's only got 35,000 Instagram followers. That's a micro-influencer. So it's versus that. And there's a lot of overrated things like the influencer, like, oh, I need a celebrity to make this famous. That can help. but that's steroids or sugar high stuff thinking than anything tangible. But I think one of the things that we've unlearned over the past year is digital might be cheaper, but digital because of all the bots and we're not sure what Google and Facebook are doing, we're not getting true measures of what's going on there. So some of the thinking digital isn't as effective and it's still very effective. That's why TV is gone. Maybe one of the most surprising things is satellite radio performs extremely well, extremely well for early stage companies.

In other areas that are still untapped, like podcasts, the phenomenon of podcasts is huge. The amount of airtime dedicated to ad dollars is small. So guess what's going to happen? We're going to have a brought to you by in the middle of this thing probably in a year from now because- Not this one. Yeah. It's like that's what will make this more premium. But people want to go to where the ears are, the eyes, and get in front of their target consumers. That's harder to do. The great thing from my old marketing and brand life, which is still my current life, is you're going to have to earn that consumer's attention in dollar. and to sustain that over time. So you just can't like how we found you, the four Ps of marketing in the world, or awareness. It's gotta be preference and trial. So we're gonna see more targeted. In many ways, marketing programs are very targeted, but also there might be like the big home run where you do a Super Bowl commercial of that stuff. We've had three early stage companies approach this about, what do you think about doing the Super Bowl in 2019? And we said 0 for 3 on that stuff, just because they didn't have the backend ready or any of those things, but it's an arms race. So excluding anything that you've mentioned so far, piece of marketing are you most proud of having created? Wow. Having created individually. I would say there's some things coming up I'll be super proud of, but I can't mention. I will say our most recent one is we did something for Nike, where Nike hired us, ironically, to sell sneakers in physical retail stores. And part of it is they've had such a huge dedication to DTC, as everyone has, but there's still the power of if everyone stops doing retail, a lot of businesses go down. And Nike's one of them. We did this campaign and the target was a 19 to 20 year old who does not like media. And so all they do is Instagram, YouTube, maybe Twitter, some other channels. YouTube is a huge, I say, I was anti-Google earlier. Credit YouTube is pretty effective. So we created this massive campaign that became like the number one organic ad on Twitter. pulled in three and a half times stronger for product advertising on YouTube and sold 22% more product than it was supposed to. What was the campaign? If you go in and you'll never hear this, like Fat Joe selling retro 90s inspired Nike shoes. And I'm just proud of that because it's a sign for a company that's dealing with early stage companies, like bigger companies, like we need a more modern approach. So they're coming to us. Same way the bigger investment firms. But otherwise, like the Harry's launch stands out quite a bit.

And most recently, Claire, which is a direct-to-consumer paint company from Nicole Gibbons, probably the best PR launch I've ever seen. In July, she launched a new paint company. And there's been little innovation in paint. Benjamin Moore, Sherwin-Williams. We were approached three years ago from a company that one of those companies bought, saying, we're trying to do a new direct-to-consumer proposition. We can't do it ourselves. Can you help us? And we were putting it together. And then they got acquired by one of the companies I just mentioned earlier. We think there's an opportunity in the paint business. It takes 135 days from the time you decide to paint your living room to actually doing it. It is a painful process of pain in the ass from do I want sky blue, yellow, purple, blue, yellow, blue. Like there's all these things. Like this is where the. Paradox of choice comes into play a bit, but there's no empathy to it. So we've backed a company called Claire that is a direct consumer paint proposition that you get these big samples sent to your door to see if you like it, and we've limited it to 55 colors, and we give you tips to do it. And the magic is, are we going to do it cheaper or whatever? We think we can help you get that 135 days down earlier. So we're about 90 days into launch, so we're getting data now. But Claire was all PR. And for Architectural Digest to say this is the Warby Parker paint and for Cosmopolitan to write up about it, that it's just, that's the power of earned media at launch. And that validation is better than any marketing thing we could do. Any other portfolio company examples that you think are good examples of a lot of these principles that we've talked about? I really, what resonates with me, and this is way beyond just the consumer experiences, this idea of stuff that just hasn't changed in a while and where the experience is, if you really think about it, a lot of this stuff, I would never have identified paint. It is what it is. If you find yourself saying that phrase about it, maybe that's a marker of opportunity. Any other companies that you think are interesting to highlight just to make the point? I'll go macro again. When we see activists,

hedge fund people like approach us or we see it in the news. We think we're going to take a position because they're spending too much money in marketing. Somewhere between 62 and 200 million. They don't know on that side of it. That kills us. The funny thing is the best companies early on realize if you do that proposition right again, you can spend less money in marketing advertising. Warby Parker, I think, taught me that lesson. So when they were early on, they did an ad campaign. It was like a radio. It might have been a Howard Stern. I can't remember what. And they got inundated and flooded. We call it to the point that they were like three months behind. So they shut down all marketing and they were saying, sorry, sorry, sorry to their consumers catching up. And so what they did is they put that into customer service. And they realized it's actually a better acquisition and a better experience because people are talking about it by a strong customer service. So what, again, was a negative thing in the beginning, like we don't have enough glasses, we're not doing it, are we going to tick people off? They invest in customer service and realize, wow, that's a lot better than doing advertising or marketing. And actually, they started getting the talk value like, wow, these are great glasses, $95. And they stand for something different. They felt like more of a Ralph Lauren than like a traditional retailer. And then to expand, I'm going to put this under marketing. They did their first pop-up store. Now, pop-up store, you hear that all the time. They did their first pop-up store by the Standard Hotel in New York City. It was great. It was up for three or four months. It also exposed the brand to a lot of people that were coming from Germany and from London to stay there like, what's this Warby Parker? So they actually wound up doing, let's keep this open because if we look at it as marketing, we're getting a strong ROI in marketing and people can actually pay us on the spot. So people have wondered, especially out of the Valley, like, why would you do physical retail stores? It's like, because it's marketing. And the average consumer for them and for a bunch of others we have. Their average customer is more profitable and stronger that goes in a store and does stuff online than just stuff online. Even though, well, just online is a stronger margin. So you could say, well, that's ops and that's that. We look at that as marketing. When Harry's went into Target, Harry's can do all this stuff on digital, but there's something to the people in Overland.

Park, Kansas, that going to Target, that's validation. If Target gives us the seal of approval, it's like, that's good. So when Harry's went into Target, it was a sign of marketing. And we did end caps in a different way and a different proposition. And it brought some heat to an aisle. In the first four months, they only had 25% of the shelf space versus the Gillettes. They were getting 50% of the buys in the first four months. And so Target's happy. It's like, great, we have some new noise now. But we chalked up to marketing. So marketing in the form it's not ads, it's not that, is being where your customer wants you to be or getting discovered and having the EQ and speed of whatever size company you are to say, wait a minute, we should do more of this stuff. What have we missed in terms of your process, things you care about, areas of investing or marketing or anything that we've talked about that you feel you're, have something to offer a deep expert that I haven't asked you about? Anything? You've probably figured this out, listeners, too. It's like, I'm not ridiculously smart. We love EQ more than AI for that stuff. We dial that in, even on the consumer level. So it's not just 2,200 people in a survey. It's just like, what are people really doing? And we study that quite a bit. And don't be fooled. We look at TAM. We look at total addressable market. We look at gross margins. And we look at those things. But I don't see greatness in Excel sheet. I don't see it in like wow or that. We look at it in terms of so many other outlier things that are not going on here because I don't think the best businesses are going to have to come from a Boston or New York anymore. We invest in a company in Pittsburgh, Pennsylvania that is launched in February. Their October was bigger than the first six months combined and everything. We're going to see great businesses come out in different areas. There's too many smart people in Cincinnati, Ohio that have worked for P&G. Maybe they're going to do something new. So it's just like we're seeing this regeneration on that side, but still.

The fundamentals come to play, total address the market. We want to make money in businesses, but we care about some of the stuff that people look at the front of the bus. We use as a pressure test as to what not to do it. Because if something is a great consumer experience, but it's never going to make money, we're not going to invest. So my closing question for everybody is for the kindest thing that anyone's ever done for you. It's fine. I've heard this. I knew that question was coming. I've heard other podcasts and it's just, I go to different places because I'm one part, it'd be my wife for letting me do this. I was a pretty senior. person at a firm we were making great money and I just I had to do this because I didn't want to be that guy and I was in my mid-30s and like prime earning years and doing pretty well and but I was like what happens if I don't take that shot if you will and she allowed me to do it as crazy as that was and to quit the profession that I had some or others thought I had success in and by the way with a baby that's six and a half months into the equation and to like not pay myself for you're gonna do this to build it up it's like She had the bravery, maybe more than kindness, to allow me to do this. Whether she believed it in or not, she believed in me. That's deeply kind. It's deeply kind. And then more functionally on the business side, so I don't get too teary-eyed, it's First Round Capital, who for no motive other than their generosity as a firm, spent a lot of time with me to get this right on that side. And then very recently, Todd Benson is one of our investors. I mean, this guy's a baller. former co-head of private equity at Citi, chairman of L2, Scott Galloway, which sold. And he saw something in us and to some degree me that said, like, I'm investing and you guys are going to be much bigger in the next fund and the next thing I'm going to help you. Is that based on returns? Yeah, I think so. But just it's when other people have bet on you and they don't have to. or spend time. So that's my triad of an answer. Well, this has been a blast. I've learned a lot. It's an area that I'm fascinated by and frustrated by and you shed some light on it. We're going to work on your brand. We got this. We're going to work on your brand. Thanks, Mike. Thanks, Patrick.

Hey, everyone. Patrick here again. To find more episodes of Invest Like the Best, go to InvestorFieldGuide.com forward slash podcast. If you're a book lover, you can also sign up for my book club at InvestorFieldGuide.com forward slash book club. After you sign up, you'll receive a full investor curriculum right away and then three to four suggestions of new books every month. You can also follow me on Twitter at Patrick underscore Oshag, O-S-H-A-G. If you enjoy the show, please leave a quick review for us on iTunes, which will help more people discover Invest Like the Best. Thanks so much for listening.