The Profit-First Approach to E-Commerce Growth

Speaker A: Growth at all costs is such a bad strategy. I think it should be profit at all costs. A lot of the founders don't even care about food. The CPG is just a vehicle for growth because people are funding it. Uh, I look at one time orders, two time orders, three time orders, because I know once somebody's ordered three times, the propensity for them to keep ordering to the 15 time 20 times is really high. The risky period is when they've ordered once till three. And that's where all my attention is.

Speaker B: Welcome to the DTC Insider podcast, where online business owners come to find actionable tips and tactics to grow their businesses. Now, here's your host, Brian Rosenthal.

Speaker C: Hey, welcome to another episode. My name is Brian Bracentle and today I'm joined by, by Arshad Bal, founder of Amrita. It's a great company. I've been following him for years on LinkedIn. As I was telling him before recording. And if you don't follow him, of course by the end, we're going to give you the his social media handles. But it's amazing and it will be an amazing episode and different from the previous ones, I promise. So stay tuned. Hey Arshad, thanks for being on the show.

Speaker A: Thanks, Brian. Thanks for taking the time to talk to me.

Speaker C: Yeah, yeah, my, my pleasure. Likewise. You know, I was telling you offline that your content is different, but it's not even about your content is what you value about. Building, uh, and growing a business is different than what I see, uh, in most people I, I talk to or I work with or I read about online. Right. So what, why is that? Why, why do you think that that happens? And for context, for people who don't know you or doesn't follow your content, you don't speak about the latest AI trick. I mean, uh, there's nothing wrong with AI, but the latest AI trick or thing they can do, the AI creatives, they can implement. You talk about the fundamentals or that's my opinion, doing the reps, excellence in operations, in real life, connections, staying in touch with your customers. So why do you think more people isn't talking about it?

Speaker A: Yeah, that's a great question. You know, I came into entrepreneurship a little bit later in life. I had done corporate, I had done a lot of things that I'd gone to school for, you know, so, so entrepreneurship to me was really taking an idea and idea that came out of a personal need and finding a market for it, delighting customers with the product and then building the business. And you know, I started in 2013. And at that time the CPG industry was very different than where it is now. That time it was a bunch of hippies, uh, people who really cared about food, agriculture, the way, you know, the soil was being farmed. You know, uh, you didn't have gluten free, you didn't have all these terms polluting this. It was all just clean food that was being made for people to consume. Really simple transactions. You didn't have venture funding into the market at that time. And I think these are people who were very happy making product, taking it to a consumer, getting money for it and, and then re reinvesting the money into the business. And what I've noticed in the last maybe five years or so is CPG got an influx of venture money. And um, it has completely changed the narrative of a lot of the founders in the industry where they're really in it to exit and they're trying to grow at an unnatural pace with money. So a lot of the founders don't even care about food. They just. The CPG is just a vehicle for growth because people are funding it. And that's a tough situation to watch because you want your colleagues or you want your friends in this space to be doing things for the right reason. Like they really, really care about why they're selling a gummy right that has greens in it. Not, not, not to. There's a big DTC example of a big company selling gummies that went to a couple billion dollar exit in two years.

Speaker C: And the risk, well, you believe it or not.

Speaker A: Yep. It's crazy. I mean, nothing to take away from the brilliant execution that that guy and his team did. Amazing. Like he's a, uh, operator. Very few people can operate and execute as well as he did. But you know, in the old days, people could not get to a billion dollar exit in less than 20 years or something because they were just building step by step by step. Right. And um, he. It's very interesting how things are today. So I just take a different approach. I take a more of the old school approach. Like you. It's. You build really amazing product. First and foremost, you delight the customer. You make sure your repeat customer rate is really, really high. Otherwise you go back and fix the product as to why the customer's not buying over and over again. And then you figure out every channel that you can get to the customer in the most efficient way. Right. For us it happens to be D to C, but for some other people it's retail. Uh, and then you just rinse and repeat that, because I think even I've done it for so long, I'm still a novice in what I do. Right. There's so many things we can learn. So I, I stay super excited about the industry that I'm in.

Speaker C: Do you think that it's not. Not better or worse, but do you think that brand founders who started the brand after the pandemic operate drastically different than the ones that, that started before and value different things?

Speaker A: I think after the pandemic, uh, the cash dried up a little bit, right? Uh, maybe, maybe not. I think there were some big changes in buying behavior, especially in the snack business. Like, the snack business dropped about 30% during COVID because people were not snacking, they were staying at home. Right. So a lot of the snack companies struggled during COVID On the other hand, there were some companies that just exploded, like, you know, the, the baking companies or the, you know, the bread mixes, all that. So I, I think different part. And the. An e commerce exploded too. Right. So a lot of stuff, a lot of changes happened. Some people were observant of the changes and jumped on the right ship. And that's, you know, you can debate whether that's right or wrong, but if, if they enjoyed it, that's great. But I think there was a fundamental change in, like I was talking about earlier, where money was coming in and then money just dried up. And a lot of the people were left high and dry because they started the business with the assumption that somebody was going to fund them for an exit. Right. They were building a business similar to Amazon, where it was like, profit was not the lever, growth was the lever. And everybody knew that, including the investors. And then the investors pulled the rug out and said, we're not going to fund you anymore if you're not profitable. And to me, that's not correct. Right. Uh, you funded them because of growth, and then you change your, your ideas along the way. But a lot of companies in CPG were impacted by that change in the way the funders were thinking. And a lot of those businesses went out of business because their fundamentals were just not there. But I don't think the founders were at fault per se, because they were rewarded for growth, not rewarded for profit. And now everybody wants to reward people for profit.

Speaker C: Yeah. So I think that conversation should shifted a lot. Indeed. You know, talking about profit in the last few years, whereas before it was all about growth and all costs, you know, talking about revenue and everything that we all know by now. But it was like socioeconomic, you know, the socioeconomic landscape changed a lot. The technical landscape changed a lot as well. You know, the privacy issues with Meta. After 2021 or iOS 13, many things happened and now it's not growth at all cost or getting new customers only. It's focusing on retention. But retention, it's such a vast word. Right? But, but it's so important. Of course your customers are important, but that's only a fraction or one part of a company. One level, let's say the other one is, you know, doing again m putting in the reps as you said, goes across the business and I love you to expand there if you can. Like what are the fundamentals part of a business for every brand these days? What's the most important thing? You up in the morning you look at and you spend most of your time in.

Speaker A: Yeah, so for my situation it's slightly different because we are vertically integrated. So I actually run a factory. So I start my day typically at the factory going what are we making? You know, get, make sure everybody's up and running, doing that. Well and that's been only about six years in the making. Before that we were using co manufacturers to do that. And I went into the factory partly because I wanted to get dirty with my hands and make the stuff. And so that was just a personal desire that in turn has turned out to be a real economic value adder because our cost of the goods have been dropping the more we optimize the factory. So it's really, really helped us be more profitable. That that's from a business perspective it's been the best thing we ever did. So that's important for me in a day. I think the other things in terms of reps are to look at the retention numbers, to look at the acquisition numbers, new customers and returning customers. I typically look at the metric which is um, I look at one time orders, two time orders, three time orders. Because I know once somebody's ordered three times they the propensity for them to keep ordering to the 15 time 20 time is really high. So the risky period is when they've ordered once till three. And that's where all my attention is. Right. Like we nurture those customers, we give them anything that helps them get over that trust gap. So like they may have got a sample from us. Maybe they like two flavors, maybe they whatever it is, right. They didn't like everything. Maybe it was just a batch that was just didn't work for them. We just need to find out we need to fix it so that we can get to second and then we need to get the third order right? And practically 99% of time after the third order they are either they, they love it or they hate it. And if they hate it after the third order, like it's not, we're not the right product for them. So we move on. But typically this attention to the first three orders is, has really solved our retention problem for us heavily. And then obviously I think we, I spend a lot of my time now thinking about the, what is unique to the direct to consumer channel, right. I think it's, there's so much noise in the market with AI tools, with you know, all these people trying to sell you low cost services at volume, right? Everybody talks about volume. At the end of the day, I think what matters the most to the consumer is do you care directly one to one about them? Right? So we spend a lot of our time one to one with customers, right? So let's say we, our goal is to add a thousand customers per month to our acquisition. We will basically say ask uh, 500 of our existing customers, will they recommend 500 friends? Because we know that word of mouth is so important. We will push a lot of our marketing dollars into that 500. Like we'll give them free, a free box of bars because we say, and we'll write a handwritten note in there that says your friend Brian recommended us to send this to you. Check it out, let us know what you think. Here's uh, my phone number. Call me, here's my email, email me with your thoughts if you love it. Here's a coupon code to use on your first order, right? That's old school, super slow way of doing it. But the, but think about it, our cost on that box, maybe $10, $12 all in. We convert, we can, we're converting those customers at such a high rate compared to a CAC on um, Facebook of 25 to $30. Right. And even on Facebook the lifetime value is iffy because the person is just trying it out for the first time. So I'm kind of in. So I spent a lot of my time in terms of reps doing reps like that, like going how can I be so uniquely different? And where, where can I make that connection with the consumer where they are struggling with today, right. Most consumers are really over inundated with media with all these emails coming to their box. So sending them more cold emails doesn't help the problem, right? But sending them a postcard that says, hey, your friend recommended this to you and they know Their friend. The chance of them trying the product is so high. And that's again, old school way of doing it.

Speaker C: This reminds me to uh, of a conversation that I had with a, uh, former Disney executive. I interviewed him on the podcast, I think it was 2022. We started in 2021 by the way. So I had the pleasure of chatting with many, many founders. And he said something that stood out, that seems simple, obvious, but those typically are the best tips or pieces of advice. Right? It's like map out your customer journey. You know, the goal is to dis, right to, to create this wow effect. To map out your customer journey and see what you can do in each, at uh, each step of the process. To create this wow feeling. What you're saying is, if I got it right, you know, it's exactly that. Don't send a, uh, cold email. Just, you know, be intrusive. And something else that, you know, I, I wanted to highlight just, or emphasize just in case some people didn't notice. What you said is that you didn't just speak about apps. When something's not working or you want to improve, you try to test multiple variables, including one that is really forgotten or typically forgotten, which is the offer.

Speaker A: Yep. Right. The offer is so critical. Right. And I think this is something I've, this is actually something I've learned from the big operators like Grunds and Hollow. And these people, right, they are, it's all about the offer. It's. Yeah, the product has to be good. But if you look at Holo that sells socks, come on, so many people are selling the same socks right now. How are they at, ah, whatever, 40, 50 million? It's because their offer is fricking amazing. Right? And I, um, think that's one thing that's really interesting about D2C that I am so excited about because I'm a student of marketing and I go, DTC is evolving so fast all the time. And the beauty is that it's evolving in public. Right? These guys are talking about what they're doing. You just have to find out where they're talking and, and go learn. It's like a masterclass that's happening constantly. And there are so many of these companies that are, that are growing at a rapid pace where they're doing everything correct and you just, you just go and listen to what they're doing, uh, come back, do a test application in your own business nine or ten times. It works. And ah, and I think that's where we're living in this really beautiful Economy right now where I don't have to pay a broker to tell me, a D2C broker to tell me what to do. I just have to spend my time listening to the experts of what they're doing because a lot of times they are doing it and then showing the results like uh, you know, and so it's, it's a very unique feature in D2C that's not as common in retail or other places.

Speaker C: Yeah. One thing you, you, one thing someone who built in public to told me here on the podcast is at least he applied these to his business is that they, in order to grow to the next level, they kill the previous version of the company at every step of the way. Like even things that ah, are working. So this guy for example, started at Etsy and he was doing great, but then he transitioned to something else. He killed that and everyone was like, you're crazy. And then he transitioned to something else and killed the second thing. So you might not be this, you know, aggressive in every case, but have you ever done that or something similar?

Speaker A: We've killed a lot of products. That's what we have done. So we, I went through the lens of margin, right? I said, um, now that I own manufacturing, I can clearly see profitability through operational lens, which is throughput. How many units can I make? What do these units sell for? What is my cost? Right? Simple equation. And I go, there's nothing for me, there's nothing better than doing protein bars. It's the highest lever. But a lot of my customers got used to us making protein oatmeal. They love it. I constantly get emailed and we don't make it anymore because it's not efficient. We don't make as much money on it. We're going to bring it back because it's, it's a, it's a really good upsell item where somebody buys bars and they can add. So it's. Our AOV can increase. But I know that there's nothing today that I can make that has higher margin than bars. And so I cut out everything else, right? And I said, I know the industry in bars is huge. People like what we're doing. We're just going to continue going that. I also did cut out a lot of channels just like you say your previous person on your podcast cut out Etsy. We were doing a lot of similar things. We just. It's a great example is I've got this guy who is a broker for me for the, for coffee shops and he's just old really, really old school. He refuses to use the Internet, like texting me his orders. And I finally said I can't. You know, even though it was a couple thousand every month, it was just like inefficient the whole process. And we shut it down. And so I think you, you're right. You have to protect your time and you have to do the highest value things with your time. And, and so, and that will require deleting a whole bunch of things that just don't match that equation. Right.

Speaker C: I think there's fine line between expanding product categories to grow and between you know, that and the, and being a distraction. You know there's a line between distractions and amplifying categories for growth purposes. There's no right or wrong. But again as you said, you need to find what I mean whether it's one or the other for your company. I mean I, I met so many founders and some have, some are successful with a thousand categories and some others, you know, they sell one, one product type. For example belts made a multiple eight figures selling belts. And I just said, you know, back then, you know, have you ever thought of expanding? And it's like, no. Why? Like this is like we are optimizing and maximizing the value as you said for these categories. Maybe in the future, who knows. But for now this is, we are growing very well. So I guess market, the market changes a lot. Everything changes. But something there, there's something more to this and I think that I know that in your case it's this way as well. Most companies that were most successful companies that I've met, they have a big why, a big reason for existence and they every, anyone else can sell what they sell, but they build such rapport within a certain group and certain community that they build something unique and it's like a moat against competitors. So what's your why?

Speaker A: Yeah, so my why has changed a little bit through the years. Early on it was to I. And there was an internal why and there's an external why. Right. But, but really the, the why was to create a really clean protein bar. In the beginning that I started that was that met the needs of um, of low inflammation and allergen friendly. And that was because I started the company based on my son's journey with autism and you and a ah, low inflammation diet that helped him in his recovery. So that was my why early on. Then I, when I started my manufacturing I realized I had this opportunity to give people on the autism spectrum jobs and there was a data statistic That I heard about that I can't forget ever which was the young adults in the autism spectrums. These are like 21, 22 year olds have nearly three times the unemployment percentage as neurotypical. So people without autism do. And you know, if you think about it they, these are like prime years of working and they can't work because they have some development disabilities that prevents them from functioning neurotypically in an environment. And I real. And I knew right away that I uh, could give them opportunity in a manufacturing environment. So that became a big part of my why is really and started with autism with my son but kind of like now threaded into autism as a uh, at the facility level. And now we typically have about 20 young adults come to our factory every single week to do vocational training. I've hired one full time person years ago and I'm getting ready to hire my second one now full time. And my goal is to try to hire a person a year within my establishment and to give them jobs, but to really give vocational training to as many as I can. Um, so that's a big part of my why is kind of this, this inclusion piece right to go. How can I find people who are disadvantaged, whether it is, you know, immigrants working in our facility or people with development disability, give them opportunities. And every single time I've done that it's been net positive for the business. So even if I think about it as I'm doing this because I want to do something good, it always ends up being net positive for the business. So which has been really reinforcing to me that you can do good and make money at the same time. Those two are not mutually exclusive.

Speaker C: Uh, um, what would you, what would you tell those people who are thinking or considering about hiring someone with a, how do you say? Neurodiversity? Neurodiversity.

Speaker A: Yeah, neurodiversity.

Speaker C: Many people might have, you know, good intentions but they are afraid they might not know how to handle things at work uh, because they are not around them um, as ah often. So what would you tell these people? How have you prepared your to do it as well?

Speaker A: Yeah, so actually I've been doing a little bit more work in this space for trying to, trying to convince the state of Connecticut to give more funding to companies so that they get more comfortable with hiring people with autism. It really comes down to the fact that people with autism have certain skill sets that they are really, really good at. And then maybe they, they might be slightly below average on certain skill sets. And the thing Is in certain industries these skill sets are super valuable. So manufacturing is a great example. So somebody with autism tends to be really, really good at following directions, especially repetitive direction. So if you're in manufacturing, kidding, anything to do with putting things together, somebody with autism will be like higher output any day. But at the same time they might take their ramp up time might be a lot higher than, you know, a neurotypical person. So, so you just have to build in that, that extra bit of ramp up time. Um, they tend to be very punctual, very uh, they don't call out sick because they, they, they really like that repetitiveness of the job. So those are the things that I would tell people to watch out for. But I really, really think that there are so many people on the spectrum who are looking for jobs. And if you've got something that is at that level of kidding, shipping, manufacturing, you know, connect with the local nonprofit, like ideally connect with school programs because all school programs have something to do with nonprofit, uh, autism programs. And they will bring kids over and they will do a lot of the work for you and then you can hire out of that group if it works out well.

Speaker C: Great. Yeah. I was listening to an expert in this topic the other day in the radio. I don't listen to the radio very often, but I actually have a podcast here in Argentina as well in studio. And I live like an hour away from the city, so when I travel I listen to podcasts mainly, but I didn't find any that I loved while I was driving, you know. Uh, so I was listening to the radio and there was this expert and they were covering this topic and said something that got my attention, but I don't hear many people talking about it. And it's people were people in the, in the, in the program was asking him like, is it that more people have this neurodiversity right now or was it that before wasn't diagnosed enough? Like why do I know? Because it happens to. I, I have twins. A uh, six year old twins, a boy and a girl. And both they, they go to separate grades. Separate. And um, and both of them have uh, friends with neurodiversity. And I know many of them, like many siblings and people in the school. So he was asking, you know, why is it that we don't know as many adults with that. Is it because we are not like diagnosed? Is it related to some newer behaviors in society, things they put into food? You know, anything about it?

Speaker A: Yeah, I mean there, there's lots of theories like so for my son is a great example. When he was two and a half, he was diagnosed with autism because he had no speech, he had really bad sensory issues. We had never heard the word autism till he was diagnosed. And then, uh, when we found out about it, we were like, we were blown away that one in three boys, it was literally as high as that were had some version of autism. Now it's a spectrum, so the amount of issues really varies. But when we changed his diet, it still took a year. Once the diet cleaned up, his internal stomach cleaned up. And that meant he was able to absorb a lot of the surfaces better because he was not always struggling with stomach ache. And he started recovering really well from the age of about 5 till 8. And then by 8 he started getting speech came back, a lot of his occupational therapy issues went away. And by 10 he was pretty close to being neurotypical like he was in a regular classroom and all that. But that's. I, I feel like. So that was still two and a half to ten. Right. Long time period of intense work that we had to do with him. Right. And, and I would say he was extremely lucky that everything worked out properly for him. Not, not a lot of kids are lucky like that. So. So I think. Well, first of all, it's really, really important to do early intervention. If you see a child having the problem, get going early and then just be the. The human brain is very pliable to change, like, especially when they, when people are younger. So do everything you can when they're young to, to impact the change because their recovery can be much faster. Younger versus older.

Speaker C: Yeah, agreed. So changing subjects. And it's probably one of last. My last questions for you is, you know, for those, you know, whether they are starting a CPG brand, thinking of starting one or already, you know, um, let's say growing. What would you tell them as an advice, you know, channel, first of all, channel wise, like, are you only ddc? Do you sell in retail? If you do sell in retail, what's your advice for getting into retail? Were the challenges were ups and downs were being there for the CPG brand. What metrics should I watch out for or you know, be, you know, alarm signs.

Speaker A: Uh, so yeah, yeah, yeah. So cpg, I mean there are a couple different ways to doing this, right. So you've got things that are ambient so they don't need to be refrigerated or frozen and then things that are frozen. So if you're in the refrigerated frozen category, e commerce is extremely difficult, extremely Expensive, it's, it'll never be profitable. You can try it at scale, it might get profitable, but otherwise it's not. So then you're really just stuck with retail. And I would advise most people not to do something that is refrigerated or frozen. It's just, it's such an uphill battle because of all the restrictions that you're under. So if you are in ambient, which is non refrigerated, I would say first of all you need to have margins 60% or better gross margins and anything uh, less than that, you just don't have marketing dollars, you know, to, to fuel it. So, um, and very rarely does scale significantly improve margin. It might like in the case of us when we started doing manufacturing, it definitely got better, but you should be close to 50% when you're first starting off. So then you can take, you can take, take it to 60 at scale, but if you're at 30, getting to 60 is impossible, right? So that's like number one, like make sure your pricing and your margins are correct from day one. And then I think the other thing I would advise a lot of people is one channel, one avatar, $1 million a year. That's kind of like what I learned from Harmozi, you know, and a lot of other people in the sort of the E Com D2C space. And it's really hard. As a founder especially founders are very add and we're constantly looking for like one channel gets difficult, we move to another channel, right? It's like the stupidest thing to do because the other channel is not any easier. It just seems easy because this is hard. And you're like, oh, I'll go to retail and I'll sell to 10 stores. And then all of a sudden your brain is on retail versus solving the D2C problem. And um, so I believe that if you're an ambient and you can ship effectively, start with Amazon because you can get really fast feedback. You don't have to do a lot of UX work or anything like that. You know, create good listings, sell test, see what kind of response you get and then build out, you know, Shopify D2C. And I just focus on three things right now. And um, you know, we've been scaling close to 25% the last three or four years on D2C. And the way I do it has to be amazing. Product has to be really good media, so photography, video, everything that tells a story has to be really, really good. Your margins have to be extremely good and then run A combination of organic and paid. And don't put all your eggs in that paid basket. I would say ideally put it's like a 6040 or a 7030 split between organic and paid. And then just grow slowly in the beginning. Like be comfortable with 5% growth, 10% growth, but focus on that retention, focus on the referrals. Um, and it's interesting because if your paid starts working, that spigot can be turned on really fast. You can go from spending a thousand dollars a month on Facebook ads to a hundred thousand a month on Facebook ads very quickly. Once the ad starts working, once your cat gets good, right? So, and organic doesn't scale as fast as that. So I think with paid, my suggestion to people is learn the signals of paid. Like really learn how to how the media that you're putting into Facebook ad is getting a response from people and the true response. I mean, Facebook gives you so much data. You can see from click through rates to add to cart rates to checkout rates. Like you can see everywhere in the channel where things are bleeding, right? And that gives you an option to go fix that piece. Maybe it's your landing page that could be better. Maybe it's your static was horrible, whatever, right? So that's the beauty of D2C is there's so much data that you can work off. So I always tell people start in D2C because if you started in retail, retail gives you no data back, right? Or they, they uh, charge you for data back. D2C is giving you all this data constantly for literally for free. And I strongly believe that you could be a million dollars a month on D2C for most CPG businesses, right? And then like, why do you need anything more? So it's like if you get a $10 million CPG business running on D2C and let's say Amazon a little bit on the side, why do you need retail? Just do that better and better and better, right? And yes, you will hit a ceiling at some stage. But my feeling is, and I have a very different philosophy and then many other founders is why do you need to be a bigger than a $10 million business, right? If it's a 10 million and you're at 15%, that's a million and a half cash for the founder. Who the hell needs more money than that to, you know, per year? So then you can have an amazing team. You, you can work less and less. And you know, your channel risk is relatively low in D2C because unless your all your stuff is coming out of Facebook ads. But if you have a strong retention program, a strong acquisition program, and a little bit of Amazon, you really spread your risk out pretty well. And uh, and so I, I, that's my playbook. It's like, you know, that's very true.

Speaker C: I mean, each founder should think about their own priorities, you know, But I, I agree with what you said specifically. You know, we, I remember this client, we started working at the agency in 2022 and they were doing $2 million. Now they are close to 10. And the founder is like, they've been growing steadily year over year, despite all the socioeconomic issues and all this stuff. And it's like, I don't, they are not in the CPG industry, but it's like, Brian, if we keep growing this at this pace, I'll need to move for the second time in two years to a new warehouse. They're finally moving. I visited them, um, these in this, in my latest trip to the US in May. But they, I only do hire more people, so it's like, it's a nightmare. I don't want to have. Like, I'm fine at this stage. At first I didn't get it as an agency owner because it was like, well, if we can keep growing, it would be a dream come true for any other brand who's that's struggling right now to grow. But then I thought about it from a business owner perspective and it's like, he's right. He, uh, I don't want to add more team members too. Right. So it's, uh. Sorry, you want to say something?

Speaker A: Yeah, no, no, no. I, I, I, I think that's exactly it. It's like the, uh, growth at all costs is such a bad strategy. I think it should be profit at all costs. And, and because, you know, it's like the CPG industry, I saw statistics the other day and this was CPG and D2C that um, the net margin was under 10% or 9%. And I said to myself, I was like, if those people just focus and doubled margin, they wouldn't have to double their business. They would still make double the amount of money. Right? So, but it's, some of this is, is because the vanity metrics around growth is so big in this country, uh, versus profit. Right. And also this whole thing about like, what is enough? Like if, if you, I start from customer side, not top line, I kind of start from the bottom up and I say If I had 5,000 customers a month paying me $60 AOV and I could increase that AOV to seven. Let's just say, let's keep it at 60. That's a $5 million business. I think somewhere the math works out. You run that business at 20%. Uh, net founder gets 10%, 10% goes to profit for oh, shit days or whatever it is. Uh, everybody gets paid really, really well. You've got a remote team, everybody's happy wherever they are in the world. You're working 20 hours a week. As a founder, you know that, that to me is nirvana versus $100 million business where you're working 80 hour weeks. You owe money to venture capitalists, they are breathing down your necks constantly. And then you may exit. Maybe you won't exit. It's just like, no, I don't need it. Like, you know. So.

Speaker C: Well, I guess cycling takes a lot of time, right, to practice?

Speaker A: Yeah, yeah, yeah. Or just whatever adventure, you know, it's

Speaker C: like, uh, I'm good, but you know, I probably. It's not that I loved the book. I'm talking about the four hour Work week, the classic. I didn't love the book per se, but I like the, I don't know if you read it, but the fisherman story, for those who didn't.

Speaker A: Yeah, yeah, 100%. Yeah.

Speaker C: Is basically like uh, somebody who was happy and returning home lunchtime and playing guitar and sleeping, taking naps and staying around friends, family. And then as uh, a student from Harvard or somebody vacationing in Mexico and he was told, these fish are like, if you do things better, well, in a few years you can be a millionaire and do whatever. And then for what? Well, you can get home early, take a nap. So I really value things as well. I, I, I, you know, in a few, one hour, two hours from now, my kids, we are one hour, um, ahead of EST. So at, let's say 4pm Here they get off, you know, first grade, I go to the, to school, I pick them up and I don't have to. My wife already does that. She works as well, but she takes the time. And we all, we both go whenever we can and take them to practice sports because that's life. But for others it's not. And that's fine. They, they want to, you know, the hustle culture, you know, keep doing it until midnight and having a, a bigger business. And that's fine for them, but it's not only about, uh.

Speaker A: Yeah, I think it's completely okay for somebody to work long hours if they enjoy it. I think my point in a lot of my LinkedIn posts is that uh, there is another way. Right. And the other way is to focus on the customer, to focus on margin and to focus on retention. And all of that will get you the amount of money you need to live and not have to work insane hours. Right. So, uh, you start back with, I need so much money to live. How can I make this money in the quickest, most efficient way, in a way in which it doesn't erode my soul, makes me happy and all that. And once you've made that money, it's like, stop working. Like, go, go enjoy life. Right? And I think so many founders, I was in the same boat for years. Just keep working, keep working because we've been sold this narrative that growth at all costs is. Is the right answer.

Speaker C: And so anyway, yeah, Arshad, it was great having you here in the podcast and happy that we finally, um, did this interview. Is there anything else that I didn't ask you that you like to tell the audience before you go?

Speaker A: Well, I mean, they should listen to your podcast because I, I listen to it a lot, so. So I appreciate that, number one. And I, I think the, the number two thing is that doing good and making money is very possible, especially in today's versatile economy. Um, and I think the last thing is that people should always keep upskilling themselves. Right. So we talked earlier about AI. Like, yes, maybe AI is not the salvation for a lot of companies, but I want to learn what it is. So I spend my personal time on a weekend instead of doing work, learning AIs, because I'm just interested in it. Right. And I. And I think, uh, we live in a fascinating time now where there's so many interesting things happening in the world and so it's like, be interested in what's happening and. Versus just your business.

Speaker C: Yeah, a hundred percent. But there's a difference though, right? Be interested in what's working, but don't neglect the fundamentals and the foundations of it.

Speaker A: Yeah, yeah.

Speaker C: Absolutely amazing, Marshad. So for everyone listening to this, first off, thank you. Second, if you want to, um, you know, follow. Arshad. Where should I go to follow you and Amrita?

Speaker A: Yeah, LinkedIn is great. I. It's like my personal diary. I'm writing there quite often, my posts. So LinkedIn is Arshad Bal on LinkedIn.

Speaker C: Great. We'll post and include everything in the. In the show notes. So if you go to the ddcinsider.com and then hit the podcast tab, you will find the interview and there you will see all the show notes, including all the social media handles. As well as the the website. Arshev, again, it was a pleasure having you here. Thank you.

Speaker A: Thanks, Brian.

Speaker B: This episode was brought to you by BSR Digital. We help DTC brands grow through paid ads and email marketing campaigns. If you'd like us to help your business grow, head on over to bsrdigital.com and Schedule A call with us.