He Went From $0 to $100,000,000 in 2 Years Selling Deodorant... | Moiz Ali

Hey, everybody.

Welcome back to the channel.

I'm Ryan Daniel Moran.

Before we jump into the interview with Moise Ali, I want to give you a warning about the content in this video, because this is a video that is a Q and A with Moise Ali, the founder of Native Deodorant. And Moyes started this business and had a hundred million dollar exit in about 18 months after starting the business. And that's awesome. Like, it looks great on a headline. It looks great as a case study. It makes Moyes look like a hero. But oftentimes, as entrepreneurs, when we hear a case study like that, it activates our own imposter syndrome. It activates our own doubt because someone else has killed it so much so.

Quickly, and we're not.

And it can be tempting to listen to a case study like this and say, well, man, that guy killed it so quickly. What am I doing wrong? And before you have that reaction, I just want to call it out because sometimes that happens in me when I even interview some of these people on stage. And what you'll hear Amoise talk about in this Q and A is the fact that he started the business with like a few hundred bucks and that the early stages of the business were him just testing different products to find out what worked and realizing that in the early stages of the business, the reviews weren't that good and that he stayed absolutely tunnel vision, focused on doing one thing extremely well. Selling a $12, a $15 product. That's the real punchline here, because the headline of this video, the catchy part of this video, is how somebody that you didn't care about before made $100 million in 18 months. And that's catchy because of the promise of. Of making a lot of money really quickly. The takeaway, though, is the reason he was able to make so much money so quickly is because he was so focused on creating something great that was in service to somebody else that ironically solved a problem that he had. Rather than hear this talk and think about what are the tactics that Moyes used to have this big exit? Notice the mindset that he had going in. What's a problem that I have that I'm annoyed with in the world? How can I create something that's better.

In the world and how can I.

Do it sustainably in a way that creates value for somebody else? Sometimes the nine figure answer is right under our nose, sitting in a problem that we are facing and dealing with right now. And our own imposter syndrome prevents us from seeing it. And so we Start looking at the hack and the trick that worked for everybody else. But your nine figure idea, your hundred million dollar idea is probably inside of you right now.

And I'd be honored to help you.

Find it in one of our trainings or just in this content. So I wanted to share that with you before we go into this case study with Moise Ali on how we made $100 million in zero time flat. All right, let's jump in.

Yeah, of course.

Thank you.

Welcome back. Thank you. So we're going to do this one.

A little bit differently.

We're going to do a blend of fireside and Q and A.

So meaning, like, I'm just gonna call on some of you when, like, so mic runners, just be ready for an hour of running around. So we're gonna do this very interactive.

Because.

You sold native in 2018, is that right?

At the end of 2017.

Okay. So you've had a couple of years.

To let the dust settle on a big exit.

Sure.

And I'm curious, we often talk to people who, like Sam Parr this morning had an exit like three hours ago. Right. I don't know if the wire's cleared yet. But you've had a few years now to let that settle. And you've also let it settle during a time when the industry has just gone nuts. Valuations are crazy, new businesses are coming out of nowhere. There's all kinds of things happening. I'm curious what your perspective is on the e commerce industry right now, being a few years post exit after all of this change has happened.

That's a great question, and I think the answer is twofold. 2020 was probably the best year in the history of e commerce for anyone who was in the industry. Facebook CACs were low. People were buying everything online. You know, it was just the growth of e commerce. There were incredible tailwinds to e commerce. Covid kept everyone home, so everyone was purchasing things on the Internet. I think 2021 may be the first year I've been in e commerce since 2012, so almost a decade. 2021 may be the first year ever that has genuine headwinds to e commerce. From evaluation perspective, things are still very frothy and people are getting multiples that were unheard of five years ago. But, you know, container prices have gone from 2000 in 2019 to $25,000 per container. Containers sit at ports and never get unloaded. And in the last three to four months, Facebook has struggled mightily to deal with changes to iOS 14 and a half. And those struggles are getting worse and not better. And I think that as much as brands have wanted to not rely on Facebook for customer acquisition, brands sub $10 million have and should have in the past few years relied on Facebook. That was the channel of customer acquisition. You know, brands that are like, I'm an investor in a bunch of brands that do hundreds of thousands of dollars a month, and I'm an investor in brands that do tens of millions of dollars in revenue a month. And the brands that are gotten to tens of millions of dollars of revenue a month have really been able to bear it well because they're diversified when it comes to things like selling through brick and mortar stores or.

Even advertising channels and outside of Facebook. I think the real hit to Facebook that happened in April is getting worse right now. And I'm just not sure what the path is to getting on the other side. That path could be multiple things. Facebook launching its own phone. It could be Facebook working on a deal with Apple so that they resolve these privacy issues. But right now there've been a lot of headwinds and if you've been reliant on Facebook, it's been tough.

I didn't expect you to go that way where there's headwinds and we're not sure how it's going to shake out.

Yeah.

Have you seen any of the brands that you're invested in or advise navigate this well, and if so, how are they doing it?

I have. And diversity is really the answer.

If you're at a certain size, certainly diversity when it comes to sales channels and brick and mortar stores. I'll tell you, when we sold Native, we were not in any brick and mortar stores. And I think that if we hadn't gotten into Target or Walmart or CVS or Walgreens, we would have probably plateaued in a 75 to $100 million range. Like, I don't think we could have. I don't think there would have been a glass ceiling there that we could not break through if we didn't diversify channels. And you know, Amazon was part of that diversification and probably gave the brand a $20 million top line boost. But you know, at Target alone, native sells $60 million of product A year. And you know, that's a huge diversification channel that doesn't rely on Facebook ads to drive sales. Like, we have shelf space and we get more shelf space and we can work with Target to drive sales in stores. And that diversification really allows the brands that are that large to survive. I think if you're a brand doing under $10 million in revenue a year, you're going to have to focus a lot more on retention, which is how can I keep my existing customers and how can I get them to purchase again? And so if you're in the mattress business, you're probably it's going to be tough. And then I think it's a function of can you diversify acquisition channels? And you know, people are begging for new acquisition channels to exist. Everyone was hoping that with Snapchat and in some ways it was. Everyone was hoping that was a Pinterest. In some ways it was. But to date there has not been a real competitor to Facebook. TikTok may be that competitor. You know, a year from now we'll know. But I think right now it's too early to tell.

You've been particularly hard on mattress companies in some of your posts. So you've picked on Casper a few times.

What is the lesson that you are seeing that company or just mattress companies as an example?

Yeah, I've been harder on Yacht PO than I have been on mattress companies. But with mattress companies, you know, it's a tough business. There's a lot of competitors. You're selling a commodity product or virtually a commodity product and you're trying to acquire customers online in an industry where tax are super expensive and you have no retention. Like I think when Casper IPO, they said that they had something like 12% of customers purchase from Casper again, not purchase another mattress again, but just purchase from Casper again. And so that's not a ton of people in the first place that are purchasing from you a second time. So you really have to make those first order acquisition economics work out. I'm not sure if Casper has done that in a way that represents a meaningful long term viable business. And I think their market cap suggests that like they've raised $400 million traded a $200 million valuation. I bet there's multiple people in this room, myself included, who have thought about taking that company private and sort of saying, okay, let's fix this business in a way that doesn't rely on public markets to support your market cap.

You've brought up diversification as being the way kind of through the industry changes right now. But yet I've also heard you say that when you were building native, you were not diversified at all. Yeah, right. You were just all in on one platform. And of course the game's changed a little bit because the way you were acquiring customers has adjusted. But there seems to be a dichotomy there.

Yeah.

So would you comment on that?

Yeah, sure. That was like, you know, part of the reason that we sold the business was that I was like, we're reliant on Facebook and only Facebook.

That was one of the reasons you sold, certainly.

Yeah. I was like, all of our chips are in this basket. I mean, look, there was some diversification. We were running some Google Ads, we were running some Pinterest ads, but, you know, we were spending a million dollars a month or like, you know, somewhere around a million dollars a month on Facebook ads. It's a lot of money. And, you know, if things had materially changed on Facebook, if what happened in April of 2021 had happened in April 2018, there would have been a real body blow to the business. And so our diversification or like, you know, part of the exit strategy that I had was, okay, we can build this business, make it a meaningful business, find a home for it, and let it grow through channels that I don't understand as well as digital advertising, through the targets of the world and through the Walmarts of the world. And so that was part of like, that wasn't part of the strategy when I launched the business, but certainly part of the strategy when we sold the business was we're reliant on one channel. The way to diversify is to go into brick and mortar stores. The way to do that is through a company that really knows how to do that well.

So what would you do if you were starting today or you had a low seven figure? But I'm thinking of you right now. You have a great, you have a great plant based, high protein pancake mix.

They're fantastic, by the way.

I loved them.

I ate all three bags already.

What's the brand called?

Loop Topia.

Okay, gotcha.

Wow, that's good. It's based off of some weird legume I've never heard of that works great in a pancake mix. So you've got like, you've got a business great product that is like on its way up. It sounds like you're saying the same playbook that got native to where it is may not be the playbook that you would use today. So what would that be?

Yeah, it would probably be very similar to that playbook. Still, to be honest, I just don't know how long that playbook will get you and I don't know if it'll get you to the same spot that it got native to. So for instance, I would diversify into. We didn't sell on Amazon before We sold the business I would get on Amazon earlier today. Whatever gets eaten up like, you know.

In the next six months, I can imagine myself selling all of my Facebook stock and taking all that money and putting it in Amazon stock. The tailwinds to or the headwinds to Facebook are tailwinds to Amazon because it's harder for people to discover new brands on Facebook and so they go to Amazon where they do their shopping. So I would diversify into Amazon much earlier than we did. It took us years to do it. I would do it as soon as I thought I had product market fit and a way to like genuine reviews or when I sent out the product, I would get genuine five star reviews and didn't have to gain those five star reviews. So that's probably the first thing that I would do.

So just to clarify, are you saying that you would have started on Amazon as a platform and then pivoted over?

No, I would have still started on a direct to consumer channel because it allows you to figure out, hey, do I have something wrong with my product? How do I iterate on this? And then once I thought I had product market fit, I would shift onto Amazon.

I'm glad you said that, because Amazon can be a bit of an illusion.

Of product market fit because you can game your exposure. It's harder now, but you can show up enough to have 50 to 100 people find you and buy and you get caught in this trap of you're not really going to break out because you just have a little bit of a foothold in the marketplace and you can get good reviews and sometimes you can game your good reviews and you can kind of hold on to that, but you never really break out because it's almost the illusion of product market fit. And you're saying if you can get product market fit according to a cold acquisition strategy, that will translate over. But the opposite is not necessarily true.

Definitely. And like, you know, you understand repeat purchase rate when you're selling on your own website. You understand cadence of repeat purchase rate. You understand why you're getting five star reviews and why you're getting one star reviews. And you know, you can work with people to try and figure out how do I turn this one star customer, how do I make this one star review a five star review? Do I just work with this person and say, hey, I'm going to send you more product because we're iterating on our formula until you become a five star customer, or is there something else that I need to change about my Business in order to improve. And so I'd still start with direct to consumer. That's really the only communication. It's the only way you're going to be able to communicate with a bunch of people, hundreds or if not hundreds of thousands of people at the same time, and get product feedback. And once I had that, I would shift to Amazon much faster than we did at Native.

When you started Native, you were, you were basically responding to your disappointment in Toms.

That's right.

So you were just disappointed in the amount of products in the marketplace and their quality. Today it seems like the menu of options has widened very, very quickly. So what spaces are you interested in right now? When somebody comes to you with a pitch deck or you're just looking from a consumer standpoint, what industries are you looking at now?

You know, I'm an investor in a bunch of businesses that I have no idea what they're doing.

So for instance, I'm an investor in this business called pepper. It's wearpepper.com they make underwear for smaller chested women. You know, I've never tried the product and I have no idea. You know, and these people, like the founders came to me and were so green the first time I remember the first time I met with them, it was like, it was funny except that it was actually happening. You know, we started talking about retention and they're like, we don't know what retention is. And so I was like, okay, think about how many people purchase your product again. They're like, that's not something we've been paying, paying attention to. I'm like, that's something you gotta look at. And I'm like, this is how you should think about it. Like, you should think about it in terms of if somebody purchased in January 2021, what percentage of those customers have purchased again? And a lot of times people will talk about retention and they'll say, 30% of my revenue this month came from returning customers. I don't know if that's good or not. Like, that doesn't mean anything to me. What percentage of your customers from January 2021 purchased again? That's a number that will mean something to me. And so that happened like 18 months ago when I made that investment. And then we have these board meetings every month. And like six months ago they were just like, boys, you don't understand these analytics any longer. They were so on top of their numbers. They were putting me to shame in every single instance. I'd be like, what about this? And they're like, We've thought about that. Here are the three things that we've done as a result of that. You're thinking about what we did six months ago. You guys start thinking about the future. And I was like, wow, these girls are fantastic at what they do. They've grown their business and, you know, it's wonderful to see them go from we have no idea what retention is to Moyes, you dumb fucking idiot. You don't understand these numbers. Stop. Stop getting on fucking calls with us. And I saw that all in like 18 months. And I was like, wow, these are the entrepreneurs that I want to get behind that.

That's exciting. As an investor, when the entrepreneur starts to surpass you.

So much fun.

What are they looking at that's different. Different than what you were tracking when you were running Native.

They were just looking at top line growth. They're like, okay, we did $100 in sales yesterday. Today we did 200. Things are going well. And I'm like, well, did you spend more on what did you do to get that extra amount of sales?

Looking at retention, certainly, if you have a consumable product is the most important thing you can do. At Native. Our first few years of customer acquisition were incredibly profitable. Like in 2015, I think we were acquiring customers at 2 bucks a person. In 2016, it was $4, and in 2017 it was like 6. And so in all of those, we were profitable and immensely profitable. And so people like, you know, when our retention, when our retention was bad because initially we launched and our product wasn't very good, I was like, okay, this sucks, because everyone, every single customer service email I get is somebody yelling at me, but I still made $4 on this person, so maybe I should, like be okay with this email. And so I was like, you know, I was just like, okay, we're still printing money even though our retention sucks. And once we got our retention to a place that we thought was good and turned out to be best in the category, you know, aside from the fact that we were still printing money on new customers, the returning customers we were making even more money on because we didn't have to acquire them again. And so that was what really unlocked our business and unlocked the growth to the next level.

I want to ask you a question that someone kind of cheekily asked in one of my YouTube videos when we announced that you were speaking here. This person said, moise ali has had $100 million exit.

Yeah.

And he invests in all these things. What the hell is he doing at the capitalism Conference.

What the hell is he doing at the capitalism conference?

This is boys. I just want to know, now you've had all this, what draws you back to like the starter entrepreneur and like the person who's still scaling from seven to eight figures?

Yeah, that's a great question. I guess there's a few answers. One, conferences like this, I hope they give you energy. Like, whenever I attended conferences like this, I always got super pumped. And like after a conference like this, people like, there'd be dinner and I'd be like, fuck dinner, I'm gonna go home and work. Because right now I've got the energy to do it. So they still give me that type of energy. And two is like, I learn a ton when I'm at conferences like this. Those Pepper, the girls who run Pepper taught me are teaching me, like every time we get on a board call, I'm the one who's doing the learning. I don't think they know that yet. And when they do, they'll stop, they'll start canceling those calls. But like, I learn a ton on conferences like, conferences like this. Like, what's working for people? What are the strategies that are working, what isn't? Is everyone else experiencing the same Facebook issues that everyone else I know is? Or are there people that are immune to it and why are they immune to it and what's scaling? Has someone figured out, OK, TikTok ads are going to work because the pixel's great, they're figuring out targeting. When we launched on Facebook, lookalike audiences were amazing. We were lookalike audiences only and Facebook desktop only. And we'd meet with our Facebook account reps and they're like, you dumb idiot, Facebook is all mobile now and you're the only company still advertising on desktop. And I'm like, maybe, but it's working for me. And then it stopped working. And then we were mobile only because what they said was right six months after they were right after they told me that. So they said that in June and by December I'd seen the effects. But in June, desktop was still printing us money. And so only at conferences like this, speaking to like minded entrepreneurs who are in your industry or in your category, can you figure out, okay, what is working with businesses and what isn't and what should I be doing with my life for the next 10 years as a result of that?

So two follow up questions to that.

One, it sounds like for you, even after being through it a couple times, the fire still burns. The itch still itches.

Yeah, I was having dinner with somebody yesterday and they were like, you got more money than I do. And money doesn't even affect my life that much. What are you doing still starting businesses? And I was like, that's a great question. But the reality is making money is really, really fun. And more fun, I think, than it is having it or probably spending it. But that's like the journey that I really enjoy. And I figured that out about myself and now I'm like chasing that.

Yeah, I completely get it. And so you said sometimes you asked the question, like, what am I doing with myself for the next 10 years?

Yeah.

Once you have had a nine figure exit, is it harder for you to answer that question than when you were starting out just trying to make something happen?

No. Yes, it's much. I have no idea how to answer that question any longer. And I don't know how I would go about trying to figure out how to answer that question. Because before it was a lot of like, okay, I want to make money so I can buy a nice house, take care of a family.

Go on vacations. And now I sort of have the money to be able to do that. But there's still, you know, like, Peter Thiel tells this story where he's like, he sold PayPal. And he's like, after I sold PayPal, I got really depressed because I ended up going from having 200 emails a day. Like, you know, the CEO of eBay would be emailing me, asking a bunch of questions to the only email I'd get would be 20% off at J. Crew. And that's basically, that's so true. Like, I sold a business before I sold Native and I felt the same way. I was like, really depressed because I was like, I went from people caring about, like, people wanting to hear back from me to nobody ever emailing me. And I don't think it matters who you are. Like, once you sell that business and you're out, you're out. And whoever you were then you are not any longer. And so you've got to go and find that passion. And for me, that passion is building businesses.

And so that's what I like to do. Money or no money.

Money or no money.

Yeah. And that's like, I guess having money or not having money, I still like to build businesses. And, you know, everyone's like, oh, I wish everyone could have money so that you realize that it's not all that it's meant. Like, you know, you think it is before you have it. That's so true. I was I really thought that was a lie. I was like, people are lying. They just have money. They don't want me to have it. They were not lying. And that's really disappointing.

I mean, once you have the house and the car, like once you have crossed all those things off the list, the marginal utility of dollars is very low. Is low. Like you've either got to have a much bigger. A much bigger dopamine hit in order and it's hard to keep topping what you did.

Yeah.

Or there has to be something else that is driving the interest and the obsession to keep you focused. So what is that for you?

Yeah. I mean, it's not like I don't want a private plane and I don't want a yacht. Those aren't the things that drive me for. It's like building businesses and getting to hang out with people who have those, who have that passion. Like, the first business I started, everyone wanted to leave at 6pm including me, because it wasn't going very well. But at Native, no one felt that way because the business was going well. And it felt like we could take over the world. And it felt like nothing could stop us. You know, we'd have a product manufacturing issue and, you know, we'd get over it. We'd have a scent that everyone hated. We'd get like, nothing could stop us. And that was what was really amazing about the business. It just felt like we were the Roman Empire and invincible. And that's the feeling I'm chasing.

You had a team of six.

We had a team of eight when we sold the business.

Okay, that's awesome. And then you got acquired by Procter and Gamble.

Yep. Which has a team of like 197,000.

Okay.

Right.

And I know that because I called up Capital One one day and I was like, I want to increase our credit card limit from 40,000 to like $60,000. And they're like, you know, where do you tell us about your business? And I was like, my business is owned by Procter and Gamble. They have a, you know, they're higher rated credit than the U.S. u.S. Treasuries.

And they're like, okay, how much business, how much revenue does Procter and Gamble do? And I was like, $66 billion. And I heard this woman typing in these numbers in her computer. And then I was like, she's like, how many employees does it have? And I was like, 197,000. She's typing this in. And I was like, so can I get the extra $10,000? And she's like, no, the system says you are not approved. And I'm like, this is, you know, Procter and gamble has a $300 billion market cap. I'm asking for a $10,000 kettle on it. And she's like, no, we can't do that. I was like, okay.

How do you respond to something like that?

What was different?

I mean, it's such a different experience having a team of eight.

Yeah.

Scrappy and young and things are flying around all the time to like the biggest infrastructure.

Yeah.

You being a cog in the wheel, essentially. Big organization.

Yeah.

I imagine that the business you're excited to build next is more on the Native side.

Definitely.

So what about anyone who's worked at.

P and G for a day would be like, yeah, I'm interested in the other business.

Help us understand the difference there.

Sure, yeah. I've got a bunch of great examples. So the first is when we were acquired by P and G, we were selling our formula of Native deodorant which we'd iterated on ourselves and we don't know what we're doing. I was a lawyer before, I don't know how to make deodorant. And so three P&G chemists came up to me and they're like, we've been working on this aluminum free deodorant that we're going to put in Native. It's going to be way better than Native's formula. Your repeat purchase rate is 50%. Now it's going to be 75%. And I was like, you know, what do I know? I've been doing this for two and a half years. These three guys have PhDs and have been working in deodorants, formulating deodorants for probably 60 years between the three of them. And so I was like, great, let's do this. I want a higher repeat purchase rate. We create this new formula, we start manufacturing it, we start selling it and you know, what we do is I've got a little bit of caution. So I'm like, we're going to a b test your formula against our formula. So we're going to send out your formula to 5,000 new customers and our formula to 5,000 new customers. And we're going to monitor the reviews and repeat purchase rates. So it'll take us about 8 weeks to get feedback on this.

Within like 4 weeks when reviews are due. When we start sending out emails asking for reviews, it's clear our formula is destroying their formula. And you know, I'm like, what the fuck Happened here. You've got 60 years of experience. I can't even, like, I don't even know, you know, I know what's in our deodorant. But, like, you know, I'm not a chemist, and I certainly don't understand the chemistry behind. It just works, and people tell me it works. You guys actually understand chemistry, I think, and don't know how to do this. And that was what was shocking to me. I was like, you know, we've got a bunch of scrappy people who have no idea what they're doing, but we're willing to think outside the box and test ingredients and be satisfied with the outcome. These guys want to run their process and say, hey, we've got a bunch of chemists that have come up with the best formula. Here it is. Let's go sell it.

This is such a trite question, but there is a perception that once you have the kind of success that you have, there's like, you never leave the mountaintop.

You never leave the mountaintop.

So what's a bad day like for.

You now these days?

Yeah.

Oh, I have bad days. Well, let me tell you a couple more P and G stories. Oh, yeah, please, that question. There was another time where my manager at P and G was like, show us all of your Facebook ads and let us comment on them. And I'm like, you know, I've spent. I personally ran all of native's Facebook ads until basically the moment I left the business. And so I've spent tens of millions of dollars on Facebook ads. And there's a decent chance that, you know, I run an ad and I'm still wrong. But this guy who's, like, telling me, hey, I want to change your colors on this Facebook ad, I'm like, first, I've run tests, and this is the color that works. So I don't know why I would change it just because you're saying it. And second, you've never spent a dollar on this thing. Where are you coming up with this authority? I wouldn't lead troops into battle just by. I wouldn't join the army and be like, great, I'm ready to. I'm qualified to lead troops into a war. I need to learn. And that's what you're doing in this situation. And he's like, no, you need to change your ads this way. And I was like, you know, I don't have any desire to move up within the P and G organization.

And that was a real blessing because I was like this. You guys have an amazing organization. And to be honest, I'm a huge P and G shareholder. I love, I think what they're doing is incredible. And they do have genuine innovation, like, aside from the deodorant issues, you know, they've created Swiffer and Tide pods and I do, I do admire that. But I was just like, you can fire me if you want, because whatever, you've already paid me a bunch of money, so I don't mind. I'll figure out something to do tomorrow. But I'm not going to change my ads the way you want them. These ads work because they work and I've tested them and I put money behind them. But I'm not going to make a bad decision because you want me to make a bad decision because you don't like this color. So there was a bunch of that at the, like, you know, sort of within 18 months of me being there. And that was a little rough.

Makes sense. I'll return to my previous question in a second. What a refer to. But first, I'd actually like to know now that you've seen both sides of that. You've seen the chaotic startup, you've seen the big infrastructure, now you're sitting in the investor's seat. You've invested in a bunch of companies, you advise a bunch of companies. It gives you a great contrast between, between the two. So what are you betting on when you're coming at it from an investor standpoint?

Good question. There are instances where, like, you know, most investors will be like, we bet on the people and not the company. You know, I think there's some truth to that. But a lot of, like, I think about product a lot more than I think other people would think about product. Like if Mark Zuckerberg was like, hey, we're going to start urinating in bottles and sell this to customers, I'd be like, I don't think that's a good idea. I'm going to pass on that investment. Although you're Mark Zuckerberg, and so really I think that I focus more on product than I think a lot of other investors do. That's not always the case.

And generally I think, especially with E Commerce, you should be able to find some product market fit before you're raising a ton of money. And that doesn't have to mean that you've actually sold $250,000 worth of merchandise, but some people will be like, here's this idea I have. I want to raise money. The first thing I say is, why don't you start a website which will cost you virtually nothing and run some Facebook ads or do whatever advertising strategy you were hoping to do to try and get some product market fit and show that this business will be successful. I was having brunch with somebody who works at a company called Figs. And if you're not familiar with Figs, Figs is like, basically a square that nurses wear on a daily basis, except they're much nicer than traditional scrubs. And he was like, the way they started, the girls who started this business were like. Two of them were at lunch one day. One of them was a nurse, and the other used to work at Levi's. And she was like, your scrubs look terrible on you. Why don't you give them to me and I'll hem them so they look much better on you? And so that happened, and she hemmed the scrubs, and when the nurse went back to the hospital, all the other nurses were like, those scrubs look great. I want those as well. Can you get your friend to hem mine? And I'll pay her to do that? And that's how the business was born. Like, there was product market fit before that business was born. With native, we sold the first 50 units of deodorant before we ever had a single stick of deodorant in our hand. And, like, you know, the first 250 before we actually got the sticks, actually. And so we knew, like, I knew the business would work, or at least I thought the business would have some sort of legs before I even spent money on products. And I think in E commerce, it's one of those rare industries where you can do that. And so if you're launching something new, test it out before you spend a bunch of money. And when I'm investing and people are like, I've got this idea. I want to raise money. And I'm like, what have you done to show that either the idea is good or you work and you're not just lazy? And when people are like, well, here's my deck, I'm like, okay, this is where I pass, because you haven't put in enough effort. But other than that, I'm an excited investor. I tend to write checks more often than I probably should.

Understood. Now, it's my understanding that you acquired some business in the last year or so. I haven't heard you make much mention of it. Are you sharing this story yet?

Yeah, I acquired an Amazon business that was based in Florida, where all good things come to an end. And this business was run by an entrepreneur that was probably in her 50s or 60s and had a bunch of wealth already. She was a wonderful human being and a good entrepreneur, but she was like, look, I don't want this business to be a huge. I don't want to spend my time, I don't want to spend 80 hours a week on this business. And I was like, great, I want to spend 80 hours a week on your business, so why don't you let me do that?

So I bought business attracted you to this. Like this seems very random, Moyes.

Yeah, it is random.

First I sold native deodorant for $100 million.

Then I bought an Amazon based business.

From a woman in Florida.

That's right, yes. When you put it like that, it seems random.

So there's something else going on in this story. Tell us about it.

Well, you know, I bought the business and look, you know, she was like, I don't want to spend 40 hours a week or 80 hours a week on it. And you know, the day I bought the business, three of the top five selling products on Amazon were out of stock. And I was like, you know, how did that happen? And she's like, I told you I don't want to spend that much time on the business. And I was like, well, great answer. And so I put in charge a guy that I'd worked with in my past to run the business because I didn't want to operate the business either. It turned out like within a week I was like, oh God, this is hard. And so I look at Amazon sellers.

That just feel totally like vindicated right now. If Moist couldn't figure it out.

Okay, Amazon is such a, Amazon is a very different channel than direct to consumer. And if you're good at both, you know, hats off to you. That's really incredible. I was like, you know, like there were inventory issues, there was contract manufacturer issues, there were shipping issues, there was personnel issues, there were issues all over the board and so bought the business. And I put like, I'd worked with this guy in my past at my first E Commerce business and I tried to recruit him for Native for years and he was in business school and I was like, don't worry about business school. We're going to, you're going to learn everything you need over here. And he was like, no, no, no. So finally, you know, one of the benefits of having sold Native is that there's a little bit more credibility now. And so I was like, look, you should run this business. I know you're going to be good at it. We've worked together in the past. There's money to be made. I know there's money to be made. I've looked at the business and here's the clear path to doubling revenue. And I thought I was just doing a sales pitch and he agreed to the business. He agreed to take over the business and he has doubled revenue. And I was like, oh, wow. I thought I was just selling you on all these dreams that would not come true. And sure enough, he made all those dreams come true. So he runs the business entirely independently. We have a board call once a month and he's great at it. And, you know, he'll call me up and he'll be like, hey, I've got a container that's priced at this much is this market. Or I have a container stuck in the port of la. What should I do? And so. Or it'll be like, my Facebook ads suck. And I'm like, let me help you there. But it's pretty hands off.

So you acquired it, solidified it, and brought somebody else in to run it?

Yeah, I solidified it. By solidified. That's a very generous term you're using. I spent a week and a half being like, oh my God.

Let me get somebody else to run this business.

Was the intent to build it and scale it or was it more of just an opportunity that you decided to solidify?

I think it was more the latter. I don't want to spend all of my time building an Amazon business. I still want to figure out what I want to do with my time. And so I was like, this is a great opportunity. I do want to understand how Amazon works. And like, you know, there's a bunch of people out here that have had a ton of success on Amazon and I don't know how the thrasios of the world make a fortune. And so I was like, maybe this will help me learn that.

I'm sorry, we can have lots of fun conversations.

Yeah, I would love that. But really, that was what it was. And then I was like, wow, this is. I remember that week being like, God, what an idiot I am. But it turned out all right.

So it's interesting because I can hear.

You kind of dancing around this question of wanting to replace the excitement that was native, wanting to replace that excitement. And so you've planted these seeds in. You bought a bunch of real estate, you're investing in a bunch of companies, you bought this random Amazon based business. And it sounds to me like the itch hasn't been scratched.

Definitely. Yeah, it's A midlife crisis. But instead of Ferraris, I'm buying businesses.

Probably have a better ROI doing it that way. I would hope maybe so. That's interesting. It's interesting to me because I think.

Most people in your position would just.

Buy something and stick with it almost as a distraction.

And hoping and praying that they get passionate about it. But it sounds to me like you are walking into it and be like, this hurts. I'm just gonna bring somebody in for this and waiting for the pitch on the next one.

Yeah, I hope that's not the case because that sounds like I'm setting myself for disaster. So I appreciate you saying that because I'm gonna be on the lookout for it in the future. Really. I just thought the Amazon business was a good opportunity and a good price and a person who would not mismanage the business, because I think mismanage means that you can't do it. It's just that she didn't want to do it and that's perfectly fine. Like, not everybody has to try and build a 200 billion dollar business. You can be like, I've got kids and I've got a good life and I want to spend time with those kids and go boating and all that kind of stuff. And so I thought it was a good opportunity for me to learn and a good opportunity to buy a business at a good price and a good opportunity for like, you know. The other thing I thought about now is I'm like, can I buy businesses and hire CEOs to run those businesses? Am I good enough at attracting talent, retaining talent, and hiring talent to hire CEOs? I think right now the answer is yes. But I've only done it once and it was with somebody I knew for a decade before I hired them. So I don't know what the answer to that question is, but I agree that itch of me starting another business has not been scratched and I hope it will be soon. I just don't know what it'll be, but I am trying a bunch of things, but not. I'm dipping my toes in the water and not jumping in just yet.

Yeah, got it.

We have more to go through, but I want to turn it over to the audience for. We'll do two questions. So mic runners over here. We'll go to Jeff.

Hey, how's it going? Moyes.

Hey.

So I guess one of the things I'm really into is equity crowdfunding because it's basically like direct to consumer capital markets. Do you know what equity crowdfunding is?

You're doing equity crowdfunding. Yeah, I know what equity crowdfunding is.

What are your thoughts on that in terms of like a capital structure and raising capital for direct to consumer brands?

Have you already done it or are you thinking about doing it?

I do it right now, professionally.

What do you mean you do it professionally? You're the crowdfunder.

I raise money for companies you help raise money for.

Okay. Yeah, I'm not a big fan of it is the honest answer. And I was hoping it wasn't your job, but now I feel bad about that.

Why not?

But I'm not a big fan of it. Not because I don't like the idea of your best customers supporting you because I think everyone loves that idea and.

That should happen. That's a great way for your customers to evangelize whatever it is you're selling or making. I think the hard part about it is that right now it signals to the market that, that you don't know. Like nobody's willing to invest money except people who don't know how to invest money. And I think that's my fear. Like if I saw a business that had crowdfunded, I'd be like, why couldn't you raise $250,000 by going to the Ryan's of the world or the Moises of the world or any of the other venture capitalists in the world whose full time job it is to raise money? What is it that they didn't see in you that I am seeing in you, but you had to go to crowdfunding to do do it? And look there, I'm sure there have been businesses that have been successful doing it and that are successful doing just. I still think that it's a market signal that you're unable to raise money from, I don't know, better capital, for lack of a better word. And that gives me a little bit of heartburn.

Can I change your mind?

Yeah, you can change my mind by changing all of the other investors minds. Then you'll have convinced.

I would like to hear what, what.

Your response is to that.

Yeah, I'd love to be proven wrong.

Do we got time? I mean, I don't want to take a.

What, what?

I'm curious your response to Moises analysis.

Do you think that it signals to the market that it's bad, this company's bad?

I think there's a lot of problems in equity crowdfunding. If you look at the European and Israeli crowdfunding market, it's way more sophisticated, better infrastructure, cleaner valuations. But especially like our crowd out of Israel, probably like the best crowdfunding portal that there is. So beyond Meat was our crowd company. I think it's a great option for companies that are looking to build a path towards ipo because it allows you to build a retail shareholder base and tell your story in advance of the ipo. It allows you to meet your shareholder basis. There's a lot of really cool ways it can be done. I think in the US it's what.

Stage are you looking at when you're talking about that?

So you can, I know you're talking about very early stage, right?

You're talking about season.

He's talking about early stage.

I'm usually looking for companies that have traction at some point so that there's, there's a vehicle that can take in growth capital. So I'm usually not doing pre seed stuff. So I'm doing stuff that's going to be typically in a 7 and a half to 20 million dollar round. And a lot of times it's still stuff that VCs probably aren't going to fund because they're just not an enterprise SaaS company.

That is your concern, is it not?

Well, my concern is that like nobody. Yeah, I mean VCs don't just fund enterprise SaaS businesses, they fund everything. They fund native and they fund DryBar and they fund, you know, Sweetgreen. Look, it's not like, you know, I'm like, oh, you're not a VC enterprise, you're not a SaaS company. No problem. I'm not going to put money in this. I'm like, I just don't know why. How, how come everyone thinks you're not going to make money is the problem?

Well, so, so I've seen it go both ways. So I've seen it where VCs will follow on because of the crowdfunding round as confirmation that like customers like your stuff enough to like become shareholders in your business. I have a deal right now that's backed by four VCs and they're going to come specifically to my platform because they want to build, it's a real estate, it's proptech company and they want to use it as a way to both raise capital and acquire customers at the same time. So that's what we do with them.

So I want to interject here because.

This is very close to like, should.

You run Facebook ads or TikTok ads? And it's like the question is not that, it's how do you acquire customers?

And in this case it's like, is it better to VCs or is it.

Better to go at the equity crowdfunding route? And there is no wrong answer to this. I'm curious for you, Moises, if you were to do a raise for your next project right now, how you would go about it because you did not raise a ton of capital. I think you raised some 500k. 500k. And I think one of your investors, you even gave their money back because they didn't want to be in, if I'm remembering that correctly. But how would you do it now? Differently than previously?

How would I raise money now? I wouldn't do it. I would not go to crowdfunding.

Still, what would you do? Like, what would be your approach?

I guess it would depend on the business. Like if it was a brick and mortar business, I'd say, okay, who are the people who have invested in sweetgreen? Let me contact them and see if they'd be interested in raising money for this.

Brick and mortar business. If it's a fintech company, there's fintech investors. If it's an E commerce company, there's e commerce investors. If it's a real estate company, there's real estate investors. There are people who are like, look, I just understand this. So I tend to focus on this kind of stuff. And so those are the people that I would go to.

Fair. All right, let's do one more way in the back.

We're going to do one more afterwards. This girl right here, she raised her hand really high. Okay, we'll hit a. Lynn.

Sure. So we're working on something I'd love to get your feedback on as an investor. So we're looking at creating a, for lack of a better word, online institute.

Where we train and certified e commerce operators. And one of the things I love to get your feedback on is this. Is, is that a bottleneck for you as an investor? If you, I'm sorry, would that accelerate more investment from people like you? If you actually had a pool of people who had been trained and certified to run 6, 7 and even 8 figure E commerce companies?

So your, your, your actual focus is training the operators, not the entrepreneurs, Is that correct?

Well, we, we are we. Okay. The owner. I think there's only so many owners. Right. What we, what we notice, and this is why I like feedback, is it seems like there's a bigger pool of people that, for example, investors who want to put, deploy capital but they're reluctant to do it because there's not enough.

But you're you're specifically training operators, right? Correct. And so your question is, if a certified operator is on board of a company, does that make an investor more likely to want to part with their dog? Is that correct?

Yeah.

Okay.

Okay, I misunderstood your question. Then your question is not would I hire people who've been certified, but if this business has somebody who's certified, am I more likely to invest?

I'm sorry, no. More like, this is some feedback I've gotten from other investors. This is why I want to get your feedback is I've talked to some investors, they said, do we have the capital? We even found a product. Our reluctance is that we don't have somebody to run the business. Kind of your comment early. I don't have a sale CEO to run this business.

Yeah.

So we had a community of people that we've already trained and certified. My partners built two companies to nine figures and multiple eight figure companies. So now what we're looking at doing is training the next wave of people.

And then look, I mean, if you can train really good entrepreneurs, it's all a function of who do you have in the pool of talent that you're training. If they're fantastic people, great. Of course it turns out that you're running like the Harvard Medical School of E commerce entrepreneurs. Of course people are gonna come and try and hire those people. I think the real question is just like, how do you maintain that level of integrity and talent over the long term? Generally.

Even in an e commerce business, you hire people. The first people you hire are really passionate and love what they do. And as you continue to hire people, fewer and fewer people have that passion. If you're able to maintain that level of talent, of course people will come to you.

And I would add to that, I think it is extremely helpful for there to be a pool of that talent for there to be a group of people who might be qualified for that. I would personally would not give any more credibility to somebody who is certified at running businesses than somebody who had run a business that didn't work out. But they were the operator. I would not see one as better than the other. But I genuinely would like to have a resource to go find those people who are trained in that.

And there's a business in the marketing space, like, just like you were talking about, called market hire or marketer hire. I'm not sure which one it is, but they basically do that. They're like, you have an e commerce business, everyone needs marketing people. Our marketing people worked at Casper and wow, it's me ragging on mattresses again and a bunch of other mattress companies come and hire them. And so that exists in different verticals of the.

Yeah. Stage two is basically to create a marketplace. But stage ones, we got to get enough people. I mean, it's a chicken egg problem, right? You don't have enough people. You can't create a marketplace. So the big picture is to create a marketplace of the e commerce talent.

Yep.

Great.

All right, Aleyah, let's go over to you. You can just shout it out.

My question is, I'm a little different.

Organizations. I have a physical product. I do that I was getting designed, created. But someone gave me the advice to stop. They said, if you have this idea, this is going to cost a ton of money to develop it. They said, if you develop it on your own, thinking you'll be better off with investors, they're going to say, cool, you created this snowball out and sell it and come back in a year.

And give us the results.

So their advice is to stop having it designed, stop having it built and go to investors now with the idea and the pitch deck and the passion for this company, someone still sticks stuck in between whether that works.

So I was hoping to get you.

Guys feedback on where I'm stuck with this product. It's going to take me a good.

Amount of money to develop.

I need a little more data.

So could everyone hear the question is basically, should I raise money before I've developed a product or after I've developed a product? The rationale being that if it's after I've developed the product, investors are going to be like, go sell this product and prove that you can sell it. If it's before, maybe they'll give me money to help me develop it, all that kind of stuff.

Is that a fair summary?

And you know what's crazy is Pinterest did something like this, which is they raised a fortune, like several hundred million dollars right before they launched their ad platform. Because they're like, if these ads don't work, we're going to need several hundred million dollars to figure out what to do next. And if they do work, great. We have raised this money. But at least we've got the buffer of several hundred million dollars.

You know, I would say two things. I'd say.

It'S a physical good, great. Create a website, start selling it right now. You don't even need to design it or like, you just need to create a photo of it. Don't actually make the product. See if you can get sales if you can get sales, you'll be able to think about the economics and say, okay, should I go to investors right now and dilute myself more? Because right now people are going to say I'm not going to give you a 2 million dollar or 5 million dollar valuation on this business. You don't have anything. You just have this idea in a deck.

But if you had the product and had sales, you could earn a higher valuation or you could be like, you know what? This business is going to make sense. I got great sales data, great initial feedback. Maybe I should wait, spend my own capital, develop the product, start selling it instead of raising it. 5. Raise it 20.

Aley, I heard your question a little bit differently. I heard you ask, I'm going to raise money. Should I raise it on the underlying business that is already working or on the extension product line that I'm launching? Is that that is another factor in it? Because my answer to that would be 100% raise it on the underlying business. Because what you said was you're kind of concerned that if you raise it on the extension on the new product line and it doesn't work, your focus might be drawn away from primary business and distract you from the thing that is actually the foundation of everything because you feel like you need to justify to those investors that they made a good decision. But if you raise it on the underlying foundation, the new product line could fail and you could do something completely different that you can't even foresee right now. And they're still backed by the underlying business rather than the things that that didn't work out the way that you wanted it to.

Well, Ryan's a great listener. I didn't hear any of that.

Moises, there's been a theme in your talk today I haven't quite heard you or I haven't heard it before, which is in a way, a lot of your work at Native was getting to lightning in a bottle. It was like uncovering the lightning. It was in chipping away at making the thing convert so well that you could spend an infinite amount. It was chipping away at making it so good that your reorder rate was high enough to justify you going really aggressive. And I've heard that when Derek and.

I have spoken, we've talked about that.

Magic spoon we had them on the podcast is the same exact way it was about chipping away at getting liftoff rather than focusing on the platform or the strategy to make the thing lift off. I don't know if I'm hearing you differently or if you're saying it differently, but I would like for you to comment on that a little bit more.

Yeah, I think there's a lot of noise in the world. And I'll tell you, we raised 500k, including from the founders of Thrive Market, seventh generation.

The guy who runs Facebook Messenger, a bunch of people who are really bright and, you know, no one knows your business or thinks about your business as often as you think about your business. And so generally, you gotta do what you think is right. And for me, that was ignoring a lot of noise. You know, we were a deodorant business that sold only online. When we were running, before we sold our business, you know, of course we thought about, you know, launching other categories like toothpaste and body wash and bar soap and shampoo and all of those things. Of course we thought about that. Of course we thought about diversifying acquisition channels outside of Facebook and trying to figure out, hey, do influencers work in 2017? Everyone was like, influencers are the way to go. Of course we thought about launching into brick and mortar stores. And our investors were constantly like, hey, when are you going to launch another category? In fact, one of our investors, I remember being, he said, you will not be able to sell this business until you prove you can replicate it with another product category. And I was like, all right, well, what do I know? But I'm going to try not. I'm going to not listen to you and see if I'm right.

A lot of the business is sort of saying no to people who you think are smarter than you. And that no includes, like, say no to me all the time. Like, everything I said could be completely useless to all of you. But, like, say no and listen to yourself. You know, you're working on your business. Somebody asked me when I was running my business, they're like, have you thought about influencer advertising? I was like, I live and breathe this business. I think about it the morning as soon as I wake up and right before I go to bed. You think I haven't thought about what you just thought? Influencer advertising. You think I haven't thought about that? And, like, you know, I'd just be like you. Of course I've thought about that. There's. I've got to focus on what I think is going to make the most bang for my buck, and that is going to be, how do we get a product that's better and increase our repeat purchase rate? Because if we can increase that 5%, it's way better than making our Facebook ads. 2% better right now. How do we get people. How do we get more people to buy two units instead of one unit? Because if we can get two units sold, our AOV goes up, our profit goes up, and we can spend more on ads or we'll be more profitable. And so I sort of ignored all of this other noise that was going on and I was like, this is what I'm good at and this is what I'm gonna do. In fact, my father, I was having a conversation with him a couple days ago and I've been investing in a bunch of single family homes. And he's like, here's this commercial building that's for sale outside of Minneapolis. We should go take a look at it. And I'm like, this dog doesn't learn new tricks. I'm like, don't. What I have is a strategy that's working for me and making money. And so I'm just gonna continue to reinvest in that, that strategy until I feel like there's cracks in it. And I feel like people don't do that often enough. If you have something that's working, don't listen to me because I suggested you focus on TikTok ads. You have something that's working, triple down on it and don't listen to anybody else. Nobody knows your business better than you do. And there's no one's opinion that you should trust more than your own.

Yeah. It goes back to what Mickey harped on for over an hour. Right. Is like t tapping into that and building from there. Isn't it a beautiful theme that is building throughout today. I love that everyone is talking about it from a slightly different lens.

Moyes, did you have before or after native? Did you have projects that burned out and fizzled out?

So many. In fact. A great story is that, yeah, I love you. I'm glad you asked that because I feel like a lot of people will only talk about success.

Yes.

My failures are way more fun. I started this company that I wanted to build to be kayak of home loans. So if you've ever applied for a mortgage, you know, it's a dumb process where you've got to send in bank statements and all this kind of stuff. And I was like, why do I need to send in a bank statement? I don't even get bank statements at my house. Like, just connect to my bank of America profile and pull everything you need and connect to like my Gusto account and pull everything you need. And so initially I started, I built all the software for this. I called it Zenlen Z E N L E N Inc. I started running ads and I was like, I hate this business. Like I don't like being in the fintech business, I don't like being in software businesses. I don't like any of this. And so like two months into it, you know, we've gotten some leads for mortgage brokers. I stopped running the business and started Native instead of and I was too cheap to reincorporate. And so Native was run like Native was owned by Zenlin Inc. And P and G bought Zenlin Inc. And today There are like 15 subsidiaries that P and G has put under Zenlen Inc. And like, you know, I'm sure one day someone's gonna be like, where is this name from? This doesn't make any sense from a CPG perspective. And it was because it was a kayak for home loans and, and that's how the entire thing got started.

Did you have any projects that legitimately just failed? That one you just didn't like doing and it ended up being Native. So it's still a happy ending. Did you have any that just burnt?

Yeah, I mean there are other ones that I tested for about a hot second where I'd create a landing page, put it up on product hunt and see if anybody liked it that failed. There was one that I really liked this idea of. It's sort of like fast checkout and shop pay now, which is just put in a URL of the product that you want to purchase on a website and they do everything they like, check you out of the whole thing and apply the best coupon code. I wish that still existed. But before I started my first business I was trying to create like a location based app business. This was back in 2011 and I had this meeting. So I had started, I hired some engineers in India to work on it.

And I had this meeting with Mark Suster who's actually a big investor in la. He runs a fund called Upfront Ventures. At a random meeting with him, like a friend of a friend set us up and he's like, I remember this question very clearly after I was done pitching him, he's like, how honest do you want me to be with your feedback? With feedback? And I was like, brutally honest. He's like, stop working on this right now. And I remember I was virtually on the, I was on the edge of like tears.

And you know, he saved my life actually because I thankfully did not work on that. Started another E commerce business, got my feet wet in E commerce Sold that business and that like, you know, took all of those learnings and developed native. And so there's a bunch of failures in my past and those like failures made it so that I could succeed. And you know, you just got to keep throwing darts at the board until something sticks. And the hard part is having the courage to be like, fuck, I failed a fifth time, but I'm gonna get up and do it a sixth time and not, you know, work for the man.

Well, it sounds like you've gotten comfortable at cutting things. You've gotten comfortable at cutting them before they become your life and as a result, give yourself more swings of the bat in order to connect. Is that true?

My ex girlfriends would agree with you.

But yeah, I think that's right. You know, I'm just like, okay, this business, I'm not feeling it. I don't have the energy or motivation to make this successful. Or I've started it and I do have that energy and motivation, but I don't think that it will be successful. And I'm willing to be honest with myself and say, hey, this isn't working out for me. Whether it's because of the business or me. And as a result, it's not a good fit for me.

Is that terrifying to cut those? Those are like my scariest moments to cut parts of.

Yeah.

There's a part of me that is like, if this one isn't the one, there's never gonna be another one. Like, this one has to work. You get oneitis over your business.

No, I've cut so many that I'm very comfortable with that.

Like, you know, that's a muscle that gets built.

That's at least rejection where you're. Or like a form of rejection where you're like, I'm using to this. And you're like, you know, yeah, there's a two to four week period where you're like, God, what am I going to do with my life? I suck. But then you get over it and you're like, okay, I'm going to go, I'm going to do something again. And so I think that like, you know, there are two forms of failure. I think one is like the, the like the form that exists where you're like this, this business clearly isn't making money. I'm losing a bunch of money. There's no path to it making money. I've got to close the doors. There's also, and maybe failure is not the right word here. There's some form of like this businesses that you start and you're like, I understand what this business could have been. I made a bunch of mistakes where I was learning a bunch of things. I got into the wrong product category, but the next time it'll be much more successful. And I think that's what happened with me. And I was blessed with the ability to exit my first business really early on. We sold it 18 months after I started it. And so it allowed me to start another business.

And take all my learnings and apply it to that new business. I think the hard part is what happens if you're sort of stuck in that business where you know that you've learned a lot and that you should be doing something differently. But you know it's working. You're making $200,000 a year, or you're making $100,000 a year or $500,000 a year, but you're like, I've learned enough and I know this industry well enough that I think I could 10x that. But are you willing to give up that one? That's the hard part, I think. And that's something where I think I would still struggle with.

I'll take a couple of questions from the audience in a second, but I.

Want to ask, is that easier to do once you have $100 million?

Is that. Is it easier to do? I'm going to say yes, because I don't understand the question, but I think it's probably easier to do with capital.

So when that mentor or advisor of yours told you, stop doing this business, that was even before the whiskey business.

Yeah, that's right.

So did it hurt more? Was it harder to get that because you had not had a big win yet?

Definitely. It was also hard because I was like, maybe I'm not cut out for this. And the reality is it's just a numbers game, and you gotta keep throwing darts at the board and something will work. So, like, you've gotta fight that feeling. And you also have to be honest with yourself and say, hey, this isn't working. I gotta stop doing this. And I think that's really hard to do. And I think it's even harder to do when you're like, I've got a little bit of success, but not like that business. The whiskey business, it's called Caskers. We sold it for $7 million. It was bootstrapped. So it was a great exit, but, you know, we were probably making. We were a $500,000 a month run rate, but it was Q4. And that's when everyone buys this kind of product, but our margins were like 10%. And so, like, you know, there were ups and downs and, like, you know, there was no path to that becoming a huge business unless there was a fundamental shift in it. And fortunately, I was able to get out to be able to take everything I learned. In fact, the developer I found in Kaskers works with me today. So, like, you know, you get to learn those things.

Yeah, I'm really glad you said that.

Because I think most of us in.

This room can relate to that feeling of, well, maybe I'm not cut out for this. If this one thing, can anybody besides.

Me relate to that? So I guess what we're learning is if you've ever had that, you're right on pace with Moise Ali. Perfect.

You're on pace with every entrepreneur in the history of entrepreneurship. There's nobody who's like, come out of this, A.J.

Have you ever felt that way?

I thought he was going to. I genuinely thought he was going to say no.

I thought you were going to say no, too. When I looked over you, you seem to have a lot of confidence.

All right, let's take two from the audience. Let's go to Chad.

Hey, Moyes, question.

You had gone ahead with investors at one point. What was the advantage in your mind for that versus going towards debt?

Maybe speak from a growth standpoint, because a lot of the investors I've spoken with, they look at the growth of my company and they're like, yeah, you're doing good. Inject some capital. But it's not capital necessarily I would need to the next level, because definitely debt could satisfy that.

It's an interesting question.

So why didn't we go with debt instead? Why did we go with equity instead of debt?

Good question. The first, I mean, we raised $500,000. Like, the first $300,000, which is really what we raised, came before we were doing about or when we were doing about $100,000 a month or less in sales. So we really didn't have any profit to be able to pay down debt. Assuming this isn't like, convincing convertible debt that converts into equity, this is like genuine term loans. So if we're talking about genuine term loans, you know, we know we maybe had $7,000 a month in profit. Like, what is someone going to loan us if we've got $7,000 a month in profit? And the things that exist today, like ClearBank didn't exist back in 2015 or 2016, so we didn't have that opportunity either. I think the other. That's Part of the answer. The real answer, though, is that I was green and had no idea what I was doing.

Doing.

I moved out to San Francisco and everybody was raising money, and they were like, get a TechCrunch article. And that's how you know you're being successful, or that's how you know you're on the path to success. And so I was like, let me raise money like everybody else. I've never done this in the past, and it must mean that other people believe in my business and it's a good business, and this is the right thing to do. And so we did it. And, you know, the guy who wrote the first $50,000, he wrote it. He wrote the check in November 2020, 2015. In November 2017, we gave him, you know, a million. More than a million dollars back. And, you know, when I handed him back that check, I was like, wow, maybe we shouldn't have raised money.

But, yeah, so, like, for me, it was really just because I was green and I didn't have a better answer.

You said, maybe you should or should not have raised money.

Well, when I gave him a million dollars, he gave me a $50,000 check. I gave him a million dollar one back. You know, I wasn't feeling too smart at that point. Point. But that's part of the nature of business, and that's what happens. And I actually love the guy. I called him and told him we were selling the business, and he's like, my wife just had a baby today, but this is the best news I've heard all day. Wow. And I love that human being. I didn't feel that way, actually. I didn't feel bad about it, but we chose equity because that's all I knew, and I didn't know any better. And my business was so young that debt really wasn't an option. If I were in your shoes, I would think about what I want to do with my business in the next five years. Do you want to, like. Do you, like. Do you see the path continuing where you can pay down this debt, but the money will help you accelerate your business, and you're still going to be running this business. Great. No problem. Like, debt is perfectly fine. Do you feel like, you know, Facebook or there have been. Facebook has changed, or these. You know, the operational costs have changed dramatically such that your business will not be as easy or there won't be as many tailwinds as there have been in the past. If so, debt might be a tougher option because you're going to have to pay down that debt or somebody will claim your business. And so it really depends on how you see the next five years of your business and what you want to do.

I had a conversation with Trevor Blake about this inside of our incubator a few months ago, and he said that the only reason that he takes on equity, equity investors is for the strategic relationships, and that debt is there to fund operations, but the investments and the relationships on the equity side are what make it worth it for him. Do those things answer your question, Chad, Great. I saw Kirtan's hand in the back. Go ahead, my man.

Yo, what's up, Moyes?

So I know you've told the story, and I'm probably going to be answering a question, asking a question you've answered so many times, but this is personal to me, as I'm also from a similar area as you, from Silicon Valley, where so many people raise, like, gazillions of dollars, where they don't even have, like, $2 in revenue, as you've mentioned before.

And I can't believe you said Silicon Valley and not India there, by the way.

But go ahead.

I like that.

And.

My question is, you decided not to do any of that in a world, in a small world where nobody does what you do or nobody takes the strategy that you took. And everybody, I'm pretty sure so many other founders, you know, were kind of like, for the lack of a better word, shitting on you for it, if I'm. If I'm saying right. And how did you just keep your, like, head still in the game, like, so focused without being affected by any other. Your other entrepreneurial friends, if I may ask.

Yeah, great question. And I think I was certainly impacted by them. Like, I think it'd be crazy to say that I wasn't. You know, I'd walk into their offices and I'm like, this is a stunning office, and you've got you, you know, 80 employees here. And you walk into my office, and our, like, the first office we ever paid for. The. I printed out a sign that said native on a computer, like a, you know, an eight and a half by 11 sheet of paper, and stuck it up on the door, and I'm like, that's our sign.

And, you know, our office looked crappy and we had no employees, but we were making a lot of money. And, you know, I didn't understand how these. All these other guys were, like, hoping to make money. And now I do. I think now I have a better understanding of that. Like, those guys are Betting on very different horses than I was betting on. And at some point there was enough cash that the business was generating where I was like, this horse is a good horse and I want to stay on it. And so I think I just got comfortable with it. I think the other thing that I did that would be helpful if you're in those, if you're in the same shoes, is just surround yourself by like minded people.

You know, I think about all of the trailblazers ahead of me in E Commerce. Like, you know, Andy Dunn made like digitally native vertical brands a thing. He built E Commerce as, you know, as DTC businesses know it today. And that's a really amazing thing. And when I was doing it, there were a bunch of other people who were bootstrapping businesses that I would hang out with. And one was like this guy Jake from Movement Watches. You know, Jake built a $100 million watch brand, sold it to Movado and he'd also never raised any cash. And so like I remember the first time we ever got brunch together in la, we chatted and I felt like this weird friendship with him already because we're both like, we don't have a lot of employees, we are making money. Are we doing this right or is everyone else doing this right? And we're idiots. And I think today I would say that there's no one right path, no one was an idiot in that situation. We did what we thought, we did what we were comfortable with and what we thought would generate the best outcome for ourselves. And there are businesses like Dollar Shave Club that raise a bunch of money, have beautiful offices, a ton of employees, and that generate meaningful outcomes for those founders and investors as well. There's not one right or wrong answer. But I'd encourage you to hang out with people who are running businesses like you are and who are, because it's going to make you feel a lot. Safer isn't the right word, but give you a lot of comfort in the fact that you're not the only one out there building these businesses. But it was really, you know, my brother, I moved to San Francisco because my brother was out there. He had raised $40 million from Andreessen Horowitz. Get an entire floor in this beautiful building. You walk in, there's this beautiful sign, it says tinyco. And for a long time we just had a tiny conference room out of there.

And you know, it was weird. And people would be like, what are these idiots doing in this conference room? Like, you know, they come here early, they leave Late. But I don't know if they're. They get a bunch of packages. I don't know what's going on here. You know, we had a great outcome. And at the end they were like, okay, you can build businesses out of conference rooms as well. And so like, have faith because those businesses exist. You just got to surround yourself with like minded people.

Yeah. And it'll happen.

How did Tinyco do?

They did well. They sold to the guy. They actually it was the second company my brother started and the second time he sold it to the same acquirer. They just had rebranded and had a new CEO and the CEO was the guy who founded MySpace, Crystal Wolf.

Wow.

So, you know, it was a great exit for them, but it was an even better exit for us. And we were working in the conference room all the way in the back that had like no windows and no air conditioning and no light. And afterwards, you know, my brother was like, people were, People are now coming up to me being like, what was going on in that conference room that they had such a fantastic outcome. And we had the rest of the floor.

Let's do one more. And then I'm going to close with one question. One more way in the back.

I'm hoping you can talk a little bit. I'll bring the volume down a little bit. I'm hoping you can talk a little bit about your transition from being a lawyer in your career to starting in your first couple, like entrepreneurial ventures. The reason for that? I'm an operator at one of the roll up groups right now and they're paying me pretty well. It's fun to be from the agency level into like a private equity group and it's cool. But I want to build something big myself in the future too. And it's kind of like what you talked about of kind of having difficulty cutting at some point. I like what I do, but I know I want to make that jump at some point. What was that transition like for you?

You know, I would say, look, afterwards, let's hang out. I'm going to text your boss and quit for you right now.

Because there's no better time to do it than this moment right now. It only gets harder. And I certainly don't know your personal, financial or family circumstances, but if you're sending kids to college, it's gonna get a lot harder to do it then than it is to do it now. And if you've got a big family and are growing it or have medical issues or all of those bills that pile on top of Us, as we grow up, you know, it just gets harder and harder. And so the best time to do it is right now. So I will text your boss for you. But, you know, for me, like, you know, I was living in a studio apartment in New York City, and I didn't, like, change the quality of my life, and I lived a lifestyle that I could easily afford. And so I was like, I can go for a year without making money and it won't really be that bad. And I think, like, if anything, that was back in 2012, so a decade ago, if anything, things have gotten so much easier to do it today. Because if for some reason you try and do your own thing for three years and God forbid it doesn't work out, and you're like, okay, I need money now and I need to work for somebody now, no problem. People have become much more accepting of that today than they were in 2012. So really, I would encourage you to do it now because it gets harder. And you're not going to get as wealthy as you want to be or even as successful as you want to be without doing your own thing. Like, there is a pride of ownership that exists only when you're doing it yourself. Even if you became CEO of whatever aggregator you're working for, you will not feel as happy as you will starting your own thing. So from a financial perspective, from a happiness perspective.

Those are the reasons I'm going to give your boss.

But let's do that. I'm serious about it.

Moises, I wanted to close by bringing.

Up a point that you said you were trying to make as you were preparing for today that you were struggling to make, but the ultimate takeaway being something along the lines of solve your problems once you have a lot of money. Would you explain to me what point you were trying to drive home?

Yeah, it was really solve your problems, but getting lots of money is really what I was going after. But I really think it's that a bunch of people in this room are like me, I hope, or maybe not. But a bunch of people are like, we want financial success. We want pride of ownership. We want to feel successful. And the only way to do that is to build businesses and continue working on your business and trusting your gut. That's how you're going to get there. And I promise you, the joy of building that business will far exceed any joy you have from that financial outcome. This is the part where you will always look on these times as the times where you were doing something incredible and so enjoy it. But you Solve your problems by becoming rich, but not with the money. You solve your problems by building a good business, by hiring great people, by being successful, and by having problems. Pride of ownership. When you have that financial outcome to the aggregators of the world.

You'Ll feel great about it and you'll go on a shopping spree and you might buy a nice house or something. But building a business will really be the memories that people remember you for and that are written when you die, that are written in your.

So do you mean that your problems.

Are solved not once you get rich, but in the process of becoming rich?

Your like personal. Like my problems were solved that way. Which were? I wanted pride of ownership. I wanted to do something red. I wanted to do something that I was passionate about. I wanted to do something that I loved. I wanted to surround myself with people that I loved. When I ran Native, there'd be people who were good employees and I would hate them on a personal level and they would just leave because they're like, we're not getting along with Moyes. Everyone who worked at Native was somebody I personally loved. They loved the brand. They wanted to make this successful business and it wanted to work and was like, you know, jived with me well. And so all of the problems I had got solved by the business.

So in other words, instead of making the money or waiting for the money in order to solve the problems, it is by addressing the problems in the context of business that leads you to the financial outcome.

That's right. And at the end of that, you have the same problems again. That's the story.

Tell me more about that. The same problems.

Well, you know, you feel the same way where you're like, I want to surround my. I want to be passionate about something. I want to surround myself with people that I really care about that are also passionate about the thing that I'm passionate about. I want to delight customers in really amazing ways. And I want.

It's that. It's that desire for the same things.

Yeah, that's right.

You're calling them problems. I'm hearing them as desires.

Yeah, that's right.

Still have the desire to be. Be in business with people that you enjoy being around and that you like serving. You still enjoy solving problems. There's still a desire to build something that gives you a pride of ownership. And it just so happens that by following those desires that everything else is added unto you as well.

That's right. And you know, I'm sure there's a sub segment of the entrepreneurship category where people are like, I just want to be rich and live on a beach. But I think a bunch of the people here are going to be like, I really want to build things that are amazing. And it's a really special feeling.

I have a native backpack still, and people will stop me in an airport and be like, is that the deodorant? And I'm like, yeah, it is. And they use it, and sometimes they'll pull it out. And I'm like, this is amazing. We created something that somebody at this airport has. I never thought that that would happen seven years ago.

Yeah. Moyes, I love hanging out with you, man.

Thanks so much for the time. This is fantastic.

Get enough from Moyes.

Ali, thank you very much.