Seth Waite - Founder & Buyer Psychologist @ Schaefer

Speaker A: Oh, hello there listener. You've probably stumbled across the podcast asking yourself, doesn't it feel like the world of ratings and reviews needs a superhero? Well, you're in luck. Enter Catl, the caped crusader with Canada's largest, most diverse and daily active consumer panels. That's right. Catl is much, much, much more than your average sponsor. Cattle is like that cool friend who always knows the hottest trends. Something that I personally cannot relate to. I mean, after all, cattle is the voice of the consumer. At this point you're probably asking yourself, why choose Cattle? Simple. Cattle excels in insights from your consumer while also blazing trails in the realm of ratings and reviews. Pioneering the future landscape of, um, user generated content beyond the valuable syndicated receipt data. They stand as the unparalleled collector of reviews at scale. Just one of the many testaments to their impact. They have partnerships with essentially every major CBG brand and retailer across Canada. First time clients get 50% off any research or review campaign with Cattle. Just mention Hearts and Carts when you email insightsattle ca or visit askcaddle.com to learn more. Welcome to Hearts and Carts, the CPG podcast. The podcast about the people behind the products that are winning hearts and filling car is for anyone with an interest in the world of consumer products. I'm your host, Justin Osborne and my mission is to bring you weekly content that makes you a better and more informed CPG professional, all while having some fun along the way. Hello everyone. Long time no talk. It's been a very busy start to the year for me both personally and professionally since. So apologies for the big gap here between episodes. If you're back and listening, thank you for joining again. Thanks for sticking with us and if you're new to the show, welcome. We've got a really great episode to be back with with the incredible Seth Waite, who is the partner and buyer psychologist at Shaffer. Seth has some amazing experience. He's a bit of a serial entrepreneur and he gets into this, his experience and some of the trends he sees. It's a absolute must. Listen. Fantastic guest as always.

Speaker B: Thank you for your support.

Speaker A: If you haven't already, remember to like subscribe. Follow us on social media. Uh, and let's get into the conversation with Seth.

Speaker B: The wild eyed voice that had been away, haven't changed, had much to say but man, I still think them cats are crazy.

Speaker A: Seth, uh, how are you?

Speaker B: Good, how are you doing?

Speaker A: Good man, you're making me look bad with all those family photos behind you, I need to clearly up my family photo game.

Speaker B: Hey, this is part of the deal. So I got three kids, how about you?

Speaker A: I just have the one, so I'm only third as busy as you there.

Speaker B: There you go.

Speaker A: How old are yours?

Speaker B: Um, oldest is 11. Then I've got a nine year old and a six year old. And this year we hit like the magic moment where all the kids are in school and they're all, this is be the only time it happens. But they're all going to be at the same school and it's like elementary school right down the street. It's beautiful. It's going to end next year when our oldest goes to middle school, middle

Speaker A: school and high school. Yeah.

Speaker B: And then.

Speaker A: Yeah, then you'll have I guess elementary, middle school, high school maybe or something like that. And then.

Speaker B: Yes.

Speaker A: Yeah.

Speaker B: Complicated, fast.

Speaker A: Yeah. Good start. Yeah. My son's 6, so kind of same life. He just started kindergarten as well. So similar life stage.

Speaker B: Yeah. There.

Speaker A: It's a good age.

Speaker B: Yeah. That everybody's uh, still happy to spend time with you and they want to be with you and we're trying to like take advantage of that moment before the next couple years when everyone's like, oh dad, you suck. You know.

Speaker A: Yeah, yeah. There's a uh, I mean we all go through it in life, I guess there's an age in your teenage years where it's not cool to be with your parents or hanging out with your parents and then in your 20s, whenever that is, you kind of go back to it. And now like I love hanging out with my parents again and frankly need their help with my son and everything else. And so yeah, it's like a weird, weird curve there. My son's still very much the same way and he's, he wants to hang out. He still thinks I'm strong. You can do all these things that I can't do. You know, we go to the school and I dunk on like an eight foot net. He's amazed. And I'm like, yeah, just let's remember this is 10ft.

Speaker B: Like that's store this core memory.

Speaker A: Exactly right. Just remember that I used to be able to do this.

Speaker B: Yeah.

Speaker A: But uh, it is, it is kind of a really, really fun time anyways that really appreciate you taking the time and coming to chat with me here. I know we were bouncing around a little bit for a while, so I'm excited. Uh, you know, in looking up uh, a little bit about you and learning more about your story, seems really unique, seems really cool. And I think there's a lot of value there for our Listeners, for sure.

Speaker B: Awesome. No, it should be fun. My experience is often, uh, defined as non linear. So. Yeah, ah, it's, it's an interesting path. It's a good example, I think, of the fact that if you're pretty intentional about what kind of life you want to have and the kind of impact you want to have, um, you can find a way to do just about anything.

Speaker A: So I love, I love that we need to get back into that for sure as a, as an advice topic. But so what I, you know, what I love to do with, with people on the show is just start like early career, right? So maybe it's starting at that moment where you're being intentional about the life that you want and you know, starting, uh, out earlier in your career, you know, go back as far as you'd like. But like, how did you, how did you start out? How did you get to where you are and, and maybe some of the stories along the way.

Speaker B: Yeah. So retail, cpg, marketing, all those things weren't anywhere on my radar. Um, coming out of college, I had a bachelor's degree in political science. Not a direct connection. As part of that, I did what everybody thought that they were going to do coming out of political science, which was like, I'm going to be an attorney. And I got, uh, a scholarship. I went to law school. And in the process, I was about halfway through my second semester and I just like looked at my wife and was like, this sucks. And it's not because it's hard work. Like, I was ready for like, you know, 70, 80 hour weeks. It was mostly just like, I can't actually see myself do this for the rest of my life, you know, and, and I also felt really contentious, like the, the, the atmosphere, the circumstances. I was like, I don't know if I want to kind do for most of my career as part of the process. So I left law school. Everyone was like, this is gonna be the decision you regret for the rest of your life. And I'm gonna be super clear. There has not even been like a 30 second blip since then where I've thought, man, I really should have stayed. It's been awesome. Um, haven't regretted at all. And what usually happens is attorneys come up and they're like, yeah, man, I should have, I should have been bit. The bullet left before I got too far down. But you know, for some people, they really love it and that was the key. It just wasn't me. So I was living in Arkansas and I went to the University of Arkansas as part of the process. And I just so happened to be in, like, cpg, like the Mecca I was in Bentonville. Like, I was Walmart headquarters, um, and I just fell into the industry, to be honest. Like, and I had, um, during college I had written a bunch of politically, like, focused, kind of like public service type, like blogs. And I did a bunch of digital marketing in that space. And I learned how to build an audience and create from that, like, real marketing chops and experience. And so as I was coming out of law school, it's like, cool. What in the world am I going to do now? Um, I actually got recruited by a retail and CPG focused agency in Arkansas. And they were like, why don't you come in? Because your digital experience, um, is kind of so prolific at a time, especially when there wasn't a lot of people doing digital, um, that we're going to find something that will be a good fit. So I walked in the door and when I left, I was the head of content strategy for Sam's Club, Digital marketing and grocery. Wow. So like 20, you know, 22, 23. Um, and my job really was, how in the world do we use all these kind of emerging digital platforms to sell wholesale products? Right. It was kind of like, cool, I just bought 10 pounds of chicken. What am I going to do with that? Like, that was like, almost like project number one was just, how do we use digital in a way? So created a blog network of, uh, like 300 moms. As part of the process, built, uh, out an entire, like, ecosystem of websites called Simply Delicious Meals. And all these things where it was like, how do I deal with the fact that I'm getting massive value selling wholesale products that usually are high quantity, and how do I figure out how to make sense of that? And in the process, I was working with Sam's Club directly every day, going to headquarters, and naturally then I was meeting every food CPG that was doing work with Sam's club. And so all of a sudden I was just all the way in almost overnight. Uh, and so it was an awesome experience. And over the next year, in addition to grocery, I picked up, uh, the mother baby category, which was hilarious. Um, and it wasn't lost on me that I was like, I don't have a baby. I'm not a mother. Like, you know, yeah. And, uh, and really rapidly I realized, like, oh, you want me to help you understand if, you know, Huggies or Pampers is better? Like, let's talk body shape and blowouts and like, all the things And I just really enjoyed and appreciated that process, even though I hadn't no natural business being there. So that's kind of how paid off

Speaker A: later in life with your personal life. Right. You know, you're gonna have three kids, so you're just doing research.

Speaker B: Yeah, 100. So. So it was fun. And. And I just. I learned a lot. Um, the agency was acquired by wpp, which is the largest agency holding company in the world. Got to meet, like, Martin Sorrel, like, Sir Martin, you know, like, I just got engulfed immediately because of my proximity to Walmart. And CPG suddenly was just. It's like everybody you meet in Bentonville works at Walmart or works for someone who works with Walmart. And, um. So it's awesome.

Speaker A: Yeah, it's amazing. Yeah. Sometimes it's, um, you know, right place, right time, right. It's like Bill Gates using computers, and he just happened to be in a place that had some of the best computers. Right. Like that story. This is the C version of that. You being in Bentonville, the behind Walmart. So, um, amazing. So you're. So you're there, you're kind of. Yeah. Interesting career paths. Right away, I, uh, went to school for something different and realized quickly I didn't want to do it as well. So I can appreciate that story. And then you're getting all this experience, you know, building out cbg, Ah, relationships, connections, all that stuff because of where you are, of course. And so, um, what do you do next?

Speaker B: Yeah, so from there, um, I. I basically was like, cool. I've been working on all these clients, and I had more than Sam's Club. I was doing Walmart work. Banfield, which is like petsmarts, you know, vet services. I was doing content strategy all over kind of the industry. We had a lot of clients. It was super fun. Um, and I also had been the. The digital strategist over Walmart's like, or Sam's Club Scan and Go technology, like, which was super innovative and still one of my favorite features. So we're doing that, and I get to this point where I'm like, I really want to go in house. And this is like the most classic. Like, every agency person feels like, this strong pull. I feel like, of like, I want just one brand I can really isolate and focus on and. And put all of this work that I've put into place into practice. And I want to own the strategy. Because the other challenge, I think, when you're on the agency side is like, you pitch 25 ideas to get a yes on one. Right. So it's like they didn't even. Sometimes you're walking away and you're thinking that wasn't even the best idea by a mile, you know.

Speaker A: Yeah.

Speaker B: But it was the politically appropriate idea or, you know, whatever it was. And so as part of that, I just felt this really strong need, um, and I got recruited, um, again, like proactive, like recruitment for um, a nutraceutical company. Like a supplements company that was brand new. Um, they'd been around for nine months. But the owner had created Vitacost, which is, oh, major player in the space.

Speaker A: Yeah.

Speaker B: And, um, was acquired by Kroger and like all kinds of stuff. Like, it's just really interesting. And he had a whole history there and there was like a lot of drama. Um, but he, he decided to create a competitor. And uh, and so as part of that process, he needed a head of marketing. I didn't realize until later he had two head of marketing roles, um, in nine months. And he was on the, he was on the third E Commerce build in the nine month period. Like he had gone through like Magento and then he went to BigCommerce and then he was doing a custom like asp.uh net storefront. And it was just like wild. Like, you know, he changed marketing and technology. Like he changed his pants. Like it was just like all the time. So I show up, uh, there's like no team, there's definitely no culture. And on like day two, the CFO is like, hey, um, I'm just letting you know that if you don't figure out how to get a ton of sales in the next like five to six months, we're all out of a job. I was like, no pressure. Yeah, no pressure. And, and that's the moment where you're like, I'm 24 years old or whatever the deal is, you know, like, like it's, it's real. And there were 50 or 60 employees. They had built a $10 million facility. Like we had robotic fulfillment centers. We actually manufactured all of these supplements. Like, it was a cool company that had an amazing customer experience setup and no customers. And so really quickly I was just like, hey, let's put a strategy together. Like, let's make this work and let's like, let's understand the customer at the finest level. Like, who are these people? Why are they buying this? What do they actually care about? And who are we going to stand for? Because I think that's a big conversation too. Like, the supplements world is super sketchy. Um, it's still super sketchy, but there are some shining stars and really good actors and those people can be super successful. And it's not well regulated, which is another issue. So it's like marketing in that space is really complicated because trust is already like in the basement. Yeah. So we realized we've got to make an enormous amount of progress in an incredibly short amount of time. And I hired four people in like 30 days. SEO was like one of the core pieces, um, advertisement, creative. And then we had an email person specifically. And I came in in September. And by January, which is good timing, start of the year, everybody's doing that kind of stuff. We had gone from 30,000 in monthly revenue, which was not enough to support 60 employees, to a million and a half. So it was just this insane growth trajectory. Um, and we did it at a row as a return on spend of, uh, four to five. So it was great. Um, and so it was just a wild, like, period of time. I, I, I lived at the office and the office happened to be like a 45 minute commute from my house. I moved to Las Vegas, um, as part of it. So my wife and I moved and, and I was basically just working for 18 to 20 hours a day, um, because we were redoing the E Commerce platform. But the benefit was it was like this pivotal moment in my career because I was integrated in everything. Yeah, I was walking out in the fulfillment center and understanding their process. I was going upstairs and talking to the call center. Like, I was integrated into everything. And at the height of like that early January period, we had so much work that the CEO came into my office panicked, and he was like, turn it off. Like, turn it off. Like we're getting hammered out in the fulfillment center and like, we, we've got to figure out how to do, you know, how to make that happen. So it was this awesome moment. And, um, I had some problems, my whole team had some problems with the way the business was run at large. Some strong disagreements around a couple things. And so actually what happened is we all left and started an agency. And basically, you know, for us it was like, hey, like we went through a period of conversations like, hey, we're not willing to work and operate like this. And there was just no negotiation as part of it. And so we were like, this sounds crazy, but we're going to go start something.

Speaker A: So we did.

Speaker B: And that was crazy, stressful and it was like a blast because on one hand we got a chance to say we just did something insane. Like, it was an amazing experience. We generated a ton of revenue. It was profitable. Like, everybody in the organization but one or two of the characters that we were, like, trying to work with, like, they got it. And, um, matter of fact, throughout the next, like, five to 10 years, almost all the leadership in that company went on to somewhere else and gave me a call. And we're like, you did some crazy stuff. Can you come back? And so we left, started an agency, and for the next 12 months worked on a bunch of e commerce companies who were trying to sell CBG products. And along the way we started getting all these referrals, um, from customers or from a partner. So when I was at the previous agency, I worked with two super smart guys. Um, one of them was like an architect from a technology standpoint. So he was really like, designing and architecting, like, Sam Scope's first mobile app and, like, all this stuff. Just brilliant guy, Michael. Um, and then the other guy I was working with was named Joe. And Joe was just a gifted strategist and an incredibly good at simplifying a really complex world down to something you can manage and understand. So they had actually left that agency at the same time that I had. When I went and told them, I was like, hey, I want you to know I'm leaving. I think you guys are awesome. They're like, cool. I want you to know we're leaving. We think you're really awesome. Maybe our paths will cross. So about a year into the agency, we had, you know, E. Com companies, and we're doing all this work and it was, it was a bunch of fun and a bunch of stress. And I get a text message from Joe and he's like, do you want to get the band back together? And I was like, well, what do you mean? And he's like, hey, what if we bought your agency and merged and started to build something really cool together? So that's what happened. Um, about three weeks later, we had, like, wrapped up negotiations, joined the Revenant team, and as part of the process, um, went on what became probably the most wild career ride. I went on so forth. I became the head of, like, marketing and sales, and for the next six years, we doubled revenue revenue every single year. I, um, mean, we were running a 95% CAGR, as you look like, you know, this kind of compounding growth rate. Yeah. And so it was just wild. We were primarily working with retail and cpg and we transitioned a lot of the work. We did a bunch of marketing probably for the first three years, and then we just realized there's just so much technology work in this space. And so we built Walmart's employee apps, like all their mobile apps. So anytime you walked up to somebody and they were like trying to answer a question, they were going to pop open this phone. There's nothing scarier than rolling out uh, a mobile app to 2.2 million employees. Like. Right. Um, and when we got that contract, we were a 12 person company.

Speaker A: Oh my gosh. Yeah.

Speaker B: So we won it and we had to beat out um, a joint proposal from IBM and Apple. And there's like, we were like, there's no, we have no business doing this other than we're, we're hyper strategic, we're super scrappy. And that's exactly what we were. And so for the next like bunch of years we were building an enormous amount of Walmart's technology. Um, and we picked up like HB and Zappos and we were just working all over the retail space helping them roll out, you know, curbside, like pick all these interesting problems to solve. Um, we were doing a ton of that as part of the process. So my gosh, yeah, that, it was a crazy experience. Yeah.

Speaker A: So, Yeah, I mean six year run, uh, doubling every year, like it's 90, 90 plus kegr and some of those accounts too for us. I mean, yeah, you can imagine the competitiveness of trying to get the Walmart business or Zappos or Heb or any of these other ones. Right. And so to be a smaller agency and get them is, is like incredible. I think like during that ride, what do you think your biggest learning was?

Speaker B: I think it always came back to like knowing who you are and knowing what people think you are because those are two different things. Often like, and I think everybody shows up oftentimes with this strong desire to like, you know, this is how the world should see us. And our growth was really hard in the first couple of years. I mean it was like you need a printer fixed. Like we'll do it, you know, we'll be there, you know, because we're like operating out of like the library kind of a feeling, you know, like it's just super scrappy. And as we really understood why people bought uh, from us compared to anyone else they could. And really, let's be honest, like Walmart has 10,000 engineers and designers. Like they have people inside that could have done this. So we got to this point where we just kind of became very clear on people want to work with us. And that's the uh, hook. Like there was this moment where we Kind of almost realized by the time we finished the tour of our office, we can almost tell you with like 80% certainty if they were going to buy something we hadn't pitched them yet because there was this feeling of like, yeah, this energy. I want to be part of it. And, and how does, how do I get this to rub off on me and my team? And um, and so that was a huge learning. The other thing I think too was like, you just have to work with great people that you respect. And I would say love, like, and that was a huge part of the process was we would always kind of joke, like it wouldn't matter if we were building some of the most complicated and sophisticated like technology on the planet or digging ditches. Like we would win with the crew that we have anywhere, any time as part of the deal. And so those two things I think really stuck out. I mean there were a million lessons. At the end of that six years, a private equity firm actually made a strategic investment, essentially purchased us.

Speaker A: Yeah.

Speaker B: Uh, and, and so it was just this really cool kind of culminating moment. And the day that the paperwork was signed, I left and was like, hey, it was all pre planned and everything but it was like, hey, I want to go start another thing. Yeah. So I became a fresh entrepreneur, uh, on that day again. And so it was pretty crazy.

Speaker A: Yeah, amazing. I love, yeah, I love that concept. So, so this is when you start out, you become an entrepreneur, I guess, sort of all over again. And then this.

Speaker B: Yeah.

Speaker A: Is this, is this something else?

Speaker B: This is something else. That's what I was telling you. The experience is crazy. I've done the entrepreneur thing a lot. Um, I've also purchased a number of companies. So like that's been a part of the process is like finding great people, acquiring their business. It can be, when done well, really amazing growth opportunity. Um, in areas that people don't often think about. Like I, I think they mostly think I'm getting a brand, I'm getting revenue, but it's like you're getting people and they're special people. You can't hire. Like they're not out in the market. Um, you can't get these people any other way. And there's something super powerful about that. And so, uh, one of our customers while at Rev Unit was supply chain because we were doing some transportation stuff. And like I'd work with Walmart and a bunch of these people, J.B. hunt and like a bunch of transportation companies who tied into the retail space. So in the process we worked with a company that was both a logistics and a moving company. And they're the largest moving company in the U.S. unigroup. And they own, um, Mayflower and United Van Lines. So, like, you know when someone shows up and they literally just say, we'll see you later, they walk in, they pack your dishes, they do everything. The service is incredible. But, uh, we just kept coming back to like, they were a client of ours. And it just came back to the fact, like, I'd moved a number of times away from Bentonville to Vegas, back to Bentonville, like all these things. And it just came back to like, moving sucks. And it does. And it's really expensive and there's gotta be a better way. So we got a $12 million investment. Um, like we, I raised an investment round. Um, we built a company called Handled. It was guided by computer vision and AI. Back before that was like, easy. Like it, I. I had PhD mathematicians on my team, like, uh, doing the work. Because it didn't exist. There wasn't OpenAI. There were no like, tools. It was all crazy hard. But, uh, we changed the moving industry from taking like, it takes me eight days to get a quote to it takes me six minutes. And it's on my mobile device. Yeah, my house. And it identified every object and gave me an inventory. So we grew that company, um, over the next two years. And we went from zero cities moving people, like we were literally moving people to 121. We had 7,000 like trucks and drivers on the platform. Um, it just scaled really fast. And Unigroup then acquired us and said, hey, cool, let's take all the technology, let's take everything, let's bring it in house. So, um, that's actually how Shaffer started, which is interesting. So Sydney, my business partner now at Shaffer, was working at another place and I just reached out to her and we're like, hey, I know you've always wanted to start an agency. What if I was your first client? So I actually was the company's first customer. I signed a two year agreement and we grew, sold. I worked in house at Unigroup during that transition because we had 60 like team members that integrated. I ran, um, their marketing and creative departments and then all of their IT. So we had 250 plus employees kind of like overnight. And I went from like agile startup to slow.

Speaker A: Slow moving company.

Speaker B: Yeah, yeah. So I did that. Uh, and just to be frank, like, there's a lot of great people. But the moment my contract was up, I left. Same day. Um, so left there. Sydney Reached out was like, she is the same message. Do you want to get the band back together? And, uh, came in, bought a part of the company and joined Sydney. And we've been, uh, just running ever since.

Speaker A: And so. And so what is it? What is Shaffer Digital?

Speaker B: Yeah, so Shaffer Digital is really a buyer psychology company. Like that's what we call it more than anything else. Agencies often get caught up in their activities. Like all the things they do. We do this and we do that. And at the end of the day, if you don't know why people buy, it doesn't really matter. Like, all those campaigns don't work. And that was really the kind of transition point for us, the part that really clicked. Um, it was ultimately the fact that we just kept coming back to like, people would call us and be like, can you help us? We need to improve our conversion rates. We need to improve our ads, all these things. And we get in there and they only want to talk about like how the ad looks or the words on the ad. And we would keep coming back to the fact that you have the wrong marketing strategy and you're talking to the wrong people, no matter who you hire. That's not going to fix it if you're just focused on the individual tactics. And that's really when we just said, uh, we're throwing out like all the normal agency work and we're going all in on research. So we do an enormous amount of market research for people that turns into really detailed segmentation. And then we, we created a model. We, we literally call it the why People Buy Pyramid. But like, we created a model where we take Maslow's hierarchy of needs. You know, like, people have to feel like they have to have their basic needs met and they have to be safe and all these kind of things. And what we do then is we turn that into Maslow's hierarchy of needs for food and beverage purchasing. And you could do the same thing for lots of CPG categories. But it's basically like, if you don't have taste and texture, if you don't provide areas emotionally, if they don't feel like they're getting healthier, if they don't feel like it goes beyond themselves and has some form of like, self transcendence, like there's some social good, right? Like all those elements combined, great brands check the boxes in each of those core categories and that's why they stick around for a long time. And so we do that work for people so that they know, here's who we are. Here's what we're doing. We lay out the marketing strategy. Like, this is how you talk to them. And more importantly, this is the right offer price. Right. Like the product, the packaging sizes, all of that stuff so that you've got the right deal on the right channel and you can go from there and then the rest is easy. Like marketing is easy after you get the strategy and the research right.

Speaker A: Yeah, I think that you're right. The amount of time you spend looking at like one piece of creative or something versus the actual strategy is silly. And I like that thought process of like the hierarchy of needs because that's something that I don't know if we learn in like grade five or something. Right. Like something that we learn on like a personal level. Very, very young. But some. I haven't actually seen it applied on like the, the marketing side on why someone buy a product, which makes a ton of sense to me.

Speaker B: Yeah, yeah. And so we. It also just helps. It just simplifies the world. Like when we start talking research, most of the time people's eyes glaze over and they think, nerd. You know, like, there's this moment of like, oh, geez, we're going to have this super academic conversation and you're going to show up with a bunch of formulas I don't understand and a, uh, book of information and data. And I'm not even going to. Sure, sure, I know what to do with it. Like, and typically what happens is. And they're like, and you're going to try to charge me $150,000 for it, which I don't have. And so that was, for us, was the whole point of, like, we just need to dramatically simplify how this works. Explain it in terms that are business centric, not research centric, and make it so that the transition between research and action on the marketing side is obvious. And they don't have to do any, like, deciphering. There's no Ouija board of like, you know, what's, what's the research telling me? And how does this work? Yeah, I love that.

Speaker A: That's so well said. So, um, yeah, so I guess that's. So it's really understanding the, the psychology behind why we buy, the things we do, and then everything beyond that. I think like one of the. I wanted to ask you a little bit about like, your, your thought process around customer segmentation and stuff. I have a feeling it's a bit more advanced than, than the way that most people look at it historically, which is like age or sex or um, you know, kids. No kids. But, uh, like, what are your thoughts on how you. You build that? Ah, within your mix.

Speaker B: I always go back to demographics and a lot of those kind of facts. They're interesting. So I use that word specifically because it's like, it is interesting. Like, it's a great, like, dinner conversation. Um, it's fun facts as part of that conversation, but very rarely do they directly tell you what to do.

Speaker A: Yeah.

Speaker B: Household income is another great example. Like, everybody cares about. Like, I want to focus on marketing to people that make more than a hundred thousand dollars. And I'm like, what's the difference? You have no idea. If they make $200,000 and they have no disposable income and they're in debt up to their eyes, and they can't afford to buy the thing you're trying to sell them, or. This happened with a customer of ours. They were focused on, like, we sell a premium product. We actually did all this research, and we come to find that their ideal customer that's buying most of their product today is on a 50 to $70,000 income.

Speaker A: M. Yeah.

Speaker B: Even though the product is a $200 box of, like, USDA prime steaks, and it's all this expensive stuff, because what they found is their disposable income side because they're all retired. So they don't, like, the stats don't make sense. Oftentimes if you just focus on demographics and behavior, only like, what they've done. And so our focus is always like, you can get Nielsen's data and Spin's data, and you should, like, you should understand the analytics of what's happening. But if you want to impact what people will do, which is switch brands, try something for the first time. Then you have to understand the motivations, and those are much harder to get at if you're not talking directly to them. And everybody wants to skip that part, which is like, hey, I talked to my grandma and a couple neighbors, and at a party, I would tell people about my product, and they really liked it. And they're like, no, you have to actually talk to a large quantity of people. And it's not as scary or as hard as you think. So our model always is go talk to people. Usually 5 to 10,000 is kind of our minimum do in home testing. Interview people and do it in weeks instead of months that most people take. Like, you can do it fast. You can do it inexpensively. And do it in a way, though, that gives people real data that says, this is my actual customer and then we always focus, too, on what we call, like, the kingpin strategy. And it's basically like a bowling reference, right? Like, in bowling, I'm not a. I'm not a super bowler, but I. I know enough about bowling to know, right. Like, if you want to get a strike, if you want to knock all the pins down, you have to hit the first pin, which is the kick pin. And when you hit that, it has enough weight and momentum that it hits the two behind it, and then they hit the pins behind it, and you eventually knock all the things down. And with segmentation and marketing, what normally happens is people are like, well, this is our customer, and this is our customer. And this is like, they pick, like 10 segments, if they pick any at all. Usually it's like, everyone's gonna love this, and they pick a lot of the hardest. Like, I know I'm gonna have to educate them on what this product is. It's like, no. Pick one segment that you can dominate in where you have the shortest putt. I got all these. The shortest putt to getting to a sale. You'll save the most money on marketing, which then you can reinvest on scaling and getting volume. And then the momentum of that, uh, influential segment should drive adjacent very similar in close segments who became the group behind it. And you start to knock down all the pins, but everybody wants to go to the back row first and like, let me knock down five at once and see if that's going to work. And it's like, no, go find the most influential and easy to sell to segment. And then the moment that that happens, the goodwill, the reviews, all of the volume getting out the door on a retailer's shelf, it then drives your next opportunities and you've got the scale to create the budgets, to create the marketing and sales channels that will be successful when you have to have more education and more brand awareness and everything else. Yeah, um, I'm take.

Speaker A: I'm taking notes. Even though it's recorded really well. Yeah, really well said. I think it's. Sometimes it's like, it's the rush thing, and they feel like we're all in a rush to get to, like, as you described at the back, the back row. Right. It's like everybody wants to skip the steps instead of doing it the right way. So I think that's. That's fantastic advice. Um, yeah. What, what else? I think, you know, you're. You're very great, great experience. And of course, in your role right now, where you're understanding psychology and why people are buying things and customer segmentation and all this stuff. Like, like, what other, uh, challenges do you see or trends do you see with your, with your customers that you think people are missing out on?

Speaker B: Yeah, um, I mean, I, I think we could talk like, how the market's shifting because it's always lifting. But there, there are some just big macro trends, which is like, health and wellness is here to stay. Like, it's not a fad, it's not a subgroup. Um, it's going to continue over the next decade to just be general expectation. It's not even political at this point. Like, both sides of the aisle in the US now are like, yeah, we, we should probably not eat ultra processed garbage. Right. Like, there's a general take. But what I will say is, while we intellectually understand lots of things, our purchasing very rarely follows in a one to one relationship at the same time. So we did a big survey just for fun. I mean, we are nerds, but like, we did a survey and everyone was boycotting Kellogg's last, like, October, Right. There's this big Kellogg's boycott, uh, around the artificial food dyes that they have in their cereals. They had promised in 2018 to remove them. And it was like, hey, you guys never showed up. Where's the deal? So we wanted to see with actual Kellogg's cereal buyers how they felt. What we came to find out is like nearly 50% of all of them knew that there were artificial and synthetic chemical dyes in their food. And what was crazy, though, was, uh, out of all the people that were currently doing this, only 20% of them said that that information would negatively impact their purchasing decisions.

Speaker A: Wow.

Speaker B: Now, if you look at it, if you're Kellogg's, right, they make $2 billion a year from cereal. So 20% of 2 billion is significant. It's not small, but 80% of their customers are kind of like, hey, if we're still here buying Apple Jacks or pick a thing, we're going to keep doing it. And we're comfortable with the fact that this stuff is in here, at least comfortable enough that we're not changing our buying behaviors. They've either. And so the people that care have either already left. Yeah, it's interesting. Or there's just a subset as part of it. And so, like, you can be outraged, which I feel is appropriate that there's all these, like, you know, pretty toxic things.

Speaker A: Yeah.

Speaker B: But on the flip side, I think Kellogg's is like, from a business decision, like, we'll go buy a Health cereal brand. At some point they'll make up the revenue gap. And we know our, we know our customers. And while I think that's disappointing, um, at the same time it just does go back to. There's all these emerging brands that are just absolutely sure that, like, now's the time and everybody in the market is going to want this thing, especially in that health and natural space. And while I think obviously everything data wise is showing that we're more conscientious than ever and we are buying more in that space, there's still an enormous volume of purchases that are not impacted by health or wellness at all.

Speaker A: Yeah, I mean, makes it, uh. It's like disappointing, I guess, but it makes sense. I mean, we've known that a lot of these foods are. I don't want to name it like, like McDonald's I've known my entire life is bad for me. I still eat McDonald's occasionally. Right. Like, it's, it's, it is like, uh, how do you beat a M. McDouble want to do. And what we actually do sometimes they're very different. So.

Speaker B: Yeah. And that's cpg purchasing across the board. So what I come back to is at the end of the day, taste wins.

Speaker A: Yes.

Speaker B: 87% of all purchasing decisions, um, have to have taste as the primary number one reason why they buy. So you cannot show up and be like, but we're healthy and taste mediocre. You have to crush it on taste no matter what you're doing. And then everything else becomes this differentiator. And I think right now, like, you're seeing, like, everybody's putting protein into everything. And the people that are going to struggle and fail over this next year or two because protein is oversaturated from all the research we're doing. Um, and, and people actually care less about protein than I think everyone thinks they do. Um, what's going to happen is you're going to be. We're seeing all these brands who. The only thing on their label is their protein count.

Speaker A: Yeah.

Speaker B: And that can't be your differentiator. Like, it's not. That can't be the reason why people buy. It might be the tipping point for. That's the difference between the three options on the shelf. But so often the brand shows up and it's like, I just don't get why people aren't buying this more. Because let me give you this really scientific explanation for why our protein is better or why we have an extra gram and it's just not why enough of the market is making purchases. And you see this trap. Every couple years there's this huge trend. Then suddenly everything has, you know, this stuff, uh, seed oil is kind of going through it. There's a whole bunch of things in the food and beverage space, um, but you see it in beauty and all these other categories, um, in the same way.

Speaker A: Yeah. The one that always jumps out to me is Keto. There were so many products that were. Keto was like bigger than the brand name or the product or the. It was almost the product Keto dipped off. And it's like, well, now your brand doesn't exist. Right. Like so short term kind of ride on that one.

Speaker B: Yeah, yeah. And, and that is the challenge when you have this kingpin model, which is like, if I go after a really influential subgroup, how do I make the transitions into the next sections? Because sometimes you have to be so narrow that you can get enough momentum. In the early days where people are like, man, I would die for this brand. You know, like, this is a key part of it. And so lots of brands that, that get early traction, they do narrow enough and focus on a segment enough that they get traction, and then they struggle as they start to scale. I think particularly when they hit like 2 to 5 million range in total revenue, then it's just really hard because they're like, our market's probably not big enough this first segment to get much further than this. And how do we not piss off all of our current customers and at the same time, you know, make sure that we're, we're keeping them and going and getting the next ones? And that's why that, that's why narrowly focusing around features rather than brand values and some of these other core things that are much more durable is really important.

Speaker A: You're very like, involved in this industry and aware of what's going on and the trends and everything else. So I, I ask all of the guests the same question. I'm, um, very curious to hear your answer, but is sort of what I call our brand crush. Like, what is a product or brand that you love? It can be something you use a lot of. It can be something you love on the marketing side, something maybe on the psychology side you talked about, like nerding out over for surveys and stuff. So I'm very curious to hear, you know, if, and you can pick a couple if you'd like. But what is, you know, what is something that you look at that you are just really, really impressed by?

Speaker B: Um, there's a couple things, like I have A lot of products that I buy, um, as part of it. And I actually have a budget every single month for just trying new products. So, like, I have. I have stuff on my doorstep every single, like, day almost. But, like, I'm always trying new products because I want to, number one, have that customer experience, and I want to understand what that's like. Um, so my family is this two. They're two very different brands in the same space that I'll call out. Um, my family is like hardcore dumplings. Like m. Soup dumplings, pot stickers, all that kind of stuff. There's five different, like, countries and cultures that have their own unique, like, dumpling. Um, I love Mila as a brand. Um, phenomenal product. Incredibly delicious. Ships really well, which is hard to do, is in all the retailers. Their branding is phenomenal. Like, their whole experience is just pretty incredible. Their boxes are custom when they arrive. They've got character. They focus on this. It's not kitschy and kind of annoying, but they have this grandma character that they use. Uh, it's just done really well. And again, at the end of the day, taste matters. And it just. The product delivers every time, and you make it yourself. And that. That's such a key part of the process. The other thing is they just crush it on their segments. Like, they know exactly who they're. They're selling to, um, as part of the process. But another brand I like in that space is an emerging kind of new brand. They're called Namu N A N a M U. These guys are Georgian dumplings from. It's hilarious because they live in the state of Georgia, but this is actually a dumpling from the country of Georgia. And so it's like Georgia squared, you know, as part of the process. But these are much bigger dumplings than most people have experienced before. You eat them differently. They're incredibly, like, flavorful. A beautiful compliment to, like, any meal. They can be the star. And, um, you know, and they're going out and competing against, uh, a market that largely knows Asian dumplings.

Speaker A: Yeah.

Speaker B: Like Gyoza and all these pot stickers and all this stuff. And these guys are just pushing hard in that space with the product that's super authentic. And, um, that took them a lot of time to figure out how to get the dough just perfect so that it doesn't tear and all those little nuances. It freezes well, but it thaws just as well. Um, so those are two brands that, like, I love. I mean, like I said, I got stuff everywhere because I'm Always just like, I love these guys. Here's what I would do, but dumplings are on my mind right now. Um, and those are two great ones that I think do just a really stand up job. Um, and they're at two kind of different stages. Mila is definitely hitting their paces, their mass market. And Namu is like, you know, at the very beginning carving out, um, a really interesting niche. One more that I'll throw into is Strauss Strauss Family Creamery. These guys have, you know, like, at first you're like, oh, it's a, it's a, it's a dairy is what it is. It's in California. You can find them in Whole Foods and Sprouts. Um, but if you get a chance to have their chocolate milk, like, it just blows your freaking mind. Um, their chocolate, everything comes in like the glass bottle. It's not pasteurized. Like, it's, you know, you got to be West Coast. So like, literally when I'm West Coast, I stop and get it. But their ice creams, for now, everything that comes out of there is ultra premium flavor and like ingredients. And so they're just an absolute killer. One of my, one of my favorite, like I said, I will stop on a business trip or a family trip or whatever it is and run into a Whole Foods to grab some.

Speaker A: See that, that, that to me is the definition of like a brand crush. Right? It's like you're going out of your way to grab that. You have to grab it. And so I think it's, um. Yeah, those are, those are three really great examples. And I'm, I love that idea of like setting money aside to try new brands. That something I've never heard of. And I think I'm definitely stealing that. I'm going to start doing that in my own personal life because it's enjoyable and there's so many ones that you'd want to try, but you don't, you know, you kind of get in tunnel vision when you're shopping in a grocery store sometimes. And, and so I think that's really cool concept. Um, Seth, uh, last, last question for you here. You provided some great advice throughout. I mentioned I was jotting down notes, but, uh, you know, what advice would you give? Maybe this is a two parter. What advice would you give to your younger self starting out? And then the second piece of that is what advice would you give to a CBG company starting out?

Speaker B: Those are both good. Um, I, I think if I was talking to my like 25 year old self at this point, um, I'd probably just say calm down. But as part of it, right, like, you know, I think early in your career, in life you just have, you put. So I put so much pressure on myself. Um, it did create a lot of opportunities. So like, I made a commitment with my wife coming out of college. I was married pretty young and I just turned to look at her and said, hey, like from a career standpoint, I'm going to spend twice as much time working for the first 10 years of my career than anyone else. And um, the goal was I want to learn twice as fast as anyone else because I believe in the, in your 20s especially, like, it compounds and you get massive advantage in later years because you're kind of a first mover in all those spaces. And I absolutely did that. Um, I did have to unlearn that, which was like, cool. It's been more than 10 years. My wife had to remind me of that, you know, like, um, but it was such a big advantage. And I think at the, at the core, what I would basically say to myself is like, focus on learning. Like that's the right thing to do. Learn as much as you can. Be curious, make mistakes, try new things and use the combination of your experiences to really shape your perspective. Because I think we get so often like industry focused and we only put the blinders on of like, let me think about CPG all the time or retail or whatever. The thing is, and there's so much to learn by looking in industries and spaces that we're not in because that's where we learn about people. And that's all CPG is. Like, we all think about CPG as a product based industry, but it's a people based industry. We're just building things that people want and need. And so I think that's important. And I think from the like CPG advice, I think a core perspective is don't be afraid to like, well, maybe I just say don't be afraid. Like it is hard. CPG is a really tough business. Um, the margins are slim. Everything's really challenging. The people that succeed though, ask a lot of questions and um, they're not afraid of being wrong. Um, I find that the people that are not afraid of being wrong are often right. And that I think is a really important concept. And um, don't fall in love with your product so much that you're unwilling to listen to data and people because a lot of people fall into that trap as well, which is, you know, but this is exactly the idea that I've had in my mind, and this is how it has to be. And there's definitely a place for being stubborn and, like, pushing on customer experience. But sometimes I think a lot of founders get caught up in, like, this is the package I had in mind, and this is the whatever. And it's just. It's not going to work from the first day. People don't want to tell you that, but after you've blown through all your savings and you've spent years chasing buyers and doing all the really hard things, they're all going to tell you that at the end, which was like, yeah, it's probably these things, and so ask those questions and be open early and then be open to making the changes necessary, because I think every business is doable. Um, it just comes down to, can you make pivots early enough? And if you can, in an emerging business, um, you're going to increase your Runway, right? Like, how long you can keep going before your money or your family pressure or all the other things kind of push you to a place where you're like, I don't know if I can do this anymore. The key is just surround yourself with people that can provide mentorship and learning and ask them the hard questions that you probably don't want to hear the answers to, and you'll make changes and build a good, uh, product that. That customers love.

Speaker A: That's awesome. That's, uh, amazing advice. Um, I think the people that aren't afraid of being wrong are usually the ones that are right. That's, like, one of the truest statements I've ever heard. I, um, Fantastic advice throughout. Well, uh, I just want to say thank you. Really appreciate you taking the time to chat with me today, uh, share a lot of your story, your career, your learnings, um, some amazing, like, psychology and what's happening in the marketplace as well, and, uh, just a lot of value in there for our listeners. So really, really appreciate you coming on the the show and wishing, uh, you a ton of success.

Speaker B: Awesome. No, this was a lot of fun, and I really appreciate it, Justin. All right, thank you.

Speaker A: Have a. Have a wonderful weekend, and, uh, hopefully you'll be able to catch up soon.

Speaker B: Yeah, you too. Thanks. Sa.