0108 Jake Kassan - Turning an Indiegogo campaign into a $100M exit

Before we start, I want to thank our sponsor, Quiet Light Brokerage. Quiet Light's team of advisors helps entrepreneurs like you buy and sell online businesses for 6, 7, or 8 figures. They closed over $75 million of deals last year alone, and they've closed hundreds of millions of dollars since they started in 2007. Want to know how much your business is worth? Visit quietlightbrokerage.com/exitstrategy to find out. The site will teach you how to determine what impacts your valuation and how to optimize your valuation through add-backs and accounting methods. Whether you're aiming for an exit or want to run your business for years to come, Quiet Light can help you. Ready to learn more? Visit quietlightbrokerage.com/exitstrategy to get started. All right, onto today's episode. Okay, fantastic. All right, we're on the 8th episode of the Exit Strategy Podcast. We're here with Jay Casson, who's the co-founder and CEO of MVMT Watches. Jake, MVMT is an accessories company that sells fashion items that shouldn't break the bank. Is that a good way to describe it, or is that a bad way to describe it?

I think that's a great way to describe it. We've evolved. We started with watches. We started with 6 watches at our core, priced anywhere between $95 and $100, kind of comparable to those $300 to $500 price point watches. And then the goal was to continue to build a lifestyle brand and grow into other accessories. So now we have Everything from watches, men's, women's, to sunglasses, to jewelry. And, one of our most popular products as of late is actually our blue light blocking Everscroll glasses. Everyone's stuck in front of their screens all day. And, I think a lot of people, at least me, I had some trouble falling asleep or sleeping. And, because I'm staring at screens all day, we have nothing else to do. And, this is me selling a little bit, but this is a little shameless plug. But, the cool thing about them is everyone has the device on their screen or has an option on their screen to block it. but it actually distorts the color. So, for us, it filters the color. So, if you shine blue light in, it just blocks it and filters it. So, graphic designers or gamers, whatever it is, you're able to continue to do what you do without affecting kind of your sleeping patterns. But anyways, that's been blowing up for us right now. And, the goal is to continue to branch out into other accessories and really be truly a lifestyle brand.

Who buys the blue light stuff? I feel like whenever I talk to people from LA, I'm just like, all you guys think about is LA stuff. I was talking to Steve from Olipop. I don't know if you know him. I think he's based in LA and he's telling me about stuff and I'm like, everything you just said is very LA. When I talked to Nick, who's a mutual friend of ours who runs Thrive Market, he's like, yeah, I'm taking these beehive pollen shots. And, I'm like, that's so LA of you.

Yeah.

Is a blue light blocker LA or am I just missing the boat here?

I think it might have started as LA. It was kind of something people like to wear and be fashion-forward even if they didn't have prescription eyewear. But, I think given the world we live in today, it's accelerated the need for them. And truly, there is a benefit to it. I mean, there's proof, there's data backing it. So I think what maybe was somewhat of a fashion trend has now turned into a real utility that is helpful.

So that's a great answer. Maybe I want to do this now because if it's LA, I want to do it over here.

I live in LA. I haven't been out of my house in a while. So maybe it is LA. I don't know. But it's doing well for us, I think, around the nation and globally.

So gotcha. Okay, let's get started with like the beginning of MVMT Watches. Would love to start the— like, I know you guys launched on Indiegogo, but even taking a step back from that, you're the youngest e-commerce entrepreneur that's super successful that I've ever met. Before you started MVMT Watches, I read that you dropped out of college and that you were $20,000 in debt, and then you decided to start MVMT Watches. Is that right?

Yeah, debt was partially credit card debt. I think it was like $6,000, $7,000 of credit card debt funding my lifestyle more so, and MVMT partially. Like, I was still in college and I had stopped working at the time to put all my energy into MVMT. And so I had 18 months of like interest-free credit card debt. I maxed those out for samples and everything else. And then as well, I had received money from kind of family and friends for a previous business that just ended up crashing and burning. It was doing well at its peak. Yeah, I needed some capital to continue to kind of grow it. Some of the money came from my parents, so I've definitely returned that money since. But yeah, it was largely kind of credit card and family and friends money.

So I feel like you rarely hear about entrepreneurs who have had the success that you've had and actually like legitimately have a story about credit card debt. Usually it's all these guys who sort of had dads who were millionaires and who sort of were able to fund their own success or raise money because they had all these amazing connections. You started MVMT Watches actually swiping your own credit card, being like, yeah, I need to pay for samples and I'm going to go in debt here.

Yeah, for me too.

It was like, that's fucking insane.

Yeah.

You chose to make your back against the wall. You're swiping the credit card, ordering samples of watches, and you're giving up your work opportunities and ended up dropping out of college for this business. You chose to put your back against this wall.

That's a lot of fucking risk. It's all you have though starting off, right? Like, for me, my dad had a business, was kind of middle class, but during the last recession that we were in, business went out. He had to close his doors after 20 years and lay off his employees, etc., and ran through their savings. So, I saw financial stress from them. I was supporting myself in college. Granted, I had kind of planned on dropping out regardless. I wasn't doing much in college because I had my previous business before Movement that I was hoping was going to be the big winner. And then when that went under, it was kind of like, okay, I have an opportunity to fund another business using my credit cards that I currently have. Let me go big. And honestly, my mentality, and maybe it was a little overdramatic, but, or maybe not, it was, I'll go work anywhere if this doesn't work out. I'll go pay this off.

Yeah.

And I think people who have their back against the wall typically end up succeeding because sometimes it takes that to like really figure it out and grind and put in the extra energy. And you may try 10 different things and only one works out, but like that one thing Sure. May be the difference.

So yeah, give me a poor and hungry person any day of the week versus like a rich Harvard grad. Like the poor and hungry person is going to want to like succeed and has a lot more at stake basically. But like, it's crazy that you're like, I funded my business on a credit card. Like everyone's like, I funded my business with the millions of dollars I had. I funded my business with Andreessen Horowitz money. No one's like, yeah, I funded my business with this Visa card that I have in my pocket. Do you still have the same credit card that you used to buy stuff?

Chase Freedom.

Chase Freedom. Okay, there it is.

I love it. No, I don't have it anymore, but what a great card. I mean, shit. That's crazy.

You get these samples, you've got 6 watches, you launch on Indiegogo. That's how you sort of get the business started?

Yeah. So back then, I think I knew I needed a source to drive orders. I knew I needed capital to continue to go forward. We needed at least like $15,000 to actually place the first PO.

Okay.

So, it was like, okay, we need at least $15,000. And that was the small goal. That was like, if we do that, we may just give the money back because is it really worth it in the end of the day to move forward? So, we ended up doing like $15,000 the first, I don't know, 30 days of the campaign. It was a 50-day campaign. And then, based off of like Indiegogo at the time, their algorithms, et cetera, we got featured on the homepage and then we did another $30,000 that day and then just spiraled off ending around $300,000 in pre-orders.

Gotcha. So, your mentality was, look, if we only get $15,000 in sales over 50 days, we're just going to cancel this whole project, give everyone their money back, and go do something else because that's just not worth the business.

Potentially, it was like, does this even back out? Yeah.

So, you do $15K the first 30 days and Indiegogo features you on the homepage and you get another $30K as a result of that?

Yep.

Were you in touch with them to get them to feature you or their algorithm was like, these guys should get the homepage for today?

No. So, that was, we, again, being kind of dropouts of college, we were just kind of studying the platform. So, we knew that there was algorithms that we had kind of figured out how they worked and some of them was like, as a campaign's ending, it gets pushed to the top of a page, or if a campaign gets a certain amount of funding percentage-wise, they get pushed. If you send enough email, there was all these hacks. Like, I was big— the word growth hack to me back then, I mean, that was like, I loved and breathed that, right?

Yeah.

It was like, that's what I lived by. Today, growth hacking isn't always scalable. To some degrees, it can be, but like, at some point, it was like, okay, I need to figure out different ways to scale the business. But back then, I was a growth hacker.

Yeah. I mean, it's still like, it works when you're going from like 0 to 1, right? It doesn't work when you're going from $50 million to $100 million. Like there's no tiny growth hack that you figured out where you're like, I just got $50 million in sales. But there is growth hacks to be like, okay, I got an extra $30,000 in sales. Those exist back in 20— when did you launch the business? This is back in what, 20— 2013.

Yeah. So in 2013, they exist.

I think they still exist in 2020. That'll get you from like $15,000 to $30,000 or $15,000 to $50,000.

Oh, 100%.

Today, when people run Kickstarter campaigns, I see a bunch of Facebook ads saying, hey, go check out this Kickstarter campaign. Were you running paid ads behind this Indiegogo campaign, or was this all organic initially?

Back then, we were paying certain publishers, certain blogs to post about us. So we had blogs like Cool Material. And then I basically, again, found some sort of software that allowed me to reach out to editors. Basically, it aggregated— I type in a topic, it aggregated articles across the web, And then, it'd give me the editor's email. I exported them to an Excel and sent a personal email with their name, everything to 200 people. I ended up getting 15 or something of them to post about it, which was great. Playboy was one of them. I was like, okay, I'll take it, whatever.

Yeah.

And then, those gave us kind of momentum and that combination with kind of a few other strategies. Reddit was a big one. We were banned from Reddit actually. We got kicked off of Reddit. I created about 100 different Reddit accounts. We had a proxy which hides your IP address. So, we would log in using different IP addresses, posting with different IP addresses, and then upvote. And then, you gain momentum. And then, once you got enough momentum, you just skyrocket.

Yeah.

They call that astroturfing. One of the subreddits we did was called Shut Up and Take My Money. So, it was literally, hey, here's a product. These are consumers who are looking to buy something.

Yeah.

And somehow, the detectives of Reddit Traced back something.

What you were doing?

Yeah. There's a thread somewhere. It's great. It has a ton of upvotes, but there's a thread about how movement astroturfed Reddit, and so now there's a love-hate relationship I have with Reddit. But anyways, I don't know if you can still do that today, but that was like a big piece of like organic traffic basically.

And this is back when you're still running the Indiegogo campaign. You're you're trying to get Reddit to post about you guys so people will click over to Indiegogo and start funding.

Pretty much, yeah.

Do you think Indiegogo is still like a viable launch strategy today? Like, I feel like in 2013, like, I'd go to Kickstarter once a week and sort of look at the new projects. I feel like now a bunch of people have been burned by Kickstarter and probably Indiegogo because they're just like, I ordered a case for my iPhone X or my iPhone X, it didn't get shipped to me until the iPhone 11 came out and now it's useless.

Yeah.

Indiegogo and Kickstarter as big as they were back then, or like, how do you feel about that?

Yeah, I don't think you have like the big, big, big winners, at least that I know of, otherwise, because I don't hear about them anymore, right? And people have been burned by like the coolest cooler and stuff like that. They don't even ship. But what I would say is like, I would, rather than looking at us as like an example of how we did it, right? That was 2013. And as we know, like technology and the world changes so quickly. I would go and find people who have successfully funded in the last 12 to 18 months. And if they've done it, then I would say that there could be an argument to still maybe go get friends and family money, or maybe before you even go out and do that, just use it as like a platform to get— because regardless, there's still millions of people that are using Indiegogo and Kickstarter.

Yeah.

So, regardless, there's still an opportunity to get your product in front of faces for generally free. So, I'd argue like it's a good marketing tool whether you raise $300K or you raise $50K or $20K. I still think there could be a benefit to it. Now, with Facebook and everything else, I don't know how like the marketing stack and how it integrates with Indiegogo or Kickstarter. But I would, again, if I were starting over, I would look at someone who's recently funded and just kind of reverse— I mean, reverse engineering. Again, growth hacking, reverse engineering. Those are the 2 things. Like, I take a brand and just completely reverse engineer Indiegogo, reverse engineer. So yeah, I would do the same.

Gotcha. Okay. So you think that they're still viable strategies? Like, did you realize once you were on Indiegogo that you had found a product that was going to be big and scale, or did it take some more time? Like, you know, with Native, In the first 2 months, we were seeing a cost of customer acquisition of under $2 for the first 2 months. And I was just like, this business is gonna work. Like, I haven't made the product yet that's great enough to drive an enormous business, but I know this business is gonna work because people are buying this stuff at $2. Like, it cost me $2 in advertising to sell this product. Like, that's phenomenal. Like, it doesn't happen today anymore.

Yeah.

I knew instantly that the business would work, and it took me a little bit of time to reformulate the product and really get like product market fit and see a ton of growth. When did you know that MVMT Watches is going to work? Was it the day that you were on the homepage and you're like, we just did another $15,000, this is fucking great, or did it take some more time?

Yeah, I think there's different levels of what's working, right? I think, yeah, when we got on the homepage and did $30K in a day, I said, okay, this is real now. That's real money. This is real. Let's think about this. But then, you have your Q4 holiday numbers, you start seeing what you— I remember there was a day where we had a $25,000 day. And, at that time, it was like, holy shit, that's huge. And we've scaled since then, but like you have days like that and each time you're like, you're just reevaluating like even what you're thinking about and like the expansion of kind of where your business can go.

Yeah.

As you know.

Yeah. Indiegogo campaign's over. You realize, hey, look, we're going to start this business. We're definitely not refunding people's money. We're going to actually ship this product. We want to go make it. When we launched Native the first time, we were supposed to pick up stuff at our manufacturer. We used a freight forwarder to like drive a truck there and pick it up. They were supposed to arrive like a Tuesday. They didn't come on Wednesday. They didn't come on Thursday. I dispatched another company to go pick up the deodorants that we had our manufacturer, and the first guy picked them up and we'd already canceled that order. So I was like, wait, our deodorants are on a truck? I was like, is this manufacturer just lying to me? Because we were supposed to get all these deodorants and they're on the wrong truck. And I was like, holy shit, what the fuck is happening? Do you guys have any of those operational— because you guys aren't making this stuff in the United States, I imagine, right out of the gate. Or are you making it in the US?

No, we're making it overseas in Asia.

And so are there operational challenges like that right out of the gate? Because have you dealt with Asian manufacturers and shipping things on boats or air freight? Are there operational challenges right out of the gate?

Yeah. I mean, I think there's just a learning curve, I think, more than anything. We had a 3PL, so we had a third party helping us with our fulfillment, and they took on a lot of the logistical stuff in terms of the importing. I think they might've even been the importer of record, if I'm not mistaken, but it was a long time ago. I don't remember us having anything that was a major issue per se, fortunately, but it was more of just a learning curve and figuring out what the best way to do it, what the most affordable way to do it. I think a lot of times you just pay a premium because you don't know better. And then it's— yeah, we ended up starting to ship by boat. And then you have to kind of build that into kind of your timeline. And then you also hear like, well, is the condensation like while going over the ocean like ruin the watches in the boxes? So there's just a lot of like logistical things you have to keep in mind and think about, but we've never really had a major Operation blocker. Yeah, exactly. Yeah.

Was it difficult to find a manufacturer? Like, I would imagine, like, was that easy? Like, do you just go to the Shenzhen whatever fair that they have and they're like, okay, there's 400 watch manufacturers here? Or is it like really hard to find that guy?

You certainly could go to like a fair and meet with manufacturers. Again, we thinking of flying to China for us when we were just getting started to get something sampled. I didn't have the credit card credit to do that. So We ended up going on Google and doing some research and finding a manufacturer or consultant who knew different manufacturers, and we worked with him initially. And then, I think once you really start to get going, once our Indiegogo caught attention, then you have other manufacturers who may be a little bit more legitimate, a little bit more reputable start reaching out. And, I don't think it was until maybe almost our 3rd year, maybe our 2nd year where we actually flew to China and met with different manufacturers. And in the watch world, there's like middlemen. So like for us, we have— or not middlemen, but we have the movements inside of our watches. We have a quartz Miyota movement.

Yeah.

For most of our watches. So Miyota, it's— they're in most like quartz watches. So they're incentivized to go and introduce us to the best manufacturer. So they went and kind of pulled us into the 3 top manufacturers and kind of got to see who was vibing with our business at the time and who believed in us and And have you had to switch manufacturers since you started the business?

Like from that Indiegogo campaign to today, have you been like, okay, I went from here, I scaled up beyond this facility, so I went here, or are you still with the same guy?

No, we're not with the original. We have multiple manufacturers prior to Movado, the Movado acquisition. We had multiple manufacturers, I think for multiple reasons. Some manufacturers are better at producing different things. I think it's always great to, whether you want to leverage them against each other, not to bully them, but just simply to make sure that they're being Giving you the best price. And there's benefits to that. Some manufacturers can only do a certain amount of production, and so it's just, it's keeping them responsible for what they're doing and motivated so that they don't take advantage of you in any way.

Post Movado, and I'm not sure if you can talk about this, have you moved manufacturing in-house? Like, is Movado doing the manufacturing, or are you sort of still doing the same thing that you were with your own independent contractors?

So no, we're still doing the same thing. Movado, they do Swiss and et cetera, but I'm pretty sure that For us, at least, we have still third parties. And yeah, I think largely the fashion watch industry, quartz movement is all third party. I don't think it really makes sense to go and open up your own factory, at least to my knowledge.

So, okay, so you're launching the brand, it's 2013, Indiegogo campaign successful. Like, what does your revenue look like in 2014, 6 years ago, or 2015?

So first year, we ended at about $1 million, including the Indiegogo.

Yeah.

And I don't think we did much. It was like, blogs, it was Uncrate. The money I spent was like, get on Uncrate, get on Cool Material, figure out those type of things more so than rev-share type of commission type of opportunities. So, it was pretty organic, which was great.

You were like, hey, Uncrate, we'll give you 15% of sales.

No, no, no. There's a few of them. So, a few publishers, Uncrate, you pay a flat fee. Back then, it was like $7,500 for a feature, but it would return a large amount of orders. So, those are big opportunities that no longer exist, but also they were unknown opportunities. So, it was kind of navigating a sea that No one knew where to go.

Growth hacking. It's growth hacking.

Exactly. So, now, it's a little bit more everyone knows and has seen us or MeUndies or you guys on all of these blogs. So, it's saturated and it just doesn't perform like it once did. But, it was largely blogs and then some was organic as well. We did a big refer a friend. We really, really encourage our team or not our team but our customers to refer their friends for either store credit or discounts. And then, one of the biggest things we did back then was every 500 likes, On Facebook, we gave away a free watch, and then it got too much. So, we did 1,000, and that was our fastest-growing platform, Facebook. We're like, okay, we can get 500 new people to like us.

Yeah.

At least one person's buying a watch from that.

Yeah.

It's worth giving out a watch, and people just went nuts about that, and we just scaled through that. So, that was year 1. Year 2, we started to play with Facebook. Year 2, we did $7 million, and that was like the rocket ship is where I think we were getting like $10 CPAs for a $100 watch.

Yeah.

And that was when it just took off. Year 3, we did 30.

Okay. So you go 1, 7, 30.

Year 1 was $1 million to 7 to 30.

And it goes from blog to Facebook to more Facebook?

Blog to Facebook to a lot more Facebook. And then after probably 30, it was like, how do we diversify different acquisition channels? We don't want to be solely bet on Facebook. What if it gets saturated? What if CPMs go up? Blah, blah, blah. Here we are today.

Yeah. I remember like the first time Native raised money. One of our investors was putting on some sort of marketing day show, and we went there and there were Facebook reps, and they're like, yeah, on Instagram, we're allowing certain vendors or certain businesses to advertise. And one of the first businesses is MVMT Watches. And I was like, how the fuck are you guys one of the first? Do you know that? You were one of the first businesses that you had special access to be able to advertise on Instagram before anybody else.

I think we did know that. So back in the day, I was running it out the gate, and then we worked with a freelance consultant, and then we ended up hiring in-house. It was like anytime there was a beta, because we saw the success, I knew Instagram was going to be huge because I used it as a consumer and the numbers of its growth. So we were like, get us on the beta, get us on the beta. We were really lucky for 2 reasons. We worked right next to the Facebook LA office.

Yeah.

So we basically just kind of bear hugged Facebook and we made sure that that was a network that we stayed close to. And I'm friendly with a bunch of people over there just in the sense of Not that we were getting necessarily special service, but it was just being able to talk to them more frequently about what was going on. Before, we had like a small business rep in Texas, and that was just, you hear from them once a month. It was like surface-level stuff.

Yeah. It is weird that Facebook has sort of outsourced so many of your representatives. I think it's in Austin, and they're like, even if you're spending $10 million a year, they're like, here's some rep in Austin that really isn't going to give you great feedback. You really have to network your way within Facebook in order to get the right people on your account.

Yeah, I think they're doing a better job, but I don't know. I mean, we're in LA and we're close to them, so we've been in the network. So maybe we've been working with certain teams just because of that. But we also have spent, as you guys, I'm sure, a significant amount of money on Facebook.

So yeah, once we were a part of P&G, they assigned P&G reps to our account. We were no longer in the Austin office. So I'm not sure what's happened the last 2 years with it.

Yeah, I know they have different sets. There's like a growth, like a, I forgot what, like, it's like a growth So, it's like brands that are in the $10 million plus and spending millions on Facebook. And then, you have the big guys who are the big corps, whether it's—

Like Wish.

Exactly, exactly. Yeah.

Unlike almost everyone else I've ever chatted with, you guys never raised a dollar of outside capital. You guys are funding this on credit cards. And then, once you sort of hit that $7 million range, I'm sure you're profitable or breakeven and sort of funding. Did you ever think that you should raise money? Did you ever try and raise money or were you like, no, this business is working. I want to control our own destiny? Yeah.

I mean, there was always an internal kind of discussion that me and Kramer, my co-founder, had about, do we raise money? Why would we raise money? Everyone else is raising money. Why are they raising money? Does it make sense? Like, do we need to grow faster than we're growing? And there was a time where we were strongly considering at a later stage to go and raise money to help kind of with expansion and growth. And fortunately for us, it was kind of right around the time where we started talking with Movado, and that just made so much more sense for us based the synergies in terms of brand and just like where we wanted to go, they already largely knew and were able to support and help us. So, that made more sense than doing it ourselves and raising capital and diluting ourselves. But it was tough. I think back then, there wasn't guys like me and you and others who were talking about like stay lean. And there wasn't examples of the Bonobos and I can't even think like this company that just— there's Brandless. There's— what was the one that just came out the other day? Anyways.

Look at Casper's IPO, right? Like they raised $400 million and now they're worth $300 million. Yeah.

Like there's a ton of those companies.

WeWork that raised a ton of money.

Blue Apron. Blue Apron is a great example. So anyways, probably more of them than less of them, right? Like, have turned out to be failures, unfortunately. And largely not because they're necessarily a bad business, just because they raised at a crazy multiple that they can't run from. So anyways, that wasn't as apparent. And we networked with a lot of people. And that was the one thing because we didn't go to business school. I wouldn't say that like from the finance side of it, like, that's not where our specialty is. We were like brand builders and scrappy and Entrepreneurs kind of seizing opportunities and enjoying the process. So we talked to a lot of different founders who had raised money, and to be frank, like a lot of them were kind of not happy and said, "Stay away, stay away." And it was just weird that every time we talked to someone who we idolize in terms of the business that is all over the news and gets all the press would be like, "Don't do it. If you're making money, don't do it." Blah blah blah blah blah. And now, I mean, I think that just makes so much sense for so many reasons. And And, we talk about this even offline all the time, but it's just like in terms of brands being able to acquire you for reasonable number, the second you go and raise money, you may outprice yourself for so many brands and you just cause complications. You may be growing an unhealthy business which will hurt you in the long run.

Yeah, sure. There's a day that that all sort of comes back and haunts you, right? You could be celebrating and being like, yeah, we just raised— I think I mentioned to you before Native, at one point I was thinking about raising money and we talked to a VC fund and they're like, we'll put in $3 million at a $30 million valuation. or $30 million at a $300 million valuation. So I was like, I could get a $30 million valuation or a $300 million from this person sitting across the table from me right now. Like, that doesn't make any sense. And they're like—

Yeah.

They were very honest about it. They're like, look, if you take the $300 million, you're gonna have to work here for 5 more years and build a $600 to $700 million exit. And if you take the $300 million, you can probably exit in the next 12 months if you want. And I was like, 5 to 10 years? I have no idea what the world is gonna look like 5 or 10 years from now. I don't know if I can maintain this and build an $800 million business.

Yeah.

And the $3 million just doesn't seem that interesting. You know what's crazy is now I also like, when you're starting to look at companies, when I see a bunch of ads like in the subways of New York City or on billboards, I'm just like, I don't know if that ROI is going to back out. I'm no longer like, holy shit, that brand is awesome. I'm just like, I'm not sure if this ROI is going to back out. When I see sales happening at the end of quarters, like at the end of March or at the end of June, I'm just like, these guys are looking to meet quarterly numbers that are required by their board. You start seeing how businesses are sort of building themselves up specifically because they've raised a ton of outside capital instead of trying to focus on building the best business they can.

Yeah. And I feel like the reason might be, and I'm not sure about this, but I think that the VCs who had a lot of experience in tech, tech needs capital often, right? Not always as much capital as some of these tech companies have received. I was just looking at Shopify the other day. I think they've only raised kind of before they went public, I think they only raised like $130 million or something like that, which isn't really a ton. Honey, I think, raised like $60 million. So, Shopify is now worth $74 billion, raised at like a $300-400 million valuation. And Honey, I think, raised $60 million and sold for $4 billion. So, even those companies, Honey raised less money than Casper or Bonobos or any of these guys, which again, it's like, I think it's just because VCs wanted scale, they wanted growth.

Yeah.

Versus having a healthy brand, really focusing on the consumer. And like, if it's resonating, it's resonating. You can't force it. And I think that's where you can force people to buy. You can spend a lot of money. You can spend $1,000 for someone to buy a watch if you wanted to.

Sure. Right?

Like, that's possible to do, but it doesn't back out. And that's what they were doing on Blue Apron or Casper and et cetera. And now, the mentality has shifted. I mean, I hear it just from like my network that like VCs are looking for more profitable businesses and It's a total mind shift. And it's funny because like back in the day, I remember talking to some of the bigger, like bigger funds and just networking, not even looking to raise, but we talked about our business and kind of get laughed at it. Like it's just not, it's not a real business. You can't scale this business, blah, blah, blah.

And it's the only real business. It's like the actual real business. And they were wrong about everything else. There was this VC, I remember he wrote this article recently, I tweeted him, I forgot what his name was. And he's like, the reason that Glossier in a way are working is because they don't have any competition, as opposed to like the Caspers of the world that have a ton of competition. And I'm like, are you fucking insane? You think Away doesn't have any competition in fucking luggage? Luggage? You think they invented luggage? Airplanes have been around for 100 years now, you crazy motherfucker. Then I tweeted him and he's like, of course they have competition. They're just like, they have less competition. I'm like, they do a great job with branding. They do a great job with marketing and they're out hustling people building that brand and like being operationally efficient as opposed to the Caspers of the world that weren't weren't operationally efficient and burned a ton of money. It is insane how VCs don't get direct-to-consumer, even though it's been around for so long and they've put so much money into it.

I think, and I hope that they're starting to, and maybe not the biggest ones because they're looking for big opportunities, but some smaller VCs are happy with a smaller exit, right? Yeah, they're okay with that. But I think the VCs that we were talking to back in the day have huge funds with businesses like Snapchat and so forth, and billion-dollar exit is kind of what they want when you think about it.

Had that mindset already shifted by the time you were selling MVMT watches? Like, I feel like that's a pretty new mindset. I'm not even sure— like, you sold the business in 2018. I'm not sure that mindset existed in 2018. I sold my business in 2017. I'm positive it didn't exist in 2017. In 2017, people were like, why are you selling your business? Why don't you raise more money and really grow this thing? And I was like, we're doing tens of millions of dollars in revenue. We're doing $1 million in EBITDA a month at this point. It is a fucking real business.

Yeah.

And I just don't know how much longer I can continue this growth trajectory, and I'm not sure I can do it by myself. Had that mindset shifted to profitability by the time you sold your business, or was that still a year away?

Sorry, are you saying were we always profitable?

No, no, no. I'm saying had VCs started thinking about profitability in 2018, or do you think it happened in 2019 or 2020?

I actually think one of the bigger articles that came out, I think you were in it as well. Jason Del Rey from yeah, I don't know what publication Fox. Yeah, yeah, Recode. Yeah, and he published, and it was like me, you. 2 big acquisitions. The writing on the wall foreshadows, and I think it might have been Lisa as well. He goes, these companies either raise very little or are profitable, and you're seeing acquisitions successful. Everyone's successful in the acquisition, right? Employees get money, we get money, like the acquirer's happy. Like, it's across the board, it's a good acquisition. And he kind of says, is this the future? And I think that was probably right around 2018. And I think I started to see a shift when Bonobos got written off by Walmart, and you start to just see kind of a trend across the kind of industry. But yeah, to your point, I don't think it was adopted widely until probably more recently than ever.

Yeah, I think it was the Tuft Needle folks that he mentioned in that article. He's like, these are the guys. Okay, let's go back a little bit more to like Movement's growth from 1,730. You're focusing on Facebook, you diversify channels of acquisition. I've seen you and Kramer on television more than I've seen like Jerry Seinfeld on TV, basically. You know, sometimes I watch TV and during commercials I'm just like, I recognize all— first, all— it's only direct-to-consumer advertising on TV. I'm like, new stores are all direct-to-consumer stores building pop-ups on TV. It's just direct. One time I saw you, I think I saw like Hubbell Contacts. Yeah. And then me. And I was like, okay, it's just us now. And I'm like, I know all of these guys on TV. Before I'd be like, Oh, there's a celebrity. And now I'm like, I know all these guys. I know exactly what they're doing here. I know what agency they're using to run these ads.

Exactly, exactly.

I've seen you guys run Instagram influencers with, I think it was like Kim Kardashian at one point. I've seen you run TV ads. Where are you spending money today or in the last couple of years? And how do those things back— does TV still back out? At Native, we never could afford influencer ads with Kim Kardashian. Or like major celebrities, do those things back out or is it like a sort of test and learn process? Is there a Yelp for influencers? Like there should be a Yelp for working with influencers.

I don't know if there's a Yelp. That's actually a great question. I know there is definitely databases full of like ability to reach out and give information and feedback and engagement metrics. So, but in terms of like, how was the experience? Did it back out? Like, did they work with you well? Yeah, at least it didn't when we were doing it. The biggest one was Kylie Jenner for us. That was like early, early on. And that was back in the day where like a lot of Instagram influencer marketing was backing out, especially people like Kylie who— this is like, yeah, maybe it was 2015 that we did it, maybe '16. So it was early on in the company. Today though, it's spread out. I mean, yeah, we still do Facebook, still do TV, podcasts, Instagram, obviously. I think we might still do some Pinterest and we've tested anything from like Snapchat, Taboola back in the day. So it's really like, I guess my strategy was you want to figure out the right marketing mix and test into it. And you have an influencer, you have like different tiers, right? You have the Kylie Jenners of the world, and then you have people who maybe have 10 million or less who are influencers, but that's kind of their getting product and that's kind of their main source of revenue, or they're a fashion or YouTuber. And then you have maybe below 100,000 or somewhere around there, maybe below 500,000. who could be micro, right?

Yeah.

So there's like, we're always testing, we're always trying to figure out, well, where are we spending the most efficient dollars? Does it make sense? Is the amount of sales that we're getting in one channel, like the incremental revenue we're getting there, like what does that actually equate to? So we're just trying to figure out, like, we're always testing. We've kind of built that in-house. And that's, I think, what's made us special is that if there is a marketing channel that comes around, like we can identify it and apply kind of our methodology to it. And it's a very agile methodology versus just buying TV, even though buying TV the way that we probably do versus buying kind of national broadcast is different. But it's a little like buying on Facebook or buying on Taboola or Snapchat or any of those or Google are more similar, I'd say, than buying kind of paid media.

Yeah, it's crazy how like marketing is really a living organism. Like you can't be like, okay, Facebook works, it's going to work for me forever. You have to like diversify and like maybe Taboola works for a year and then it doesn't. I remember Snapchat worked for us for a while, didn't work for us after that. Like you really have to diversify those marketing channels pretty quickly and like constantly be testing them to be like, is it working now or is it not? Even Facebook, like Facebook has been a behemoth obviously in digital advertising probably since 2014. Today Facebook is like, right now Facebook is very different than it was even 2 months ago. Like Facebook just released earnings earlier today and they were like, we're not immune from advertising cuts. The CEO of Expedia was like, we spend $5 billion a year on advertising usually. This year we're going to spend $1 billion and we've already spent a ton of that. It's because COVID's going on and so Facebook ad prices have come down significantly. I want to delve into influencer advertising because I feel like you guys were one of the earliest guys to do that. You were talking about 2015, 2016. Is it just a lot of like— well, one, can you talk about the most you ever paid an influencer? I'm personally curious, what is the most you've ever paid an influencer?

Somewhere around, for a single post, it was close to $150,000.

Okay. I'm going to guess that's Kylie Jenner.

Yeah, maybe.

Okay.

But that was early on. That was, again, different time. We certainly wouldn't do that today unless it was someone who we're going to be ongoing working with the brand or collab or whatever the case may be. But so yeah, that was a big check.

And why wouldn't you do that today? Is it because the numbers were backing out in 2015 and don't necessarily back out? In 2015, people saw that and they were like, what is this? I want to engage with this. While in 2020, they're Like, this is an ad by this influencer, let me move past it, or is it something else?

I think it's a combination of all the above, right? Like back then it was, first off, the engagement wasn't repressed.

Yeah.

So you're getting more engagement, you're getting more impressions, right? If she had 50 million followers or whatever it was back then, majority of those people probably saw it. Facebook was, the posts were chronological or whatever it was. So there was that. And then also just she wasn't posting a ton of ads, right? Or collaborations. So I don't even know if she was posting much about her own stuff at the time. It was just the right time, right place. And I think today, even remove her, any huge person with 50 million or more followers, like, I don't think the engagement's there. Like, people just aren't seeing the posts as much as they once were. And even if they do, we're just used to it by now to see, unfortunately, ads.

Yeah.

Even if they're as authentic as possible and they really use the product and they love the product, unless they really back something personally and are like a partner, like I just don't necessarily see it backing out like it once did. So, but arbitrage elsewhere always, right? Like maybe TikTok's that next place. Yeah, maybe Twitch, right? Twitch is a big place that we're trying to figure out, especially with those blue light blocking glasses. Like, yeah, the gamers are constantly staring at screens. Yeah. And you've seen like the trends about the Ninja gamer and then there's just a bunch of them that honestly, I feel like the average person doesn't know much about, but it's this under ground world that's just absolutely booming.

Yeah. Are you already advertising on TikTok right now?

We have a TikTok account. We're creating videos. I finally created a TikTok just to figure it out. I now understand how something can get the amount of views it does. And I don't know if it's all 100% authentic, but nonetheless, there's a lot more opportunity for the average person to growth hack, let's call it TikTok, than there is Instagram today, in my opinion. I think you can get a lot more impressions on TikTok for free And I see them doing some paid stuff. And the great thing about their paid stuff, which I don't think we've gone into yet, but their paid stuff looks like a regular post. So you have to almost double take and it's there, it says it, but you have to double take and go, oh, that's an ad. So they do a great job. Their ad units is what we call them, are really great. But we are doing some stuff on Twitch, but I don't think we're actually paying like Twitch commercials as much as we're working with individuals on Twitch kind of.

Yeah. Does any marketing channel represent more than like 25% of your marketing spend? Like is Facebook more than 25%? Are influencers as a whole more than 25%?

I think Facebook's still the majority of spend. Still the majority.

Okay.

I feel like it's pretty common for most e-commerce brands, but—

Yeah. I mean, Facebook is just like so good at what they do. Like only place where you can create demand at scale.

Yeah. Better that you are at Facebook, you get more learnings from like what creative's working, what ad unit's working, certain audiences. I mean, you ran it yourself, right? For so long as well.

So it's great.

The scary thing is when you get too deep and then Facebook starts dictating your business a little bit based off of like what's selling on Facebook too much. And you become reliant on, oh, well, this ad's working for this specific watch or this specific scent of deodorant. And it's not necessarily working. It's a balance of like, is it the ad? It's still relatively new in comparison to TV or anything else.

Yeah. And native is both our greatest strength and our greatest weakness. Like we were great at it. It was minting us a ton of money and it was scary as hell because we're like, when does this change? When do we launch new categories? Are they going to go as well as deodorant did? It was really terrifying. Are you guys more male or female focused? I have to imagine male because you guys just launched female more recently, but—

We launched it a few years— female, I think maybe 2016, so about 4 years now.

Okay. Yeah.

It's actually closer to 50/50 now, I think, in terms of product, if I'm not mistaken. We have a lot of female buyers who buy for whether it's boyfriends or whatever the case may be. So, it's watches, even sunglasses can be great gifting items. So, we do get a lot of gifting. I don't know if deodorant is much of a gifting.

It's actually more than we ever would've realized. It's certainly not as much as watches, don't get me wrong. Q4 is our slowest quarter, but we are able to say, hey, Mother's Day, why don't you get your mom this pack of healthy-for-you products? And it works. I mean, it's not as good as watches, definitely, but it's surprisingly okay. And are watches still the majority of your business right now? I would have to imagine so, because jewelry and sunglasses are—

Yeah, watches are still the majority. Sunglasses launch is kind of secondary. If you combine sunglasses and EverScrolls, They're definitely growing kind of segment of the business, but watches are still the majority.

Okay, let's fast forward to 2018. You're now talking to Movado. Is the first conversation with Movado face-to-face? Is it like email? Is it like when the first time you met them face-to-face, is it in LA or wherever they are? I have no idea where they're— I think they're based in—

The first time we met them in— I think they came to us, I want to say.

Okay.

We had a kind of a mutual contact, so we I talked to the CEO years before. Again, I think if there's a way to work together one day, partner, if there's a way to just keep the dialogue open, like, here's who we are and what we're doing.

Yeah.

And then we ended up kind of getting in contact when we were contemplating, do we raise or what's the case? And maybe there's an opportunity to work together or partner, and they were interested in acquiring us. And then it was like, well, okay, is that the right thing for us, Movement, the company, the employees? And then as we, you know, went further, we're just like, this makes so much sense. They have, you know, infrastructure that again, complements like what we do today, where we want to go in the future. They have experience in obviously manufacturing and other categories. So either they came out to us or we went to them. We needed to make sure that people didn't see us in the meeting or their employees or our employees. So they definitely didn't just come into office out the gate, if I imagine correctly. I think it was like initial kind of meeting somewhere offsite, and then I can't remember where it was.

Where are they based?

But they're in New Jersey.

Gotcha. Okay.

They have offices all over the world actually, and I believe in Switzerland as well, and then Hong Kong.

How often are you out to New York these days? Or like New Jersey?

Well, before all of this, I wasn't out there too often, maybe like 3 or 4 times a year, which wasn't too bad. And then we'd make a trip, like last year I went to Dubai for a big conference and Switzerland for a big conference. So it wasn't too much, but yeah, I had never been to New Jersey beforehand. So this was 4 times in a year after, it was different. And the vibe's a little different. Our office in LA.

I've never been to Cincinnati and I was like, I now have my favorite hotel, my favorite restaurant. Oh, here's this Uber driver that I recognize again. I was like, okay, I now understand what Cincinnati looks like.

Yeah, it's small.

Is the process a long process? Is it a short process? What is going on through your head as well? Like when you haven't raised any money, you were in credit card debt when you started the business, by the time you sold the business. And is the number that you sold for public or not public?

The number we sold for is public.

Okay. Can you talk about that number?

Yeah. So it was $100 million and then there was like an earnout component. But for us, the process took about like 75 days, I believe, from like initial kind of conversation. So it went fast because again, we were contemplating, well, do we raise money? What do we do? And I mean, everyone wanted to move fast. So it was like a 75-day process of, from initial, I think, phone call to you hire banks to kind of help you with the process.

Yeah.

Each party's meet, and then there's due diligence kind of that they go through on your end. And, and then it's just kind of figuring out any questions they have, essentially, because they need to be comfortable with the business and questions as well.

So do you think that the relationship that you had had for a few years with these guys was helpful in helping you have this exit? Like, for us, I never had a relationship with P&G or almost nearly any of the guys who were talking to us until we were selling the business. Was your relationship with Movado, you know, that was built up over time? Important to that, or do you think it would have happened anyway?

I think it was important. We didn't have it's not like I hadn't met or talked to them much, so it was like I think an introduction that yeah, it's a more superficial way of saying and yeah, yeah, I'd say that I would recommend for entrepreneurs if they know who like a strategic is that they think that they could get acquired by and complement that business and help that business and vice versa. I think it's worth. figuring out a way to get in touch with that person. And you're always scared because it's competition. Like, they could acquire you or they could— all these companies are big enough to go and start their own version of it, right? So, you know, you want to just have a conversation. It's like you want to create an authentic relationship without sharing too much of the business. But the conversation we had with them was really great. It was just an introduction, telling them who we were, what our story was, the job, you know, kind of what we're doing now.

Yeah.

It was really just interested in who we are, what we were doing, and Wasn't trying to get information or anything. It was just a very— and we had conversations with different people over the years. I actually have friends again who are in certain businesses who make it a point to be really friendly with. They send them product unsolicited with a note. We're all humans, right? I think for some people who are really trying to reverse engineer that exit, I think, yeah, if you have a relationship with someone who is in the driver's seat of making that decision and they're familiar with your business, it's going to get them more excited about the business. Versus just having no clue and then one day getting a call saying, hey, this is my business. At that point, it's probably too late. So I do think it's probably a good idea to— sometimes it works out.

Yeah, absolutely. And like, those personal relationships are so important. I remember like, you know, getting along with somebody who you might work for or work with is so— I remember when we were trying to sell Native, there was a guy that we were chatting with and he's like, I can tell you're not serious about selling Native online. And I was like, how could you possibly say that? We're doing tens of millions of dollars in revenue, millions of dollars in EBITDA. He's like, because you don't own Native.com. I was just like, you don't know what you're talking about. And this is like the CEO of that company. And we're sitting around at like a dinner table with probably 10 people or 15 people, his senior executives, my bankers. And I'm like, you don't know what you're talking about. And like, there's just silence in the room.

That's amazing.

Yeah. I was just like, you have no idea what the fuck you're doing with e-commerce. Silence in the room. Absolute dead silence. And like afterwards, the bankers and I were sort of just walking around San Francisco. A banker was like, that was a really awkward conversation. And I was like, yeah, I don't know what else to say. This guy doesn't know what the fuck he's talking about. He has no business in e-commerce. He has no material business in e-commerce. And he's trying to tell me about my industry. I'm not trying to tell him about his, but I know what he's saying is wrong. And it gets me really excited. Afterwards, he and I go out to dinner one-on-one and he's actually great. And like, he and I grew up watching like infomercials together, and that's how we got good at marketing. I remember like talking about like the rotisserie chicken and like the Ron Popeil or whatever it was, rotisserie chicken. I love the guy at the end. I love the guy. And I remember him saying, he's like, look, there are probably 3 people I would trust to take over my business, and you're one of them, Moiz. And I was like, you know, it sounds like you and I don't get along, but in reality, we stand up to each other and sort of appreciate what it takes to be a good marketer.

Yeah.

And I really enjoyed him. But it like those personal relationships Relationships and who you're going to work with are so important, especially post-acquisition, right? Like the day you sign the docs, it's great, but like you're gonna have to work with this guy. You're still at Movement Watches for a year. You know, it's been a year and a half since you sold the business. You know, you got to get along with that person on a daily basis.

Yep. Yep. No, absolutely. I think you hit it on the head.

You sell the business, all this money, you go from in 2013 using your Chase Freedom card to now having an Amex Black in 2020. What's the first thing you buy? What do you do with all this money?

It takes time to settle in, I think, for me at least, trying to figure out what you're supposed to feel when you sell your company. It's obviously bittersweet because that means it's not yours anymore and you're waiting for this day to have the financial freedom, so to speak, that you want. And it's not like you have a house lined up to buy tomorrow. Yeah, that's true. And even if you buy that house tomorrow, it takes another few months to get settled in. And I'm 28 years old. I live by myself. So, it's like, what do I actually need? Do I really want to go buy a house? And it's figuring out just like what life's like and taking a breath and not going in and trying to invest in a bunch of startups right away. So for me, it was like, I think eventually my biggest purchase was a condo that I'm in. It's a 1,500-square-foot condo. So it's great for just me right now, especially in quarantine. I'm glad I did that.

Yeah.

But for me, it's like helping my family out and it's figuring out how I'm going to invest the right way and so forth. But I think the biggest balance is just like, For me, at least, and I mentioned this a little bit before we started recording, was just kind of like ultimately, it's like what makes me happy was like what I was always in kind of search for. And like building a business, having a financial, big financial outcome was like always something that I thought was something that was going to make me happy. And I think it's a component of it. If you're unhappy in your life before and you sell your company, it probably is going to just magnify those issues even more versus like, I think I was like in a pretty good spot, but this has given me like, I can't really be complaining about, you know, my financial situation. So she's figuring out like, what do I live for outside of just work and money? Like, what are my hobbies or what, what makes me happy? And I think fortunately that can be my focus, right?

Yeah.

A large piece of my focus, which I'm super fortunate about. But I think it's taken a couple years and I'm still working on it, but it's taken a couple years to really figure out things that make me happy and like, keep my brain kind of stimulated, et cetera.

What are some of those things?

I mean, the number one thing I think has to come down to just like working out for me. I think that if I work out, whether it's cardio, anything, if I get a good sweat in and I instantly feel better that day, like whatever I eat later, I could eat like shit later that day, whatever it is, at least I got that workout in and like, and was moving and you just, you feel better about yourself. It's known to, you know, your endorphins, et cetera. So I think that's a big one. Meditating has been big, you know, even if it's 10 minutes a day or even a couple times a week has been great. People, I think relationships, I've really realized like, okay, like you have this financial outcome and it doesn't need to be just like love relationships, but just friends in general.

Sure.

One of my favorite things is like going on a trip with buddies or doing things for my family, whatever it is. And it's like, those are things that make me happy. So I'm on a road to still figure that out. I think my biggest thing in life, to be honest, is just to figure out It's a pursuit of happiness. What is it that makes— you could be happy with $100K or $50K a year. Like, I think that's great. That's fine. It's just figuring out what is it that makes you happy. And I think everyone's kind of in the race to make money because you need it to survive. And once you have your kind of the— your life, your regular finances, your kind of necessary finances in place, I think it's then figuring out, you know, the things that make me happy. I'm talking about working out, right? Like, working out, anyone can do.

Sure.

Everything else I'm talking about are things that people can do. So it's just, I'm fortunate that I'm able to take a step back and really kind of focus on it though.

We've met a few times in person, certainly. I think every time we get brunch in LA, I'm always like amazed at how self-conscious you are about that happiness. For me, I was always like, okay, great, being wealthy is gonna make me happy.

Yeah.

It absolutely doesn't. You're absolutely right. Everyone says being rich doesn't make you happy. And I feel like no one told me that, you know, like I didn't believe any of that. I still blame everyone else.

You're right.

It is all about what's inside of you that's going to make you happy and not necessarily just spending your way to happiness.

Yeah. And it makes it easier. Don't get me wrong. If you want to go take a trip or buy something. But I think I've realized that having a big TV or having a nice MacBook or iPad, those things don't make my happiness levels. For the moment I open it, I get this joy and then it's instantly gone pretty much after that. But experiences, experiences are number one. I think health, Mental health, your body, keeping those like at an all-time high. And then experiences that ultimately, like, I just try and look back on my life. If I died tomorrow, like, if I look back on my life, like, what would I be upset I didn't experience or do or experience with certain people?

Yeah, absolutely.

I'm also excited at the fact that like just going through the journey of Movement, like these people I've done it with, especially early on, like I have great relationships with those people. I wanna make sure that like as people leave or like, you know, as the company changes that like I still maintain those relationships with those people, and that's super important to me as well.

So. Yeah. The people that I worked with at Native were like my best friends. Love all of them.

Would do anything for them. Yeah.

Certainly life is a lot easier, but it is crazy where you're like, man, I really want this thing. You end up making the purchasing decision to get it, or you get invited to this thing that you've always wanted to get invited to and you never were, and you get invited to it and you're just like, oh, this is not gonna make me happy. And you're just like, fuck. And it's hard to also like, I buy something and I'm like, yeah, you're right. Moment of joy when you buy it. Then all of that is gone instantly, and you're like, okay, here's this other thing that I want to buy. And you're like, you have to be like, you know what? Buying this thing is going to bring me two seconds of joy. Is that really worth it? Yeah. I follow Justin Khan on Twitter. He's the founder of Twitch. I'm not sure if you follow him. Everything he says, I'm just like, I want to be like this guy.

Yeah.

He has a ton of money, and he's like, I'm trying not to buy anything because I buy this ten thousand dollar watch, and I'm just like, okay, I have a moment of happiness, and afterwards I'm not happy about it again. And it's like crazy that that's That's so true. And it happens to everybody. Those material items just never make you happy.

Yep. I did it for the first time. I bought like, I bought some Off-White is what I did. That was my, I was like, let me just see. I have to do it because, and I swear to God, I haven't worn it once. It's still in my closet. Not even because of the corona, just because I was like waiting for the right time. And now it's, I'm just like, okay, I'm not, I'll never do that again.

So. Yeah. It seems, uh, once you have them, you're just like, I have no idea why I pulled the trigger on this thing.

Yeah. Yeah.

I know you're like an investor or an advisor, at least to a bunch of direct-to-consumer businesses. I know like Skylar, I think is one of them. That you and I are both in.

Yeah, yeah, yeah.

What do you think happens to direct-to-consumer? Casper happened where, you know, this darling of the direct-to-consumer business sort of didn't go anywhere or like hasn't had a good outcome. Outdoor Voices had to do a recap. Brandless went out of business. COVID happened. WeWork happened. All of a sudden people are focusing on profitability. In the next 5 years of direct-to-consumer, are people building more natives and movements or movements and natives, or are people Are people still going for the, you know, VC-backed outcome, or are they just built like, you know, what happens in the next 5 years?

I think for D2C businesses, I think it's going to be a more friends and family. Like, you may need more capital than a credit card, you know, to get it going. But I think people are going to have more relatively bootstrapped or profitable kind of conscious businesses. And I think it's still very possible. And honestly, most of the companies that I invest in, they're either profitable or like very, very close to it. And the only reason they're not is because they're growing so aggressively, et cetera, that it makes sense. They're kind of on that fence. Again, I think there will be some interesting potential businesses that come out of COVID that aren't necessarily D2C or may need capital to grow and maybe still chasing a big exit. But I think in terms of like the direct-to-consumer brands, from what I've seen, the ones that are the healthiest, I mean, this is a good example. This is the most radical thing that's ever happened in, I think, pretty much our lifetime, our parents' lifetime, and their parents'. But in terms of like who can weather the storm right now, I think it's people who have good businesses that are profitable and can stay afloat. And if they need to be more lean, they can be more lean.

Yeah.

If you're already raised at a certain multiple, like the difference between getting back to that environment, you know, could take years to get back versus a bootstrapped profitable company who maybe it adds another year and a half, 2 years to kind of your exit or whatever you wanted to get to. But at least you control your business, you maintain things, you stay lean, and it just adds a little bit longer to your timeline, which I think is fine. And it's not the end of the world by any means.

Yeah. Couldn't agree more with all of that. All right, Jake, really appreciate your time. You said one of the things that brings you happiness is relationships. I feel like the first time you and I met was, I forgot where in Santa Monica, but you and I were running one of the few bootstrap companies. That existed that was at scale, or like you were running one of those and I was trying to become one of those. And I always admire that. And like, you know, really took a lot of inspiration from the way you built MVMT. And like every time you and I connect, I remember you and I connected when you were like going through the process with Movado as well in LA and was in awe of the business that you were building, was in awe of the way you were thinking about it. I remember when you were thinking about selling your business, you're like, I'm gonna go and like, I haven't told my parents and I'm gonna tell parents and they're going to be super excited and they're going to have this financial safety because of me. And I was in awe of not only the way you were thinking about it, but how humble you were. This relationship is one that brings me a ton of happiness and I love connecting with you every time we do. I feel like, you know, you and I are kindred spirits that want to build profitable businesses that are willing to do that, that are like, are independent-minded and sort of ignore the Silicon Valley ethos of raising a ton of money. You and I have had great outcomes. And we're both on this path to finding happiness. I've realized now that it certainly doesn't come from financial success, and I'm trying to figure out when you realize what it is, tell me so I can do what you're doing again.

I'll share. I'll share.

Yeah, please share.

Couldn't have said it better, man. I appreciate it. It's always been a joy to hang out and to talk with you. I get insight from you all the time as well, so I totally appreciate it. And thank you so much for having me on this podcast. I haven't done a podcast in a while that I can remember. I was excited about this one and wish you the best of luck with it.

Likewise. Thanks so much for your time, Jake. Really appreciate it. See you next time in LA. Hey guys, that's a wrap for this episode of the Exit Strategy Podcast. We'll be back next Thursday with another new episode. And if you like this podcast, visit thehustle.co to subscribe to The Hustle, a daily email that will give you the business news you need to start your day.