Brian Lee: Pioneering Disruptive Businesses

So what are you looking at? What has you excited? What are the things that you invested in a company recently? But what more kind of more things that, you know, are you looking at other things? What should we be doing? I mean, if we were going to model ourselves, because a lot of the folks here, they're adding an E comm component to it or they're launching or they're, they're thinking about pivoting, you know, their business maybe just a little bit. What direction would you suggest we take if we wanted to appeal to someone like yourself?

You know, it's interesting. It's like every time you think everything's been done, it hasn't, right? You wake up every day, you're like, gosh, there's no more opportunity. And then something pops up, right? So, so I, I'm a firm believer that, that things are always being innovated on and new bottles will always be created.

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Welcome Mr. Brian leave with us this afternoon. Let's give him a big hand. And we're going to have a fireside chat with Roland and Ryan along with Brian. Universe Valve. I feel like that was like the Gill, the old Gilligan's island one where it's Brian Lee and the rest, me and Roland. So thanks again for, for flying all the way, taking the red eye from Los Angeles.

Thank you for having me.

There's a lot of other Californians out here, so they are, I think. Yeah. Woo.

All right.

California in the house. The things where you and like tens of millions of other People, but thank you. Thank you again for coming all the way out here. I know everybody here appreciates it given all of the, you know, success that you've had with starting commerce companies and building really, I think without realizing it, without knowing that you were doing it, building kind of some model content and commerce type company. So it's fun for us just to get, get a chance to chat with you and let's these fine folks listen in.

Awesome. Thank you.

So you, you've, you've done quite a few diverse things in legal zoom. So legal, which then leads to shoes, obviously, I can see the connection there. And then lawyers wear shoes and then lawyers wear shoes and then honest with, with baby things and going into other things or I know that legal and shoe were your ideas, right, Originally. How do you come up with these things and start them?

Yeah. So I think like many of you, I think I was just born to be an entrepreneur. I always had it in me to start something. Like ever since I was in grade school, I would be like, I would make my own little mazes and try to sell them to the other kids for 10 cents and all that kind of stuff. And I think for LegalZoom, I ended up going to law school and working at a pretty nice firm, but it wasn't that fulfilling to me. And so I kind of wanted to get back to starting a company. And I remember one of my partners asked me to form a corporation for them for a client. And I formed it and took 10 minutes because it's just a check the box form. And then when the billing came, you had to approve your billing rates and everything. And it was $2,000 next to it. And I told the partner, I go, I think it only took me 10 minutes, but it has 2,000. And he's like, that's our standard fee for incorpor. I used to look, wow, that's a lot of margin in law.

I started to say, wow, a lawyer with a conscience. But you weren't like, this is wrong. You're like, margin.

And so I realized pretty quickly that you could probably automate. This is when the Internet was first started, that you could automate a lot of this process and put it online. Very similar to what QuickBooks was doing with accounting as well as what TurboTax was doing with tax software, that you could automate a lot of these very simple legal procedures. And that's the genesis of LegalZoom. And we started that company, gosh, believe it or not, like 16 years ago. So it's been a while.

I Formed my very first company, really Soft Niche Solutions, which is no longer in business because it didn't actually ever do anything. But I formed my very first company on LegalZoom.

Thank you.

No joke. Yeah.

I'll give you a discount on your next one.

Thank you. Thank you.

I appreciate it.

Anybody else has. Anybody else. Did you form your company on legalzoom of people? Yeah, it really was, it was, it was, it was great for entrepreneurs, right? That, that big aspect, it leveled that playing field. So thank you for doing that for the entrepreneurial community as well.

Thank you.

So one of the, one of the.

Questions we get from, from a lot of the folks here is I'm an entrepreneur, I have an idea or, or I am the only person in the business right now and I don't know, I want to automate Legal, let's say, or something, but I don't know how to do that myself.

How.

How do you go about finding the people that can do the stuff so that you're not having to learn how to program in Ruby on Rails and things like that?

Yeah. You know, for LegalZoom, we kind of got fortunate because a good friend of mine was working at a company called Sapient back in the day and he was building websites and we were talking to him about the idea because we knew we needed someone to actually build the site. And he joined us as a co founder. So that's how we started with LegalZoom on the coding side. But looking back at all the companies that I've started, it really does come down to knowing what you're capable of and understanding how to buttress your abilities. Right. So for every company, we vet every person that we're bringing in, understanding what the structure of the company should be moving forward. I tend not to hire a year in advance. I usually tend to hire, you know, five days late, truthfully, is kind of like taking the most out of your. Your talent and then hiring only when you need, do you think?

I don't mean to interrupt, but I think that's what a lot of. That's what we've done also. More as a function of need. Right. You don't always have the funding there to do that. So, I mean, in a lot of your ventures you have had the funding there, but so has that been a conscious thing? Do you feel like that's the right way to approach hiring and growing the team and getting the people like, like Roland talked about waiting until you, you know, until you've utilized all the resources you have?

Yeah, yeah, I think so. I Mean, you could definitely, if you have enough funding, you could definitely hire a little bit ahead of the curve. So you're not constantly, you know, battling from behind. But in terms of, you know, growth versus profitability, right? You know, you want to hire as few people as possible to get to profitability, but you also want that growth. And for me, it really all depends on, number one, the company, but number two, the macroeconomic situation of funding and venture capital. So if funding is readily available, then I'm looking for growth. When funding is not there, then you're looking for profitability. But even when you seek growth, you always want to have in your head a clear path to profitability. Because at some point, to be a great business, you've got to be profitable. We all know that, right? But what is that level? I mean, can you get to, you know, can you be Amazon? Can you get to 20 billion in revenue and not be profitable? And no one cares, right? Or even Facebook or Google. None of these companies were profitable until they got to scale. And then you turn on the spigot and you start making money. So it all depends on the type of business, the funding environment, but always with the eye towards how do we get profitable.

And as far as kind of keeping tabs on that.

What are the KPIs, what are the.

Key performance indicators that you look at to see if, like, what do you watch on a daily basis? What's important to you to see, to know kind of how the business is doing?

A lot of it is marketing. Right. Which is why you're all here. So for me, we pay very close attention to cost for acquisitions. What we call CPNs, which is a cost per new subscriber. Because a lot of my businesses are subscription based. We look at LTVs, we look at, which is lifetime value.

Oh, LTVs.

Okay. Yeah, lifetime value.

It's LTB.

Yeah.

I don't even know what that is.

Yeah, I feel so stupid.

Yeah.

So we're looking at a lot of that type of KPI or those KPIs. We use a lot of different tools, digital tools, to help us manage that. So we're working with, like, sprinklr to manage social. We work with Domo for our dashboards, boost ctr. We work with Optimizely to optimize the site. A lot of great digital tools out there. And we're constantly. The trick to growth is, as you guys know, it's always testing the new products. I mean, we're always testing everything.

We spy on you, your company, and all the other Fast growing companies with a tool called BuiltWith that tells us the tech stack. And we found a tool that you're using called retention science, which we promptly contacted them and went out to Santa Monica and talked with them and it's been really cool. So it's so important, I think to us to stay on top of that and find the, the things that work. And they said that that one in particular for you guys increased your six email welcome sequence by three times the conversion, which.

That's right. I mean, there's some great tools out there that, that you could use even as a startup. And then as you start to scale further, once you start hitting, you know, tens of millions and hundreds of millions of revenue, then you start bringing more of that in house. Of course. Right. So right now we're very focused on diving pretty deep into data analytics and building tools off of what we're finding. So for example, like our data team did this great analysis of customer segmentation of our own customers, like where we're getting them and then basically scoring them on their likelihood to churn. Right. And so we have a customer service team that get a lot of calls of cancellations or where's my order or can I add something to my order? And basically even as a call now, our CS reps have lights, like if they're calling to cancel their subscription, we have lights that have red, yellow or green. Now because now we know this person calling looks very similar to all these other customers that are low value to us. So just basically cancel them and move on to the next call. Yellow, they have a certain amount of sets to offer them. Green is save them no matter what.

So you're not trying to save everybody. You're like, if you're not our ideal customer, we just assume, you know, part ways and kind of focus more on getting green light people.

Right? That's correct.

That's a good point of optimization. So if you were to look back, whether it's, whether it's honest or it's shoedazzle, or even going all the way back to LegalZoom, what were some of the things that you did that you recall or that was done by your team that really moved the needle? That made a big difference. Because the problem with optimization is a lot of things that we try just they don't do anything. It wasn't good or bad, it just made no difference. So what were some of those needle movers? If you were to look back, you.

Know, it's interesting you say that because most of the, most of the stuff that you do test doesn't move the needle. Right. But it's really like those little nuggets that you find that all add up. But there are no silver bullets. Right. Everything is kind of built on each other and you start optimizing 0.01% at a time. And when you look back, you're like, it worked, right? So initially your gut instinct be like, oh, it only moved the needle by, by this much. But if you keep doing it, if you keep doing it, it starts to make a real impact.

It's funny you say that because we have been talking a lot lately in our company about it's not for us, it's not death by a thousand cuts, it's life by a thousand lifts. And it is, it's just those little, those little wins. Yeah. But yeah, I like, I like Ryan's question. If you, if you have anything like any moments that were, that you found those needle movers, if you, if you can say chance, totally cool.

Especially early on. When you think about early on, you're testing and you're trying so many things. And I know we're, you know, we're continually surprised. Was there anything with, you know, with Honest early on or did you just nail it right out of the, right out of the gate?

I think Honest was a little bit different because I had learned so much really at legalzoom and what works and what doesn't work. And she dazzle. I always like to say, you know, you can make a mistake once and you'll probably make it again. If you make it twice, that's on you. Yeah, ex on you. So Honest company was a little more efficient, if you will, in terms of.

So what did you learn from shoedazzle that you were able to apply over at Honest an aspect of the model?

Well, the number one thing was understanding churn levels. So how fast a customer churns out of a subscription and understanding the points of churn and anticipating that ahead of time to keep that customer longer. And that's something that's just been invaluable to us. So for example, I was talking about data analytics and how we're putting the yellow, green and red we do the same with. This is the type of customer that on average after four and a half months are likely to churn. And so at the four month period, we send them an offer and say, guess what? Next month you're going to get a free tote bag with your order. It keeps them on just a little bit longer and you keep doing that for every churn metric that you have in your database. Very cool.

Was honest. And I'm a little confused because I've read different things. Was honest. Already going. Jessica had started it and then kind of came to you and said, hey, I got this thing but I really need some help growing it.

No, no, actually Jessica Alba came to me about like nine years ago. I know her husband Cash Warren from around town and he was in E Commerce, believe it or not. So sat down with Jessica about nine years ago and she came to me and said, I have this great idea. I want to start this organic lifestyle brand. And I said, well that sounds awesome. I don't have time to do it. Exhausting because at that time I was running LegalZoom, I was just starting to shoot Azzle and I introduced her to some friends. And then about five years ago now, she came back to me again and said, I'm still thinking about this idea, really want you to help me start it. And at that time I had my first child, Davis. And I saw how my wife started changing her buying behavior. She started shopping at Whole Foods and making organic purees for the baby, started buying, you know, eco friendly diapers and so forth. And so I thought, well, maybe Jessica's onto something here, right? So I sat down with her again and basically, you know, she was so passionate about this. And I came to this, this awakening moment too, that, that now if I'm going to do anything with my career, I want to have an impact, right? And, and if I could, you know, build this business and even help make this world a little bit more non toxic and safer and healthier, then why not, right? This, this will give me fulfillment. And so we started the company almost five years ago now.

So when you had that meeting and said, okay, let's do it, what happens next? Like what is it? Is it first go get money? Is it first go get team? And how do you do? What are the steps? Like?

Yeah, so, so for us it was definitely first go get team, right? And so we brought on Christopher Gavigan and Sean Kane. So Christopher Gavigan comes from this non toxic world, if you will. So he was former CEO of Healthy Child, Healthy World and he basically built all of our initial products. And so then Sean Kane was an operator in town. He used to be at Price Grabber and some other companies out in Los Angeles. And so the four of us were the co founders. Then we raised capital to start the company and then it was off to races from there.

What do you thought? I mean every, in every business, you've done. You've talked about having these co founders that were doing this. Obviously, the upside of that is help and expertise that you don't have. The downside is you don't have the whole thing anymore. Um, has that ever bugged you? Because I know as entrepreneurs, we struggle with that a little bit. Right. Anybody who's starting something, do I want to divide up the pie? Am I okay with a small piece of a bigger pie? So how do you. How has that ever been an issue with you?

It's never been an issue for me because I just figure if you get the pie big enough, there's enough pie for everybody. Right. And so. So even with LegalZoom, I kind of fell into working with a celebrity. It was more a need. Right. It was when we started LegalZoom back in 99, 2000 when we started working on it, trust was a big issue online. I'm not sure how many of you guys all look pretty young, but for those of you my age or older, I mean, you realize that a lot of people are even scared to put their credit card information online, let alone to give us their Social Security number, their kids names and bank account in order to make a living trust online. So. So trust was an immediate factor. And although I was working at a great firm and my partner was, no one had ever heard of these firms, Right. So that's when we contacted Robert Shapiro to kind of be the face of LegalZoom and our third co founder. Because we wanted people to instantly recognize, okay, well at least I know this attorney, right? And I can trust the site. So that's how it happened. But then what happened was that Robert Shapiro started going on to talk shows and talking about Legal Zoom. And every time he did that, we would get more orders. I was like, wow, there's something to this. We don't have to spend any marketing dollars and we're getting all these orders. So that's when I realized the power of influencers and celebrities.

So you cold called Robert shapiro at like 5:30 at night or something like that. Just didn't know him or anything. And he happened to pick up the phone, right?

Yeah, so.

So that was incredibly serendipitous. And then Jessica, you met through somebody that you already knew. And Kim, I think you met Karshashi and you met through Robert Shapiro.

Right.

So for those of us who do not have the stars aligned quite so well to have that kind of luck if we want to attach a celebrity, how would you go about approaching that?

I would go about approaching it kind of the summer. Well, number one, you got to think of any, you know, potential partner as a potential business partner, even if it's a celebrity. Right. So. So a lot of people ask me, like, well, what's it like? And this and that. It's like Jessica's not, you know, Jessica Alba, the actress in the office, you know, she's our. Our business partner. Right. And so unless you approach it in that manner and understand that this is your partner, this is not going to just be a. A face to the brand. And look, you could always pay someone to be a face of a brand or, you know, go out there and talk about something, but to truly have a partner, that's. That's a decision you have to make in terms of, you know, equity splits and how much involvement and everything else. So now they're just like everyone else in terms of, you know, potential business partners. But how. How I would approach it if I didn't know these people directly. The first thing you want to do is try to reach them directly, right? Because it's very difficult to go through talent managers and agents and so forth. And on top of that, talent managers, I mean, their jobs are to say no, right? It's like, no, not interested. So try to use your network as best as you can to see if you could get to that person directly as opposed to through a talent manager or an agent. And if you have to go through a talent manager or agent, there are definitely some agents and talent managers who are definitely more adverse, are more active in terms of seeking out opportunities for their clients. And so, you know, you just kind of have to. To meet enough of those people in Hollywood to understand who's who.

So we've.

We've had reasonable success by sending what we call a firm offer. So we will go direct because agents we find are very challenging. And we'll just send a contract that says if you sign this, then we'll pay you this much and kind of go from there. Once you have that initial contact, how do you. How do you decide equity splits and comp and stuff like that? Where do you start with that?

You know, it's when it comes to.

Without revealing the equity position of your business.

Yeah, for sure. Like, just generally. Yeah.

How much. How much she got?

Like, go ahead.

How much money does she make? Yeah. So in terms of equity splits, it's really the wild, wild west. Right.

That's when I find. I don't know where to start, though.

There's no standard. There's no, no one. No one says you know, if you're a C level actress or a C level singer, you get this much. There's no formula.

Yeah, right.

And so it's, you know, again, it's all negotiation. Where do you start?

How?

Just because I know everybody has its challenges.

Yeah.

So where do you start? Do you say 5050 or do you say 6%? I mean, it's just, it's so. Yeah.

How do you do it?

It really is. It really is. I think a lot of it depends on how big the influencer is too.

Yeah.

Right. I mean, I. Is Gary Coleman still alive? I don't know why that name popped up.

Gary Coleman is, is not. But it's an amazing reference. So keep going.

So if it was like Garrett Coleman, so I could.

He would get less because he's dead. Yeah.

But it's like you might give Garrett. You're going to give Garrett Coleman less than you would give, you know, br. Right. There's a scale.

Unless Brad Pitt was willing to accept what we would give here.

That's true. But yeah, I mean, I've seen, I've seen deals get done for, for half a percent. I've seen deals get done for 80%, you know, which is kind of crazy. But it's is all across the board depending on, you know, how much involvement that celebrity is going to have. That's, that's the most important. Like if you're ever going to work with a celebrity as a partner. Like a lot of these celebrities have a lot of other responsibilities and things that they're working on. So you have to make sure that you're going to get the appropriate amount of time and effort from them.

And I think the perspective that you had is a good one. They're a business partner. So I think you would almost have to approach it in the same manner that you would any other business partner you had that had a full time job.

That's right.

So you're approaching and saying, this is going to be my whole thing. I'm all in. You're going to be part time. Now don't get me wrong, you're a big deal and that's. And that's great. But I'm all in on this. This is all I'm doing. You're going to be part time on this. And then when your agent calls and you got a big movie and you got a flute and debugging off to Hawaii to shoot for, you know, a couple of months, you're not going to be here and I am. So I think maybe that's how you would have that conversation, at least that's probably what I would have, how I would do it. And I think also thinking through, because I don't know if it was discussed ahead of time, when you're talking to a Kim Kardashian, like, is it just, we want to use your name, or are you going to be actively promoting it on a daily, weekly, monthly, yearly basis? Or is it just you got some association? It's kind of more just a brand deal. I'm guessing that factors into it as well, right?

Absolutely, absolutely. It's kind of tough because I've seen contracts done for celebrities that say every month you have to tweet five times, you have to post 20 messages on Instagram or whatnot. That tends not to work. Truthfully. It's kind of like if you were forcing any partner, this is what you have to do.

It's a partnership. A partnership is a relationship. It's not transactional.

If you can't see eye to eye with, with a potential partner, then you shouldn't be their potential partner. You shouldn't be partners. Right. And so that's, that's what I see. It's, you're either in it or you're not. Right. Tell me, tell me, tell me how much you want to work on this. And let's go from there.

How about, how about team Non celebrity, the other team members? How do you, how do you, how do you think about bringing them in? Do you offer equity, stock option plans, those kinds of things? Not in a bigger company like Honest has become, but like when you're kind of getting started out?

Yeah, I think that's one of the greatest tools any entrepreneur can have, our stock options. So at all three companies, I think every employee has stock options. Okay. And of course, the earliest employees get bigger stock option grants, but you use them, you know, as you start growing, the grants become smaller, smaller.

You have a VC fund or a startup, an incubator. What is BAM Ventures?

Yeah, so I've been angel investing for a long time, so for over 10 years, probably invested in about 70 companies in the Los Angeles area. And so just about two years ago, I finally put some structure to all my crazy investment.

All your hairbrained schemes. You brought all your crazy ideas under one roof. Exact. What could go wrong?

So we kind of formalized. I, I, I have a partner named Richard John, and we, we, we formed BAM Ventures, and basically we're investing out of that now. So we love backing entrepreneurs, especially, you know, in Los Angeles. Although we invest, you know, in Other cities as well.

What are you looking at today? I mean, you, you're so. Most VCs and angel investors, they have money, but they don't know what the heck's going on. And so there is. And I know I've got. And I say this, I have friends, like really good friends that are out there, and they asked me, like, what should I be investing? I was like, dude, that's not good, man. You need. This is like your job. You, you're doing it, You're a practitioner, right? You're not someone who made it. Now you're done. Like, you're, you're working, you're living this stuff. Had multiple, you know, startups, you know, yourself, many exiting. So I would assume that you would know more than at least a lot of the people that I know who are in the VC and angel space. I know some pretty smart big guys.

But.

So what are you looking at? What has you excited? What are the things that you invested in a company recently? But what more kind of more things that, you know, are you looking at other things? What should we be doing? I mean, if we were going to model ourselves, because a lot of the folks here, they're adding an E Comm component to it or they're launching or they're, they're thinking about pivoting, you know, their business maybe just a little bit. What direction would you suggest we take if we wanted to appeal to someone like yourself?

You know, it's interesting. It's like every time you think everything's been done, it hasn't, right? You wake up every day, you're like, gosh, there's no more opportunity. And then something pops up, right? So, so I, I'm a firm believer that, that things are always being innovated on and new models will always be created. I'm really excited about, about augmented reality and virtual reality right now. I think it has, you know, it's at the nascent stages right now. But I was meeting with a company that, that was building what I thought was the first truly virtual mall. And it was, it was really exciting. I put on these Oculus glasses and I was like going through their rough kind of schematics, and it was, it was beautiful. It was a beautiful experience. And basically depending on the, on the shopper and what they knew about that shopper are the type of shops that they would show that shopper.

So you're sitting there in your lazy boy chair and you're like, yeah, honey, I'm going to Cabela's.

That's Kind of cool though. So you're doing a data driven mall. So the mall changes based on what you know about the past behavior of the people.

That's right.

That's pretty cool.

I think that's exciting. I think there's a whole new world in terms of virtual shopping. I tend to be more of a consumer facing guy. So those are the deals that I look for. But I also just love technology. I saw this drone company that was amazing. It was based out of Germany and basically there was a drone the size of probably this whole stage. It was gigantic, but it was a little capsule where it could actually transport a full adult about 50ft. Today, program programmatically and at the pace that evolution is going is within 10 years, I mean that 50ft becomes 5 miles and then it's going to be pretty amazing just seeing drones take people places. I mean people talk about self driving cars and autopilot and this or that. I think the future is in drones.

So it's either honey, I'm going to Cabela's or honey, I'm going to Cabela's.

Right?

One of those. You're looking for either of those? Yeah, yeah, I like it.

So one of the investments that you made recently that launched was the one that you were telling us about backstage Holler. Want to tell the folks kind of what that is and what attracted you to that? Because that's a thing that kind of falls into that. Everything's been done, but actually that's a pretty big thing that hadn't been done before.

Right? Yeah. So, you know, I'm an entrepreneur, I'm an operator, so I don't have time to actually go and run something else. But I, as an entrepreneur, I'm always coming up with these ideas and one of these ideas was kind of a value store on mobile and ad online.

Like a dollar store.

Like a dollar store.

You guys have been in Dollar store?

Has anyone been to Dollar General or Daiso or 5?

Amazing thing about that. People walk in there just to see how much crap can I get for 20 bucks?

That's right.

It's recreation, right. It's consumerism is ready.

It's a treasure hunt. It's incredible. It's an industry that has over $50 billion of market cap just in the US, over 100 billion globally. And no one was doing it online like no e commerce. No mobile commerce was doing it online. And most smart people will tell you or most E commerce people tell you because you can't ship a $2 item and make money or a $1 item and make money, which is true. Right. But what I learned after kind of looking at that business model is that the average cart at 99 cent only stores was $23.

Ah, right. See, we didn't talk about that ahead of time. I already knew that.

Yeah, it was $23. And so once you get to a $23 cart, the economics start to make sense. Right? The unit economics. And so just looking at that industry, it was really interesting because I have a friend who was the owner of nine ice and only stores. His name's Eric Schiffer. He's telling me all about his models. And he told me the most interesting thing. He said our most popular store, our most productive store is right on the edge of Beverly Hills. I go, really? Right. And he says, it's great because it pools from the north, the east and the west and they all conglomerate at this one store. And it performs extremely well. And in my head, I mean, I just know that it doesn't matter if you're rich or you're poor. You want value. Right. I've never heard anyone walk into a store and say, please charge me more. Right. It's never like that. They're always looking for value. And so for me. But not everyone wants to go to some parts of town to go to a dollar store. Right. So I saw this opportunity to kind of expand that $50 billion market even further. Because, I mean, if you can buy saran wrap for two bucks as opposed to 299, why not?

It's all right.

So. And that goes a big point, a.

Big question that we get.

We're talking about the tripwire because what. Basically what he's doing is creating a store of just tripwire items. You guys realize that is that pretty smart? So a lot of the questions that people get is that I will ask us when we talk about this model is, dude, if somebody comes in at such a low price, isn't the value overall going to be less? Isn't it going to cause them to spend less? And the answer is no. So it ties back perfectly. I'm time back.

Perfect.

What you just said to some of the things that we talk. Thank you for validating some of the things and didn't even plan that.

So in terms of looking at that, as you were thinking about investing that there is an app that we talked about, the Wish app, that.

That is kind of that.

How do you. How do you look at that when. When somebody comes to you.

When you.

I think you had that idea actually. But when you Say, oh, this is a great idea. And they're like, ah, these guys kind of sort of have it. Do you think about differentiation or how do you approach that?

Yeah, absolutely. Differentiation. So. So when you look at the items that are sold on Wish, it's a very different kind of product offering. It's all kind of made from China and exported from China and they're kind of like mostly electronics and gadgets and so forth. Whereas on Holler it really is about inventory that we have here. Right. So the shipping times are much less, but it's just a different kind of product offering. We sell a lot of kind of kids toys as well as consumables, consumable staples. It's kind of like this. I think the reason why Wish is so successful and I think the reason why Holler will be so successful is because anytime you go into E commerce retail, you always have to think Amazon is going to kill people. Yeah, right. I mean if you're not thinking Amazon's going to kill you, then you're doing something wrong.

Right.

Because they will be delusional.

Exactly. But when you look at the overall US economy and what's happening in America, you've got the wealthy who are getting wealthier and you got the poor who are getting poorer. The wealth gap is growing at an unbelievable rate. And I think you all know this, right? But yet when you look at retail, the fastest growing segment isn't even E Commerce. It's not Amazon. It's actually the dollar stores. It's the value chain stores. They're at their all time highs and they're meaning and beating every quarter. Right. So how is that possible? It's because if you walk into a Dollar General store or a 99 cent only store, 95% of the items in that dollar store are not available on Amazon. Right. Just like items that you find on Wish are not available on Amazon. Well, a lot of them are and aren't. But, but especially it's like when you go into, you know, Nine eyes and Only. I mean you're not, you don't find Tide as a line detergent, you don't find Crest toothpaste. I mean every now and then they'll buy some closeouts and they'll offer you something. But you know, it's more Shasta Cola than Coca Cola. Right. And so that's why I think you know that that Dollar Play store is making so much money.

So you mentioned Amazon and definitely be aware of that. What are the things that across your investments you're doing to kind of deal with that, like from shipping to any kind of differentiation. How do you plan for that? Because I know initially you didn't want to sell on Amazon and I think then you started about a year ago, was it?

No, we still Amazon. Oh, I thought, okay, well our products are available on Amazon but through third.

Party, but not through you.

It's a higher price.

I didn't realize that.

So we do not have a direct relationship with Amazon.

Okay, so how do you address that threat slash opportunity that exists with.

I think it's a great opportunity. Will we sell our brand on Amazon at some point? Probably. But right now we're a four and a half year old business still building our brand, getting great traction and building our own community and building a good barrier around that community. And so I think once that's strong enough, then we'll start selling onto Amazon as well. It's interesting because we started off online as an e commerce company because that's my background and the DNA of the company. But we started selling into offline channels too. So Costco was our first large retailer and we sell kind of like a family size baby shampoo at Costco and it did extremely well. And we really kind of asked ourselves, well, like what are we, you know, are we e commerce? Are we offline retail? Like what are we? And we came to this moment where we decided we're a brand, right? We're a CPG brand and we really shouldn't care, we should be agnostic to how our products get into your home. So long as they get into your home. Right?

Does this sound familiar? Give me nuckies on that. Thank you. In other words, you're defining your business by the people you serve, not the product that. By the people you serve, not the way that you sell it.

Exactly. Yeah, exactly. Because for us, our mission has always been we want to create a healthier world. In order to do that, we have to be in your home and we don't care. Now you can shop online, you can shop offline, you can shop mail order, catalog, so long as we're your home.

And what are you doing to build this? You said you. I love the way you put it and because it so encapsulates the theme of this entire event, right? Community built brands, content and commerce. Not, not just selling stuff, but really serving an audience and building this community. And you almost described it, almost sound like we're building this, you know, this wall kind of around, you know, around our people.

What are you, what are you, what.

Are you doing to.

To.

To make that happen. Are there people at your company that.

Are in charge of that?

Like, what does that process look like?

What is it? Yeah, on a day to day basis. So, so community is extremely important to us. It has been from day one. Right. Because an engaged community leads to an uplifted brand. And no matter what happens to that brand, you'll have that community who will support you. Right. And, and so what's really interesting to me is going into offline retail, you know, you meet these, like, I had never, I didn't even know what a planogram was.

Right.

Like for offline.

What, A planogram?

Yeah.

I don't think most you guys know.

What a planogram is. This is what big retailers do to plan out their sets for the coming year. And we had to learn all this as we went. But it's interesting. You look at like, I'll use Tide as an example again, right. So if you go to Target and look for laundry detergent, you're going to basically find, you know, three or four shelves of Tide and they call that boxing out. Right. So they'll come up with all these new formulas and scents and this and that, different sizes to box out the competition. Right. And I found it really interesting because we do the same online, right. We just don't call it really boxed out, but we're building a social community that's boxing out all of our competitors because once they're part of our community, they're not part of yours. Right. And so we really took that to heart and it's all about that engagement, that social engagement. So we do have, I think we have like six people on our social media team. Right. Constantly creating new content and keeping that community engaged. When you look at our social engagement numbers, I think it's something like five times higher than the next CPG brand.

Just kicking the crap out of Tide. Well, no, but it's true. I don't want to talk to Tide. Right. No offense. You can't talk to Tide if we got tied people in the room. My bad. But I don't want to talk to Tide. I don't know who's behind Tide. I know the people behind Honest company. Right? Yeah.

Mr.

Tide, call up. I'd like to speak to Mr. Tide. But I think what you've done is you've built a brand that's distinctly human, that is, is lovable, that, that you want to, to care about and you want to be a part of. And I think that's a big part of.

Yeah, I think, I think the most successful kind of communities built on social. It really is about transparency. It's about authenticity. It's about sharing your story and being truly honest about it.

Well, I think given that the clock has us, that is a perfect place.

I'd like to ask just one last thing. So. So knowing what. What we've been able to tell you in the short time that we had together about our audience of folks here, is there any thought that you would like to leave them with? Any bit of wisdom, golden nugget, sage advice, or.

I'd say there's a whole world out, a whole new world every day. You know, there's so many opportunities out there. And I would say try them, test them. You know, it's like when we started LegalZoom, I think we were advertiser number eight in the entire world who paid for a click, really. And that was the advantage of LegalZoom. We were very, very early because a friend of mine was in passenger, was working on something called Goto, Right. Which was Overture back in the day. Right. So we stumbled onto that at Shoedazzle. Facebook was early. Right. We were in their beta test for their marketing campaigns. Right. And so we kind of grew very quick with Facebook and then with the Honest company. It was really about social influence and how all these kind of YouTube stars started gaining so much traction. We caught on to all of them very early. Right. So it's constantly changing, but there's opportunities all the time and be testing everything all the time because you're not going to know what's going to move the nail until you. Until you test it.

That's great. Thank you.

Perfect.

Thank you so much.

Riley. Everybody give a round of applause. Thank you very, very much. I really appreciate it. Thank you. So now just. Did that sound familiar? I promise you guys, we did not talk about this stuff ahead of time. I wanted to see. But notice how these themes keep recurring. When one person has a good idea, it's a good idea. When two people talk and they collectively create a good idea, that's cool. When two separate groups or three separate groups or ten separate groups come up with the same good ideas separate from one another, it's worth listening to and what you heard there, humanity, honesty, transparency, all of these things. And that's why I wanted you to hear from someone who's doing it, doing in a big, big, big billion dollar way. All right, so with that said, we are going to now take a very short break. 10, 15 minutes. You do not want to. We're going to break up again. Go to our respective Corners breakout sessions, but you do not want to miss James Altucher tonight. If you want to see what authenticity and transparency looks like, you want to be in this room. I didn't lie to you about Donald Miller and I'm not lying about James. Also, you want to be in this room. With that said, thank you so much guys.

Hey, Roland Frazier here.

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