This HACK Will Solve Your Cashflow Problems | Andrew Cariboni COO, Unbound Merino (Podcast 310)

Don't be so mean. There's a reason why I'm in the role that I do. I'm a big doer. I very organized and like things a certain way. And I think that as I've gotten older, I've realized that that stuff doesn't work so well long term. It does a lot of damage and you have to do a lot of undoing to rebuild trust with people and get what you really want out of them.

Well, you're in for a treat today. We've got a really great podcast with Andrew Caraboni from Unbound Marino. Really, really successful company, super intriguing, second in command. He talks a lot about their growth, about how he and the CEO have known each other since they were nine years old. Some of the highs and lows of working that closely with a CEO that you've known, how he also hired his wife into the company and the highs and lows of working with a spouse. Talks about some issues around cash flow and scaling a company that is doubling year over year. I think you're going to love the episode. You'll love their brand. Take a look at their website as well. Unbound Marino. They do pre orders of a lot of their products, which is some of the reasons and ways that they've actually cash flowed their business. And it talks a lot about outsourcing and how to be a second in command. So you're going to love the episode. Also take a look at it on our Second In Command podcast channel on YouTube because we share all of our top episodes there as well. So, Andrew, good to see you again. Welcome to the Second In Command podcast.

Thanks for having me. It's super cool and super exciting.

Yeah, you and I got to hang out a little bit at Baby Bathwater and I'm curious what it was and well, we should actually explain what the heck Baby Bathwater is first because that's a really weird term for people. It's a, an event that is typically very CEO, very entrepreneurial connections. What was it that you were doing there? Because you're a little bit. Were you out of your element or because I guess you're a co founder. With Unbound Marino, it still made a good sense for you to be there.

I was totally out of my element in the sense that I never thought I belonged at an event like that. You know, generally my co founder, he does all that stuff. But you know, we have a mandate to grow personally and professionally. To be honest, he was looking out for events that he was going to go to and he was going to go to Baby Bathwater, But I think he just heard from different friends of, you know, what the event was like, and he just said, you know, Andrew, I think you should check this one out. And I'm like, let's do it. It was amazing. I had, like, a preconceived notion of it being kind of a bit like stiff and entrepreneurs just talking business and that whole thing, but it was just people having a good time. And, you know, I pretty much got hooked and tried to sign up, and they accepted me. So it's pretty exciting.

Yeah. I mean, that event, we were hanging out on a private island in Croatia, and we were partying at night and dancing and listening to AMAZ music and swimming in the ocean. It was pretty hard to see that as a stiff event after we were there, wasn't it?

It was, yeah. It was not what I mean. I kept sending messages back home saying, this is crazy.

Now, you mentioned grow professionally. What does that mean in a COO role that you're trying to grow professionally?

I'm a bit of a hermit, so I think a lot of the stuff that I've learned is from just doing things on my own, you know, locking myself in a room and figuring something out, taking a hammer and banging it at a nail or trying to bang a door down, for instance, when there might have already been an open door next to me that I didn't see. So I think putting myself in an environment with other entrepreneurs, the idea there was to see people that might have dealt with similar issues or just have some similarities and just meeting and chatting with different people. You learn about them and learn from them and get ideas for maybe how you can do things yourself or how you can do things differently. I mean, I totally came out of that event with a bunch of ideas, types of people that we should consider hiring. So I think for me, what it means is getting out of my own element, where I'm used to doing things a certain way. I learn a lot from books. But there's a different thing when you're just meeting people and just talking well, that might have done something that you've already done, which I'm not super exposed to or I haven't been in the past.

Yeah, it's interesting. We run an organization called the COO alliance, and all of our members are second in command from companies all over the world. We've got a. An event coming up in September in Boston held at an MIT offsite. And the group that's there are very similar to you. They are more of the introvert. Is that something you've seen as a difference between you and the CEO as well?

I think so, to be honest. I'm definitely outgoing when I'm around people. I'm a pretty talkative guy.

Totally.

Generally in business environments I, I probably get a bit of a turtle shell that pops up and you know, I'm kind of shy. I feel a bit out of my element naturally. I mean, at heart I grew up as a visual artist and I used to paint a lot and I was musician. So kind of never really been involved in too many business circles. But whenever I go I'm always like, you know, I get totally different things than Dan, you know, my co founder will get from, from these events. Like I will think about things totally differently. I'm thinking about things more in an operational way and he's thinking about things probably more from like marketing standpoint.

It's very normal actually. We do personality profiles on all of our members and their CEOs. And all of our members tend to be very analytical. They tend to be fact finders. They look at all different areas of a project or problem before they initiate. And most of the founders tend to be, you know, act now, plan later. Right. They're quick starts or a lot of our second in commands tend to be people that put systems in place. Before you approach projects, do you get a sense on how you approach business? Do you, do you have a sense of how you see the business landscape or how you see projects?

It's interesting you said that. You know, I actually, I felt like I gelled more with the first type you just mentioned. So Dan and I are. Sorry, I keep saying Dan, he's the CEO of Unbound, but I think we're both in the camp of just act fast always. And it's one of our core values for sure. I'm certainly, I think that I would be the more cautious one, maybe the a bit more paranoid, you know, looking for iceberg ahead, for lack of a better analogy. And he's probably bigger risk taker when it comes to business or maybe less of a pessimist. But I think when it comes to acting, both of us are just do anything now and let's just see what happens. You know, as long as we're not going to blow up the ship or something like that, we just want to make a move.

So how do you make those decisions? Is it based on, you know, core values, based on budget? As long as it's aligned with your core purpose or vision, how do you say yes to things because there are, you know, a million opportunities and ideas that we get into our brains.

I think it depends on what you're trying to decide. If you know your goals for, like, let's say, the next year ahead and this decision kind of pertains to hitting the goal like that, then it's a little easier to make a decision like that. Say you want to, you know, hit $6 million in sales. You're way off of it. You have an idea for a marketing campaign that's clearly going to get you there much easier than anything else, and the risk is low. And like, you have a target, it's going to be much easier to kind of decide, okay, well, let's take this risk. Because it's the only way of getting there for something else that maybe you, like, have a nice shiny opportunity that just came in and said, hey, you know, do we want to work with this? Let's just say it's an agency to help us with, I don't know, social media. It's going to cost a lot of money, but it's a great opportunity. You look at something like that, you're like, well, what does that to do with where we want to get to tomorrow? And I think right then and there, you can kind of shut it off or be like, well, it's aligned with it or it isn't. So I think risky decisions are definitely trickier to make, but if they're aligned with where you're going, that certainly gives you a little more ammo to being confident with whether it's a good decision or not.

It's very aligned with your vision. Right. As long as you have clarity on where you're going, then that intuition kicks in. You just understand whether it's a yes or a no.

Yeah, I mean, we have a lot of, like, people would come to, like, a weekly meeting, and I don't know if anyone's familiar with the format for scaling up or traction or stuff like that, where you kind of, you go over your, your weekly KPIs and you kind of go over the biggest issues of discussion. We used to have a lot of, like, opportunities come up in these meetings that had nothing to do with the goals. And we'd be slow to kind of figure out why are we talking about this, you know, even though there might be exciting things, but, like, this is going to take us off track. But the more you kind of start thinking about, well, what are we trying to get to at the end of this quarter, at the end of this year, the easier it is to kind of be like, well, let's just save that for the next time where we're kind of strategizing. Unless it's like, we can't ignore this. Right.

Yeah, I like that. It almost becomes a not now versus a no.

Yeah.

The opportunities don't have to be. I always look at opportunities and say I green light them, yellow light them or red light them. Green is we're going to put it into our project map for the quarter. Yellow is it's a not now. So we'll look at it again next quarter to see if we're going to start it. And red is, yeah, it used to be a good idea. Let's kill it. Right?

Yeah, I absolutely love that. I mean, that's kind of the same thing that we do. It's like a 90 days. We'll look at this in 90 days and see if it still makes sense. Unless you just can't ignore it.

I'd say a third of our COO alliance members use the. The systems traction or eos from Gino Wickman's work. How many employees do you guys have with Unbound Marino right now? I'm just curious.

I think we're about 10 full timers. I might be off, might be. It might be 11, to be honest, because it's changed a couple times and a lot of people work with are just contractors or consultants and agencies.

You're at the sweet spot for EOS as well. I think it tends to break down when you get into like the 70 to 100 employee zone. You tend to need systems that are a little bit more scalable and robust, but it's such a perfect scalable system for. For kind of the non startup. You're well past that, but you're in that. That great zone for it. And it's an amazing system. Let's talk about unbrowned merino and give us a perspective. I want people to understand what the brand is, what you do, and then we'll get into some of the stuff around coos.

We make clothing for travelers that is made out of merino wool. And the purpose of our clothing is to help people pack lighter. The way it does that is merino wool is a antibacterial fabric that you wear a shirt for, let's just say seven days, it's not going to smell. So the idea is that a traveler can pack way less of those. They can. They can travel for, let's say, a month at a time with, let's say, three T shirts and less underwear than you would Ever need to pack of cotton clothes, and that helps you pare down your luggage. And the benefits of that, I think just weave their way into your everyday life. You know, for instance, I've been wearing this same T shirt probably for about a month now. I might be the extreme case of the example. I'm also a bit of a uniform kind of guy. I don't like to change my look too often. So, you know, minimalism is certainly at the core of our product. But the idea is to help people simplify their luggage and simplify their lives, not be bogged down by waiting at the luggage carousel, not having to check bags, not having to do laundry while you're traveling. And I think just those benefits just weave their way into your everyday life as well. So, yeah, I think we are pretty much servicing a big audience of travelers, but also like digital nomads and entrepreneurs as well, that just want, you know, a more minimalistic lifestyle.

Now, wool can't go into the dryer. Are your products dryer safe?

We don't put our stuff in the dryer. There are items that you can, but for the most part, everything is depending on the garment. It's lay flat to dry. If it's a button shirt, you can hang it up, but because, you know, if you were to hang up a button up or like a T shirt, if it was wet, it would stretch.

Yeah. I'm going to check out your stuff. I've been living out of Lululemon and, you know, rotate all my stuff. But most of the places that we go to, North America has dryers everywhere. But most of the rest of the world, it's a washing machine. And then it's either you hang stuff to dry anyway. So I'm going to check out some of your stuff and see how it works for me.

Yeah, and I'll hook you up.

All right. So you mentioned agencies. I'm curious what your thought is around when do you bring something in house and when do you outsource that to an agency? Whether it's marketing or ops or back office.

You know, we just heard like this. I forget what podcast it was, but my team keeps referencing it and they said, if AI can do it, get AI to do it. If AI can't do it, hire an agency. And if an agency can't do it, then you hire someone on the team. I thought that was an interesting framework. I don't really have a great answer to that, but I think that when we don't have the competency ourselves, let's take advertising for Instance, because we do work with an agency for advertising, we have the competency to make creative. Our previous business, Dan used to run a video production company that I worked in and we all made video. So we had a real good competency there. So we make our own creative always. But the media buying, we have a person that did it for a long time, but it's gotten to be such a big part of our business that it's too demanding for just one person to do with the other things he has to do. So we just decided, well, let's just get an agency that does this really well. You know, that that's, you know, people are giving a, you know, a great review of or recommended from friends and we hired them. And I think the, the thinking was that we don't have the bandwidth of on our team. We also don't just want to bring someone on to do something and then have an employee that maybe it doesn't work out. It's more of like a testing ground as well. But I think competency is a big part of it. And also just bandwidth. I think if it's something that is a full time job, long term for one person that we just absolutely need, it's a different story. Maybe. We're also pretty slow to hire. So I think that in that case it might have made sense to hire someone. But I like the idea of using an agency if we can before having to hire someone.

Yeah, I like the thought process there too. I also like the fact that you're keeping creative in house because it feels like it's much closer to the brand and the soul of the company and kind of the reason for being that that's harder to outsource. But media buying and traffic and there's so many different areas to be advertising that's hard for one person to be so good at that. Whereas an agency, you might have six or seven people assisting with parts of your account to be on, you know, 12 different platforms. Right. So yeah.

And just for the record, we always made the ads together. But I used to run the ads account and then after I ran the ads account, you know, we actually hired a friend of mine that was in my band. We just thought he was a bit of a. He was building modular synthesizers, you know, from scratch, sourcing part from China and looking at like schematics. I'm just like, this guy's building instruments, like electronic instruments. And I told, you know, my business partner, buddy, he's like, let's hire him to do our ads. So he did. We did. And, you know, I taught him, you know, what I knew, and then he learned way faster and he became amazing at it. And now he just kind of, you know, he's so smart that we're like, let's get him involved more in our finances. He still manages the ads, and we're like, okay, well, let's just have him manage a team. And for him to kind of onboard someone and then, you know, deal with like a full time staff member, I think is a different risk involved than bringing on a someone that already does this and that. You don't have to put on your payroll and worry about any issues.

Yeah, I know you guys are definitely approaching it the same way. I would as well. I want to know a little bit more about the differences between you and Dan and what you perceive as the differences between roles of a CEO and coo, because you were also a co founder of the organization too, right? So you're sitting in the op seat, the COO seat, but you were a co founder. So how did this whole thing play out and how did you decide how to divide and conquer on roles?

I think it happened naturally. So Dan and I have known each other since I was about nine years old. I think I met him at summer camp or at public school or both. Different times. And we've had every job together. You know, we've delivered newspapers, we cleaned this guy, Mr. Farkas, backyard once. We worked at the movie theater, we worked at restaurants, everything. And then Biz Media, which was a production company that he started. I think naturally we just always gravitated into our roles. So when he had the idea to start unbound, you know, I said, let's just do it. I was always down to follow him. You know, I think he's always been a visionary, and I always trusted his judgment. And I've always been a bit of a doer. So if there was ever something that needed doing, I would just figure out how to do it. And then over time, I'd probably learn that maybe I was doing it a stupid way. And then. And Dan would point me in a direction and be like, hey, maybe you should talk with this guy. You know, he's an expert at that. Or, you know, or we'll meet somebody and then learn how to do things better. But naturally I would. I would do everything myself until the team started growing, and then I'd have to start kind of learning how to train people and also how to work with people. I used to not really know how to work with people that well, and I wouldn't say I'm an expert at it, but now I'm a bit of more of, like, a managerial type role, and I think Dan is less of a managerial type person.

You and Dan are very similar to Brian and I in a lot of ways. It's almost like you had an unfair advantage. When I joined Brian at 1-800-got junk. Two months before that, he was the best man at my wedding. Right. We'd been in a forum group with the Entrepreneurs Organization together for five years. We knew everything about each other. So to build a company together was like, yeah, let's do this. You know, we'd already been interviewing each other for five years. Is that kind of similar to you and Dan, where the trust is just so strong and you can finish each other's sentences and. And you're just. You're almost like Siamese twins?

I think we know everything about each other to a certain degree. There is a ton of trust. We have inside jokes that have lasted, you know, more than two decades. I think that's a bit of the culture between Dan and I. And also we have another business partner, Dima. We've all known each other for over 20 years. Can I finish the sentences? Probably not. But I think there is an unfair advantage in the sense that we can say anything to one another. We don't need to be shy. We can attack each other in a way that might seem terrible to an outsider, but isn't that bad? It's just being honest. And I think that is an unfair advantage. Sometimes it's led down, you know, a path of. It was somewhat problematic, but I think we always knew what our intent was and that it was for the greater good of the company and for the greater good of our relationship. Maybe we just went about it the wrong way, but I think that we have an unfair advantage in the sense that we know each other really well, we know what our skills are and our weaknesses are, and we can say anything to each other.

Does it get in the way at all where you have that ability to attack each other in a way that maybe others don't understand? How do you explain it to others so that they get it? Because there is a little bit of that, right, where you're so close to each other that from the outside looking in, they're like, whoa. Do you let them know, oh, by the way, we've been doing this for 20 years?

Like, I think they get it over time. I never really explain it unless I said something completely crazy in a meeting that I thought needed explaining. Well, there's one co worker that says this all the time. You guys are crazy. I think she. She means, like, we're crazy in the sense that we're doing a ton of work and the company is growing at a fast rate and it's an exciting time. But she also just thinks we're literally crazy because we're just a bunch of goofballs. So I don't think it. I think it's somewhat evident to people, but maybe not on the first day or. But within a week or two, you'll know how we're talking to each other or how we talk about each other, that we're not a very corporate organization, that we've known each other for a long time. And also, it's in our company stories when people are. Are applying. They kind of probably read the about us to know that we've known each other for our entire lives.

That's great. Yeah, that. That all plays out really nicely as well. So talk to me about some of the highs and lows of starting this off. I'm sure it hasn't been, like, an easy business. And how long have you guys been running it?

So we started planning for our crowdfunding, and I have really bad memory, so I'm sorry if my numbers are wrong, but it was 2015. I'm pretty sure the company launched in 2016. So I guess seven years since launch. The highs being the success of our crowdfunding campaign. So this was just supposed to be a side project, something fun. We were looking for, you know, a way of making money and starting a new business. And I remember just being on a road trip with my friend in California and getting messages saying, wow, you know, we're successfully funded. This is crazy. And then I remember way after the campaign, when we put the website up, people were just buying things. We weren't doing any marketing. People just knew about Unbound Marino and somehow were finding us. And I think that was just a mind. It was a surreal feeling. And right now, I mean, we're feeling a similar surreal feeling. We are all of a sudden doubling the company more than doubling it, you know, year over year, when our goal was way less. We thought we were going to do, you know, X number. And all of a sudden we were way off. And then the biggest problem started being, well, we don't have enough stock to meet this demand. It's a terrifying, fun problem, but it's like, holy crap, what is happening? It's a crazy high, and it makes everything a fun game at the same time. And super exciting. I mean, hiring close friends is another high. Hiring my wife is a big high and also an addition to my stress. But there's, yeah, it's endless highs. It's also just being able to run a company with the people that I'm already the closest with is just. I just feel so fortunate all the time.

We don't often get a lens into the operational side of cash flow, and cash is kind of our oxygen in business, right, that when we're four years old and we dive down to the bottom of the pool to get the penny and we come up gasping for air, we're not going to die. But the bigger you get, if you run out of cash, you die. How do you plan and what. What have you had to do to adapt as your company is getting bigger and your cash needs are big? You learning about cash flow and managing cash and inventory and inventory turnover and financing and, like, what are some of the lessons around that? Because you can grow too quick at times, you know, for your cash position.

We'Re certainly very careful. I think one thing that's always helped us with cash flow is pre ordering, and I think that's kind of what helped us get to a few different levels along the way. From what I was told, we had about $1,500. I don't remember too clearly, but we bought probably about $60,000 worth of inventory. We bought that with someone else with cash Flow that came in from a pre order because we were a crowdfunding campaign. And once we got the taste of that, whenever we needed cash, we thought, you know what? We want to launch this hoodie. Well, we can't afford this hoodie. We can't buy this with our existing cash flow. Let's do another crowdfunding campaign. And the value in that was doing a crowdfunding campaign as a marketing event because you're going on a platform like Indiegogo or Kickstarter, and if you're doing somewhat well, then you're trending and they want you to win because it's more money for them. So they start putting you in their newsletters. It's a marketing machine that works for both parties and also is a way to just kind of secure cash when you don't have it. Those little bursts helped us get to a new level. We did that when we launched a hoodie. I don't think the intention was necessarily to launch the hoodie, although it was. It was also to kind of fuel growth. And it happened when we launched Women's Line. We launched a Women's line, also in Indiegogo, and use that cash from there to fuel the growth again, you know, now I think that we do enough business with certain suppliers that they give us a line of credit and we're able to extend it and, you know, put some orders in without necessarily having the capital at times, because we're good for it and we're always paying it. And if ever, you know, the needs do arise, you know, we have ways of getting cash. But so far, I mean, at the point we're at right now, we're able to fuel the growth on profit lately, which is really nice and a situation that we've never been in until this year, which is huge. Yeah, it's crazy.

You guys are the only company that I've ever been to their website and you've got a really beautiful, clean website. It almost feels like a. A blend of Apple and Lululemon.

Oh, that's a huge compliment.

Yeah. Which, which, that was intense.

They agonize over it.

Yeah, no, it's. It's very clean, lots of white space. It's just very intuitive. You've really, I think, agonized over the limited wording, which is nice. Which is very Apples. Yeah, you've done a really nice job with it. But this is the only website I've ever been to where on the main menu bar you have pre order. I mean, it's so freakless. Like, it's like men, women, pre order. Like, I've never even seen that. It's so blatantly obvious now that it is a part of your model. It's brilliant.

Yeah, it was part of, like our quarterly planning. You know, when, when you do, I think the Gazelle's scaling up approach, you know, you talk about the four things that you're going to talk about this quarter. Is it people, is it cash? Is it. You know, I forget the other two in the framework, when it was cash, we're like, well, how can we get cash? We're like, we can just sell things before we have them. And that is just something that has just lived with our brand for, you know, as long as I can remember, it came from the crowdfunding campaign. It is definitely part of our model for making sure we have money and we could pay all our suppliers and all that stuff.

I love it. Yes, people. Strategy, execution and cash. How do you guys know of the scaling up model and Gazelles and Vern Harness?

You know, I think Dan's the one that brought it to us a long time ago when we were partnering With a, a friend's business. And we had hired a coach to help with his business and the coach kind of onboarded us onto understanding or mastering the Rockefeller Habits.

Do you remember his name or the. Or her name?

The coach was Lester and the company was Dbrand.

Weird. I don't know either. I'm very close with Vern. I've known Vern for 25 years. He and I have been on stages. I've been on his stage. I'm friends with the co author of the book Scaling Up. It's a great system. It's. What I meant was when you said you're using Eos, that EOS is perfect for your size companies, Rockefeller Habits was great. Scaling up became almost complicated and it's almost like you need a 100 person company for scaling up systems to work. Eos is this blend in between. But it's interesting that you guys are using parts of both. It's really smart.

Yeah, I was going to say that before when you mentioned how EOS is perfect for a smaller company. I am always kind of rereading Scaling up and I was the one that kind of told everyone to read what's a Traction? But sometimes I'll just be reading a piece of Scaling up and saying, okay, we should do this. And sometimes I'll be in traffic and I'll be like, okay, we should do this. And I, and I know that you're just supposed to pick one and stick with it.

No, I, I don't. I disagree. And so do I. Yeah, I've had these discussions with Vern over dinner where, where I remember we were in Barcelona together about 18 or 15 years ago. I'm like, no, you can't just go with one system because the company's different. And he's like, no, it has to be exactly the way I'm like, Vern, you said in your daily huddles that every employee is supposed to Talk. We have 180 people showing up at our daily huddle. We don't have time for them all to talk. He goes, oh, so yeah, you have to iterate, right? You have to kind of.

Absolutely.

Little bob and weave. So I think you can take a little bit from Scaling up and a little bit from traction, a little bit to make it your own. But I think you're reading two of the most foundational books for every company to be reading.

Yeah, ours is definitely a hybrid. Sometimes we borrow from one. And I would say that Scaling up is the one that was, that had the most impact on me. And it's the one reread over and over again.

So that's really interesting as well. And I just spoke with somebody about that yesterday too, and they said they read a book a week and a book a month. I'm like, that's crazy. What you should be doing is finding the one book and reading it over and over again until you do it. Like, Scaling up is one of those books that you could read every six months. Good to Great is another one that just kind of can pay really big dividends. Another one you should take a look at. Have you heard of 3 Hag Way by Shannon Susko?

No, I'm writing that down. She's.

She's been kind of in the orbit around all of these communities. A brilliant business leader, proven business leader, who just kind of took a lot of her concepts. And I'd say it falls in and around the whole traction scaling up. It might be just a different lens on stuff too. But, yeah, you're definitely on the right track, because I don't think there's any other books out there that are anywhere close to that strong.

Yeah. And I would also just say, like, you don't even have to read the whole thing. Sometimes you just need to read a section. It's like, you know, you get what you need.

Yeah. It's not a novel. You don't read it from front to back. You read chapter four, and then you go back and read chapter two, and then chapter 12. Like you read it as you need it. Right?

Yeah, absolutely.

Right. So interesting. Those. We also, if we go back to the whole Baby Bathwater, Gino Wickman and I were both in two different mastermind communities together. We would sit at the same table as peers. Vern Harnish and I have been in a mastermind community sitting as peers. I've been in burns. Like, when you plug yourself into different mastermind groups, that's where a lot of the learning can get supercharged too. Right. Which is why you were at Baby Bathwater.

Awesome. Very cool.

Yeah, it's all good stuff. So you hired your wife.

Yeah.

Awesome. And again, super high trust factor coming in. Right. What are some of the highs and lows of working with a spouse or a sibling or family member?

The lows are that you talk about work sometimes when you shouldn't be talking about work. That I might get into a heated debate because I'm really, you know, I feel strongly about something that she might not. And when it's about business, I'm really good at separating the relationship, marriage and business almost to a detriment towards the marriage because it's so separate that I will literally be like, no and. And. And super argumentative and fight for, you know, my other baby. So I think it can get contentious. I found a way around it to a certain degree in the sense that I made sure she didn't report to me. I made sure she reported to my business partner so that there would never be this conflict of, you know, who's the boss here? She's the boss. Always. Even at Unbound, she's the boss because I'm not her boss. And I think we found a way around any, like, issues by avoiding talking about work after a certain hour. The lows are, yeah, there can be some contention with the differing of opinions and expectations because you have a relationship that is romantic, and then you. You're mixing that with a professional one, and. And you might be butting heads in the professional one. I think the highs are that she's actually just amazing. That was such an amazing hire. I didn't want to do it for a while. Dan really wanted to hire her, and I just was thinking, I don't want to mix this up. She's got a good career in pr, and then I think she was just working really hard in PR and harder than I'd like to see. And. And we're like, just join this company. You'll have a better life. You'll work with friends, and we're not going to grind you. We're going to build something cool together. And just seeing the value that she brings to her company, I mean, is. She's just a machine and a beast for. For a lack of a better word.

Is she working in PR for I'm.

Down Marina, then she manages. She's the brand director, and on top of that, she manages the PR team and, you know, the people that hire the influencers and the affiliates, and pretty much just an overall marketing brain with the leadership team.

What about some of the other highs and lows? And then I want to talk about some of the more operational stuff again.

Being able to work with people that I'm already close with, I think is probably the biggest high. The team that we've hired over the course of the past few years, you know, just having people that are smarter than me. You know, when the company first started, it was Dan Dema and I. We were doing everything, and we were the smartest guys in the room. And I would say, you know, if you put all three of us together, we're kind of smart, but, you know, we're all not that smart. So one of the biggest ties is just being in a weekly planning meeting and being the dumbest guy in the room. I think that as bad as that sounds, I like being the dumbest guy in the room. I like seeing other people that are just sound super smart now running the company because it's just a good sign of things going in the right direction. You know, aside from the actual the company's growth, I can't think of anything else that comes to mind other than just working with people that I'm a big fan of and them just being amazing at what they do. I think the biggest low for me was probably is probably like a low that was very consequential, and that is that I did everything. I did everything from the get go, and not everything, obviously, you know, but I did a lot. And as the company grew, it was hard to kind of let go of those things. So the company grew and the work got more crazy, and I continued to do a lot. And I would say it's put me into a few pickles where I didn't know how to get rid of certain amounts of things that I do. And, you know, sometimes I'm still at that point. I think that I've kind of set myself up for being in a difficult situation where now I'm kind of screwed and I need to figure out how to hire for several roles.

It's a big step for sure for entrepreneurs, but also for CIOs. As we scale companies, and especially in the stage from the 10 to 30 employees and even 30 to 100 to let go. Yeah, because we're either good at it or we're running 100 miles an hour, or we don't want to slow down to train somebody, or we don't have the depth or competence inside of our team. How did you learn to start letting go, and what did you start letting go of first? And I remember one. I used to send out our weekly results, kind of our dashboard to all of our franchisees at 1-800-got-JUNK. And every week that I would compile it and send it out. I think at the time, we only had about 30 franchisees. There was always a mistake. It wasn't formatted beautifully. But I was so busy, and one of my guys asked if he could do it. In the first week that Centauri did the dashboard, it was way more beautiful. There wasn't a single mistake. I'm like, what have I been doing this for? Like, why was I doing all this work? It was stupid.

Yeah. I mean, well, so to answer the first part, how did I let go? I think you just had to. But I'm pretty sure I read it in a book or two that that's kind of the best path forward. And I learned that it's better to have somebody try and make a mistake. You know, so long as a mistake isn't going to blow up your business and you course correct and eventually you do that 30 times or so, then you've trained somebody to do a job that you shouldn't have been doing in the first place. You know, I think I learned, you know, probably a couple years ago that that's a valuable direction to go in. So I give people tests all the time and I just make sure I'm available, provide guidance on it. And I've become better at being okay with things sucking. Now, that's not to say it's in every part of the business. Some things I, you know, I can't let go of just yet. But that is, that is the method is, is finding people that you can trust that care so you can trust them to do a good job and making sure that you're giving them a project where, you know, if they make a mistake or if they fail, that it's not detrimental to the whole company. So you let them fail and then you help them and you course correct and you tell them how you want it done differently the next time and you measure those things and you come back to them and maybe you have one on ones where you can kind of touch base on things and see how they're improving. So I've certainly gotten better at letting go. And I think that's kind of where my direction has gone in the past several years of the company is as we've hired people to start to do the things that I or my business partners have done is making sure that I've set up some sort of systems for onboarding them, training them onto new tasks and giving them feedback as some sort of decent cadence.

I love your approach with that and mindset. I don't remember where I heard this before, and I'm going to credit a mentor of mine who was being groomed as the second in command at Starbucks. Years ago. We used to do monthly calls together, quarterly full days. And so I'm going to credit Greg Johnson, but he said your to do list doesn't have your name on it. It's just great. It's just stuff that needs to get done. I'm like, oh. He goes like everything that's on your List, you can delegate all of it. It doesn't have to be done by you. And that was a really interesting thought process for me of just realizing if I can make a list and then delegate 80% or 90% of it, it's getting done.

Yeah. It's also, I think you look into the future and you think, do I see myself or do I want to see myself doing these things? If the answer is no, then you clearly need to have a plan for not doing them.

So. Yeah. So you guys are going to double the size of your company again. What are you going to be moving away from next?

That's certainly the conversations that we've been having. I'm not too sure, to be honest. There are a few options. I'm pretty heavily involved in product development, inventory decisions, managing the web team. I even manage photo shoots and probably a few other things. I feel like additional operational help is probably going to be what I need. Probably someone like a product manager. I don't want to say I've made up my mind on that just yet. I've sat in various bars and just wrote so many lists of like, you know, how this can be structured and my answers keep going to the same place. But we, you know, we've enlisted the help of a third party to kind of come in and look at our systems and actually help with auditing the operation. Because even though I, I manage the operation, I think when you're a bit of an octopus and you, you got your hands in a lot of different pots, maybe you're making a few mistakes and you can't even see them clearly. So I, I guarantee I have a few sloppy processes in there that are probably done in a less than optimal way.

Yeah. Somebody else told me one time to get, always get a second opinion on expert advice. Is it great because it's, it's hard. Right. Because we turn to these experts and consultants and they're seeing it from their lens and, and sometimes it is nice to triangulate and get it from a third perspective too. So you led into a question that I had around fulfillment. Are you guys outsourcing all of your fulfillment? You don't manage your own warehouses or do you?

Oh, yeah, we manage our own warehouse. Absolutely. Yeah. Right here in Canada.

Why do you do that?

I don't know why we decided to do it from this, from the get go, but we like having the control. We've considered potentially not doing that, I think, in the past, but I think when you manage your own warehouse, then you, you can do so Many, you know, special things for customers that you can't do if you're using something like a 3 PL, you know, you can message someone on your team and you're not just a ticket in some other company's customer service system where, you know, your request is being processed just like any other customer. We literally can control the customer experience, the packaging, everything.

Yeah, it makes sense. It's interesting. Kendra Scott, who I've known since she was just starting in her business, managed and oversaw her own warehousing for years as well. For that same reason. She really wanted the high touch customer experience. And we did the similar at 1-800-got junk. We ran our call center instead of outsourcing the call center. We wanted that high touch with the customer. So it makes sense why people are so happy.

We had very little say in how it's run. When we first started, you know, we worked out of a storage space and you know, we kind of set up the. That's how you print a shipping label, you put it on the box and whatever. It was pretty basic. But as the company's grown and we've gone from, you know, one space to a bigger space to an even bigger space, we've left it in the, the person who manages our warehouse to actually build the systems himself. And with very little oversight. You know, I would say it's more recent that we just kind of started becoming more involved in that because we're like, you know, maybe we should be a bit more involved. But he's just, you know, we gave someone autonomy and, and accountability and he just figured it out on his own and, and with very little help from us.

How about inventory and inventory numbers? Do you follow any metrics or any ratios or like any key numbers that you look at for inventory?

Yeah, I don't think we have a good grasp on what a good number is in terms of like, you know, we follow inventory turns or inventory turn ratio. I don't think we have a good grasp on what good is, but we track it so that we can start to see the patterns and slowly understand what we think good is. But that is, that is the main inventory number that we're tracking.

So I'll give you, I'll give you one that I learned years ago and I'm not going to ask you to tell me your numbers. I learned about it from a couple of people that built billion dollar retail brands. It's called the 240 number and it's the number of inventory turns multiplied by your gross margin has to be greater than 240. So let's say that your gross margin is 50%, you have to turn your inventory five times because it's five times 50 to at least be 250. Or if your margin is 30%, you got to turn it eight times. Or if your margin is 80%, you got to turn it three times. So Walmart as an example operates with like a 15 gross margin, but they literally have a can going out the door and a can is being put on a truck.

Right, right.

So yeah, take a look at your 240 number.

Interesting.

Yeah, I learned that through a mastermind community 20 years ago and it's always stuck with me. And I've, every time I've worked with kind of behind the scenes with any supplement companies, Amazon brands, that was a big number for them to wrap their heads around because once they did, then their cash really started to help them scale because the often we can have too much sitting in inventory that we don't need or not enough when we're selling out.

Yeah. Interestingly, I'm a gut feel inventory guy. Now, mind you, I don't actually do the inventory. You know, we have, we have an inventory planner that does that. But I'm the, the person that's signing off on it and when I look at it, I look at it like a 5 year old would look at it. I'll just be like, you know, I. That's one of our most popular items. Yeah, I feel that number's too small.

You know, the gut feel works kind of like the swimmer who's four and goes down to get the penny. If you're wrong, you're okay. But gut Feel is a 50 million dollar company or 100 million dollar company can be run. You run out of oxygen when you go down to 140 scuba diving, you die, Right? Yeah, yeah. Gut feel has to change. What advice would you give yourself back then that you know to be true today?

Oh, just don't be so mean. There's a reason why I'm in the role and that I do. I'm a big doer and I think I very organized and like things a certain way. And I think that as I've gotten older I've realized that that stuff doesn't work so well in long term. It does a lot of damage and you have to do a lot of undoing to rebuild trust with people and get what you really want out of them.

That's amazing. Well, from everything I've seen about you today, I think you've certainly learned that lesson and let that one go.

So I hope so.

Andrew, thank you so much for sharing with us. Really appreciate you being a guest on the Second in Command podcast.

Sweet. Thanks so much for having me. It's so cool.

I would not rush any type of communication interaction with key employees. I've learned to take time in the old days. Ready, fire.

Aim.

Ready, fire.

Aim.

One thing to the next, to the next. What happens with that is you lose connectivity and you don't establish relationship.