Successful Leadership Requires Passion AND Discipline

Brian: [00:01:37] Hello and welcome to Future Commerce, the podcast about the next generation of commerce. I'm Brian.

Phillip: [00:01:42] I'm Phillip. And today we have a very special guest, someone who's been on the show once before. The founder and CEO of Italic, Mr. Jeremy Cai, is coming along for the ride today. How's it going?

Jeremy: [00:01:55] Hey, thanks for having me again. It's going all right. Yeah, it's an interesting time in the world.

Phillip: [00:02:00] It is. It's a very interesting time in the world. We will kind of dive into some of that. I feel like most folks who listen to the show probably have some sense of an idea of who you are. But I feel like the one or two times that we've had you around our content, we kind of rehash the origin story almost in a Spider-Man-like fashion. It's like we keep getting the Peter Parker origin over and over. Jeremy Cai Origin. Just give us a what's happening this year right now in Italic. What what are you working on and where is Italic going at the moment?

Jeremy: [00:02:29] Well, we've tried a lot of things over the years. I think that's a good way to put it. And so have many brands. I'm not singling ourselves out here, but I think this is a time in the world where, for any company, you kind of want to reversion to the mean. And for us, at least, that's getting back to what made the company special in the first place, which really at the core is really high-quality products, really great price points, and a slew of categories that differentiates us from a normal direct to consumer brand. We obviously have a unique business model that puts us in a different operating model than most brands do. But at the same time, the customer doesn't see that, frankly, and the customer doesn't care about that. So for us, at least this year, it's a reversion back to focusing on a smaller assortment, focusing on kind of taking back growth targets and getting the fundamentals really, really good in a time when I think capital is expensive. So just making sure the business is healthy first and foremost.

Phillip: [00:03:32] Yeah. As any good leader should do. And I'm sure we'll get into it a little bit here today. Let's chat a little bit. You and I met up a couple of months ago, and we had what I thought was a really different kind of conversation, especially in what I think some people might be labeling right now, I certainly couldn't be accused of having ever said that we're in the post direct to consumer age, but maybe in the indirect to consumer age. There's been a lot of conversation around whether the conversation or the mentality has shifted in DTC. Has your thesis changed on what a high-growth consumer brand is, especially those that are the start startup variety and venture backed variety? How is that different today than it was, say, two years ago?

Jeremy: [00:04:26] Yeah. I think any time... Well, we could talk about this all day. I think a good way to put it is there are cycles to any category. And I think this category by all accounts is no stranger to its ups and downs. You saw the flash in the pan in the early 2010s with the first crop of these direct consumer brands who became kind of media darlings. And then the second generation per se is more so in the 2015 to 2017 range. And a lot of venture money flowed into both accounts, both periods. And obviously in the past three years with this growth cycle, every category across the entire venture market saw a huge amount of inflow. So I think direct to consumer as a category is not necessarily different than it was in a past period. The tools are different and there's a lot of money that flows into that. You can talk about Shopify and Klaviyo and all these different platforms that have developed around it, and venture investors obviously would look to those as being fundable, as not having a physical part of the business. But I think what's different this time around, I would say, is twofold. You have two waves in the past and you can actually look back and pattern match, hey, what actually happened to those companies that raised money, and what happened to the ones that didn't? And there's a pretty clear distinction. It's not, I think, nuanced to say that those that ran the classic New York branding agency raise a whole bunch of money, grow as fast as possible, negative EBITDA, and so on and so forth. It's not that I think that story is over, but I think there's a pretty clear path towards public markers and private markers that show that, hey, at least the way we were doing things the past 5 to 10 years, maybe not sustainable in the future. And I think you fool me once, shame on you, fool me twice, shame on me. I think that that mantra is pretty true. Now, on the investor side, where you're going to invest in a direct to consumer company, the bar is much, much higher than I think it was before. And then I think on the flip side of the competition, there are just so many more brands than there were in the past 5 to 10 years when these companies were starting out. The cost of capital has grown tremendously in the past six months, and at the same time, I think the cost of starting one of these businesses has dropped tremendously as well due to all the new software. And that's not a new kind of notion. I think that's been told many times over. But I think the difference is, at least if you were a venture-backed company, now you have not one, not two competitors. You have like thousands coming at your heels. So I think, you know, for our thesis at least, it's still I mean, it's the largest market in the world. It's retail, the direct to consumer, as you talk about omnichannel. Is it a channel? Whatever. I think that narrative has been played out as well, but I think the category itself still lends itself to a lot of newcomers. And if you want to fund that, I think that'll be fine as well. The second-biggest... In the top three startups in the world, bigger than Stripe, you have SHEIN, right? Obviously, the category is still fruitful if you can play the long term. But I like to give the narrative. SHEIN has been around for 14 years. The first 12, they were hustling and no one knew about them. And there are a lot of these cases. So I think [00:08:12] brand building, going back to reversion to the mean, it takes a really long time. Luxury legacy brands are successful because they've been around for decades. You can't brute force that. So I think that's a realization a lot of us founders have. Whether we admit it or not, is a whole nother story. But I think it's probably the truth. It takes time and patience. [00:08:37]

Brian: [00:08:38] I think you hit on two really important points, which are like the capital side and then sort of the competition side. What about the consumer? So you mentioned SHEIN. I think that's a great example of sort of a brand that's taken off in the past couple of years, as you mentioned. Prior to the pandemic, a lot of direct to consumer was sort of focused on the High Earner Not Rich Yet HENRY category. And that was like a really hot button topic about spending power and so on. SHEIN maybe not targeted at that consumer. And so I guess my question is maybe the third leg of this. I'd love to hear your opinion on is the consumer is the customer changing is HENRY sort of a construct of the pre-pandemic thinking.

Phillip: [00:09:35] Maybe HENRY's the construct of just the Twitter echo chamber, not anything else.

Brian: [00:09:40] Right? Of course, we've got our own construct, which is CARLY, Can't Afford Real Life Yet, and that I think really plays into the SHEIN narrative. But I would love to hear your opinion about how the consumer is changing and has changed over the past couple of years and if that's playing a role in all of this.

Jeremy: [00:10:01] Yeah. I mean, I think no one can debate the fact that the consumer has changed tremendously over the past 5 to 10 years. They're more informed than ever before. There are more options than ever before. And the bar for the storytelling side has also changed tremendously. In the past, you could just say "We cut out the middleman," and I'll blanket believe you right away. Or the direct to consumer ethos of offering better quality products for cheaper. I think that was the original thesis of the category really. No longer, really. No one believes anymore, frankly. If you look at the ecosystem. So I think as a customer at least, you know, it goes without saying, people are buying stuff online more than ever before. I think that will continue to grow. Will it become like the Amazon narrative of taking the majority of customer spend? Probably not, and probably it never will. Growth obviously has stagnated from COVID, and I think everyone can agree that that was artificial. That was not the norm in terms of the growth trajectory. But I think in terms of the customer behavior, at least I can tell you what we see. We're still focused on, I think we try to run away from it a little bit and go down market. But really, we're still focused on what you might call a HENRY or Twitter might call HENRY or whatever it is. But I think within that category there's a huge amount of differentiation. So I think to the SHEIN example, they did really, really well in a down market period, but a company that also did really, really well in the down market in the same period of time, but with a totally different audience, is LVMH. Arguably had their best five-year run ever. And same with a lot of these premium direct to consumer brands as well. A couple of the examples that people like to look to on the non-venture backed side would be you have like a Ferrari or you have a Yeti or Traeger or what have you. Those are by no means serving a SHEIN customer. It's very clear. You could call it a HENRY, you could call it whatever it is. But there's a niche there. I think the general conclusion on that is if you can find... It's just so big. If you can find a niche that happens to be undergoing some amount of growth or stagnation and you want to reinvent that category similar to how those brands have. I think there's still plenty of opportunity because the customer hasn't seen a direct to consumerification of the category per se. But I also think the expectations of, hey, I can just go to Red Antler, brand this thing, and then like sell it to an unknowing customer. Like, that's gone. You can't do that anymore. I wish it was that easy. But those days are, I think, behind us.

Phillip: [00:13:10] I think [00:14:10] there's also consumer fatigue around micro brands, small, very niche category brands, where there's no reason or there's no imperative on the behalf of the consumer to have to come back to see what's new. The imperative is on the brand to bring the consumer back to the site. And I think that that power dynamic is really shifting. What is the kind of a site that makes me want to frequent it of my own accord? It's one that has a constantly rotating assortment. It's one that's constantly reinventing itself in something new. [00:14:48] Not to glad-hand Italic. I am an Italic customer, but Italic would be the kind of thing that I think has a better opportunity to shift what a consumer believes it to be over time and to be more things to more customers than a lot of the "softest hoodies you'll ever feel" brands. Because I feel like those have a much harder time even though the price points are quite premium, they have a much harder time becoming something different.

Jeremy: [00:15:20] I think to riff on that a second. If you look at what a brand internally actually does and take away all the fluff from it, really for 99% of the brands out there, and I'm sure they won't like hearing this, you're essentially taking the same product... And this is past launch. You got the minimum scale, you have a customer list, and you have a product pipeline. 99% of the time, all you're doing is you're taking the same exact product or assortment you have in every season, applying a new coat of paint on it and a new story on it. And you have to sell the same thing 365 days per year for ten years in a row. And that's literally the course. I mean, you look at these mattress brands, for example, or any company that thought that they were a lifestyle brand. They're still selling... Their hero product is still the same thing they launched ten years ago. And that's actually fine. There's no problem with it. But really, the internal team, you look at the staffing. Do we really need 500 people to sell the same product we sold five years ago any better than we did? Maybe if you're doing retail in brick and mortar, possibly. But I think the efficiencies are heavily being scrutinized and it really started with one of the mattress brands going public three, four years ago where head count, I think, was scrutinized a lot more heavily. But I think it calls into attention a lot of, hey, what is like the actual thing being sold here, and do we really need to think of ourselves as anything more than a brand to operate as a good company? I think in our case we have a pretty large engineering team compared to a lot of direct to consumer brands. We have our own custom solution and proprietary software and all this stuff. There are reasons I think we can justify for it. But every founder likes to tell that to themselves, so I think it does. But at least I think on your point around as a brand, essentially it takes a lot of money and time to actually justify real business innovation from the product side because nine times out of ten, those product innovations or second lines, I can tell you as a founder of what every founder pitches on the investor side is, "Hey, look at how well this did. If you give us money, we'll either launch a new product line and assume that it'll do just as well." That almost never works. "Or we'll expand out of the US. Let's launch it in Canada, let's launch in Europe,  let's launch it in Asia. I can name every single China launch over the past five years. Not a single one is doing well or they've been shuttered and Europe typically becomes like ten, 20%. So, you know, it's a hard pitch nowadays to say, "We're going to invest a lot of money into product innovation to expand that customer list or increase the LTV or whatever it is. Typically, it doesn't happen. So on the Italic side, one of the reasons why we diversified so quickly and so early on in a time when I think everyone's like, "focus, focus, don't just get one category right," mainly was we didn't want to be pigeonholed into forever being known as like that handbag company or that bedding company or whatever it was. And not that that has a problem from a business standpoint. But I think if you're raising money and you're trying to go after this. This is actually why if you look at what SHEIN's strategy is now, yeah, they're launching 10,000 SKUs a week, maybe in a day nowadays, but it's not just in apparel. They're doing it in home. They have it in accessories. Things that they traditionally do not do. So I think to actually run that playbook, it's extremely capital intensive, and it's very hard to kind of brute force your way through it and get off the ground. But there are real points of leverage that a company like SHEIN (or there are others, of course. Wayfair being a good example) uniquely has once you have that supply chain set up.

Phillip: [00:19:31] What they don't have, though, and this is what I find really interesting, since SHEIN has come up so many times here. We did I did over in the Rightpoint side of the house last year, I spent a whole quarter just doing consumer research on SHEIN and the business there. And Depop and some other sort of gen-z marketplace. And the thing that I came away believing about SHEIN is it's much closer to Breitbart than it is to Amazon. And what I mean about that when I say that is it isn't a bodacious and audacious thing that they ask of their consumers to gamify their buying and to share it as a means of social signal. And somehow they've done it in such a way that it's very addictive. And we could all take from that whatever we want to. We can impose our own ideology on top of that, whether that's good or bad. But they've done an unbelievable job of doing that, so much so that I think that that aesthetic starts to creep out of that ecosystem and it starts to shape the way and informs how we the rest of the ecosystem interacts with the customer because now that's what consumers expect. I don't know if you have any thoughts about that.

Jeremy: [00:20:49] I think if anything, it defines very clearly if you are playing in that category, this is what it looks like. And if you're not playing that category or you want to distance yourself from that, you distinctly want to avoid that. And actually, I think there's a lot of historical somewhat semblance of this. I'll give you one example. SHEIN acquired Romwe a while ago, and they still operate that independently. Fashion Nova has plenty of sub-brands. Jenni Kayne recently did this. They have their home line which is semi-premium kind of masstige type of... Not masstige. They're actually pretty premium. But I think they differentiate by labels and over the past 50 or so years you see the luxury brands do this as well as low or mid-tier brands trying to go upmarket. So Ralph Lauren Polo obviously has all those different labels. Brooks Brothers tried to do this. J.Crew. I think what happens at least is once you saturate a core market and demonstrate growth, which every company who is trying to raise or go public or see returns needs to do. And then you start looking into how do we actually acquire the next customer base? In the SHEIN case, I think the unique thing that they stumbled on is their market is just so bad. It's like 80% of the US, probably 90% of the US and every European nation and South America for sure, you know, Southeast Asia. And there's a reason why you don't see like an Everlane or like a mid-tier brand ranking number one and app stores, or even having an app in the first place because you don't really shop on apps. I know that was a whole nother narrative, right? Like mobile-first. So [00:22:54] there's a customer who shops on their phone and buys like $10 things and that's that customer. So I think at least the gut reaction for me, is I think for that customer base like that's the aesthetic and shopping experience that they've now come to expect. But if you were to try to duplicate that gamification or whatever you might call it on a different category, I am pretty certain that it will not work for a whole bunch of reasons, but I think that's clearly a category look now. You [00:23:33] look on AliExpress or SHEIN of course and you know, classically in the US, you have Wish and so on and so forth. Fashion Nova. It all looks, it's converging into this look and feel, but I think it's that's what the category customer expects. I don't think they would expect that from shopping at Gucci.

Brian: [00:23:55] Where do you fit into this, Jeremy? So somewhere between. Somewhere between Gucci and SHEIN lives Italic. For you and for Italic what is this sort of aesthetic and market that you're you're headed after? Because I think prior to the pandemic, or I shouldn't even say that, but in DTC 2.0, HENRY was sort of your customer base, to simplify it, really simplify down. It was like, "Hey, HENRY, there's an affordable way to get to luxury. You don't have to be actually rich yet to go get quality products."

Jeremy: [00:24:41] Well, I think there are two things I can say there. One is we tried to go down market and actually we tried to become more masstige and try to be something for everyone. And I think the second a company says that you're screwed. We tried. And I think very quickly, customer quality degraded, customer experience degraded.  [00:25:05]There's something special about sticking to what you know well and just doing it for a very long time. And really, that's what brand building is. It's not a lot of fluffy stuff. It's just repeating the same thing over and over to as many people as possible. [00:25:21] And I think for Italic at least, hey, we tried going down, didn't work, we're going to go up and just like stick to our customer base, which you can say is the HENRY customer. Really, I think if we define it a little bit more clearly internally, we call them Julia and Lily. Julia is essentially a late twenties, early thirties, new parent or newly engaged, newly married, fairly affluent customer who is very familiar with shopping online, very familiar with all the direct consumer brands. And I think the point I was going to make is on the HENRY's, I think people like to use very, very general universal terms to describe a huge amount of... Like Gen Z. Within Gen Z, there are literally a thousand variations.

Phillip: [00:26:17] Yeah.

Jeremy: [00:26:17] I think for us at least, with Julia what we found is the current direct to consumer brand typically serves, and this is the 2.0 version, if you will, serves like a 20 to 25-year-old. And a lot of those people gradually... It's affordable luxury, but by no means is it actually luxury. It's more like a semi better version of what you find at Target, which is not a bad thing. Again, it is just like a different type of product and a lot of them graduate into a more premium tier of product. It's not luxury brands. I think there's a pretty clear distinction between masstige premium and then true luxury in terms of the product performance and quality and price point. And that's the one that we found that we served well. We compete with direct to consumer brands on relatively similar price points, but we try to offer a premium, a truly premium or luxury grade experience or price point. And we can't do that on every single product category is what we found. We try to do and I'll just give you an example. I think, Phil, when you and I were getting coffee, I mentioned to you there was a time when we sold camping equipment next to beauty, next to jewelry, and you got to be pretty deliberate about each of the moves that you make. So for us at least, I think we realized, okay, our customers come to expect women's clothing and accessories, men's clothing and accessories, bed, bath, kitchen. Beauty, pet, travel, and kids are growth categories for us, but they're not dominant by any means. But really, that's it. So I think for Italic what that really kind of boils down to is our Julia customer is looking to graduate from their initial direct to consumer purchase behavior. They are moving out of that first apartment and they're graduating into like a townhome or something a little bit nicer for the first time. Here's a really great all-in-one assortment to furnish your closet, your home, and your discretionary purchases whether it's a backpack to the bedding, and so on and so forth. And then the Lily customer is, in our case at least, it's more of an archetypical of essentially your suburban parents, mom or dad who does not live in a big city, is not very familiar with like the direct consumer brands, but is very familiar with wanting nice things and appreciates a good deal. And I think for us at least, we feel that those two niches very well in many different categories. And that's why I think to the earlier point around product innovation, at least, it allows us and it earns us the right to be able to tell you "you bought a towel from us now by our cashmere sweater," whereas most brands it doesn't really fit or that's a very hard transition to make. So I mean, we're still pretty early. We're still pretty small. I think there's plenty of room to grow in that. But I think the realization we've come to is like, hey, we just got to stick to the script and play this out over the long haul. And I think over that long haul, there's a really valuable kind of market to be made.

Brian: [00:29:30] So I love something you're saying right now, which is that it's not just about growth. It's about being... You know who your buyer is. You know that's a lasting story. And you're going to stick with that, even if it's potentially a more sort of steady approach to growth. You know that it's a long-term strategy that makes sense. And so you've got a game plan that if you divert from it to try and spur additional growth it's just going to dilute what you do. And you may be bumped into that a little bit in the past couple of years.

Jeremy: [00:30:15] I think the general realization we've all kind of come to is you can actually have, a company can have one goal. And the good goal in actuality in retail should be like, let's build a good business here. The actual goal that people talked about over the past ten years is let's achieve growth. Now, if you look at the business when it was starting, okay, good margins, good market, low CACs, every pitch deck has this. Looks good. Cool, cool. What happens three years in when you have 100 competitors? What happens when you've saturated your market? What happens when CAC explodes because you've already... And it's a one-time purchase, right? Or it's a low-margin purchase. All of the initial assumptions that... And the interesting thing about these pitch decks was, essentially you assume that all your fixed costs go down including your variable costs. "Oh yeah, the bigger our brand gets, our CACs are going to drop." That's false. "The bigger our brands get, the lower fulfillment is going to be." That's false. A lot of these core assumptions that you would assume with scale actually get better, but in fact, get worse. So I think when you're looking at a goal, at least, if we're trying to achieve growth in a ten year period and this company still needs to be around, you can no longer justify because you've seen this play out so many times, you can no longer justify brute force growth just for the sake of it to acquire that incremental customer. Assuming that your CAC is going to drop or your LTV is going to grow, neither of which ever happens. So I think if that is the reality you're dealing with as a brand operator or founder, you're like, "All right. Yeah, we have some pretty big issues right now to fix." And of course, an immediate solve that people go to is, "Okay, we'll do brick and mortar and a retail distribution partner." That works for three years. What next? It's tough. {laughter} I mean, I'm just complaining here, but I'm just saying this is what...

Phillip: [00:32:16] No, no, no, no. This is a therapy session. We're just letting you get it all out.

Jeremy: [00:32:21] It's really tough. Yeah.

Phillip: [00:32:26] I really can't even imagine what it's like to operate in this environment, especially when a lot of folks, I think probably had some unrealistic expectations of an acceleration of eCommerce that actually turned out to be a very marginal growth of eCommerce. And as you talked about early on, about regressing to the mean, we're sort of back in that slow, steady growth of eCommerce as a total share of retail performance. Yeah. If I were an investor, I feel like, I'm looking at environmentally no one investment that I've made in CPG or direct to consumer is... They're all in this storm. They're all in different boats, but they're all in the same storm. So they're all experiencing different environmental challenges. I guess my question to you is you're a serial founder. You have a lot of experience here. I consider you having a lot of sage advice and wisdom for folks who might be in the middle of their journey too. I mean, what could you say publicly on a podcast that your PR team is going to allow us to publish that equates to some advice of how to get through the next 24 months and maybe say that in a way that can't be clipped and used against you 12 months from now.

Jeremy: [00:35:22] Oh, boy. I mean, I feel like I'm coming across with a lot of doom and gloom. And I think if you have a board.

Phillip: [00:35:29] I don't think so.

Jeremy: [00:35:30] Well, I think this is actually what a lot of investors are doing right now. They're just going around all the boards and basically starting up like, hey, cut, cut, cut, get cash in the bank and make more money. Like, that's pretty hard.

Brian: [00:35:44] The VCs have become PE firms. {laughter}

Jeremy: [00:35:48] Yeah. I mean, I definitely understand why. The dynamics. And this is true, you know, my first company was SaaS. It's true not just in direct to consumer. This is universal advice being given. I think as a founder really like you need to look in the mirror and do two things. One, hey, are you in this for the long haul? Because in retail it is a long game. It's not one where you can get in and get out. Maybe you could have, maybe you still can, but that's few and far between. And I think that's like a really hard gut check for a lot of these founders who I would say are like tourists in the industry, like went to some MBA program, got some lecture on direct to consumer and wanted to start a brand because it takes time.

Phillip: [00:36:44] I mean, a lot of people from Wharton listen to this show, so let's not go too hard on them.

Jeremy: [00:36:48] Nothing wrong with that.

Phillip: [00:36:49] No, no, sorry.

Jeremy: [00:36:49] It is a long game. I think the more practical advice I would say is, you know, this is cyclical. I think the only two things that are constant in startups are you're either alive or you're dead. And as long as you're alive, you're still kicking. And secondly, you should ignore me and you should ignore a lot of the advice that's being given out there. I think good companies are built in good times. Good companies are built in bad times. And if you try to time the market, you're screwed. It's not worth you trying to prolong the inevitable death of a company by a couple of years. That's the worst thing you could do. On the flip side, if you think this is going to make it like, yeah, get cash in the bank, cut expenses like crazy, try to make more money, squeeze more out of what you can. And that really that's the three levers you have, right? Maximize cash, decrease expenses or outflows, and increase your inflows. That's all you can do. And when the market comes back, which if you believe in the US economy, which I certainly do, then yeah at the next time... No one would have thought four years ago that in two years things would trade at 100 x. But I can also tell you, in 20 years ago, no one thought that it would happen again. Even ten years ago after the GFC. So because of the cyclicality, I think like [00:38:26] most of the market is a lot of noise and a lot of sheep that just like to compound on each other. "Things are bad. Okay, it's going to get worse," and it does get worse, but then inevitably it comes back. So if you try to time the market, I don't think that's a good idea. But when the market does come back, then yeah, raise or raise now if you need to survive. So I think that's some pretty universally applicable advice whether you're running a DTC brand or not. So good luck. [00:38:53] Yeah.

Phillip: [00:38:54] There's something that I'm keenly aware of. We're part of the problem in the ecosystem in that self-important people with podcasts sort of proliferate a lot of knowledge and assume that people take actionable advice from it. And I've never once heard Elon Musk or Andy Jassy or Marc Lore or anyone else who we might praise for their sage advice in leadership or wisdom ever say, "You know what I heard on a podcast one time?" So I do think that there's sort of this challenge that we have as like needing to feel like we have answers and dispelling some sort of sage advice or knowledge. I'm really trying to be cautious of that rather than trying to give advice. Maybe us talking about things that don't have answers and just talking about the bigger questions that we all have. And I think you hit on all of that just there. Brian, we have Visions coming up. We've got a lot of themes in that report that I feel like actually tie into this conversation. One of those is the idea of profitability of distraction. It sounds like maybe this is an era where folks are becoming way less distracted.

Brian: [00:40:13] It's interesting. Yeah, we've maybe come out of an era where having your attention split resulted in a lot of opportunities. And it was easy to do that, although I would contend that there's still a lot of that to come. If you think about financial squeezes, maybe the profitability of distraction actually just goes mass market with the current downturn, Phillip. Having your side gig and your main gig and all of that. I feel it's all still there. It's all still there. Getting focused, though. Jeremy, I think you mentioned that a couple of times. Like getting tight. That's sort of the push is to cut, focus more, and make sure that you're focusing on only the things that are most profitable. Where do you see brands sort of delving into this idea that having multiple focuses can actually be beneficial?

Jeremy: [00:41:27] Yeah. I want to go back to one point really quick that you just made because I know there are a lot of funders in here. No matter who you are or how many times you start companies or do this, there is one universal thing that happens and I'm extremely guilty of this, which is when cash is abundant and you have cash in the bank, you get punch drunk and you just forget. And it happens every single time, every single cycle, like every single raise. It's almost a universal thing. It's like "We have cash in the bank, we're fine. We have 36 months of runway," until something bad happens. That's when distractions happen. It's like, "Oh, let's do this, let's incubate this new project. We've been wanting to do this forever. Let's set a team on it. Let's hire. We've always wanted to do TV. Let's do TV. We always wanted to do brick and mortar..." I think it's a capital constraint. And I know it's a very common thing to say from the investor side. But I think having constraints and real constraints and why you have so many of these bootstrap companies that end up being outperformed by their venture-backed peers ultimately when they go public is because of the lack of distraction that comes from having abundant capital to deploy it. Because as a founder, your job is to deploy capital. So I think that's just one thing that I've seen again and again. It's always good to remind. And then I think on it's not to say, to your second point, there are many ways to achieve the same end goal, which I think should be to build a good business, not to necessarily... It's unpopular. It was unpopular last year to say it, but to just purely grow for the sake of growing, which we have certainly, you know, we've done that many times. I'll say very confidently we've made a ton of mistakes because of distractions. But at the same time, those distractions sometimes can play out to really great outcomes, right? So it's not just all bad, but like, yeah, 99% of experience experiments will fail. But I think you need to acknowledge that that's the fact before embarking on distractions. So I guess what I'm saying is twofold. If you want to run experiments and take the risk, which is not a bad thing, I think every company needs to do that. Okay, just keep that in mind that it is more likely than not to fail. But the upside is probably hopefully worth greater than the resourcing that you put into it. I think the issue that people have had over the past five years is the resource that you put into it pre it working is greater than the expected outcome and just running a very simple like expected value out of that, you're like, oh yeah, it's negative. Like, I shouldn't have done that and hopefully, you learn from that. But I same issue as we just talked about, like if you have plenty of cash, you're going to do that many times over. So just be careful if you do. And then if you don't, what is your core business? In our case, we are a brand that sells products to customers. That's it. We make money when people buy our stuff and we make more money when they buy more stuff from us. So if you boil eCom down pretty simply it's just like, how do you get... This is very pedantic, but it's CPM, how much are you paying to get traffic to your site? Conversion rate, contribution, margin, frequency, and AOV. Out of that is your inflows. Your outflows are all your variable costs plus your expenses and that's your business. So I think if you boil down the company into that simple equation, in our case, hey, the simple answer is we just need to sell more stuff so and get more efficient with selling it. So I think for us at least, it's all about let's build a better experience for the customer, for them to come back and either convert on day one or convert over time or purchase again if they've already been one. That's why we have the membership still. And I think in terms of the outflows and focusing, it's like, okay, where can we operate more efficiently or get more out of our infrastructure team? Which we're not efficient, we're not good at, by the way. So I think that's a focus for us this year.

Brian: [00:45:54] You know it's something that Alex Greifeld over at No Best Practices just wrote recently on LinkedIn. I thought she had a great note. She said, "Let's face it, achieving profitable growth as an eCommerce brand is a lot harder than it used to be. Here's the eCommerce stack you need to succeed in today's retail environment." And then she makes a list: product that meets an unmet need, differentiated brand narrative, strong margins and good unit economics, diversified customer acquisition strategy, addressable audience broad enough for Facebook and TikTok. And lastly, passionate founder. Do you think that's a pretty good list? Is there anything that you add or... That the stack. {laughter} I think that was sort of her point. She's like "I bet you were expecting a list of apps," but would you add anything to that list? Because I thought that was a pretty strong list of how do you stay focused right now? Like, I thought that was pretty good. Is there anything you'd add or take away from that list?

Jeremy: [00:47:11]  [00:47:11]I think the difference between a passionate founder and a disciplined founder is execution. And I think that you need both. You need to be both passionate and disciplined to succeed. [00:47:27] All of the first couple, I think yeah, that's universally true. Absolutely. No doubt. But I think what happens a lot is as a founder, you get inundated so much with this concept of strategy, but [00:47:40] a strategy only works if you execute it long enough for it to work. [00:47:44] And this is my learning. I've made this mistake. We changed, we went membership, then we went marketplace. And then now we're back to this. And I think the main thing I might add to that is just patience and just doing the same thing over and over and over for many iterations and reps and putting in the time. It's not really surprising, but I think that's the only ingredient missing.

Brian: [00:48:14] Thank you for being on the show today. Where can people find you if they want to go check you out?

Jeremy: [00:48:19] Go to Italic.com. We've got a lot of really good stuff. I wouldn't always have said that truthfully, but now this year, I'm pretty darn confident in our assortment and in our team and delivering a good experience. And then on then all the social platforms we're @Italic, so we'd love to have you.

Brian: [00:48:43] Awesome.