From $3 Million to $30 Million (These Mistakes Will Break Your Brand)

Transcript:

Jared Ward: 

Well, welcome to Ops Unfiltered. Today we have an amazing guest, Damian Dayton. So welcome, Damian, to the podcast Ops Unfiltered.

Damian Dayton: 0:39

I'm excited to be here. You know I don't get to be on very many operations podcasts Usually actually people. You know I have a face for radio so you'd think I'd be on more podcasts, but I'm not.

Jared Ward: 0:53

I mean, you've got glasses for, you've got glasses for YouTube content.

Damian Dayton: 1:01

It's to convince people that I'm smarter, you know if they, and that's why I make them white, so they stand out. Yeah, glasses, he knows a thing or two.

Jared Ward: 1:05

So I've gotten to know Damien a lot more over the past six months or so Because we Luminous is actually a client of Creatably, so Damien is the chief creative officer, part owner of Creatably, which means, by extension, he's involved with Pillow Cube and Stairslide and Boulder Play and a lot more stuff. So Damien's been in the game in the e-commerce marketing and ops game for a really long time. I think you've seen yeah, you've seen a lot. I think we can have a pretty fun discussion today reminiscing about some of your bad operation memories and the lessons learned.

Damian Dayton: 1:53

I think a year in D2C, a year in e-com can feel like an eternity. So I've been in production for almost 30 years but in e-com for about six or seven, but with a lot of different companies. I think we've done over. We were counting up a little over a hundred campaigns and really seen a lot of startups have that explosive growth journey and some of them crash and burn during that periods and yeah, Well, so what do you do at Creatably?

Jared Ward: 2:22

Tell us, tell us what is Creatably and what do you do for them.

Damian Dayton: 2:25

Well, when people ask what I do, I usually say I do as little as possible, but we do long form commercials, long form, funny commercials made for the internet.

Damian Dayton: 2:35

I like to say we're on a quest to create the greatest commercials in the world, and we think the internet's the best place to do that right now. You know, we just had the Super Bowl not too long ago, and what I like to say, like a lot of people, their goal is to have a Super Bowl commercial, and I think there's opportunities online to create a Super Bowl commercial any given Tuesday. Everybody pays the same amount for a Super Bowl commercial, but if you make a really fun and engaging and enjoyable commercial, you actually pay less per view on social media than you would on TV. And so that's, you know, at the core of our philosophy. We have this great performance opportunity online. If you can create funny, engaging and really earn people's views, then you're playing a lot less per person, you can see a lot more people and as you see your results, you can put more money down on it, and so you can kind of create this virtuous cycle.

Jared Ward: 3:32

And who are some of the brands that Creatably has done commercials for?

Damian Dayton: 3:37

Well, you mentioned some of our house brands, which are companies that we've either started, invested early on or acquired, and so we started Pillow Cube. You know Jay Davis is the founder, but he's also the founding partner at Creatably Stairslide. We invested early and then acquired the rest of the company. Boulder Play, cold Case, ice Cream and a handful of other companies are house brands and then companies that people may know and recognize. We've done some great work for Thread Wallets, love the Bowers and what they're doing. We helped Homie get off the ground. We did some really early work for Owlet. You know they had their IPO for a little over a billion dollars. We did some early work for Gab. We helped them both with their Kickstarter and their first ad campaigns. We helped Kizzit get off the ground and did their first internet ads and a lot of other brands and Collar I'm wearing their shirt right now. Love their stuff.

Jared Ward: 4:36

You guys have had your fingers in a lot of the successful Utah e-commerce companies.

Damian Dayton: 4:42

Yeah, you know, up until recently we didn't really have much of a marketing strategy for our agency, so we just worked with brands around us and a lot of those have been Utah brands. But we've worked with a lot of LA and New York brands Clean Cult comes to mind. They just did their nationwide release in Walmart and, yeah, we've had some other successes outside of Utah but definitely have made a lot of great friends in Utah. There's also just a great community here. I mean you and I just met over a baccarat table at Silicon Slopes, yeah, and I think that's how a lot of our business relationships began. We were throwing wild money that night. Yeah, wild pretend money. You know it was great.

Damian Dayton: 5:22

Which is also kind of like e-commerce.

Jared Ward: 5:23

You feel like you're spending pretend money. You know which is also kind of like e-commerce, you feel like you're spending pretend money sometimes. Well cool. I want to dive into a couple of different topics today. First one I would say is can you sort of explain your involvement in operations for PillowCube? Obviously it's more from the marketing lens, but I guess, where have you, where have you touched ops or intersected with operations for some of these e-commerce companies?

Damian Dayton: 5:54

Well, we're now at a place with all the companies that I mentioned at Creatively where they have their own operators and running everything. But in the early days, when you ask what we've touched is, we were involved in everything. I mean, I remember our first Christmas, our first major Christmas was pillow cube, my wife and my kids. We were at the warehouse packaging orders and so it was everybody was kind of all hands on deck. You know I was answering Facebook messages and individual like responding to comments on our videos, and you know I wrote the first commercial and it was all employees. And you know I wrote the first commercial and it was all employees of creatively that were in the first commercial. Um, and we've made most of their ad content since then.

Damian Dayton: 6:33

But in the early days I kind of took a little bit more of the marketing role. Uh, I wouldn't say I was quite cmo, because jay has a lot of marketing genius there, but I put on my producer hat. The main skill you have to be a good producer is have the ability to pick up the phone, which is also, ironically, the same skill. You need to be a good supply chain person. Yeah, so we sold $300,000 in pillows for PillowCube before we had shipped the first pillow and we were like, well, we'll figure that out, we've got a prototype, we've got multiple, we'll get it from China. And we found a supplier in LA and then we're like I bet we can get bill of cases made cheaper. I bet we can get phone cut cheaper. So I remember a few days where Jay and I were literally on the phone, driving around the valley finding people in the valley that could cut foam for us and that you know, and trying to find the right density of foam and people sew shops that could do really good quality as we were prototyping.

Damian Dayton: 7:35

You know the pillow cube takes. You can stick in a regular pillowcase but it's a distinct shape so it needs a distinctly shaped uh pillowcase. And so, yeah, you know I came on doing marketing. But in the early days it was kind of solve all the problems you know a lot of. I think most people's first experience with supply chain is just putting out fires and then you realize oh, there's people that just do that. You can find firefighters that just help you develop things so you don't have fires. I don't think we had early indicators that PillowCube was going to be successful. But to go from that $300,000 in the first year before we shipped to $3 million, and the $30 million was really big leaps. We created supply chain problems really early Then. A lot of that was happening during the pandemic too, and I think that gave a lot of people a good crash course in supply chain logistics and how a boat in port just because it's in the United States doesn't mean it's in the United States yet.

Jared Ward: 8:43

Well, let's isolate PillowQ for a little bit and talk about that. So I have a belief that e-commerce founders and companies, they go through predictably unpredictable phases and I think you nailed it, like the first year of PillowCube 300,000. The next year, 3 million. Next year 30 million. I think those just you nailed it like the first year of Pillow Cube 300,000. The next year, 3 million, next year 30 million. I think those are three distinct phases. How would you, how would you classify those three phases if you had to put a name to those phases? Like you know, just getting off the ground and then like getting product market fit.

Damian Dayton: 9:18

And then, oh, I shouldn't label them, but we you, oh, I shouldn't label them. But we talk about the type of ad strategy you need is really different with where you are as a company. So we sometimes talk about it using college terminology, like this company's in their freshman year. Because you think about, like, as a freshman, you're like I'm smart, I can do some things, but you don't really know who you are. You're kind of figuring out what works and what classes you want to take, and so you could call that the product market fit year.

Damian Dayton: 9:52

But success for a freshman is surviving and I think that's for a D2C brand.

Damian Dayton: 9:57

Like your first year, like, hey, we sold product, we can quit our day jobs, or hey, we're making our ad spend back, and that feels like success, you know. And then your sophomore year um, you know you're like, oh, I can do this and I'm competent and I can. You know, um, that those first few million. And it feels like, oh, this, this is success. Now we really need to do this at scale, now we need to do this seriously. And I think that's your, you know, that junior year or that senior year when you feel like, okay, now we just need to live this with purpose and we need to get specialists in each department and I think a lot of people hold off getting those specialists or they jump in too soon and they hire. We can talk about this from supply chain, but I think it's true Supply chain marketing when they're like, oh, this person was at this big company, let's bring them in and yeah, well, we talk about a lot, it's sometimes it can work.

Jared Ward: 10:58

It depends on the person.

Damian Dayton: 10:59

It's a completely different skill set to run a $30 million company than it is to take a company from 3 million, to take a company from $3 million to $30 million and that's true of $100 million company too To maintain a company at a certain level is a completely different skill set than to take a company from $30 million to $100 million. And I actually think each of those years in school I'm so sorry, you're good, it's fine, turn this off, get this out of here. Oh, you didn't hear it and I think those skill sets are defined by the bottlenecks that you face at those levels of growth. And one thing that Jay likes to say is like, well, you can decide whether you want to be the king or you want to be rich. We have a lot. I've met a lot of people over the years that are kings of million dollar kingdoms. Like, well, I get to be in charge, but I'm not going to grow beyond a certain level, and so, um, I think each of those stages require bringing in a different level of expertise.

Damian Dayton: 12:02

And really I think the most painful of those years was the $3 million to $30 million year, because you can be so optimistic, because all you see is the upside. But you don't see that exponential growth comes with exponential problems in certain key areas Cashflow, supply chain, marketing, scalability. You know that finding product market fit is probably between the 300 to $3 million a year. You've just you've made it. You found that people want what you have to buy. But how can we get this in front of everybody? And once we've gotten in front of everybody, how can we fulfill their desires?

Damian Dayton: 12:43

And the two fears that most entrepreneurs have when they start is will anybody come? And the second fear is how many take care of all these people that have come? And more small businesses fail because they can't handle that crush of growth than because nobody's going to come. Now I think we're all familiar with, like a restaurant in our neighborhood that like there's a location, there's a whole Seinfeld on it. You know that a restaurant pops up and closes its stores and those are kind of like doomed. But most restaurants and most businesses don't close for that reason, because nobody comes. It's because they grow too quick and they can't maintain their level of growth or their level of quality or their level of inventory management. And to be able to see when you're at that $3 million level, like wow, things are going great. Is that going to be $30 or $40 or $50 or only $5 million? Right, you see that upward trend and you don't know what's going to happen after that, next month, and what's going to happen.

Jared Ward: 13:47

Yeah, I totally agree with you. I think the trick that I've seen is scaling from 3 million to 30 or whatever it is, you know, a million to 20. I think the market has sort of I mean, there's never been a better time to start an e-commerce company or just a company in general that sells products. Start an e-commerce company or just a company in general that sells products Literally the entire market and the ecosystem is set up. You have Shopify, you have so many platform businesses where you can get people as long as you come up with a cool product. And it's interesting, during those phases, those beginning phases of business, you can basically outsource everything. You can outsource your fulfillment to a 3PL, you can get a fractional bookkeeper, you can get a fractional CFO, you can get a fractional everything, and you can just kind of experiment Does this work? And yeah, it's the scaling from 3 to 30 where you put your big boy pants on and it's like, okay, now we need a full-time marketer.

Damian Dayton: 14:45

Oh, we need an actual marketing strategy, oh yeah, well, and what I've seen, what I've seen work, I've seen a lot of people do it differently and I think you can stay small in those areas, but you may. You know there's a lot of fractional services available. I think what you realize really quickly is creatively. We say you what you want to cultivate, your genius, but whatever it is that you have as a company, the three or four of you or two of you that started the company that you're great at, keep doing that thing and the things that you're not great at. That's where you need to start finding help. And very few people get into e-com because they're great at sourcing products. They usually have a great idea. They're usually an inventor.

Jared Ward: 15:26

They're great at warehouse management.

Damian Dayton: 15:28

Yeah, most people like those people start 3PLs and or they. I know a lot of people have started 3PLs that are horrible at warehouse management. But actually Utah is really lucky You've got a lot of great 3PLs here, yep but oftentimes that communication between just because you have a 3PL, understanding how to communicate with them and so they know what your priorities are that you might have. Listen, I know we have an order placed today, but these ordered placed seven months ago through our Kickstarter. We actually really need to fulfill those first and helping them understand that.

Jared Ward: 16:04

Well, let's get some Damien opinions right here, okay. So scaling from $3 million to $30 million, I've seen companies go either way, where you take fulfillment back in-house, or you just keep going into a 3PL and you just expand. In fact, you get multiple 3PLs To 3PL or not 3PL. Which one would you choose?

Damian Dayton: 16:23

That's interesting because I just talked to the client that they're like yeah, we just from the early stages we did all of our own warehousing, but they had some operational excellence in that area. So I think that's really variable. I think for a long time, though, you can be shipping out yourself and there's a fun story to tell there, and there's a fun story to tell there and once the activity of shipping it out yourself starts crushing you and you stop having the time to do what you're great at, then you need to start looking at other sources. But I can look at a couple of great Utah companies that have done their own fulfillment and I think the size and scale and the uniqueness of your product can make a difference.

Damian Dayton: 17:06

So two great Utah companies that both happen to be Ring companies Manly Bands we help serve Manly Bands. They do their own fulfillment and they're very good at it. But it's a lot easier to warehouse a thousand SKUs when it's this big versus a pillow cube that's this big, you know. So I think the size and scale of your product Enso Rings also does a great job of their own fulfillment. I think if there's a uniqueness in how your product, we're doing our own fulfillment with our ice cream brand, because that's really tricky. They're like half of. We have genius flavors, but figuring out how to ship that across the country there's a genius involved there as well.

Jared Ward: 17:47

That's interesting. With Luminous we talk about operational archetypes and the cold case you guys fall under are we call it non-traditional D2C and those archetypes are forced to figure out some messy things early, like cold chain logistics and full traceability and lot tracking like all before they're sub-million dollars in revenue. It's ridiculous, it's crazy. So I would second that. I would agree.

Damian Dayton: 18:11

It depends. Another great Spoonful of Comfort does a really great job of bringing their logistics in-house, and because they need a lot of personal care in there, it's not just what you're getting, but they're sending you a note and it's a care package, and so they really want to have a personal touch on that, and so that matters a lot. But I think that's the one thing that most people don't see looking at an e-com brand is how often we've had to change 3PLs because it wasn't a right fit for us, and that's almost a skill in between warehousing and using a 3PL is having somebody who's good at finding the 3PL that will suit your needs and knowing how to vet them, because I can't tell you the number of conversations I've been in like guys, this is it. We found the 3PL we're growing with.

Damian Dayton: 19:03

Famous last words yeah, yeah, 3pl, we're growing with Famous last words. Yeah, but we're fortunately in a really great place with most of our companies right now with those fulfillment needs.

Jared Ward: 19:12

That's good. What about marketing as you scale from 3 million to 30,? Do you hire a full-time marketer? Do you rely on agencies and ad distributors?

Damian Dayton: 19:24

I think, as you do your marketing I mean, once again, this is one where I'd say like, hey, what do you have? You know, usually you want to have somebody in your partnership group that has a force multiplier in some way, and if you have a partner that's a really great marketer, then keep that in house for a long time. I personally believe that you don't need a full-time CMO until you're really close to $100 million in sales. Why is that? I feel like you get stuck inside the cave of your company. I think you need somebody managing a lot of your marketing efforts. I think a CMO should be a visionary, but in the early stages, your CEO really is your visionary and you should be taking a lot of and so tactically, you should be trying a lot of things.

Damian Dayton: 20:15

I would say that our most difficult relationships as an agency have been when people hire us and before we start the work, they hire a CMO. Oh God, those have been our most difficult relationships. But if the CMO finds us, we have a great relationship. Or the CEO finds us and we all get on board together, it's a great relationship. I think in the early phases you should be doing some very. There's a lot of low-hanging fruit in things you should be doing. But by nature of this business, you need to be taking a lot of risks.

Damian Dayton: 20:49

And I think the benefit that I think a lot of people don't realize when you hire an agency out of house is not only are they doing their agency work and serving their dozens of clients, so they're seeing what a lot of people are. You know they're seeing their service, but they're seeing what a lot of people are. You know they're seeing their service, but they're seeing what a lot of other companies are doing. But they're also talking to their other friends and agencies and seeing what a lot of other agencies are doing.

Damian Dayton: 21:13

And when you bring all of your marketing team in house, they become very insular and you start answering like well, we've developed a new product with a new thing and we're going to make a new commercial, pointing out this new thing that our product has, instead of answering the big question, which is how come everybody in America doesn't know about this product? Why isn't everybody in America buying this product yet, and what are the multiple tactics and strategies we can use to get there? And I tend to find and listen there's some small companies with amazing CMOs and that's working great for them. But as a rule, I think Jay definitely believes that, maybe even a little bit more than I do. I think at $30 million you can start interviewing CMOs and that's not a horrible idea, right, but a lot of what you need is just management of their efforts. But I think if you're investing in a CMO, you really want somebody that is a marketing visionary that sees the next five years for your company.

Jared Ward: 22:24

The truth is, you can't see the next five years for your company when you're in those early phases because you think people want your product for this reason, but the market's going to tell you what they actually want it for. I feel like what happens as well is just you get fluffy titles without a lot of substance. You have CMOs for $20 million a year, brands, but they end up just being glorified ad buyers, nothing truly strategic. That's a good pivot into. Meta ads aren't working. I've heard that so many times over the past couple of years where I'm curious to get your take on this. I have a lot of thoughts, but so many e-commerce companies as of recent are complaining about meta ads, how their business is declining. Things aren't going and so it's not as easy to convert. Return on ad spend is much lower. Euroaz is way lower. Instead of having 4, 5, 6, 7x, you're having like a 2x, 3x, hardly profitable. What are your thoughts on this meta ads apocalypse and everything that led up to it?

Damian Dayton: 23:27

There's always somebody yelling this guy is falling. There's been several. The first one I called the pixel apocalypse, but I think it's illustrative of what is happening and what is always happening and what will always happening in advertising and marketing, which is the world is always changing. And so Facebook had this really fantastic pixel for a while and before Apple cut it off, and it was really good. Before Apple cut it off, and it was really good. If you were selling a shoe or a shirt, it could find a million people that looked just like the people buying your shirts, that were looking to buy a shirt in the next month, and so you could just let the Pixel do the work for you. And the first Pixel, the first apocalypse, was the Pixelpocalypse, when Apple kind of cut off most of that data.

Jared Ward: 24:14

Apple's new terms and services. I remember that day.

Damian Dayton: 24:16

Yeah, cut off most of that data, apple's new terms and services. I remember that day, yeah, and they did the same thing with email and it was hard for us, but it wasn't until I had, like a networking dinner with a bunch of other ad buyers and they're like, how did you make it through last year? Like, oh, it wasn't as hard for us as it was for them, because and I think this is what we're still seeing today so what was happening then was people that were relying on only the pixel to find their audience.

Jared Ward: 24:44

Exactly, and I think it's when people rely on only. I'll just put the ad on Facebook and the pixel and the, the ad itself, the, the ad creative is just. It's just a vehicle to use the, the face, the meta pixel to find your customer. And if you do it at a 4X raw is great. Okay, there you go, this e-commerce business business right there. And that's why I always looked at creatively, pillow cube, and what you guys were doing is like, like that's the way to to market your product or think about marketing. It's, it's true, it's utilizing the power of social media and modern media in such a way where you're not relying on the pixel, you're relying on good, creative and distributing that.

Damian Dayton: 25:23

Yeah, I hesitate to call things like good, creative or bad creative. It's almost like you're either invested in your marketing approach from an ideological standpoint or you're not. And I hate when people talk about oh, you guys do content. I'm like no content is bad, because that sounds like filler, that's like packing peanuts. That's content.

Damian Dayton: 25:46

And it's one of the problems with AI right now is people are like well, with AI, I can have it spit out a thousand ads.

Damian Dayton: 25:51

It's like, yeah, but it doesn't matter if you're doing a thousand ads If none of them are good.

Damian Dayton: 25:55

And the problem isn't that you can't do a thousand experiments, it's that you have a thousand bad hypotheses, and so each of our marketing approaches has we're trying a big idea, not just to get attention, but there's a marketing hypothesis there.

Damian Dayton: 26:12

We think people that want to buy this will respond to X and then we can adjust that over time. And so with people that, as they're struggling with Facebook, yeah, meta, hey, they've got to fix some things right now, there's definitely some things that are broken, but I think the people that are struggling the most are those that were relying on the platform to do all the hard work for them, or relying on your ad buyer, which is largely a data-driven job, to provide you with creative. And so we just realized we made the mistake of doing the opposite, thinking we could be great at ad buying and we focus on hey, we're great at this thing, let's partner with people that are great at ad buying and let's have a conversation with them and get the data back and like, hey, not just is this working or not, how is it not working? Because sometimes we'll do an ad. It's like, oh, this is getting really low.

Jared Ward: 27:03

I think you're highlighting a conversation here that so many e-commerce founders they're not having that. I think that's why I look up to PillowCube creatively, like you guys over there, because I think a lot of e-commerce founders and operators can take a play out of your book. I think the adpocalypse, or the pixelpocalypse, really just exposed shallow. First off, it is an issue. It's an issue. Everybody's felt it, so it's not to invalidate the issues that they're running into. However, I do think it has exposed people who were hyper-reliant on meta ads instead of a vision and good creative that was powering that.

Damian Dayton: 27:47

Yeah, and, to be frank, our brands have had challenges, you know. But you can't just expect the wrong answers, like ads aren't working. The question is, how aren't they working? And when they are working is, why are they working? I've spoken to three different ad groups this week and one was like about 50% of our ads, our clients on Meta are really struggling. And one's like, oh, I wish it was only 50%. And one was like, oh, it's only about 20% of ours.

Damian Dayton: 28:11

And it's like they're pushing new ad platforms, like you know, performance Plus or, and you just have to test each of those. You don't just take, oh, they have a new ad, we'll just put everything on that. And it's like meta giveth and meta taketh away. And some I know some people that have like weak creative but the algorithm is favoring them right now. But what you have to ask is why, and whether you're you have great creative or not. And if you're not asking those, why questions? You're not going to be ready when that algorithm shifts, because it does. They all have an algorithm, they're based off and they're always constantly tweaking it and it will just take away. What I always say is you don't have a Facebook page, say is you don't have a Facebook page. Facebook has a you page and you're providing it with content, and you need to understand how that works, not just otherwise, you're just playing the lottery.

Jared Ward: 29:05

Well, I think the the vehicle in which you deliver your message or your ad to the consumers. It changes over time. You know, at the beginning it's you know eighties, nineties, it's, it's 80s, 90s, that's mainly. You're going to see your stuff like in HSN and telebrands and that was the main media distribution or buying ads in your local news station. Now it's just transformed and we're going through the next stage of transformation.

Damian Dayton: 29:34

Well, I think it's one way that old people have a little bit of an advantage, Like old advertisers like me have a little bit of advantage because we remember when we didn't have attribution and they used to say like you said to throw shit out there.

Damian Dayton: 29:47

Yeah, you put stuff on TV and you're like well, we got a lot of calls during six o'clock when Frasier was playing. So we think, frazier, our free Frazier ads are working. Um, but you had to rely on creative and so I think it's making you go back to some of those kind of core advertising principles, but always trying new things and trying, um, you know, it used to be the infomercials that like, well, we have an one 800 number that we own and so we'll put a different one 800 number in different commercials. We just have to find different tools. The path of the consumer is not a direct line from when they see your commercial to buy your product, so you have to kind of understand where their headspace is and what's it going to take to nudge them along that journey to buy a product.

Jared Ward: 30:31

You brought up the word attribution. I think it's a difficult discussion to pinpoint exactly what attributed your results. I think a lot of times it's easier to say we learned that this does not work when PillowCube grew from 3 million to 30 million, or when Stairslide, when you guys 2, 3, 4x growth there. What did you figure out? Didn't work.

Damian Dayton: 31:03

It might be different for each of these brands, so I have some biases. I don't spend a lot of money on PR. I find that those can provide you some flash in the pan. But I've got some good friends with great brands that talk about like hey, getting a full page spread in this magazine drove retail sales for a year, you know, and that was huge for us. But my, you know, our test for most of these marketing strategies is we'll do something and then turn it off for a month and see how mad that hurts. I know that's kind of a risky thing to do, but sometimes it's like, turn it off for like. With Facebook ads you can turn it off for a day. It's a really great test on Amazon Turn off your Amazon ads for a day and see how it affects your listings. And you might like hey, that five or 12 X rows you're getting on Amazon ads. You are going to get those sales anyway. So turning things off is a really great way to find out things that don't work. So for Pillow Cube, you know I don't have a lot of faith this is across multiple brands in expensive influencers or celebrity. Those have never done more than like a flash in the pan, like we get like two days of great sales.

Damian Dayton: 32:27

I think it's important to invest in organic content, but it's never been a driver of growth for us. I think you need, but I look at organic social as buying lottery tickets and like, hey, when you're doing well, it's a good idea to place a few lottery tickets. But for every giant success story they have of social media, there's a thousand grinders that are out there putting out a ton of social that's just not catching traction. And I think you have to think, like spending 90 days of making your own content there's an opportunity cost to that. Do you want to do that? Or do you want to invest in something that has a little bit of a little bit more thought that I can put dollars every day to, and it's a little bit like working for a paycheck. So, yeah, organic content hasn't driven a lot of success for really any of our brands, but you need to be where people are.

Jared Ward: 33:21

So organic content versus like higher production content?

Damian Dayton: 33:26

well thought out produced, although we have, like we sell. Our commercials are not cheap. But, as one of our customers said, your commercials are only expensive. If they didn't work, yeah, but if they work they're hugely valuable. But the biggest common denominator in our campaigns that work is the amount of love and attention that we've put into them. And so I guess you can put that same amount of love and attention into your organic content. But once you put it out there, people accept it or they don't. Content, but once you put it out there, people accept it or they don't. If I put a lot of love and attention into a paid commercial, every day I'm putting dollars behind it and for $600, if I'm doing a video view campaign, I can get between 100 and 200,000 video views. Whether my commercial is good or not. The difference will be whether it's 100 or 200,000, but I will get those eyeballs. And if you put that love and attention to organic, you're kind of seeing if somebody picks it up and if they pass it along. And if they pass it along and that's what I haven't been as far as platforms haven't had a lot of success on Pinterest, but I know there's some people that have success there. In my belief.

Damian Dayton: 34:41

I think each of the social platforms kind of represent one of the seven deadly sins, and Pinterest is like a coveting machine. But it's also a procrastination machine, like when you see something you love on Pinterest, it's like, oh, instead of buying it, I'm going to add that to my board and that means I want it someday, and it's a really great way to put off the purchase. But there is something to the ephemeral nature of most of the other platforms where you can't really say that I can like it, but I'm like I either need to purchase this or send this to somebody else. I'm going to forget this ad, or maybe I should just buy it. It's not too much, I'll just buy it. So Instagram in the early days was gluttony because it was all just people speaking for their food.

Jared Ward: 35:28

Either food or bikini pictures or booty pictures.

Damian Dayton: 35:31

Yeah, there's lust, there's greed and pride. Those are all represented. But they also tie into our human urges to hunger and want certain types of things.

Jared Ward: 35:45

So I've got a quick question for you. Something that Luminous we believe in big time is in a content flywheel or a content engine. Oh yeah, if you were to be running the creative direction of Luminous, what would be a good ratio for organic founder-led content so what I mean by that is like a podcast or just weekly videos that go into clips versus a big ad campaign, what percentage do you think we should strike?

Damian Dayton: 36:15

I think you should spend as much money with Creatably as you should Well see what you've got going. What luminous has is you're incredibly engaging and you're willing to talk about your product and I. It's amazing how many founders I talked to like well, I'm not big in self-promotion. I'm like then get out of business. I'm not good at self-promotion either hey, hey.

Jared Ward: 36:35

But to be fair, I said the exact same thing Like before I got involved in social media, like I hadn't posted in years and even before that I was never big into posting things. So like I feel like it's just something you get over the first week of posting and it's normally like insecurities about yourself and how you're perceived.

Damian Dayton: 36:55

Well, I like the way you put it because it is a flywheel. If you have paid content out there, your organic is going to go so much farther. If you have something interesting to say, which I think you do we've talked about this a lot because and I think a lot of people have specific questions and you're dealing in a very technical space and even in a long form content like commercial. Like we do, I can't answer everybody's questions, and so usually somebody has a supply chain or a forecasting problem and it's a hair on fire situation and they're like oh crap, this is happening, how do we deal with this? And they're searching for an answer, and that's when they're likely to find you.

Damian Dayton: 37:39

I love your balance right now because I like how much stuff you have out there, because you're not jumping on TikTok trends, you're not dancing, you're not.

Damian Dayton: 37:47

You know what I mean. You're putting out content that's very particular and unique to that niche, which is a really quickly growing niche of people that have questions about you know, their supply chain, their forecasting, their product, their warehouse management, and they've just hit a major wall and, like we thought we had a great 3PL and a holiday hit and they just couldn't fulfill anything and they're looking for those answers. And you know those answers better than I do. I've just seen the problem side of it several times, right, I've been in that vehicle traveling. All of a sudden it's run out of oil and I'm like, oh, I know how to drive a car, I know how to fix engines, and I think that's a good analogy for a lot of e-commerce owners. It's like, oh, they're getting someplace really quickly in this car and they don't know how to run an engine. At a certain point you realize, oh, if I'm putting this many miles, the difference between 300,000 miles and 30 million miles is where you need to invest in a mechanic.

Jared Ward: 38:45

And I may know how to drive, but I now have engine problems about staying in stock, because I think you guys have a unique perspective on this, seeing as you guys do a lot of massive campaigns where a lot of thought has gone behind them, and you're expecting big, massive sales. How has it been demand planning and forecasting for Stairslide or Pill pillow cube before these big pushes, and what lessons have you learned on staying in stock and purchasing? How has it been?

Damian Dayton: 39:24

It's been absolutely horrible. No, it's been great. I mean, success is great, but it just brings you to the next headache, right? Success hides a lot of failures and then it always brings you the next problem that you didn't anticipate. And we would have grown so much faster if we could have stayed on top of our supply chain issues, because you find something that works, you get momentum, and then you're out and you're like how fast can we get back in stock? And you're making sweaters and by the time you're back in stock, the weather's warm, yeah, and everything in the world has changed around you. But honestly, it's even been as an agency. Ironically, inventory management has been important for us. So here's my example Our first B2B campaign was for ourselves.

Damian Dayton: 40:16

We made a commercial for ourselves and all of a sudden we went from we, our website, used to say we don't have a sales team, we have a tom, and tom would take lunches and do some networking and I'd go to some events and meet some people, um, and then going to hundreds of calls a month, he's like I can't take all of these and like we needed to have our sales team, went from one to five. But to get to that team size team. We had to train them and had to get, and so we had to turn back our ad spend. And it was like one of our clients once said to us you know, you gave us the worst September ever but the best fourth quarter ever, which is it is just like, oh crap, we spent all all this money. We're getting this great row as and now we're out and now stuff's on a boat, and so my choice is be patient and lose money and opportunity, fly stuff over and just make less money, which is most of the time what we end up doing. Most brands end up doing fly stuff over, um, or find a new way to get stuff.

Damian Dayton: 41:19

So for us, with stair slide, for instance, one of our solutions was we brought manufacturing to the united states. Most brands, as they grow, they grow their manufacturing outside. Doing a cost benefit analysis, we pay a few dollars more per stair slide, but stair slide is just a great Christmas product. Like our last commercial said, this is how you win Christmas and we kill it during Christmas. But if I haven't predicted my numbers accurately, I'm just dead in the water if I get to Black Friday and I've sold out, and the last three years we've sold out at Black Friday and the last three years we've sold out at Black Friday.

Damian Dayton: 41:58

So we've moved our manufacturing to Utah and we have a truck coming from the factory every single day to our warehouse so we can turn that dial up and down no-transcript and was able to be a lot more profitable for us because we were able to manage our cash flow. Our cash wasn't stuck in another country for six months. We didn't live and die on that forecast. We had some really great partners here to do that and so we could dial up and even then there were still some bumps and so, as we've been adopting Luminous, it's been really helping us overcome those issues.

Damian Dayton: 42:41

So with Stairslide, it was moving production locally. With Pillowcube it's been a blend of things. We've had suppliers locally, like locally in Utah, in California, in Arizona, and as well as some things coming from China and other countries. Finding being able to find the best. Having better software allows you to track that it's not just a chain, it's a flow of water and noticing where there's going to be pools and giant waves coming and dips and flows, and plan for holidays, because that giant wave of business can crush you if you're not ready for it or deplete you and then people like, oh, I think they're out of business because they don't have any product and people's lax interaction with their your website is their perception of what they think, where they think your brand is and what people don't understand with modern e-commerce is modern e-commerce operations introduces a lot of distribution points early on, which is very different than back in the day.

Jared Ward: 43:49

Now you replenish FBA United States, fba Canada, maybe even in Europe. You have a 3PL. Maybe you might have two 3PLs one for wholesale, one for something else. So what people don't realize is inventory becomes really important. It's easy to forecast and replenish when it's just like two products and your volume is low.

Damian Dayton: 44:11

But once you have 50 SKUs and you have FBA Canada, fba United States, a West Coast 3PL, an East Coast 3PL, Well then you throw retail in the mix, and I think that's even another chapter where the level of volume and complexity doubles or triples. And you're like, well, yes, I have everything in my warehouse, but I need to get it to this warehouse, which is very different, and they have different packaging requirements and labeling requirements and and all that stuff. And you just thought, you know, I I have, I could count on my hands the number of companies that that excitement of solving, signing that Walmart deal ended up crushing them because they just legit the.

Damian Dayton: 44:57

The logistic nightmare of letting them know that, oh yeah, well, we can make the stuff just flow. You know your logistic of letting them know that, oh yeah, well, we can make this stuff just flow. Your logistic, your supply flow. Instead of I'm going to coin that term instead of supply chain, we're going to talk about supply flow. You just don't want that gap to turn down to a drip and then they feel like they can't trust you and then they will move on without a problem. Oh yeah, without any problems. I want they will move on without a problem.

Jared Ward: 45:20

Oh yeah, Without any problems. I want to pivot the conversation a little bit. Okay, so we just finished our well, actually not quite finished. We're almost done with our Creatively Ad. There's some pretty funny jokes in there. What were some of the jokes that you wish could have gone in? And I want you to tell us what they were.

Damian Dayton: 45:44

Boy we had. I always say every year I would really love to do. You know, the Impressionists got started in Paris with the Salon des Refusés. They're all the artists that didn't get entered into the main salon. I just thought it would be fun every year if we could read the commercials that got rejected, because everybody has some.

Damian Dayton: 46:08

There's a surprising amount of cursing in your ad and it was really really funny on set from children and it was really funny. And I'm like I don't know if this is right. And then you test it and a big part of what we have to do is what we call killing your darlings. You know you have this joke that you love and then you put it out there like God, it didn't really work. You know, I mean, there's some of the gags that we filmed that were really really fun and then they fell kind of flat in the editing room floor and then some scenes that you feel are slow and then you watch them and you show them to an audience and the audience loves them and sometimes they just love information that they've never heard before.

Jared Ward: 46:52

The funniest part, or the two funniest parts of the ads, it was the little girl, lila, saying like it's not that spicy little bitch. I got the most laughs of that one. And then also where Tito just swears.

Damian Dayton: 47:07

It's the fact that not just that she cursed, but she said it like she was able to demean him so much. It wasn't just that you're surprised that this little girl swears. It's like she means it and it hurts. It's like she means it and it hurts. I can't remember if she's eight or nine years old. She means it as she demeans the actor. That's funny.

Jared Ward: 47:30

I know one that we also missed out on. So there's going to be a joke in there. Well, a lot of jokes about three-letter acronyms, because there's so many of them in supply chain and operations, and there's one that you said, actually our first day of discovery, that I wish would have made it in there, because we have, we have, we have really, I don't know really basic jokes about the three letter acronyms like FML and WTF.

Damian Dayton: 47:59

Yeah, like FBA, eod, like FML and WTF. Yeah, like FBA, eod, fml.

Jared Ward: 48:03

FML, wtf. You said one where you're like you do a bunch of three-letter acronyms and then you're like man, all of this is giving me IBS. Oh yeah, I wish we could have gotten that one in.

Damian Dayton: 48:15

Well, if you'd brought it up on set we probably could have. I just had forgotten. Well, if you'd brought it up on set, we probably could have. I just I'd forgotten. The funny thing is sometimes we're in that writing room together, you know, and we're throwing stuff and there's a lot of jokes, and then we kind of sand down the edges and we get some notes. We always try to talk to people like hey, make sure you tell us what you love, because while we're fixing something that may not work, we hope we don't lose those pieces that we love. But yeah, I did like that joke. Yeah, that's still in my sketchbook.

Jared Ward: 48:39

It wouldn't have made sense for Lila to be saying that though.

Damian Dayton: 48:42

Yeah.

Jared Ward: 48:43

Like I don't know, coming from a child, it's got to come from one of the adults, yeah.

Damian Dayton: 48:47

Yeah, but I love that we kind of created a feel for your spot that feels smart and clever and it's a little bit there's kind of a Wes Anderson-iness about it that I like and, yeah, we're really excited. I think Wednesday is when you're getting the final look at it, I believe. Oh, the final look? Yeah, I should check that. Our post supervisor is out today.

Jared Ward: 49:13

We were talking about it today and going over final graphics. I'll probably air this podcast on the day that I actually share it on social media.

Damian Dayton: 49:20

Oh, cool, cool. Well, we're really excited for it. I think there's just a huge opportunity for business to business people. I think they're just so obsessed with this like white paper world to realize like you're selling business to business but you know who are in those business People and I think you can show commercials to people and they make decisions. And we've had just some incredible like just from our agency commercial. Really large brands reach out to us like oh, my daughter was on facebook and saw this ad. It was like we didn't get them by having a really like flashy website. Yeah, and it's just getting your message out there and telling your story it's something that I believe in big time.

Jared Ward: 50:03

I think especially we're taking on the NetSuite. We're taking on big ERPs. It's like the most boring shit you could ever think of, like NetSuite, dynamics 365, and when you go to their websites it's just like robot speak. So that's why we were so excited to work with you guys.

Damian Dayton: 50:22

It's like because we have a bold take on the market and we're going to boldly go after this for years and years and years you just have a chance to yell this message to everybody and whoever wants to listen to hear, instead of having 30 people fill up your inbox and like if somebody brought in a hamburger right now, I would eat that hamburger. But if I had an email saying like I have 30 hamburgers for you, Set up a link on my calendar and I'll give it to you, I was like phew, I don't know why it fills me with such rage to get unsolicited emails. I love it, but I'm okay with a commercial Like oh well, let's see what they have to say in this commercial. But as soon as somebody sends me an email selling me something that I might want or need but I can't tell you how many NetSuite people have approached me as an ad agency I'm like I don't need NetSuite.

Jared Ward: 51:18

Somebody approached me NetSuite rep approached me and I sent them my video, my YouTube video. It says implementing NetSuite would have killed my business. I was like here, watch this Clearly, you didn't prospect me. It's so funny Whenever I go into my LinkedIn inbox and you see that one thread 15 messages long. It's like dude. Can you like stop, hey man?

Damian Dayton: 51:43

did you see that last message? I'm circling back with you just to see if, like, just in case you didn't get my last 17 emails, and uh, craig, he's been sending you some emails too, and so he wanted me to see if here's my calendar information and I'll tell you what, I'll buy you some coffee. I'm like, don't you see that you're you're emailing Orem here, like I'm not, I don't need a coffee and I'm not like I'm trying not to be rude to you, so I just thought ghosting would be the most polite way to respond, cause that's how I do it with a commercial I'm not interested in.

Jared Ward: 52:12

You know what our sales reps do at Luminous. They film custom videos for the brand, for the brands. They literally like thomas, one of our reps uh, just a couple days ago he just did a stupid skit. Like we're like. He rolls into frame and like the other rep is scratching his back, he's like oh, I didn't see you there. Who's back do I have to scratch to demo luminous with?

Damian Dayton: 52:38

and he's like says the person's like it's stupid it's like it's a human on the other end.

Damian Dayton: 52:43

yes, and so I. This happened on thursday, like so this? Within the week, I got the exact same email from three different people. So I deleted two of them and responded to the third person like dude ai's is following you, because they I just got, before you emailed me got the same message from three people. So whatever you're doing, it's not working. And that person took that as like oh so do you want to talk about the challenges you have in your business?

Damian Dayton: 53:08

I'm like yes, it's that I spend half an hour deleting messages every day. That I don't want, but I will gladly watch a commercial if it's entertaining, Although I tell my kids as we're watching YouTube like a commercial. I was like how do we feel about commercials guys? We hate them unless they're good. I'm like okay, but because I'm checking on my own stuff, I get delivered our commercials a lot because I go to their websites and I make sure the flow is working. I see the commercials. So my son might be watching his 30 minutes of YouTube a day gets and he's cursing me because he's getting commercials for products that I'm. You know he's growing up fast, but he still doesn't need a menstrual cup yet, and I've been watching some of those.

Jared Ward: 53:56

He doesn't need Luminous.

Damian Dayton: 53:57

Yeah, he doesn't need Luminous yet, but I think he will be an entrepreneur. That's good. Well, that's basically it, thank you so much for having me. This was a delight. Thank you for letting me talk. I talk too much.

Jared Ward: 54:11

No, it was good. No, I appreciate it. I'm excited to actually air the Creatively ad. It'll be really fun to see everybody's feedback.

Damian Dayton: 54:19

We are too. We're really pumped internally, like we're always like we can't share it till they share it. So we're at this point where we're really pumped to put it out there.

Jared Ward: 54:26

So yeah, alright, thanks for having me on. See you guys next week. Bye.