Latest / Skin Anarchy / The Science of Building Great Beauty Brands with Chris Hobson of Rare Beauty Brands

Transcript

The Science of Building Great Beauty Brands with Chris Hobson of Rare Beauty Brands · Skin Anarchy

• 0:00
  SPEAKER_02: Hey guys, welcome back to Skin Anarchy.
• 0:02
  SPEAKER_02: This is a very, very special episode because we're really going to be diving into the business side of the beauty industry and understanding a lot of the things I think we don't really get to talk a lot about on this podcast, which I wish we had more opportunities like this.
• 0:14
  SPEAKER_02: So we're going to take full advantage.
• 0:16
  SPEAKER_02: Um without further ado, I'd love to introduce you guys to our guest today.
• 0:19
  SPEAKER_02: He is truly a, you know, a veteran in the space.
• 0:22
  SPEAKER_02: He understands the business behind beauty, I think, better than most people that have come on the show.
• 0:27
  SPEAKER_02: And I'm really excited to kind of pick his brain today.
• 0:29
  SPEAKER_02: So without further ado, please welcome um the CEO of Rare Beauty Brands, Chris Hobson.
• 0:34
  SPEAKER_02: Welcome, Chris.
• 0:34
  SPEAKER_02: I'm so excited to host you.
• 0:36
  SPEAKER_00: Thank you.
• 0:36
  SPEAKER_00: Great to be here.
• 0:37
  SPEAKER_00: Thank you for having me.
• 0:38
  SPEAKER_00: And I hope the hope the business topic isn't too uh esoteric and nerdy for your uh for your your your listeners.
• 0:45
  SPEAKER_02: No, I think they'll love it.
• 0:46
  SPEAKER_02: And I think we all love it, honestly.
• 0:47
  SPEAKER_02: We have such a cool listenership.
• 0:49
  SPEAKER_02: And then I I always get questions, so you're actually doing me a favor.
• 0:52
  SPEAKER_02: Okay, great.
• 0:53
  SPEAKER_02: Great, perfect new entrepreneurs that reach out and ask.
• 0:55
  SPEAKER_00: Well, we'll try and keep it interesting.
• 0:56
  SPEAKER_00: We'll try and keep it interesting.
• 0:58
  SPEAKER_02: Absolutely.
• 0:58
  SPEAKER_02: Um, I'd love to actually, you know, start by walking down memory lane.
• 1:01
  SPEAKER_02: You have such an amazing career.
• 1:03
  SPEAKER_02: You have literally been building brands since you were 20 years old.
• 1:06
  SPEAKER_02: And I I would love for you to walk us down that memory lane and tell us about your first brand and college and how that turned into a whole career.
• 1:13
  SPEAKER_02: Yeah.
• 1:14
  SPEAKER_00: Well, yeah, I I it was a brand or a business that I started because I needed money.
• 1:18
  SPEAKER_00: Um and uh and and so I I created this brand um called Jonathan Rigby.
• 1:24
  SPEAKER_00: It doesn't exist anymore, but it we we made clothing kind of blending.
• 1:28
  SPEAKER_00: The insight that I had was as a Canadian that um we Canadians are sort of products of American culture and British culture.
• 1:36
  SPEAKER_00: Um, the founding of the country, etc.
• 1:39
  SPEAKER_00: And by the way, it's Canada Day today.
• 1:40
  SPEAKER_00: So happy Canada Day to everyone.
• 1:42
  SPEAKER_00: Oh, happy Canada Day.
• 1:43
  SPEAKER_00: Yeah.
• 1:43
  SPEAKER_00: Um, so as a Canadian, I kind of had this insight that I wanted to build a brand, blending those two things.
• 1:48
  SPEAKER_00: And as I got into this world of branding and sort of thinking about like what a brand means to people, um I just kind of geeked out on it and and loved it and loved building my business.
• 1:59
  SPEAKER_00: And when I graduated from college, I you know had the Canadian equivalent of a 401k, and you know, and I and I got this job offer to go work at Procter and Gamble in in brand management.
• 2:09
  SPEAKER_00: And when I was there, I got exposed to some amazing people and you know, PG as a place to work is just a super, super um disciplined marketing, um, just a machine at execution.
• 2:23
  SPEAKER_00: And as a brand manager, you get trained as sort of the mini general manager of of your of your brand, of your business.
• 2:29
  SPEAKER_00: So I learned a ton there.
• 2:30
  SPEAKER_00: Had the good fortune to work on scope mouthwash, and then uh we launched Folgers Coffee into Canada, um, which was uh back when PG had a food business.
• 2:38
  SPEAKER_00: And then I went over to the the beauty division and I would became the brand manager of Old Spice and Secret um at the same time.
• 2:48
  SPEAKER_00: And Secret was the number one brand in in female anti-perspirants, and you know, it was like rocking and great margins, great business, great advertising.
• 2:55
  SPEAKER_00: And Old Spice at that time was sort of your grandfather's brand.
• 2:59
  SPEAKER_00: And um I had the opportunity to work on, we went to the we went to Cincinnati, where I knew you're you're from, and we went to the the US brand team and we said, hey, we're just up here in Canada, let us use can the Canadian market as a bit of a test market, um, and we'll try some different positioning for the old spice brand.
• 3:17
  SPEAKER_00: And then we went and did a ton of research on kind of guys and how they thought about deodorants and and things.
• 3:24
  SPEAKER_00: And we came up with this funny insight into the way that guys thought about it, and that became the repositioning that turned the old spice brand around.
• 3:33
  SPEAKER_00: So we went in in Canada, we went from number distant, number five market share to number three.
• 3:38
  SPEAKER_00: By the time I left, I went off to do an MBA.
• 3:41
  SPEAKER_00: Um, but then that positioning became the repositioning for the brand globally, and now it's you know up there with axe, uh depending on the year, it's either one or two in market share.
• 3:51
  SPEAKER_02: Yeah, I remember when Old Spice went from like, yeah, grandpa's brand to like every guy was wearing Old Spice again.
• 3:58
  SPEAKER_02: Like it was really cool to watch, you know, like oh, all of a sudden it it reemerged.
• 4:03
  SPEAKER_02: That's so that's amazing that you had that experience.
• 4:06
  SPEAKER_00: It was really interesting.
• 4:07
  SPEAKER_00: And actually, just a few years ago, I was reading a marketing book.
• 4:09
  SPEAKER_00: Um, again, I'm a bit of a nerd, but like I was reading this marketing book, and they were talking about back then, if you remember, Oldsmobile was a car, like a car brand.
• 4:18
  SPEAKER_00: And GM was trying to figure out how do we turn this Oldsmobile brand around and Old Spice both have old in their name, right?
• 4:26
  SPEAKER_00: And the book was talking about how on the Oldsmobile brand, they came up with the line, it's not your father's Oldsmobile.
• 4:32
  SPEAKER_00: And what they by doing that, they basically acknowledged it's old fashioned, it's kind of like dated, but we're we're saying it's not dated, which is kind of an authentic but also kind of struggling in inauthentic thing to say, right?
• 4:47
  SPEAKER_01: Yeah.
• 4:48
  SPEAKER_00: And and whereas in contrast, what we came up with, the insight that we came up with was you know, if your girlfriend or your wife ran out of her deodorant or antiperspirant and you were a Gillette guy, she would use it no problem.
• 4:59
  SPEAKER_00: If you were a Menon or a right guard guy, one quick thing and then she's going straight to the store to replace it.
• 5:05
  SPEAKER_00: But if you're an old spice guy, no way would she use your deodorant.
• 5:09
  SPEAKER_00: And so we kind of came up with this like funny tongue-in-cheek positioning of like old spice as like the last bastion of masculinity and like taking guys taking themselves in a funny way too seriously.
• 5:20
  SPEAKER_00: And that became the the positioning that again reinvigorated the brand, but by leaning into an insight from the consumer, as opposed to in the old mobile case, sort of just telling you, hey, we're not, we're not old anymore, right?
• 5:34
  SPEAKER_02: Yeah, no, that's really interesting you say that because honestly, one of my biggest questions I had for you before this interview was talking about this exact idea of like, what does it take to get people to like really hook on to brands?
• 5:48
  SPEAKER_02: Like, you know, you know what I mean?
• 5:49
  SPEAKER_02: Like it's like it becomes your tried and true, it becomes like your your go-to, you know, and and you even if it is an older brand, even if it's like, for example, like I see this a lot with um, you know, the ones that have been around, like Olay and Dove, like everyone used Olay, right?
• 6:03
  SPEAKER_02: Like our grandmothers were using Olay, but Olay has done this thing where now everyone's still using Olay, you know, and they've rebranded and stuff.
• 6:09
  SPEAKER_02: And I'd love for you to kind of share your insights here because I think that's where a lot of the branding stuff gets lost to me, I know as a consumer.
• 6:16
  SPEAKER_02: And I'm sure if I'm an entrepreneur, it's even more, you know, tricky to navigate.
• 6:20
  SPEAKER_00: Yeah.
• 6:21
  SPEAKER_02: Yeah.
• 6:22
  SPEAKER_00: I I would say, I mean, I I think what the way you pose the question, you know, what gets people to hook onto a brand and make it their go-to.
• 6:32
  SPEAKER_00: Yeah.
• 6:32
  SPEAKER_00: I think it's a lot of what you talk about on this podcast outside of the business stuff, right?
• 6:36
  SPEAKER_00: It's great ingredients, it's proven efficacy, it's, you know, sensorial products that the consumer really loves to use.
• 6:44
  SPEAKER_00: So I would say at its core, loyalty, retention, all those good metrics that keep up, keep people coming back to a brand are mostly driven by product, right?
• 6:54
  SPEAKER_00: Okay.
• 6:54
  SPEAKER_00: So like in it, and there's there's differentiation in product quality, right?
• 7:01
  SPEAKER_00: So you you have to have a great product.
• 7:03
  SPEAKER_00: That's that's the core.
• 7:04
  SPEAKER_00: To me, from a brand perspective, a brand is sort of the embodiment of all the promises that a brand that a product is going to deliver to the consumer.
• 7:15
  SPEAKER_00: So that's the that's the product, the product quality, the efficacy, all of that.
• 7:19
  SPEAKER_00: But then there's an emotional aspect when we when we select products, right?
• 7:23
  SPEAKER_00: You know, there's there's the logical, this has got this much retinol in it, therefore it's going to do this for my skin, and I I can prove that.
• 7:29
  SPEAKER_00: There's the emotional side or the the less logical side of why people pick products.
• 7:35
  SPEAKER_00: And if you think, if you think we're all logical in how we pick products, go look in your garage and all the crap that you've got in your garage that's been it's been you know um uh building up over the years, right?
• 7:47
  SPEAKER_00: So so like to me, a brand is it fundamentally rests on a consumer insight.
• 7:53
  SPEAKER_00: And so that in the old spice case, there was that insight that we had around guys and women and how they how they thought about brands and how they thought about about deodorant.
• 8:03
  SPEAKER_00: In in our like uh at Rare Beauty Brands, we have two main brands.
• 8:08
  SPEAKER_00: We have Patchology, which is a patch-based skincare brand, and we have um Kate Somerville, um, which is a clinic-based skincare brand.
• 8:18
  SPEAKER_00: And the consumer insights for each of those are very, very different.
• 8:22
  SPEAKER_00: They both have amazing products, highly sensorial, high repeat rates, like they've got the products there, but the insight for a patchology consumer is I want a moment of joy, I want a moment to myself, I want a moment of self-care.
• 8:37
  SPEAKER_00: The act of putting on the mask or the patches slows me down from my crazy day, and I get a moment of joy, right?
• 8:46
  SPEAKER_01: Yeah.
• 8:46
  SPEAKER_00: The Kate Somerville consumer, you know, the Kate Somerville Clinic comes from West Hollywood.
• 8:52
  SPEAKER_00: It's a celebrity, you know, to uh clinic, um, you know, estheticians to the stars.
• 8:59
  SPEAKER_00: And there, what the consumer is buying into is, you know, I know this is going to work, A, because the products are amazing.
• 9:06
  SPEAKER_00: Like Kate Somerville herself and her team formulated amazing products, super high repeat rates, super high net promoter scores, like all the metrics, right?
• 9:14
  SPEAKER_00: They're just amazing.
• 9:16
  SPEAKER_00: But also, you're buying into a little bit of the fact that, you know, the Kate Somerville Clinic, they've been in business 20 years.
• 9:22
  SPEAKER_00: They've had all these A-list celebrities, you know, they've done 250,000 facials.
• 9:26
  SPEAKER_00: Like they've just, they've they've been doing this for years, and the products come from all of those hours of hands on touching skin and that insight of like, I want the best.
• 9:37
  SPEAKER_00: I know it's the best because of of this.
• 9:40
  SPEAKER_00: And so when you get that magic of the consumer insight married to really high quality product, that's the foundation of a brand.
• 9:48
  SPEAKER_02: I I love that.
• 9:49
  SPEAKER_02: And I and I could not agree more with you because I'm very familiar with Kate Somerville's brand.
• 9:53
  SPEAKER_02: I got to interview Kate and I was like literally raving the whole time I got to interview her because I I loved the brand for so many years, and it really does matter.
• 10:01
  SPEAKER_02: Like I remember back then when I just started the podcast as a consumer of a brand, like that was my feedback, right?
• 10:07
  SPEAKER_02: Was like, I trust your products, like I can come to these all the time, and it's always gonna be the same.
• 10:13
  SPEAKER_02: And I think so, as like a follow-up question, like that's really a big one for me, right?
• 10:17
  SPEAKER_02: Is like, where do you as a brand make that decision of like we need to change things up to get more people versus no, we need to stick to our guns and we need to really figure out what's gonna bring our consumers back.
• 10:29
  SPEAKER_02: Like, what are I would love your thoughts on that?
• 10:31
  SPEAKER_00: Yeah, no, that's a it's a it's a fair point, and it's a little bit the$64 million question of brand marketing, right?
• 10:37
  SPEAKER_00: Because many brands start with a a core insight and a core positioning.
• 10:42
  SPEAKER_00: And then, you know, brands change hands, they get bought and sold, different investors come in, different managers come in, different CEOs come in, and everybody wants to put their imprint on a brand.
• 10:55
  SPEAKER_00: Um, I'd say we're so so that that's just natural.
• 10:59
  SPEAKER_00: That's just part of the natural evolution.
• 11:01
  SPEAKER_00: And we all as businesses, we all want to grow our businesses, right?
• 11:05
  SPEAKER_00: So like we're always looking for the next way to grow.
• 11:08
  SPEAKER_00: And I think one of the one of the false paths that brands go down is they start trend chasing and launching new SKUs for news because that may not be tight to the original conception of the brand, the original positioning of the brand.
• 11:26
  SPEAKER_00: But you know, retailer X says, well, we're having a big thing on, you know, exosomes, you know, so you got better launch an exosome product.
• 11:34
  SPEAKER_00: And brands are kind of like, I don't know.
• 11:36
  SPEAKER_00: The science is sort of like suspect, but like, hey, it's a$10 million opportunity.
• 11:40
  SPEAKER_00: Like, how do we not do it?
• 11:42
  SPEAKER_00: Right.
• 11:42
  SPEAKER_00: And so I think the the and it's hard, and and I I would say we're not perfect at, you know, only staying true to the original strategic vision because we're you got to grow the business.
• 11:52
  SPEAKER_00: And I think that's the central tension of trying to do things that are responsive to the market and responsive to trends, but do it in a way that's very authentic to the brand.
• 12:04
  SPEAKER_00: And where brands lose it is where they just go wholesale trend focused and forget about doing it in a way like there's probably I haven't actually studied this, but on exosomes, as I because I just randomly threw it out.
• 12:16
  SPEAKER_00: There's probably a Kate Somerville way to do exosomes that it that could be figured out, but I don't know what that is yet.
• 12:22
  SPEAKER_00: But like we wouldn't just do it the way anybody else is doing it, if if if that makes sense.
• 12:26
  SPEAKER_02: That does make sense, yeah.
• 12:27
  SPEAKER_02: And and I'm I'm glad you actually used that example, honestly, because that is something like I'm seeing like as a scientist, I see this every day in the skincare space right now, especially more than ever, I feel like, is this idea of like not only trend chasing, but science chasing.
• 12:42
  SPEAKER_02: And it's like that's fine to do.
• 12:44
  SPEAKER_02: Like that's how science grows as a dislike as a multidisciplinary field.
• 12:48
  SPEAKER_02: But like at the same time, we have no idea how some of this stuff works.
• 12:52
  SPEAKER_02: And I say this to brands all the time.
• 12:53
  SPEAKER_02: And honestly, that's like part of why I asked you that question, because it's like as a brand, if you're like a founder and you don't have a background in something, but you're putting your name on it, right?
• 13:03
  SPEAKER_02: And you're you're you're trusting the market and you're saying this is where it's going.
• 13:07
  SPEAKER_02: I'm gonna keep following it and hopefully it'll come out, you know, other end.
• 13:11
  SPEAKER_02: Where do you have to make that decision between like, okay, you know, I can do this up to this degree, and this is my limit, you know?
• 13:19
  SPEAKER_02: And then after that, I'm gonna let the trend go and run its course, whether I'm on it or not, you know, that kind of thing.
• 13:25
  SPEAKER_02: Yeah.
• 13:26
  SPEAKER_00: I I'm not sure this ties to trend per se, but I I did face exactly this challenge when I was launching the patchology brand of the fact that we don't, we, we collectively as as the the whole community don't know how some of these things work.
• 13:40
  SPEAKER_00: So uh the backdrop on patchology is it was uh MIT technology that was spun out that was able to push ingredients through the skin in higher quantities than topical application or traditional patches.
• 13:55
  SPEAKER_00: And um, the original application was medical.
• 13:58
  SPEAKER_00: Like we did an estrogen patch and a pain patch, and we did all these like medical patches.
• 14:03
  SPEAKER_00: Um, or I shouldn't say we, because it predated me getting involved in the business.
• 14:07
  SPEAKER_00: But then they had this insight that there were all these great ingredients in skincare.
• 14:10
  SPEAKER_00: And wouldn't it be great to do skincare patches and be able to push your traditional vitamin A, vitamin C, etc.
• 14:16
  SPEAKER_00: ingredients through your peptides, your you know, hyaluronic, all the, you know, the entire skin pyramid.
• 14:21
  SPEAKER_00: Like, could you could you create a brand around pushing these ingredients across?
• 14:25
  SPEAKER_00: And we did.
• 14:26
  SPEAKER_00: We tested, you know, topical application of hyaluronic versus our patch, and we got orders of magnitude more penetration deeper into the stratum corneum than than high than than um uh topical.
• 14:40
  SPEAKER_00: We did it for peptides, we did it for vitamin C.
• 14:42
  SPEAKER_00: We did like just did it across the across the board.
• 14:44
  SPEAKER_00: And I could say, like with absolute scientific certainty, and by the way, I'm not a scientist, I just play one on TV, but we we had scientists that would do that were doing this.
• 14:54
  SPEAKER_00: And I could say, like, we get orders of magnitude more hyaluronic through the skin, obviously off of a very small base, because not very much hyaluronic penetrates anyway, right?
• 15:03
  SPEAKER_00: But we were able to get it through the skin.
• 15:05
  SPEAKER_00: And and and the the challenge was then I would go to the ingredient manufacturers and I'd say, okay, you know, you've you've done your clinical testing, you you've proven out that, you know, if you can get this this ingredient on the skin, it it does well.
• 15:19
  SPEAKER_00: What if I give you 20 times more?
• 15:21
  SPEAKER_01: Yeah.
• 15:22
  SPEAKER_00: And it go and it goes deeper into the skin.
• 15:25
  SPEAKER_00: And they would just be sort of like, I don't know.
• 15:28
  SPEAKER_00: We we haven't really studied that, right?
• 15:30
  SPEAKER_00: Or we don't really know.
• 15:31
  SPEAKER_00: We don't really know how much a higher concentration within this layer of the stratum corneum or even down deeper.
• 15:38
  SPEAKER_00: Like we don't know what'll happen.
• 15:39
  SPEAKER_00: And I was like, oh, wow.
• 15:41
  SPEAKER_00: So here we are chasing scientific certainty with this pathology brand of like we can deliver more and more more of the ingredients deeper into the skin.
• 15:50
  SPEAKER_00: And the people making the ingredients don't even know how much that's going to have an impact, right?
• 15:54
  SPEAKER_00: And so where I netted out from a marketing perspective was listening to the consumer.
• 15:59
  SPEAKER_00: And and you know, in the early days, I would go to salons with the with the with the patches, and I would, as women were getting their foils where they were getting their hair hair colored on, there's just sitting there.
• 16:12
  SPEAKER_00: And I would say, I would, I would pre-arrange this with the salons, but you know, hey, can I give you a free treatment of of our patches?
• 16:17
  SPEAKER_00: And I would talk to them a little bit about it.
• 16:19
  SPEAKER_00: And um, while they're sitting there because I was sort of a captive audience and I would I would try not to bore them too much.
• 16:24
  SPEAKER_00: And and we would have this conversation, and and I just kind of got this insight that like their eyes started glazing over when I started talking about 10 times more ingredient delivery.
• 16:34
  SPEAKER_02: Yeah.
• 16:35
  SPEAKER_00: But when we but when the when they they took the patches off and they saw the results, they were like, oh my God, this is amazing, right?
• 16:42
  SPEAKER_00: And so it kind of the insight to me was like in the marketing of the of the of the patches or of any brand, you gotta focus on the benefit.
• 16:51
  SPEAKER_00: You if you focus so much on the RTB or the reason to believe, which is what the whole the whole conception of patchology was the RTB is deeper penetration of the ingredients, more ingredient delivery, therefore better results.
• 17:05
  SPEAKER_00: Turns out all she cares about is the better results, right?
• 17:07
  SPEAKER_00: And so, like we just really had to like move ourselves away from that.
• 17:10
  SPEAKER_00: And then when we elevated from the better results as the functional benefit up to moments of joy as the emotional benefit, the brand just took off.
• 17:20
  SPEAKER_01: So yeah.
• 17:21
  SPEAKER_00: So that that that's the tension there of between the science, the science does matter and it has to be right, but consumers want results and they want a connection.
• 17:30
  SPEAKER_02: Yeah, that makes so much sense, honestly.
• 17:32
  SPEAKER_02: And you know, I think about this a lot because right now, more than ever, and I'm sure you've seen this, there's a lot of like niche, like super niche indie brands coming out that are like hyper focused, and it's beautiful because those their science is legit and they really have found something wonderful.
• 17:46
  SPEAKER_02: But at the same time, I wonder how often they run into this wall of like, okay, I know I have an audience.
• 17:54
  SPEAKER_02: That audience has bought my product.
• 17:55
  SPEAKER_02: They might even be repeat customers, but now I'm at a wall, you know what I mean?
• 17:59
  SPEAKER_02: And now I need to figure out how to take the same enthusiasm here and push it out to the mass public and figure out how to make my beauty brand a big household name.
• 18:08
  SPEAKER_02: And I'd love for you to like kind of walk through that in terms of like that whole transition of for an entrepreneur of trying to really scale a brand that might feel very niche when it starts.
• 18:18
  SPEAKER_00: Yeah, yeah, yeah.
• 18:18
  SPEAKER_00: Well, and that journey has changed quite a bit over the last call it 15 years.
• 18:24
  SPEAKER_00: Um, and and right now we're living in what I would call as a little bit of a back to the future kind of moment where back in my PG days, there was TV and there was billboards and there was like, you know, magazine advertising, and that was kind of how you connected with consumers and you shot one TV at a year, and that was kind of it, right?
• 18:44
  SPEAKER_00: Then along comes the internet and social media, and we all know the story.
• 18:48
  SPEAKER_00: And now there's just immense amounts of content.
• 18:51
  SPEAKER_00: And I can put out a piece of content every second, and it'll get consumed by some algorithm andor some person.
• 18:58
  SPEAKER_00: You know, it's just it's like a constant thing.
• 19:01
  SPEAKER_00: And what we've kind of lived through as that transition was happening, it was very inexpensive to connect with consumers at scale.
• 19:10
  SPEAKER_00: And so you saw the rise of a lot of direct-to-consumer brands or social media-driven brands, Glossier, you know, you know the brands, and/or a ton of Amazon brands that were just really good at doing the math of gaming the algorithms to accelerate brand growth.
• 19:26
  SPEAKER_00: Um now all the brands, including the incumbent brands, the legacy brands, are all spending money on TikTok and social, you know, all the other socials and all the search platforms, et cetera.
• 19:39
  SPEAKER_00: And so the advertising prices have come up and the ROI has come down.
• 19:43
  SPEAKER_00: And so it's harder for young brands to make that leap, right?
• 19:48
  SPEAKER_00: It's nowadays, like in in 2026, probably for the last three or four years, it's been really, really difficult for indie brands to do that.
• 19:56
  SPEAKER_00: Um, and so I think we're going back to a mode where, you know, it it takes 15 to 20 years to establish a brand, right?
• 20:04
  SPEAKER_00: It just it just does, right?
• 20:06
  SPEAKER_01: Yeah.
• 20:07
  SPEAKER_00: You know, and and and then then for a brief moment during the social media and search engine craze, it took two years to do that, right?
• 20:15
  SPEAKER_00: It took two years to to to have a brand that that just that skyrocketed.
• 20:19
  SPEAKER_00: And I think now that it's so expensive on on those platforms, we're going back to it takes, it takes years, it takes decades to build a brand.
• 20:27
  SPEAKER_00: Um which I think is actually healthier because you know, if you look at your local Ulta or your local Target or your local CVS, there's just and let alone what's on the virtual shelves at Amazon, right?
• 20:40
  SPEAKER_00: There's just so many brands.
• 20:43
  SPEAKER_00: Um and and like ultimately the consumer is now curating back, pairing back to you know the trusted brands.
• 20:51
  SPEAKER_00: Um yeah, and so I think I think it's gonna be harder than ever for brands to scale.
• 20:56
  SPEAKER_00: So in the context of what you're saying, like you might have a loyal following here, right?
• 21:00
  SPEAKER_00: How do we do this?
• 21:02
  SPEAKER_00: A lot of it is like you got to raise a lot of money.
• 21:04
  SPEAKER_00: People come to me with early stage brands, and I'm like, you got to be prepared to raise 10 to 20 million dollars at least, and spend 10 to 20 years on it.
• 21:14
  SPEAKER_00: Like that, like that's the new reality.
• 21:16
  SPEAKER_02: Wow, that's that really puts it into perspective.
• 21:19
  SPEAKER_02: I'm glad you had brought the timeline because yeah, like that was a big thing.
• 21:24
  SPEAKER_02: I know, like even a year ago, I just saw a bunch of brands pop out in the beauty space.
• 21:28
  SPEAKER_02: I don't know if maybe because I'm new to the beauty industry and you know, like it's only been six years for me where I've been interacting with it, but I all of a sudden it was like a search, and I was like, guys, this is not a quick make a buck kind of thing.
• 21:39
  SPEAKER_02: You know what I mean?
• 21:40
  SPEAKER_02: Every founder I've spoken to is like knee deep into it, spent you know, decades building their and so yeah, that's interesting that you say that because well, I think and there are there are a few.
• 21:50
  SPEAKER_00: Sorry, I didn't mean to interrupt you, but like there are a few that do shoot the moon and like in two years they create like hundreds of millions of dollars of value for their their investors and them themselves.
• 22:00
  SPEAKER_00: And that probably is the thing that brings all the more entrepreneurs in to chase the dream.
• 22:04
  SPEAKER_00: Um, but I think those are gonna be fewer and far between now, um, just because it's harder to scale quickly.
• 22:10
  SPEAKER_02: Yeah, and it's like really redundant.
• 22:11
  SPEAKER_02: Like that's another thing.
• 22:12
  SPEAKER_02: And I and I really would love for you to speak on this because for me, I've been using, for example, patchology, I've been using it for years.
• 22:19
  SPEAKER_02: No thing.
• 22:20
  SPEAKER_02: For years, love the brand, have always loved the brand.
• 22:22
  SPEAKER_02: And I know everybody went on a craze of like under-eye patches here recently.
• 22:27
  SPEAKER_02: Like the last two, three years, they blew up, you know, Hailey Bieber, I think, made me go super viral road.
• 22:32
  SPEAKER_02: And but my thing is, and I'm being very, very honest when I say this, I still buy pathology.
• 22:37
  SPEAKER_02: I really because the name speaks to me, you know, because it's like you think of under eye patches, the psychology connects, you know, with the name.
• 22:45
  SPEAKER_02: And I don't know, and they and they work.
• 22:47
  SPEAKER_02: I mean, that's the bottom line.
• 22:48
  SPEAKER_02: But yeah, I I would love your insight on this because it's like I feel like in the world of dupes, we're living in the era of dupes, everybody's duping everybody.
• 22:56
  SPEAKER_02: But at the end of the day, like, what what is it that you think is going to make a brand truly stay within their category and stay there for many, many years to come?
• 23:06
  SPEAKER_02: Yeah.
• 23:07
  SPEAKER_02: Yeah.
• 23:07
  SPEAKER_00: Well, uh, again, it it it it continues to come back to that product quality that we talked about earlier, and then that brand connection, that that ownership of the equity around you know, the use case.
• 23:17
  SPEAKER_00: So we don't own it, but we are one of the leaders in that space of joy, self-care, ritual moment for yourself.
• 23:26
  SPEAKER_00: Um, and the brand has been standing for that for years.
• 23:29
  SPEAKER_00: But uh to your point, uh, it's it's actually a question my early stage investors when we were launching patchology um asked me.
• 23:37
  SPEAKER_00: They had invested in this uh transdermal patch RD company.
• 23:41
  SPEAKER_00: And the whole idea was to do a bunch of patented products that would then you know get approved by the FDA, and then you just milk the revenue stream over the years while you're while you own the patent on it.
• 23:52
  SPEAKER_00: And that's the kind of investment model that they had.
• 23:55
  SPEAKER_00: And they sort of said, on, you know, as we go into beauty, A, they didn't know about that this industry.
• 24:02
  SPEAKER_00: And, you know, they were kind of like, well, if we don't patent all these things, then you know other people are going to copy us.
• 24:08
  SPEAKER_00: And and and I was like, yes, yes.
• 24:11
  SPEAKER_00: Like the answer is yes, we will be copied, and we'll be copied over and over and over again.
• 24:15
  SPEAKER_00: But uh two things.
• 24:16
  SPEAKER_00: One, when a I and this was 15 years ago, so I wouldn't have conceptualized that there would be a road patch at at some point at that then, but like when somebody, when a road copies us, a rising tide lifts all boats, right?
• 24:31
  SPEAKER_00: If we own the if we own the space, you know, we're our SEO, our search engine optimization is is best in class, you know, we're on the shelves, you know, in the patch areas, in the various retailers.
• 24:42
  SPEAKER_00: Like when when that goes viral, and again, we weren't even talking about viral 15 years ago, right?
• 24:47
  SPEAKER_00: But like when that happens, we're gonna see an upsurge in business.
• 24:51
  SPEAKER_00: And we have like our business is up this year.
• 24:53
  SPEAKER_00: We're gonna be up over 20%.
• 24:55
  SPEAKER_00: Last year we had a very, very strong year as well.
• 24:58
  SPEAKER_00: And and the brand is fairly large now, and for it to continue to to grow at at these rates, at the size that it's at, um, is testament to kind of the foundation that we've built, but also this notion that the rising tide lifts all boats, right?
• 25:12
  SPEAKER_00: Things go viral.
• 25:13
  SPEAKER_00: We benefit indirectly from it.
• 25:15
  SPEAKER_02: That's really cool.
• 25:16
  SPEAKER_02: Like, and I and I love that concept because honestly, at the end of the day, like that's kind of how I, as a consumer, view dupes too.
• 25:23
  SPEAKER_02: They actually bring my like thought right back to that product, like the category.
• 25:28
  SPEAKER_02: And then I start looking for like who's the oldest brand in this category.
• 25:31
  SPEAKER_02: Because again, it's what we you were talking about earlier.
• 25:33
  SPEAKER_02: It's like, who can I trust?
• 25:34
  SPEAKER_02: Who can I come to if I want to try this kind of product out, you know?
• 25:37
  SPEAKER_00: Yeah, yeah, exactly.
• 25:38
  SPEAKER_00: Now, I mean, and and I think there's a there's a delta in price at which you're willing to be loyal to the old product, right?
• 25:46
  SPEAKER_00: And so if if somebody comes in with, you know, our our patches sell at about a dollar to a dollar fifty per use when you buy them in the large size.
• 25:54
  SPEAKER_00: If somebody comes in with a two cent patch, okay, yeah, we're gonna probably lose market share to the two cent patch, right?
• 26:00
  SPEAKER_00: So there's there's some amount of price premium that people are gonna pay for that perceived better quality, and I think we do have better quality and that perceived better connection to me as a consumer.
• 26:10
  SPEAKER_00: But within and in the the what made me think of it as you talk about dupes, you've got a lot of very, very high-end fragrances that are getting knocked off as dupes.
• 26:19
  SPEAKER_00: Yeah, and so when it's like$600 for this, you know, 50 ml perfume or$30 for it, like there's a lot of consumers that are gonna say, yeah, I'd rather have the Chanel or I'd rather have the you know Mont Blanc, but this is only 30 bucks and it smells pretty much the same.
• 26:37
  SPEAKER_02: Exactly.
• 26:37
  SPEAKER_02: Yeah, that's a really good point.
• 26:39
  SPEAKER_02: The fragrance industry is such a shining example of that.
• 26:41
  SPEAKER_02: And honestly, sometimes they smell better.
• 26:43
  SPEAKER_02: Like sometimes interesting, yeah, interesting.
• 26:46
  SPEAKER_00: Yeah, although, and I don't know, maybe I'm old-fashioned this way, but um uh a friend of mine came back from um Asia and he had a fake Rolex.
• 26:55
  SPEAKER_00: And oh yeah, he'd gotten it for 50 bucks, right?
• 26:58
  SPEAKER_00: Yeah, and from eight feet away, if I had just passed him on the street, I'd say, oh, that guy's got a Rolex, right?
• 27:05
  SPEAKER_00: But you get up close and you notice the differences, and it doesn't weigh the same and it's like got a slightly different gold hue or silver hue, whatever, like you notice the differences.
• 27:14
  SPEAKER_00: And I think there's I think when people buy dupes, I think there's a there's a there's one cadre of consumers that are like private label shoppers, dupe shoppers, and like they they they get off on getting the best value, right?
• 27:29
  SPEAKER_00: Yeah, but the person who buys the dupe thinking like, oh, I'm getting Chanel but for a lower price, they're wearing it and they're knowing in their mind like I'm not really wearing Chanel.
• 27:40
  SPEAKER_02: Yeah.
• 27:40
  SPEAKER_00: And and I think it because it's just not that authentic thing, and I think ultimately a big portion of that consumer comes back to the original.
• 27:50
  SPEAKER_02: I agree, I completely agree.
• 27:52
  SPEAKER_02: And that's interesting.
• 27:53
  SPEAKER_02: You you brought that up because my one of my questions is really around accessibility.
• 27:57
  SPEAKER_02: And it's like, because I feel like if you're that brand that created a category, right?
• 28:01
  SPEAKER_02: And then you know everybody's copying you all of a sudden, the category is blowing up.
• 28:06
  SPEAKER_02: Oftentimes I've seen people say things like, Well, I made it into Target, I made it into Walmart, you know, I've increased my accessibility, and this is just gonna, you know, blow my brand up.
• 28:16
  SPEAKER_02: And I'm wondering, is that really true?
• 28:19
  SPEAKER_02: Like, does that happen when you increase accessibility, you really do grow as a brand?
• 28:24
  SPEAKER_02: Or have you seen cases where it's like, no, the opposite?
• 28:27
  SPEAKER_02: Like the market just doesn't support that brand going into multiple, you know, distribution channels.
• 28:32
  SPEAKER_00: Well, I mean, certainly there's I think an argument to be made for both, right?
• 28:36
  SPEAKER_00: There's many examples of brands, and and to a certain extent, we did this with pathology.
• 28:40
  SPEAKER_00: By being in multiple retailers, by being online, direct-to-consumer and Amazon, by being in Nordstrom and Neiman Marcus and Ulta and Sephora, like we became the brand, right?
• 28:51
  SPEAKER_00: You know, and and that to a certain extent, success begets success.
• 28:55
  SPEAKER_00: Like we get the call from Macy's because they saw us at Nordstrom, right?
• 28:58
  SPEAKER_00: So, like you get that certainly that can happen.
• 29:01
  SPEAKER_00: But then we've also seen examples where brands do that or they go into the big retailer, the the Walmart, the Target, like those are the huge, huge volume guys.
• 29:10
  SPEAKER_00: And if you don't have the demand generation capability in place to move that product off the shelf, like meaning the get consumers to come in and buy it, yeah, you're out.
• 29:20
  SPEAKER_00: Right.
• 29:21
  SPEAKER_00: And and so, you know, it's a high-stakes strategy that you have to execute well if you're if you're gonna do it.
• 29:27
  SPEAKER_00: Um, but I do think if it if done well, it can work.
• 29:30
  SPEAKER_00: I mean, we're we're we're a shining example of it working.
• 29:33
  SPEAKER_02: Absolutely.
• 29:33
  SPEAKER_02: And you know, that's really kind because I I would love for you to like kind of offer a little bit of a roadmap here, you know, because there are people like like we've had a lot of like young entrepreneurs chime in.
• 29:43
  SPEAKER_02: For example, they started a brand, maybe it's only on TikTok, you know, super, super small, but they're they're doing great, you know, they sell out of everything and and they have good revenue, but then they'll ask us questions, you know, from the business side of like, well, what do I do next?
• 29:56
  SPEAKER_02: Do I go and I do I approach an Ulta type of store, or do I, you know, like what's the next step?
• 30:01
  SPEAKER_02: What would your advice be for a truly brand new kind of entrepreneur that's they're doing great, but where do you make that decision about what your next step needs to be, you know, like in terms of funding or whatever?
• 30:14
  SPEAKER_00: Yeah, there's so many permutations of this, right?
• 30:17
  SPEAKER_00: Like what kind of what kind of brand it is, what kind of, you know, what's the upside potential to it, what kind of entrepreneur it is, you know.
• 30:23
  SPEAKER_00: So so like I it's hard to generalize, but let me try to generalize just a a little bit.
• 30:29
  SPEAKER_00: Um, so if the scenario is they've got one hero product, they're they're selling it on TikTok, um, and they've gone viral a couple of times, they sell out.
• 30:38
  SPEAKER_00: By the way, there's sellout and their sellout, right?
• 30:41
  SPEAKER_00: Like sell out is a function of how many you started with.
• 30:43
  SPEAKER_00: And if you only made a hundred, it can sound really cool to sell out, but that didn't really generate all that much, right?
• 30:49
  SPEAKER_00: You know, MOQ from a manufacturer, even 5,000, you can sell that out.
• 30:53
  SPEAKER_00: It's not that much in the grand scheme of things, right?
• 30:56
  SPEAKER_00: So I would as I would advise that entrepreneur to focus less on trial and more on repeat.
• 31:04
  SPEAKER_00: So TikTok is an amazing place to discover brands and therefore get people to try brands.
• 31:10
  SPEAKER_00: Um, but trial does the the way we make money as brands is repeat purchase, right?
• 31:16
  SPEAKER_00: Because if I had to go out and acquire a customer every single time, I'd go out of business.
• 31:21
  SPEAKER_00: Right.
• 31:21
  SPEAKER_00: So the only way we make money is by repeat purchase.
• 31:24
  SPEAKER_00: And so, so I would I would advise that entrepreneur, sure, do the TikTok stuff.
• 31:30
  SPEAKER_00: Go see if it's see if it's going to go viral, see if you've got a compelling proposition, but then really track the repeat purchase.
• 31:38
  SPEAKER_00: Are people coming back?
• 31:39
  SPEAKER_00: Are people complaining about the bottle cap doesn't fit properly, or it went rancid after six months, or like whatever, right?
• 31:46
  SPEAKER_00: Like really track and many times it's much more subtle things than that, right?
• 31:52
  SPEAKER_00: You know, oh, the smell's a little off, or you know, it doesn't seem to my make my makeup is pilling after I use it.
• 32:00
  SPEAKER_00: Like some really subtle things like that that can kill the repeat rate, which is gonna kill your brand.
• 32:05
  SPEAKER_00: And so you could dump all your money into TikTok and get a bunch of trial, but if you're building a leaky boat, you know, you just you're not gonna stay afloat.
• 32:14
  SPEAKER_00: Um I would I would to me it's like back to basics, yeah.
• 32:17
  SPEAKER_02: No, I'm so glad you brought that up about the repeat purchase thing because that's honestly, I never hear about like anyone talking about this and how to like really advise young entrepreneurs like and new brands about this because that is true.
• 32:31
  SPEAKER_02: Like, like whenever a new brand comes out, there's so much buzz.
• 32:34
  SPEAKER_02: Even if you have a following, if you're like an influencer, you built like a million followers, whatever.
• 32:38
  SPEAKER_02: Yeah, they'll buy your product, but how do you really measure if they're gonna come back and buy it again?
• 32:43
  SPEAKER_02: You know, like how do you even do that?
• 32:44
  SPEAKER_02: So that's really, really interesting that you bring that up.
• 32:46
  SPEAKER_00: Well, and I would I would tell that entrepreneur to focus on the his or her um D2C, like Shopify, is that's typically the platform people use.
• 32:55
  SPEAKER_00: There's others.
• 32:56
  SPEAKER_00: Um, and within them, you can get a sense for repeat rates.
• 33:00
  SPEAKER_00: And people sort of say, oh, I've got a 46% repeat rate, meaning 54% of their revenue is coming from new customers and 45, 46% of their customer, their revenue is coming from existing customers.
• 33:10
  SPEAKER_00: That's not your repeat rate, that's your share of revenue coming from repeaters, which is which but which is a higher number could be good, but it also could mean that you're just not acquiring that many new consumers.
• 33:23
  SPEAKER_00: So the right way to do it is actually to look at the cohort of people that I brought in this month, how many have repeated next month and next month, the next month, the next month, and follow that cohort of what are we, we're now in in July, follow that July cohort through the next 24 months, follow the June cohort through the next 24 months and see how many of them are coming back.
• 33:45
  SPEAKER_00: And there's benchmarks for different types of brands.
• 33:48
  SPEAKER_00: And I would I would tell the entrepreneur to focus on those numbers and really dig in and diagnose if it's lower or higher than a than benchmark, why is it, and then lean into fixing the things that make it below benchmark and leveraging the things that make it higher than benchmark.
• 34:04
  SPEAKER_02: That makes sense.
• 34:05
  SPEAKER_02: And you know, with that, like just I'm thinking about we live in this world of data right now, you know, data, data everywhere.
• 34:12
  SPEAKER_02: And especially with AI these days, as you know, everyone is putting everything into Chat GPT, including like, you know, photos of their face, like what product should I use?
• 34:21
  SPEAKER_02: And I think one of my biggest questions becomes like, you know, how do we really like what is the consumer data worth tracking to really give you true business insights that's gonna actually scale your business at the end of the day, versus just people who are online complaining all the time?
• 34:36
  SPEAKER_02: Because you know, there's so like right now, honestly, when I look at social media, I get a headache and I'm not even a brand founder.
• 34:41
  SPEAKER_02: And I'm like, if I had a brand and I just looked at all these complaints all day, I would quit because it's just complaints, you know, about anything.
• 34:48
  SPEAKER_02: So, like, yeah, like what is that data that actually matters?
• 34:51
  SPEAKER_00: So I would, I would, I think there's value in the complaints too.
• 34:55
  SPEAKER_00: Um, I I would break it into qualitative and quantitative data.
• 34:59
  SPEAKER_00: Um, the qualitative data are are those comments, right?
• 35:03
  SPEAKER_00: And and whether those comments are negative or positive, and and we didn't have this back in in the old spice days, right?
• 35:10
  SPEAKER_00: We didn't, there was no social media at that point.
• 35:12
  SPEAKER_00: So you couldn't go read comments or you know, look at ratings and or or product reviews.
• 35:17
  SPEAKER_00: You just you just didn't exist.
• 35:18
  SPEAKER_00: So you had to go focus groups and all that kind of stuff.
• 35:20
  SPEAKER_00: Um, but it's rich data, right?
• 35:23
  SPEAKER_00: Like the when we were launching patchology, um I went on, there were some competitive patch brands, and I went on their you know, Amazon pages and their pages on Sephora and Ulta and read all the reviews.
• 35:38
  SPEAKER_00: Now, now you could just copy and paste them into Claude or ChatGPT and it would summarize them for you.
• 35:43
  SPEAKER_00: But I literally read thousands of reviews and came up with this insight that people were kind of loving the output of the patch or the mask, but wondering why it was taking 15 or 20 minutes.
• 35:56
  SPEAKER_00: Right.
• 35:56
  SPEAKER_00: And so we we came up with the idea of the first five-minute flash patch and flash mask because we could use our transdermal technology to push the ingredients in faster.
• 36:07
  SPEAKER_00: And we proved that in five minutes we could get you comparable hydration, comparable um, you know, ingredient delivery to a 15-minute exposure on a competitive mask.
• 36:17
  SPEAKER_00: And so we we we got that from the data of the reviews and and and the consumer.
• 36:23
  SPEAKER_00: So the qualitative part is important, but I generally qualitative is for like insight generation that drives new strategies or new creative.
• 36:32
  SPEAKER_00: On the quantitative side, uh I just went deep, I geeked out on on repeat rates.
• 36:38
  SPEAKER_00: Like I would definitely drill into repeat rates.
• 36:40
  SPEAKER_00: I would make sure that you know you track something called the net promoter score or NPS, um, which you you've probably experienced when you use a website or you buy a product, someone said they they they give you a two question questionnaire at the end.
• 36:54
  SPEAKER_00: You know, would you how likely would you be to recommend this to a friend?
• 36:58
  SPEAKER_00: Um, one to 10.
• 36:59
  SPEAKER_00: And then why do you say that?
• 37:01
  SPEAKER_00: And it's just open-ended.
• 37:02
  SPEAKER_00: And the the first question gets, I won't bore you with the math, but like you can look it up.
• 37:08
  SPEAKER_00: But like the net promoter score, you want to you want to make sure you have a very high net promoter score.
• 37:13
  SPEAKER_00: Um, and on pathology, we consistently have like Apple Ritz-Carlton level net promoter score because people just love the products.
• 37:21
  SPEAKER_00: Um, so though I would I would really like lean into those things.
• 37:24
  SPEAKER_00: So we look at the repeat rates, the net promoter score, your ratings and reviews, like not on your own website, but on third-party websites where it's like people are being, you know, they're they're gonna be more honest and and they're also gonna be more likely to be the random consumer versus the more loyal consumer who comes to your website who's gonna tell you things you want to hear.
• 37:43
  SPEAKER_00: So, yeah, those are some of the data that we make sure that we really track.
• 37:46
  SPEAKER_02: That's really helpful.
• 37:47
  SPEAKER_02: Thank you so much for for diving into that because that's that's exactly the kind of information like I always hope to get, but I never I never have anyone explain.
• 37:54
  SPEAKER_02: So that's that's really cool to understand.
• 37:56
  SPEAKER_02: But you know, I also like you know, there's so much, like I could honestly talk to you for hours because I have so many questions about scaling businesses.
• 38:03
  SPEAKER_02: But but I mean, you've seen you've seen so much in in the industries you worked in.
• 38:07
  SPEAKER_02: And I think one of my I guess a closing question is really like if there was one thing that you could take with you or that you have taken with you from when you were 20 years old to all the time.
• 38:17
  SPEAKER_02: Oh my goodness, you know, what would that be when it comes to business and really understanding it, like you know, the science of business?
• 38:25
  SPEAKER_02: Yeah.
• 38:25
  SPEAKER_00: You know, I would say um it's sort of trite and everybody says this, but like you you kind of get to my age and stage in your career and it really hits home.
• 38:37
  SPEAKER_00: Like when I was doing my MBA, you know, we were all telling the the professors, like, I want to know how to do discounted cash flows, and I want to know how to, you know, maximize this tax strategy, and I want to know, you know, the right way to price this product.
• 38:51
  SPEAKER_00: And yeah, all that stuff matters for sure.
• 38:54
  SPEAKER_00: And when we were leaving, they sort of said, you know, you're all gonna be out there managing people.
• 38:59
  SPEAKER_00: And the most valuable class that you're gonna say was the it was called organizational behavior or OB, or like sort of just like a general management class of how to work with people and manage people.
• 39:09
  SPEAKER_00: Um, and and so like I get to this stage in in my career where I'm not doing the things every day, right?
• 39:17
  SPEAKER_00: I'm I'm hiring the team that's doing the things every day.
• 39:20
  SPEAKER_00: And and you know, I now my my success a hundred percent rests on the quality of the people that I can find and attract to the company, um, how well we can motivate them, both financially and you know, extrinsic motivation and intrinsic motivation, and um, and the culture that we can build around them, um, and then sort of the resources and things we can give them to make them successful in their jobs.
• 39:47
  SPEAKER_00: So, like I guess the big insight for me is surrounding yourself with great people, um, you know, investors, advisors, you know, you don't want the investor that's the dumb money, you want the investor that's the smart money, they're gonna be harder on you, but they're gonna make you better.
• 40:04
  SPEAKER_00: And likewise, you don't want to hire the B level VP of whatever.
• 40:10
  SPEAKER_00: You want to hire the A-level person, even if they're a little threatening to you, because they're gonna do the job way better than you would ever do it.
• 40:18
  SPEAKER_00: And that's gonna make the company better.
• 40:20
  SPEAKER_00: So that I guess the one thing I would take is that it always and forever will come back to people.
• 40:25
  SPEAKER_02: That's awesome.
• 40:25
  SPEAKER_02: Yeah, no, that's really important to understand.
• 40:27
  SPEAKER_02: I think a lot of people probably feel like I can do it all, you know, especially in the early stages, like I can do everything, but I can see that.
• 40:33
  SPEAKER_02: Yeah.
• 40:33
  SPEAKER_00: And it's actually amazing, like it just completely counter to what I just said.
• 40:36
  SPEAKER_00: I just came across this brand that's doing like 10 million in sales and has all these retail customers.
• 40:43
  SPEAKER_00: It's three people in the company.
• 40:45
  SPEAKER_00: And they're using AI for everything, right?
• 40:48
  SPEAKER_00: And so like, yeah, it scares the crap out of me.
• 40:50
  SPEAKER_00: But like it, you know, they're there, it makes me wonder if I've got this like old school economic model.
• 40:56
  SPEAKER_00: But I'm like, so I'm like, well, how do you do product development?
• 40:58
  SPEAKER_00: Well, it's me and Claude.
• 41:00
  SPEAKER_00: And I'm like, well, how do you how do you do like the regulatory part?
• 41:03
  SPEAKER_00: Me and Claude.
• 41:04
  SPEAKER_00: How do you do your sales and order processing?
• 41:06
  SPEAKER_00: Me and Claude.
• 41:07
  SPEAKER_00: And so I was like, oh wow, like, you know, maybe, maybe it's not people anymore.
• 41:12
  SPEAKER_00: I hope that's not the case.
• 41:13
  SPEAKER_00: I hope that's not.
• 41:14
  SPEAKER_02: No, but that kind of worries me though, a little bit, though, you know, because it's like if the reg, especially regulatory and stuff, like I would never want to rely on like AI for that.
• 41:22
  SPEAKER_02: I feel like I'd miss something or it wouldn't be.
• 41:25
  SPEAKER_00: No, it at some level it seems insane, but there are people doing it, and I don't, I just don't know if I'm the I'm the Luddite that's way behind the scenes and you know, it's the world is gonna pass us by, or if you know, and here's what I honestly think is gonna happen is that people will crash and burn on that because they go, they they you know, Claude tells them the wrong.
• 41:46
  SPEAKER_00: And by the way, it could be Claude, could be Chat GPT.
• 41:48
  SPEAKER_00: I don't want to get in trouble.
• 41:49
  SPEAKER_00: I don't want these any of these guys coming after me.
• 41:51
  SPEAKER_00: Um, but you know, could be any of them, like some some AI says this is the regular regulations, and someone then goes and you know has a major faux pas out in the marketplace.
• 42:01
  SPEAKER_00: So I think I think it's always gonna be the people, but made better by the technology, like right.
• 42:07
  SPEAKER_00: But absolutely, yeah.
• 42:08
  SPEAKER_02: No, I I'm definitely in that boat with you because I just I just don't trust AI.
• 42:12
  SPEAKER_02: Like I know a lot of people on the science side are using it right now.
• 42:15
  SPEAKER_02: Like the science community is like crying about it because they're like, you're writing all the papers and no one's writing manuscripts.
• 42:21
  SPEAKER_02: I'm like, that's fine, as long as there's a scientist telling it what to write.
• 42:24
  SPEAKER_00: Yeah, yeah, yeah, exactly.
• 42:25
  SPEAKER_02: Don't let it do it by itself, kind of deal.
• 42:27
  SPEAKER_00: So no, I mean, I I, you know, on the other side of the argument is, you know, when Excel came out and QuickBooks and all the various accounting programs came out, all the accountants were up in arms about, you know, our jobs are going to be gone and who's gonna be balancing the balance sheet and all this stuff.
• 42:42
  SPEAKER_00: And there's now more accountants in the economy per dollar of GDP than there were back then, but they just do higher value add things now, right?
• 42:53
  SPEAKER_00: They're not they're not drawing T accounts and making sure the things balance.
• 42:56
  SPEAKER_00: That's all done by software.
• 42:57
  SPEAKER_00: Now they're advising you on the optimal tax strategy or they're advising you on the way to depreciate assets or whatever it is, right?
• 43:04
  SPEAKER_00: They're just they've gone up a level.
• 43:06
  SPEAKER_00: And I think as as we talk about AI within our company, you know, we all have to stop thinking about ourselves as the third violinist in the orchestra.
• 43:16
  SPEAKER_00: We're now the conductor of the orchestra, and the AI can be the third violinist on a lot of things.
• 43:22
  SPEAKER_00: And by the way, helpful if you have a couple of them so they make sure that it's not, you know, going awry.
• 43:28
  SPEAKER_00: But you need to now sort of like up level yourself to the meta level of you know, managing all the pieces in the orchestra.
• 43:37
  SPEAKER_02: No, that's why I asked you, like honestly, that's why like it's it's such a you know privilege to be able to have this conversation with with your you and and people like you, because that idea of like leadership, I feel like is now shifting and everybody needs to learn leadership on some level, you know what I mean?
• 43:51
  SPEAKER_02: And I know I got an MBA myself.
• 43:54
  SPEAKER_02: I felt like I learned nothing during my classes, like no one talked to us about leadership, no one came in and said, this is how you lead a team, this is how you build a team, this is how like what you were talking about, you know, like this is how you figure out who the best guy for the job is.
• 44:06
  SPEAKER_02: You know, we never got those courses.
• 44:08
  SPEAKER_02: And so with AI, I just wonder now.
• 44:10
  SPEAKER_02: I'm like, well, we're we're doing this, but we don't have that foundation, you know?
• 44:13
  SPEAKER_02: And so yeah, it's it's yeah, yeah.
• 44:15
  SPEAKER_00: No, it's it's a it's a it's a weird time, it's an uncertain time.
• 44:19
  SPEAKER_00: It is maybe it's a time of great promise, but as we talk about AI within our company, there's equal amounts of, oh, this is exciting, this is interesting, and this is terrifying.
• 44:29
  SPEAKER_00: I don't know what it's gonna do to my job.
• 44:30
  SPEAKER_00: And you know, that's a reality we all just have to acknowledge and deal with.
• 44:34
  SPEAKER_00: And, you know, the objective is not to fire the people.
• 44:37
  SPEAKER_00: Like I actually love the people, I want the people.
• 44:39
  SPEAKER_00: Like, and we wanna we that's where we get the creative ideas from.
• 44:42
  SPEAKER_00: Um I looking for ways to just make sure that we all adopt it in a way that makes us more productive.
• 44:48
  SPEAKER_02: Absolutely.
• 44:49
  SPEAKER_02: Well, thank you so much because this has been such an honor and it's been so wonderful learning from you.
• 44:52
  SPEAKER_02: My pleasure.
• 44:53
  SPEAKER_00: No, great to great to meet you finally.
• 44:54
  SPEAKER_00: And yeah, uh, I I really enjoyed it.
• 44:56
  SPEAKER_00: Thank you very much.
• 44:57
  SPEAKER_02: Yeah, no, it's been wonderful.
• 44:58
  SPEAKER_02: And uh, I'd love to have you back.
• 45:00
  SPEAKER_02: If you ever have time in your schedule, I would love to do like a masterclass with you.
• 45:04
  SPEAKER_02: I feel like so many people can learn so many things from from your experience.
• 45:07
  SPEAKER_00: Thank you for saying that.
• 45:07
  SPEAKER_00: I would be honored to do that.
• 45:09
  SPEAKER_00: I'd love that.