Nik Sharma: Building DTC Companies

Nik Sharma: Building DTC Companies North Star Podcast

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My guest today is Nik Sharma, the founder of Sharma Brands and an advisor to companies like Judy and Cha Cha Matcha. Nik is one of my very best friends and my go-to person for all things commerce. Since we first met, we’ve spent hours exploring the future of marketing and commerce together and recorded this podcast to give you a window into what our conversations are like.

We started with Nik’s philosophy of launching Direct-to-Consumer brands. I particularly liked Nik’s idea of “The Brag Bar” on landing pages, where you can use social proof to sell your products. We also spoke about managing relationships with influencers and finding the supply and demand equilibrium at launch. Towards the end, Nik and I talked about our process for turning conversations into articles, and the time he cold emailed Mark Cuban. Please enjoy my conversation with Nik Sharma.

If you want to get weekly DTC insights from Nik, I recommend his newsletter.

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Other Links:

The Customer Acquisition Pricing Parade

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Show Notes

2:21 – Why Nik has the “world’s craziest fridge” and how it helps keep him in the know on DTC brands.

6:29 – What marketing strategies Nik has found most successful for DTC brands.

13:31 – How brands can differentiate themselves in a world of emerging brands in already burgeoning markets.

19:25 – Nik’s approach to launching a successful DTC brand and when to concentrate your advertising versus diversify.

30:19 – The role of A/B testing in building a brand.

35:43 – How influencers play into the big picture of marketing and why the “shaky video” effect is so successful.

42:12 – The selection and audition process of influencers in Nik’s campaigns and how he chooses those he sees as the best for his brands.

45:52 – The costs and benefits of starting your brand through heavy promotion via influencers.

49:56 – How the process of rebranding Hint Water’s bottle was performed and the qualitative process that got them to the bottle you see today.

57:27 – The metrics and methods Nik uses in his development of marketing strategies with his brands.

1:05:19 – What Nik looks for in a great landing page, and why all landing pages should be easy to read for everybody from a 12-year-old to a drunk person.

1:10:07 – What UGC is and why Nik thinks it is so underrated by marketing teams.

1:13:31 – The different marketing funnels and when you should use each one.

1:17:09 – Why Nik creates landing pages for fake products and makes them live on the internet.

1:22:56 – The importance of having great merch for your brand.

1:26:22 – What about internet culture makes collaborations so successful and popular.

1:34:05 – How somebody can convert a large personal following into sponsorships and meaningful collaborations.

1:35:46 – How new brands should position themselves when huge players like Amazon are in the same space.

1:44:01 – What happened when Nik cold emailed Mark Cuban and how he got an almost instant response.

1:50:46 – How David and Nik collaborate to develop, write, and publish the articles they make.

1:56:14 – Why Nik doesn’t sweat the details of his personal brand that much.


Transcript

David: We are going to spend the next couple hours talking about everything that you’ve learned about direct-to-consumer and what it means to build a modern consumer brand. But I want to start off with one of your favorite strategies of being ahead of what’s going on in this space, and that is having the world’s craziest fridge. Your fridge is a Whole Foods refrigerator, it is a vending machine and why do you do that?

Nik: Well first of all, nobody thinks there’s food in there. There’s definitely food in there, it’s just in the bottom drawer. It’s not a lot, basically I order a week at a time. But a lot of times, if I’m thinking about working with a brand and they happen to be in the food and bev space, or they are launching soon, or I’ve invested in one, then I always try to carry it. And for me personally, I just love the idea of having a vending machine fridge, but it’s always stocked with waters. Today, I think it has some OLIPOP, which is an alternative soda it’s got Sanzo, basically, it’s my way of like testing product. And every weekend there’s always people that come over to my apartment and so, it’s a good way for me to also get feedback and understand product feedback, or what people think of it, how they like the taste.

A lot of times it’ll just end up in mostly good outcomes of like, “Hey, this is something that’s great or this is something that people love,” that’s a good signal for me. For example, my company will also build landing pages for some of these brands. And so, we’ll take a quote that somebody has when they first try the product and that might be the greatest piece of copy that lives on that landing page. But more than anything, it’s just the internet knows about my fridge. The last time I tweeted about it, it got 150,000 impressions, which I think is insane and there was people commenting. It’s a polar extreme of a fridge and the internet loves reacting to polar extremes and it’s a funny thing on the internet. But then it results in a ton of other brands that might be launching soon or have just recently launched and they now want to send product to basically get in the fridge. It’s like an ad placement at some level, but yeah, the famous fridge. You’ve seen it for a couple of years now.

David: Yeah. I think that this speaks to Nik Sharma principle number one, which is that rather than looking to other people for ideas, what you do is you see the world as a museum and all the answers that you need are actually just right in front of you. And so often you’ll get questions, “What resource can I go to find that, or to learn more about that or what books should I read to do this?” And you’re like, “Just open your eyes! Have a fridge with direct to consumer products, invite people over and actually see what you need.” It reminds me of a story at a time where we went to a Warriors game and this was back in the early days when we were both broke.

So we sat all the way in the nosebleeds and we could barely see the ball bouncing. But what we got from that was looking at all the advertisements and we saw Oracle Arena where the Warriors play as this museum of advertising. We were analyzing every brand, we were looking at the in-game performances during timeouts, and we saw that experience as a lesson for how to think about advertising, how to think about product. And I think that this is a really important principle and how you live your life. It’s trying to cultivate a life that gives you the answers that you need to be at the frontier of direct-to-consumer rather than trying to look to other people for answers.

Nik: Yeah. I mean you’ve been to my apartment many times too. Everything here is probably a direct consumer brand, and my favorite part of it is the entire process from ordering it, to seeing everything that comes from that, the unboxing experience, the shipping experience, the post-purchase experience. Yeah, I pretty much just live it.

David: So let’s just go through what you’ve learned about direct to consumer and some of the strategies that work. And let’s start off with what you learned from the Female Founder article that you wrote back when you were working at Hint and let’s get into some of the ways that having articles and own content lowers your CPMs, helps you with retargeting, let’s dive into the weeds of that.

Nik: Yeah, so that was a really fun one. So prior to joining this beverage company Hint that I worked at, I was at an ad tech company and my job at the ad tech company was basically managing a client services agency within the ad tech company, where we had access to paid social tools, AKA Facebook apps and platforms built on top of the Facebook ads API. And my job was to basically go to publishers, whether it be Complex or Refinery29, or even the really trashy publishers that sit at the bottom of pages saying, “You won’t believe what this celebrity looked like 20 years ago.” And go to them and help them generate revenue using Facebook ads. And the way we were doing it was we would basically figure out which content was the most click baity or something that people really wanted to click.

We would test hundreds of headlines and images and try to run traffic at a very cheap price. I joined Hint because the founding story was pretty incredible and the product was something that I personally used. And so, I knew in my head that this was a product that could easily sell just from personal experience. So, right around the same time I joined Hint, which was early 2017, a buddy of mine started at The Hustle, which is a newsletter and they were also getting off the ground at the time. And I basically went to The Hustle and said, “Hey, how about this. Let’s take the founding story of Hint,” which I had also arranged a few weeks prior to that for the Hint’s CEO, Kara, to speak at an event hosted by The Hustle called Pizza and 40s. You basically drank 40 ounces of beer and tell the founding story and spill some secrets.

And she told this story about basically how when she started the company, it had good initial traction because the product is solid, but it got to a point where it was doing well and she didn’t know how to continue the business and so, she went to a Coke executive and basically said, “I got this business here, it’s doing decent, do you guys want to just take it? I don’t really know what I’m doing here.” And the Coke executive in a demeaning way called her sweetie and said, “Americans love sweetie.” And so I was like, “That’s a story, that’s a really cool story. And I think if we write about this story and really explain it from an emotional standpoint, I think that people are going to want to support Kara and try the product.”

So we wrote the story and it’s still live today. If somebody were to search The Hustle as one word and Sweetie as the second word, you’ll see it as the first article. And so, we wrote the story and basically had the story itself, which was written in a very simple way. That was one of the big things we learned too, was the writing style had to be extremely easy to understand. I always say, when you copyright, it should either be understandable, meaning somebody should be able to read it, really understand it and be able to spit it back out, that’s understandable to a twelve-year-old or to somebody who’s- …

David: A drunk person.

Nik: Or a drunk person, yeah, somebody who’s extremely intoxicated. And so, it passed both those checks. We put the article up and we start driving some traffic. On the other end of it too, we built a landing page, we have a proper offer for new customers. So we start driving traffic and all of a sudden our cost per click from Facebook to the article drops to a fraction where we wanted it to be, I think it was probably between $6 and $10 cents per click. And the other thing too was because we were telling a compelling story, we got so many shares and reposts by people who weren’t even buying the product, but they essentially became sales people for us because I think around 15 to 20% of people who actually read the article then went to the Hint site to purchase. So about 20% of the people clicked out, the other 80%, The Hustle basically had traffic on the site, they got emails that were being put in. They probably generated a few 100,000 emails while we completely shaved our cost of user acquisition.

It allowed for scale to a point where they had never seen those numbers and basically for the two months following that article going up there was this just hockey stick growth on the E-commerce business. And then an E-commerce, especially an E-commerce around consumables, there’s massive upside that comes from growth. There’s subscription growth, there is retail growth, there is B2B accounts growth. There’s just brand equity growth because we were telling a story, we weren’t just selling a product at that point. And anyways, that became a staple going forward was this story-based selling instead of, “Hey, come look at us, we sell flavored water. Here’s a deal for 20% off.” And it very quickly put Hint as probably the smartest direct consumer food and beverage brand that maybe still is running.

David: Yeah. I think that the word that we’re orbiting around here is differentiation, and differentiation is the real challenge in direct-to-consumer. I mean, if I walk into a Whole Foods, I cannot believe how many different kinds of wine there are. And when I go into the Whole Foods wine section, I don’t know anything about wine, so I just choose by the coolest label. And if the label is too slick, it means one thing, if it’s too premium, it means the other thing. So a couple of weeks ago I was going to a friend’s house for a barbecue and so, we’re at Whole Foods and my buddy goes, “What kind of wine are you looking for?” And I answer, and I say, “I’m looking for a cheap bottle of wine with an expensive looking label,” right?

Nik: Such a David thing.

David: It’s exactly what people want to be looking for when they look at wines. And so, I think this is what you’re beginning to talk about here is what are the most important ways for direct-to-consumer brands to differentiate? Because if they don’t my goodness, how many protein bars are out there? How many bottled waters are out there? How many milks now are out there? There’s more kinds of nuts in milk than I even knew existed.

Nik: Yeah. Well, what’s also really interesting is the offline world of beverage and even food for the longest time was heavily, heavily not endorsed. So we created Kara as this influencer/public figure/face of the brand versus what had always been done up until then was you’d pay a celebrity half a million dollars and you get their face. Like Core Water had Demi Lovato, Papa John’s had Peyton Manning and so, we changed it to a point where we were just like, “All right, our budgets are smaller, we don’t have those budgets. What can we do to build brand equity and put a face on this where it tells a story and it creates something that’s a relatable attraction point for the brand that doesn’t cost millions of dollars?” And that was basically leveraging Kara as a public figure and an influencer and a storyteller.

David: Yeah. Let’s switch gears a little here and talk about owning a color. This is something that you’ve done really well with Judy and talk about some of the brand strategy behind that and why you think Judy works. I mean, for me, you just see that orange, it’s a bright orange. I bet it’s the brightest, most saturated orange that you can find. Talk about the strategy behind that.

Nik: Yeah. So Judy’s an emergency preparedness brand. And the first line of products out of Judy is a collection of emergency kits that are customized to where you live, how many people are in your home and what emergencies you might face. And so, one, there was really no player in this space prior to Judy, as far as building a brand. Now there’s a ton of AAA emergency kits or if you go to Costco and you look for an emergency kit, there’s definitely a go-bag, if you go to Amazon, there’s definitely these random bags, but there’s never been a company that comes in and says, “We’re going to be the emergency kit brand, and we have a compelling product that has everything you need for 72 hours of survival for a family of four and it’s all in this bag that is puncture proof, waterproof, whatever.” And so, Simon, one of the co-founders and the CEO, he basically two years ago realized that so many of his friends were, his friends, by the way, they’re the Kardashians, they’re the Jenners, they’re the Chrissy Tiegen’s of the world.

These are the people that people think have never experienced problems in life, right? But he realized so many of his friends experienced these random problems, whether it’s having to evacuate and just not having a go-bag or there’s a hurricane or an earthquake and there’s nothing there where people feel comforted that they have a go-bag, an emergency kit, basically something there. And so, he decided let me create this brand Judy, where we’ll not only sell the kits, but we’ll create an entire educational experience around it. So when you get a Judy kit, you’re not only getting a kit, you’re subscribed to text messages that have localized alerts. You have content from certified national disaster preparedness experts, whether they’re webinars or whether they’re actually in-person classes pre-COVID that were hosted in people’s homes and different spaces in L.A. or New York.

And so, he wanted to create this brand around preparedness and really regardless of if you’re somebody buying a Judy or not, Judy is the brand that wants to be informing people or helping people get prepared. And from a branding standpoint, it was really important that it stuck out because for a few reasons on the branding side, which are obviously that Judy is the first brand in this space and so, the brand has to be really well done because you want that in the future. Any player that enters this space can not be in the same sentence without mentioning Judy, because Judy was the first, Judy has the biggest brand, Judy is the most in your face, Judy’s the most recognizable, so there’s that aspect to it. But there’s also the aspect of, if there’s an earthquake going down, you better be able to spot that Judy bag really fast, no matter where it is. And so, there’s many reasons why there’s that bright orange color you mentioned, but Judy has to own that color for so many reasons, both safety wise and also, again, brand wise.

David: So talk a little bit about what you do with your work and how you go about actually launching these direct to consumer brands into hyper growth stage. And maybe we can stick on Judy, but what are the different tentpoles of how you think about what it means to launch a brand? So we’ve spoken about the actual branding of launching a brand, but there’s a lot. And I mean, we could start with this idea of balancing supply and demand at launch. So with supply, you have things like user experience, technology, funding, people, supply chain, customer service. And then on the demand side, you have to think about brand equity, media, creative, merchandise, and then channel expansion. So let’s stick on that and we’ll talk about what it actually means step-by-step to launch one of these brands.

Nik: My day job you could say is I run a growth equity firm called Sharma Brands and we basically help brands in three different stages. Either A, we come in and we launch brands from scratch or not from scratch, but brands will basically bring us in after they’ve established what they’re doing and they might be in the branding phase, they might be done, but we usually come in, we help out with the website build out. From really making sure from a conversion standpoint that it’s something that’s built to last, we help from a creative standpoint, we make sure that basically from a user experience and a platform standpoint, it’s really solid. Then things like creative, media strategy, additional technology type of stuff, whether it be emails, SMS, et cetera, we come in and get everything ready and then we help launch.

And then the focus shifts to the demand side, which is, as you mentioned, the media, the creative, the merchandising, which is basically testing different, what are you selling and how are you selling it? How are you messaging it? What are you packaging together? And then eventually as it starts to grow, we focused on channel expansion. So that might be you start with you’re focused on email and Facebook ads and then hopefully you progress and as you grow, you focus on getting really good at finding customers on different channels so you’re not reliant on a single channel.

So Judy, for example, Judy’s everywhere from Facebook and Instagram ads to Pinterest ads, we’ve done direct buys on native apps, publisher type of apps, all the way to TV. And so, we’re not reliant on one channel of user acquisition, which is really important because for everybody who works in direct-to-consumer there’s weeks where Facebook can be really good and there’s weeks or months like September, where Facebook can be really bad and things can break on the platform that you just have no control of. And when you’re overly reliant on a single channel, then you might miss your entire revenue goal simply because you weren’t diversified from the beginning.

David: So I got a question for you. When is it good to diversify in terms of your channels and when do you want to actually double down on a single channel and not focus in other areas? Because the thing is, as you focus in more places, you need a bigger and bigger team. And so, when would you advise a company to say, “Hey, Facebook is working really well for you, Twitter, YouTube working really well for you, stay there and don’t dilute your attention,” and then when do you want to be diversified from the start?

Nik: It’s a good question. I think in many cases, what we do, basically, our strategy is usually let’s launch using the really easy tools, right? So Facebook and Google. On Google, you want to launch with basically branded search, which is essentially people searching directly, Judy emergency kit, not necessarily emergency kit, but Judy emergency kit, that’s a term that you own. And you want that because anytime you have a lunch, you might have PR, influencers, people posting friends talking about it, you want to be able to capture that really lower funnel traffic. Now I mean, Facebook in general is a mid to lower funnel channel, however, it does really well with finding you new customers and bringing them in. Now, what we typically recommend and often do, because Facebook is so easy to use it’s fairly cheap to run media on Facebook and really test and learn.

We’ll usually use Facebook initially to refine the marketing after launch, because you can have the most elaborate brand book and all the phrases that your branding agency comes up with, but none of those are necessarily tested or proven from a standpoint of data, they were ideated and they sound good and they were approved by whoever’s launching the brand, but you still need to really test and understand what are the value props that people actually care about that get people to click and get to your website or purchase and also, what are the things that people want to hear in different stages? You might realize that to get somebody initially interested, you have to hook them differently than the way that you speak to them after they’ve already heard of the brand or been to the site.

So we use Facebook to help determine what are those, basically we call them messaging avenues. So avenues could be, in Judy’s case, just to keep it simple, you can have an avenue of preparedness, you have an avenue of these are kits designed by experts. You have an avenue of, this is great for any type of emergency, more like macro type of things. And then as you start to identify the avenues that work, then you go more into what we call the cul-de-sacs, which are okay, now that we know that designed by experts is a topic or a macro message that gets better engagement or lower cost per clicks and higher click through rates. Now let’s go in and test seven different ways to say that it’s designed by experts, handpicked kits by experts, designed by emergency experts, backed by certified leading experts. Different ways to say it and really figure out what is the messaging that is both A, scalable and also, B, resonates the most with the end consumer.

And once we identify from a messaging standpoint that also includes from a pictures and video standpoint, what gets the best click through rates. We also use Facebook to help basically validate a certain UGC content creators, influencers, spokespeople, are they worth it for us? Then we take those learnings and start to diversify. So in my opinion, it’s important to diversify as soon as you can, but you can’t just say, “We want to start running ads on Outbrain or Snapchat or TV.” Because in my opinion, you want to test it on Facebook, where it’s cheap and it’s easiest to see the actual data very fast, you can test things within hours versus making that investment and testing something on TV where you have to commit to a creative, that’s going to cost you anywhere between $50 to $100,000 grand.

The media placement buy-in is $50 grand and we did the exact same thing at Hint to where the first set of TV commercials when we decided to launch TV, which was a huge deal, was all based off of the fact that the Sweetie article, the one that we were talking about earlier, did really well and we said, “All right guys look, we’ve had the most success with this story over the last year, so let’s just look at the data of what works really well and turn this into a TV ad and start testing it.” And it did extremely well out the gate whereas at the same time, we had a ton of other friends in direct to consumer where they were like, “Yeah, we spent $100,000 on this creative.”

The creative agency came up with it and it looked beautiful, but it just didn’t perform for direct response.” We were basically going backwards and saying, “Okay, forget the ideation part. Let’s just see what’s worked well and let’s replicate that onto a different channel.” So it’s basically, you want to leverage these easier channels to figure out how you should be talking about your brand and how you should sell it, and then leverage that across different channels.

David: Nice, that’s a great answer. So there’s a lot of places that I want to dive into. So we’re going to go down the avenue versus cul-de-sac route and I want to talk about AB testing first, but before I ask you, and you can think of your answer to this as I have this comment, but what is the role of the human and what is the role of the computer and the robots? So you could say that a human is generative, they’re creative. They think of new ideas that are just different and surprising, whereas then what a computer is doing is it’s validating and it’s testing. And so, when do you want to be focused on AB testing and when do you want to be focused on human creativity? But you were talking about the Hint television commercial, as opposed to traditional television commercials, where often they’ll spend a $100,000 dollars on a commercial and the results will come in and maybe they weren’t that good after.

And it reminds me of the quote that everybody knows from John Wanamaker that says, “Half of all my advertising is wasted, I just don’t know which half.” And so, what you’re saying here is that there are actual repeatable methods that you can use to make sure that you don’t waste nearly as much money on advertising. And what you’re doing is you’re going out, you’re putting signals out into the world, you’re validating that there is real feedback on those signals and then you’re doubling down on what works. And in Write of Passage, this idea is called the Content Triangle and so, what we do is we tell people rather than writing a big, long form essay or a book eventually, that is, your first thing you’ve ever published, it’s better to write a bunch of tweets, which then ladder up to a bunch of short articles, which then ladder up to a bunch of longer articles and at each point you’re getting validation and feedback.

And I think that this is one of the things that a lot of people get wrong about creativity or don’t realize the advantage that has been given to modern creators is getting additional feedback at every single step so that you can distill and refine what it is that you’re doing. And for people who say, “Oh, that’s not a pure way of doing creativity,” it’s just not true. Because I was talking to a guy named 3Blue1Brown on the podcast, and he has more than 3 million YouTube subscribers and probably runs the biggest math YouTube channel in the world.

And I asked him, “How do you begin to validate your ideas and begin to work through them?” And he says, “What I do is I do mock presentations for people before I spend all the time making a YouTube video with them.” And so, to get back to what we were saying here, he isn’t just doing AB testing, he’s thinking of an original idea, but then at a certain point, he’s putting some filters out into the world, getting feedback and doubling down on what works. So what is the role of AB testing in building a brand?

Nik: So I personally think that it’s the most critical. I mean, every time you and I have gotten together and put out an article, the reason the articles blow up and we’ll get 50,000 people reading it within a week is because it’s stacked on top of two or three layers of validation before we put something out. And it’s very similar to how I think a lot of the advertising or the marketing that we do on the growth side is also done. It’s very much validated a few times and looking at different signals to then say, “Okay, this is something that works, let’s now get creative within this realm or within this sandbox of how we should speak about something.”

For example, one thing we learned with Judy was that comparison videos, really not just showing what’s inside Judy, but showing what’s inside Judy compared to what you would otherwise get without a Judy and just with a more generic emergency kit was a concept that people really grasped onto and helped move the needle. And so, within that now, knowing that that’s the goal is we want to show people comparison, then we got really creative around who’s going to make these comparison videos, how are we going to shoot them? How are we going to message it different ways? You could think of that as an avenue and the cul-de-sacs are the hooks …

That is an avenue and the cul-de-sacs are okay, or the hooks in the video going to be different. Are we going to test different hooks that get people into these comparison videos? So I think that’s where we get creative. And if you look at some of the larger, even the larger agencies today, like VaynerMedia is a great example. If you look at the Planters Peanuts Twitter account, for example, that is VaynerMedia’s team all the way from their social team to the TV production team that will create the Super Bowl ad. That’s them looking at signals of what is actually getting engagement so that they’re not shooting in the dark when it comes to creating the Super Bowl ad. They’re looking at signals of what’s actually getting engagement and then they’re going to publish it. Then they’ll keep validating it before they’ve decided it’s validated to a point where, “All right, these are all the things that work.

These are the ways that people want us to talk about the brand. Now let’s create something within this that’s relevant, and that hits the nail on the head. Even with, I mean, with Hint too, if you go back to Hint’s tweets between probably mid 2017 to mid 2018, you’ll just see so much copy testing on the Twitter account, which had an audience of probably 100,000 followers at the time. It was just a free way for me to just spitball an idea, throw it up on Twitter. If it got a good amount of engagement, we would run it in ads. If we saw good engagement there, that might turn into another article that we write. If that did well, we might say, “Hey, let’s take this concept and work with Sara Dietschy and produce a video around it.”

If that did well, then that might’ve been something that ends up becoming a TV commercial then. So you just validate it through these different steps. One thing that a lot of people just don’t realize is they have free access to validate these ideas or thoughts or concepts just through tweeting or putting something up on Instagram stories and adding a poll to it. There are so many easy ways to just validate and figure out what those avenues are that are easily accessible. You don’t always have to be running an insane amount of ads or paid media to find these value props that really stick for your brand.

David: Basically, what you’re saying here is that customer surveys are more common than ever. They just don’t look like customer surveys.

Nik: They just look different. Exactly.

David: That’s huge. So you talked about working with Sara at Hint. Tell me about what you think of the role of influencers in these direct to consumer companies. What are people missing? Why do you like working with influencers and what have you found? I mean, I think one of the really surprising things that you and I have spoken about is that shaky videos perform really well. Things that look like people are making them on a whim, things that look like people are making them at home that have that raw and authentic feel generally when they’re on platforms that are very social in nature, those tend to perform much better than really produced videos.

But I think that that then leads into another one of your principles though, that you want your creative to match the platform and you need to know the culture of a platform like you need to know the culture of a city. Just as if you’re in New York and you’re walking Fifth Avenue and it’s 6:30 in the afternoon, you’d better be walking fast. If you’re at a funeral and you’re walking at that speed, that’s just weird. What are you doing? You’re not being respectful. So there’s a culture in different places and that then leads to our walking speed just as there’s a culture on different social media platforms and that leads into the kind of creative that you use.

Nik: Yeah. So there’s a couple of things there. There’re influencers and there’s culture and naitivity to a platform. So on the influencer side. So it’s important that we also reiterate that this is focused for direct consumer brands because this always makes people really angry, but from a content perspective, you’re absolutely right. The shakier, the better is a phrase that is commonly said throughout the world of direct consumer. And we’ll get into that in a second. But on the influencer side, there’s a couple of different roles influencers play. There’s the role of “I’m Ninja and I’m aligning myself with a streaming platform” and that’s a huge deal because that’s a top 1% influencer who has massive influence and they can move crowds like no other, right. And so, there is those types of influencers, but the ones that I was heavily focused on were the ones that have anywhere between 50,000 followers to maybe 10 million followers.

So not the top 1%, but still had a good amount of a following. Right? And so, one thing that I used to always see was, coming to New York and being at Hint, I would try to, I had a few friends who at the time were influencers. And I would say, “How about we get together and all basically book out the rooftop at SIXTY LES Hotel.” And I got the corporate card and let’s get some influencers together. I’ll get some Hint bottles on the table. We’ll get everybody drinking Hint and posting on their stories. And let’s just start to create this little culture of Hint-fluencers in New York. And it was never intentional, but it just started happening. And at the same time, what I saw brands doing was simply you sign up to an influencer platform, you pay them the annual fee, and then you get on the platform and you find 12 influencers who have a certain number of followers in a certain region.

And you check next to their pictures and you hit send brief of a brief of like “Hey, we want you to post on your Instagram, a photo of you drinking the water. And this is the caption. And let us know when it’s posted.” Every time people see it, if you look at the comments of actual influencers who do that, all the comments from the fans are just, “Yeah, you get that bag,” “go get that check from the brands,” “yeah, we see you killing it with these brand deals.” Like fans are hyped that their influencers they follow are getting a check from a brand. They’re not going to go to the store and be like, “Oh, you know, I saw David Perell on his Instagram with a bottle of Hint in his hand. So I’m going to go and get a bottle of Hint.” It’s because it’s just not natural.

So what we started doing was the complete opposite. We just said like, forget the whole pay for influencers. Let’s just bring them together and have a good time. And we’ll host a couple of dinners. We’ll get drinks together. We’ll get to know each other on a personal basis. And let’s look at them, not as influencers, but actually content creators. So how can we leverage some of the things that the reason they’re influencers or they have a following in the first place is because they’re really good at one thing that they do or really good at leveraging a platform, right? So for Sarah, Sarah had built a following of probably half a million followers or subscribers on YouTube because she was really good at talking to a camera when she was doing her daily vlogging. She built an audience because she was good at speaking to a camera and people felt that she was speaking to them and that’s why they subscribe and keep watching.

And so I said, okay, well, we don’t necessarily need Sarah to plug in her YouTube video or give us a shout out on Instagram. But what if we take Sarah’s skills around creating these really engaging vlogs and almost create a vlog style video for Hint that just talks about why she likes to drink Hint. And like, she was a self-proclaimed like Dr. Pepper addict and LaCroix addict. And all of a sudden when Hint came along, Hint was all she drank. And so I was just like, why don’t we just take her skillset of that, of vlogging and storytelling and combine it with the why of why she likes Hint and we’ll pay her for that video. And let’s see if we can run that as an ad. And maybe other people will identify with her story.

And from a, you could say, communication or messaging transportation standpoint, she’s good at communicating it through the screen. So we’ll use her as a content creator to tell that story. And anyways, all that to say, I think influencers are really good at creating content, which is why they can make a living off of it. So we just started looking at influencers as content creators and leveraging them in that way, where they could, there was no brief that they would get. It was like we almost had a never ending library of content because we had all these creators who we had developed a close relationship with that would just want to create content for us. And it was really dope content. We didn’t have to go and organize photo shoots and video shoots and studios and pay for hand models and stylists and all that kind of stuff. It would just come to us as content that was genuinely like people wanted to create it.

David: So earlier you were talking about how to identify influencers that you think are going to resonate? So what are you actually looking for in terms of what influencers are going to move products? Because just because somebody has 10 million followers doesn’t mean that they’re going to convert really well. So are you looking at comments, are you looking at how many likes to retreat ratio they have, are you looking at quantitative metrics like that? Or are you having more of a qualitative feel of like, “you know what, I like this person I’d buy from them”?

Nik: Yeah. It’s kind of a mix. So if we scour for influencers, we look at a couple of things. One is, is this person somebody who has good, consistent engagement? Which is just a by-product of being a good creator. And secondly, is this somebody who’s good at speaking to a camera? There’s a lot of people who have a ton of followers because they might be vloggers or fashion bloggers. They might make really cool slow motion videos, whatever it is, but they’re not necessarily good at looking into a camera and you feel like they’re speaking to you. So that’s the biggest thing. That’s why a lot of times we worked with vloggers because they were really good at speaking into the camera and articulating things really well. The second main thing, which was the biggest thing was, do they genuinely love the product? Because if they don’t, then they can’t actually have a genuine answer to why they use that product or why they liked that product.

It’s just going to be manufactured based on a brief that they get in a Google Doc. And those just never work. So even with Sarah, the way I got in touch with Sarah was a mutual friend of ours basically gave me her address. And I just shipped her nine cases of Hint or a hundred bottles of Hint. And all of a sudden it ends up, she tries it, she loves it. It ends up on her Twitter, her Instagram. And it has a whole minute long segment in her YouTube video of how Hint just out of nowhere shipped her this water that she loves. And after we saw that, we were like, “okay, this is a girl we got to work with because she clearly loves the brand.” And she wasn’t expecting that, “Oh, if I talk about it, they’re going to want to pay me or, or pay to work with me.” It was just that she genuinely loved the product and that’s why we worked with her. And so that’s the biggest thing is. Do the creators that you work with genuinely have an affinity for the product that they’re about to create content for? Because that also sparks the best creative ideas.

David: One of the things I’m surprised that you haven’t done more of is team up with specific influencers to launch a brand with them. Most of what you’ve done has been launching brands and then teaming up with influencers who just like what you said are already fans of the brand and can actually propel that brand. Why haven’t you done that? It seems like teaming up with an influencer to launch these influencer driven brands works really well. I think that if there is a wrinkle in it, it is that launching with an influencer probably helps you get up on your skis faster, but you probably can’t go as far. And all of the influencer driven brands that have done well have done a really good job of building a brand that goes beyond their name.

So Emily Weiss launches Glossier with a blog called Into the Gloss, and that blog starts doing 200,000 visitors per month. And now the company Glossier, it is not Emily Weiss and Company, is worth more than a billion dollars, right? They’re going to go public at some point and either that, or get acquired and it’ll be a really good outcome. And then you have Jessica Alba with the Honest Company of George Clooney, selling Casamigos for over $700 million. You have Aviation Gin, which was founded by Ryan Reynolds. That seems like a really lucrative opportunity that you haven’t done. So what’s your thinking behind that?

Nik: Yeah. I mean, we’ve done a few. We’ve done an audio company that launched with Miguel last year. We did Cher, we did her personal perfume. Judy is somewhat, you could say partnered with a celebrity. I mean, Simon Huck, I think is kind of a celebrity. You know, he’s got a pretty big following. He’s got a lot of connections, but you’re totally right. The initial launch is ramped up or done a lot faster, but it also, it’s still required by month six maybe, it still requires the same type of business acumen or skillsets that a brand without an influencer would require. You might just have a few months upfront where you’re saving money on paid advertising because you have an audience already. We’re about to launch a brand at the end of this year with one of the most well-known basketball players in the NBA, and it’s going to be a beverage brand.

And that’s going to be one where again, I think the first six to eight months are going to be on fire because this is one of the most well-known NBA players and his massive network of athletes and celebrities. But then after that, it still comes back to how do you fine tune your operations costs? How do you fine tune your marketing? How do you reach beyond just simply the audience that that one person has? And I mean, Glossier is another great example of that, right? Like they launched with the Into the Gloss traffic and audience, but then very quickly had to begin fine tuning the paid marketing and the messaging and the retail stores and kind of all the pieces around it to sustain that growth trajectory from the beginning. And yeah, so we have done a few of them and we have a few that are upcoming.

I’m definitely a fan of them, mostly because again, kind of like what we did with Hint, it allows you to really put a face to the brand and also build that face as a separate brand as well. And then these two brands that you build simultaneously play off each other and serve each other’s purpose, right? So like Glossier almost has three. They have Emily Weiss, Into the Gloss, and Glossier. Hint, you could say has Kara Goldin and Hint, Judy has like Simon Huck and Judy. Twice Toothpaste, which is one of my portfolio companies, has Lenny Kravitz and Twice. And so there’s a lot of like cross promotion that allows, and then the other cool thing too, is when you have a person tied to something, there’s just a lot of opportunities that you might not get as a brand, but you get as a person where you can then plug your brand.

So the first one that comes to mind is when Lenny Kravitz was on the Ellen show, it became an ad for Twice because Twice was mentioned there about doing a donation and Lenny Kravitz as a co-founder. Twice would have to pay so much money to get on The Ellen Show otherwise, but because they leveraged Lenny Kravitz and because Lenny was going to go on the show, that was an easy plug for Twice. All that to say, I think celebrity brands or brands with influencers, or really brands with people who have really good networks and access are something that I think is going to have to be almost ingrained in future brands because you can’t, it’ll be too hard to not have that network or that access or that audience upon launching a brand or too expensive.

David: Talk about, when it comes to brands, what you learned redesigning Hint’s water bottle, and the experience of what happens when you actually go to a store and look at different products on the shelf. And maybe we can talk a little bit about end caps and the ways that brands pay for end caps. And you want those to be memorable, but you spent a lot of time on that. And I’m curious to hear what you learned from that experience.

Nik: Yeah, I think it was about a year long process, the rebrand, the website rebuild. It really started, I think, with the idea that we needed a new website. We were on an older platform called Symphony Commerce, which I don’t think is even around anymore. And it was always breaking and there were always things that were down. We could never get things like new pixels up quickly. We couldn’t make changes to the site without having to go through Symphony Commerce’s own customer service. And so it was just this bottleneck of guys, we can’t scale unless we have a new website built on Shopify Plus, and that was pretty much it. And so when we started to explore that process, we also thought, all right, well, why not maybe entertain pitches or, or the thought of potentially a rebrand for the company, because it was originally branded in 2005 and then it just hadn’t changed since then.

And we were sitting at 2017 at that point. And so we started talking to different agencies and also just generally looking at kind of the brands that were coming out at the time and what are they speaking about? How do they position themselves, walking down the beverage aisle in Whole Foods, which is always the best place to look at up and coming brands because they take them in first.

David: Why?

Nik: You know what, I don’t know why they take them in first, but Whole Foods is usually the first stop on the retail map. It helps you kind of validate your product and your packaging and the way it’s displayed. And so just walking down the aisles of Whole Foods, we just started looking at all right, this, we liked the way this sticks out, or maybe Hint doesn’t stick out in the fridge because it’s, they were mostly whitish bottles.

Then we ultimately came to the decision that, all right, if we’re going to invest six figures into building out an incredible new website, we might as well also at the same time, do the rebrand and take everything from the rebrand and push that into this new site. And so the entire process probably took about a year and we learned by actually experiencing kind of the same way that like I still learn. And so we ordered every possible direct to consumer brand to the office. We took notes of how the site works. We took notes of the things that we liked on the websites, things we didn’t like. We took notes of even using a website, what makes it easy or complicated or what frustrated us? What was it on the site that we thought was not so frustrating? We were, at the same time, we were running tons of tests on the actual website itself.

Things like, do we try different layouts of pages? Do we try on the collections page, do we add the option to subscribe and add to cart right there? So you don’t have to go into the product page and somebody could easily add seven different things to their cart within a minute. So we were running all these tests. And so we took a lot of the quantitative data from these tests and combined it with the qualitative side of what we liked and didn’t like. And then on the brand side, the same thing. What were the things that we liked about brands, whether it was a ThirdLove or HelloFresh or Harry’s, or quip, and what were the things that we didn’t like and what were the things that we wanted to make sure that we communicated as a brand to consumers?

Right? So, Hint went from a brand that just sold flavored water to being positioned as a brand that takes the crap out of everyday products, replaces it with the fruit essences and also ingredients that are much better for you. And so that was the biggest thing around the positioning was making sure that we solve for that positioning message. And then once we understood from a fundamental, from a messaging from a kind of communications perspective, how we wanted that brand to live then came in the pieces of, okay, now we start looking at actual messaging copy that’s where those lines like “fruit and water hooked up” came in and then layering on design on top of that. So actually taking, I mean, to arrive at the bottle that exists today, there was probably close to a hundred different variations of the bottle and it would be, we would put them all in the fridges.

We had a retail store on Union Street, so we would put them in the fridges and see what people liked and just literally asked people all the way to taking the different samples of what the bottles look like and putting them in the fridge at a Whole Foods and just looking at the whole fridge and saying, all right, does this pop, does it stand out? No. Why not? If it does then why? And then okay. Taking these learnings and put it in iteration, in the next iteration. So it’s actually, it’s a lot of actual qualitative stuff versus simply looking at a checklist or a playbook of how to do it. And then also it was a lot of what Kara wanted in the brand going forward because this brand is ultimately her baby.

So it was a lot of why something should be a certain way or why not? And incorporating that in. But it basically starts with the fundamentals of looking at data, then looking at the qualitative side of things and then actually testing and just iterating a bunch. And then you kind of sprinkle in the elements at the very end. The things that, for example, how should our videos look? How should our copy look? What’s the tone of voice that we communicate in and that kind of layers in to finish it off.

David: Yeah. So I pulled up a quote from Pablo Picasso that I really like, and he says, “When art critics get together, they talk about form and structure and meaning. When artists get together, they talk about where you can buy cheap turpentine.” And the point of that quote is that what people on the outside talk about is very different from what the actual boots on the ground painters are actually focused on. And I think that what we’re doing here is we’re really beginning to get past, Oh, all the sexy headlines. Like what does it actually mean to run a DTC business, to do hundreds of different analyses of what a bottle could look like, to have a retail store and to make that retail store a scientific experience where what you’re doing is you are having different theses of this bottle is going to work. No, I think that bottle is going to work.

No, I think that one’s going to work and then actually putting them on the shelves and beginning to ask customers, which one do you like, which one don’t you like? And every industry has these things, the things that move the needle when it comes to revenue, the things that create success, but the things that when you’re actually doing them kind of suck and they’re very tedious. And I think that another example that I’ve seen from you is the times where you have watched the heat maps of how users actually click on websites. That is such a cheap turpentine experience that I want you to talk about.

Nik: Yeah. So that was, I mean, that’s something that we were doing at Hint and we still do it today with any of the brand pages we work on. It’s literally using a free app called HotJar and you add this pixel to your site and it can literally, so it does three things. It looks at the scroll depth of how far somebody scrolls down on your pages. That gives you really good insights as to what information needs to actually be at the top, or are you not selling enough before somebody stops scrolling? It looks at heat maps, which is where are people’s clicks coming from? What are they highlighting and where are their mouses going basically? And then the last one is actual screen recordings of user sessions.

So, we used to every morning, like 20 to 30 minutes, just to look through the past days’ screen recordings and see, okay, this person was, there was maybe a majority of people who came to this page were really interested in this paragraph that’s halfway down the page, let’s bump this up because this is something that’s really interesting. And we want to make sure that more people have visibility to this paragraph. But basically again, looking at what people are actually doing and then using that as just obvious data to re-jigger how a page might look or re-communicate how something is read to help conversion.

David: So what are some of the things that you have learned through that experience? One of the things that I repeatedly take from you that I think is something that you seem to believe very strongly in is the importance of social proof. And on your landing pages, you just overtly have this thing called a brag bar, where what you do is this is a place where you share customer reviews. This is where you have quotes from the press. This is where, when you use quotes, you use quotes that don’t just say, Oh, this is a great product. It is like, if you’re selling a water, you say, this is the most refreshing drink I’ve ever had. Things that actually explain the experience that the buyer is going to have. And not just some high level comment from some potential customer and all of this falls under an area where you are bragging about the product and you’re not being humble. You are saying, this is a good product. And this is what other people just like you have.

Nik: I’m so glad you brought this up. I geek out on this. So what David’s referring to is typically on a website or on a landing page. There’s a lot of times where there’s a section where press quotes might live, customer reviews, hopefully in the future, it gets to a point where, David, if you go to a website, you’ll see a quote from Nik Sharma specifically because I’m in your network. So basically this is the brag bar, right?

And like David said, this is where you want to brag as much as you can, in a way that is still focused on the product and the outcomes. Because when somebody is trying to buy something, they’re not buying into the what of the product, right? Nobody wants just another water. They want a beverage that’s going to get them off of Diet Coke, or they want a beverage that’s going to feel like they’re drinking dessert without drinking a sugary soda. And so you want to always be pushing the outcomes or another word for that is just the value props. And so, if there are press quotes, you want to make that from an actual logo standpoint, you are matching the press logos to the audience that you’re going to be driving to this page. So for example, if you’re running ads from Facebook, you may use, and in your target demographic is 24 to 40 years old.

24 to 40 years old. You might focus on logos like Popsugar or Elle Magazine or New York Times. And then if you are running, for example, TV ads to a landing page with a much older demographic, you might focus on things like Good Morning America or Town and Country or Hearst Media. Basically, you want to align the demographics of the publications to the demographic of the traffic coming in. So that’s one.

Then from the actual quote standpoint, you don’t just want quotes that say, for example, “This is our favorite. This is the New York Times’ favorite water. Or this water is extremely refreshing.” You want something that says, “After a week of Hint water, I was able to kick the diet soda habit.” Something that really explains why that customer might be there in the first place or why they might be wanting to try the product.

And this brag bar, helps with the validation of a) there is notable logos and publishers talking about the product, but b) they’re aligning the reason they’re there with why that brand was in the first place in a publication. So there’s that. And then the other one is the customer reviews where, again, you want to focus on things that elicit outcomes, where the customer may be looking for. I can just pull a couple up real quick.

If we look at Hydrant, for example, it’s a quote from Popsugar that says, “When I really feel the need to replenish, a water mix-in like Hydrant offers up to triple the electrolytes as my favorite drink, as well as sodium, magnesium, potassium and zinc.” That’s a great quote from a great publication. The second one there is from The Skimm and it says, “Proper hydration can clear brain fog. And that’s exactly what Hydrant does when you mix it in Your water first thing in the morning.”

So they’re focused on things that really complete that story of the brand. And then you might have customer reviews that compliment it. So, for example, on the Hydrant page, again, there’s one that says, “Ordering has been so easy. And I can’t imagine my mornings without Hydrant. I struggled to drink enough water and this has definitely helped.” So somebody reading this might say, “Oh, I also struggle with drinking a ton of water. If I just add this into my morning routine, maybe I’ll feel much better and it’ll clear my brain fog.”

So they all tell the story cohesively. But, again, it’s not in the context of this is coming from the brand. It’s in the of this is what other people are saying about it. So you don’t have to take the brand’s word for it. You take somebody else’s word for it.

David: Yeah. This is key. And I think one of the things that you didn’t quite get to that you had implied is that the more specific the customer review, the more believable it is. So talk to me about landing page design. So talk about click-through LP, listicles, quizzes and your hero style landing pages.

Nik: Yeah. So basically, I think when people first hear this, they’re going to be like, “Oh, these are just gimmicky ways to trick customers into buying products.” But in reality, what we’re doing is we’re creating experiences that, just like the creative that we were speaking about earlier, how we said shaky always performs better, just like those pieces of creative are native to the platforms that people are scrolling in or looking at, these web experiences are native and intuitive to a customer who might not have the education about a brand or the product that they click the ad on. And so these pages help identify and educate the perfect product for that customer.

So, for example, so a hero landing page is essentially a landing page. Landing pages are basically just a fancier way of saying a webpage that’s more optimized for a singular purpose, in this case, let’s call it a Facebook ad. It’s a landing page that basically tells the story of a brand so that if somebody gets to this page and has no idea what Hydrant is, by the time they finished scrolling this page, they know exactly what Hydrant is. They know this is the product for them, they will have all the marketing messages to go tell their friends of why they should be also trying this product.

There might be an offer or a higher value, yeah, basically an offer on the page to get them to convert faster. And it also tells them exactly how the product works, what it is, why it exists, how it’s created, et cetera. So you should know everything about the product by the time you’re done reading this page. And ideally, you know everything about the product by the time you get to half the page or so because most people don’t really scroll past that.

And so with these pages, the main thing you want to do is one, it actually becomes a great way to test messaging. So if you look at … Hydrant is a great example again. We were running tons of landing page tests last year with Hydrant to the point where the main website, the copy that lives on the main website was becoming reflective of what was on the landing pages because it was performing so well.

So anyways, so you get to the site, these landing page is similar to what we were talking about earlier. They have to be completely understandable by a 12 year old or a drunk person. So you have to be able to communicate really effectively and really clearly why somebody is there, why somebody should buy that product so they can quickly identify if it’s something for them or it’s not. And if it is for them, you want them to move quickly, right?

So for example, with Hydrant, Hydrant’s an electrolyte mix. But when you get to the landing page, it doesn’t say Hydrant electrolyte mix with less sugar. It says, “Meet the fastest way rehydrate.” And so all of a sudden somebody is like, “Oh, I need to get rehydrated.” As you scroll down, you learn, okay, why Hydrant? Hydrant is a refresh … Basically a paragraph in the simplest form, not getting technical and not getting too complicated, but in the simplest form, why does Hydrant even exist in the first place? Or why should somebody use the product?

Then we get into the brag bar and then we get into the shop section. So you’re not selling at the top. Basically, it’s content focused at the top. And as you go down and learn about the brand, then you get the opportunity to buy the product. This is why landing pages work much better than actual just product pages because product pages sell at the very top and they don’t explain anything. And everything that they explain if they do is below that. But if somebody gets to the product page and just sees a product and they don’t know about it or there’s no education there, then they leave. And so landing pages work because they’re focused on education first and then selling.

David: One of the things that I haven’t heard you talk about yet is video testimonials. So what are your thoughts on video testimonials? When do they work better or worse than text? How do you think about the trade-offs between really short landing pages that are almost like … Maybe you might see this in a luxury brand. We’re so good that we’re not going to give you a lot of information versus really long landing pages that try to justify their value proposition with volume. And how would you think about video testimonials and the length of a landing page as it relates to price points?

Nik: So I think a lot of times when you see a really high-end luxury brand doing the shorter pages or even just in general, if you see a really short page, it’s usually because they plan for that person to be coming from an extremely high intent source of traffic. For example, if you search the Judy emergency kit and you get to a really short page, then it’s probably because you’re coming in already knowing what you’re there to buy in the first place. And so it’s more focused on, okay, now that you’re here, let’s get you to buy and you can get on with your day versus let’s sit here and educate you because you might already know about the product.

For video testimonials, I think what you’re referring to is user generated content or UGC style ads. These have become … I mean, again, when you’re native to the platform and Facebook and Instagram are great examples of this, UGC, it’s a drug because it is so cheap to produce. All the UGC we do for our clients is all filmed on iPhones, using the selfie camera. You make sure you have good lighting. You make sure you have a camera on your iPhone and you just talk about the product and you could even ramp for 10 minutes straight. And then when you edit it in an editing software, you just cut up all the right pieces and the value props that you want in the video.

And because it’s so easy to make and record you can test so many different ways of how you communicate about the product. You can test different hooks. The first five seconds, what are you talking about? You can test different hooks. You can run it through personal pages too. It doesn’t always have to come from a brand page. So I mean, UGC is so incredibly underrated as a marketing tactic.

David: Why would it be underrated? What is the mechanism behind that? Is it that UGC is such a new thing that a lot of them were clashing?

Nik: Yeah, it’s a new thing, but it’s also not looked at as an elevated form of marketing because it’s filmed on an iPhone and because it’s not overly produced. The best UGC is actually usually never really that edited other than maybe spliced together and subtitles. But when you start adding logos and things that fly in or animations, that’s when it starts to just become another ad versus a testimonial, right? Testimonials are raw and real. And that’s this field that has to also be carried through in a UGC ad.

David: Beautifully said. So you were talking earlier about, as you think of designing a landing page, what you do is at the top, you begin to educate people, begin to justify, hey, this is our product, this is what we do. And then towards the bottom, you begin to sell. But often, the sales cycle can be a lot longer, can maybe be over many months or something.

So when do you think about running people through an email or a text message-based sales process and then how do you think about when you begin to sell, how you begin to get people onto a website where they’ll buy something?

Nik: Yeah. So, I mean, there’s definitely instances where you have a two funnel approach. So your first funnel is heavily focused on audience building and data collection. So that might be things like whether it’s using a quiz to understand somebody’s persona and collecting their email because now you have their email and you have information which allows you to cater content specifically to them. And then you use the second funnel which is basically let’s focus on a series of emails or a series of text messages or quote unquote, “Moving them down the funnel.” If they start with viewing a video, then you want to show them a different piece of content, maybe it’s an article. If they came to the article and now you’re going to retarget them with maybe one more thing. And when they get there, you want to retarget them with the final page or the offer opportunity to purchase.

We try to figure out from a messaging standpoint, how do we shorten that? And we have in many cases successfully shortened it. And the biggest trick to it is literally looking at customer reviews. And so anytime we build a page, a landing page, we go through and write down all the different value props or characteristics customers talk about. So, for example, if you’re talking about Caraway, it might be design. It might be the non-toxic, non-stick feature with no Teflon. It might be the fact that there’s a canvas lid holder for the tops of the pans. And so we literally just write down a list of these value props that people talk about. And we’ll just go through a couple thousand reviews and just start putting tallies next to what are people addressing the most.

And then when we build these pages or we design the marketing funnel or you create these UGCs, you almost just look at, all right, if the most talked about thing in these reviews is design and non-toxic, nonstick cookware, let’s focus on these two as the leading messages and everything else becomes second, third, fourth to that.

But again, it’s literally using actual qualitative customer information to see what they’ve experienced and what they liked about it. And then using that again in your marketing. That’s, again, why when we talked about using Facebook to launch and really refine your messaging, they might not have had those value props at the top of their list in their brand book, but through testing and through looking at customer reviews that’s something that they figured out.

David: Yeah. What I would say is it is using customer words to sell customers. And rather than trying to force creativity on your own, what you’re doing is you are taking and aggregating all of the words that customers are actually using and then basically playing a game of ping pong. You’re absorbing the best ideas. Then you’re hitting back at them what those are and then creating this cycle of better and better ideas.

So what do you do before you actually launch a product? One of the things that we’ve talked about is how you’ll create a fake brand and then you’ll run ads to a landing page. That’s insane. Talk about that.

Nik: Yeah. So basically whether we’re thinking about launching something or whether we work with a client that wants to launch something, we will typically create a fake brand prior to the launch of the real brand. And it’s nothing too crazy. Let’s take, for example, a CBD-infused candle, right? So if that’s something that you want to see has legs in the market to sell, you might buy the domain like candle, C-A-N-N-D-L-E and you might throw up a very quick landing page that talks about why somebody might want to use a CBD candle, the benefits of it, the price point and then something like, “Enter your email to be notified for launch.” And then you start running some ads to that page. And you basically look at a few things.

You look at the outbound cost per click from whatever your ad platform is to the page. You look at the time spent on the site and where people are reading or what they’re reading. So you basically use heat map tracking, or you can actually even record a lot of these user sessions. And then you look at the actual conversion rate of out of a hundred people, how many people are putting their email in to be notified the second the product launches?

And then even earlier, back in the ad platform, you do things like you adjust copy and creative. So basically the messaging and the images or the videos that get people to click in the first place so that when you launch the actual brand, if it’s something that is deemed like, okay, this is something people clearly want, then when you actually launch it, you already know, going back to that brand book, you already know, okay, these are the messaging points that we should focus on because this is actually what converts.

When we build the website, this is the text that should be in the hero. And when we think about shooting creative, we’re not going to spend 10 grand on a photo shoot or a video shoot that the branding agency thought of. We’re going to spend 10 grand on a photo shoot or video shoot that’s validated from the data we have based on what we know gets clicks and essentially converts.

David: Yeah. So I have a concern that maybe there’s a problem with feedback loops that are too fast. And my example here is that take something like Lululemon leggings, right? 15 years ago, when people weren’t really wearing them. If you go out and you run a test like this, you actually would have underestimated how much demand there was for those leggings, right? The market changed.

And so the thing is, I think that the strategy works for companies that are trying to fill a hole and make money fast. But then there’s a whole other kind of company that’s really revolutionary and transformative that I think is really exciting, right? If you look at Tesla, if you look at SpaceX, those are sort of the first of their kind. If you had gone back 15 years ago and you said, “Hey, let’s run some tests to see if there’s demand for electric cars.” What would people say?

They’d be like, “Yeah, maybe.” But then it would probably be undervalued because a lot of what Tesla did was they made electric cars cool. And so it’s like what Tesla did was it actually changed the shape of the market. And it reminds me of a concept in economics, it’s called induced demand. And the example here is that a lot of city planners, what they didn’t really realize when they first started building highways, they were like, “Okay. So if you have a lot of traffic, what do you do? You make wider roads.”

The problem is wider roads in some ways end up making traffic worse because when you widen the roads, after a bit of time, more people just drive. And so then what happens is more people drive and so you have the actual highways that are just as crowded, but the access roads to those highways are way more crowded than they used to be. And so I think that this strategy is interesting. But it doesn’t take induced demand into account where you can create something, change the structure of the market and aren’t those the most interesting companies to ultimately build?

Nik: A hundred percent. I think with those types of companies, you look more toward a much more macro view of where is the world going from different… Think like Roman or Himes, for example. Where is the convenience and access for medicine going in 10 years? And you work backwards from there.

And the only way, really, for a lot of these companies, like what you’re talking about, whether it’s Tesla or Himes, these types of companies, the best way to validate it is to actually just launch it and start building the hype around it to almost create your own demand. That demand might not exist. You have to go out and really create it.

David: One of the things that you notice when you walk around New York is how common it is for women, in particular, to walk around with these New Yorker tote bags. They are so popular. And, actually, if you look at the prices of them on eBay, they go for ridiculous amounts. And they’re pretty cool bags but I think that they were given to subscribers for free. And it’s interesting because you usually think of these direct consumer brands as purely digital brands but you talk about real estate and inventory and companies like Outdoor Voices, they also had a tote bag. So what have you seen be successful with that real estate and inventory model?

Nik: Well, it’s funny because I think merch is just … If you get somebody to wear merchandise or a tote bag or a sweatshirt or sneakers or I even bought a Evian and Virgil Abloh water bottle for $60. If you get people to-

David: Wait, the kind of thing that I would have seen for $3 on the store.

Nik: The kind of thing that initially sold for probably $5. Yeah. Yeah. And I’ve never opened it. But if you can get people, your customer … Whether they’re your customers who truly are super fans of the brand, or they are people who just genuinely love the way the merch looks, if you get people wearing your brand, you have walking billboards within the city. Right? So for example, like I have a couple of Cha Cha Matcha sweatshirts which look awesome. I have a Ritual sweatshirt, I’d probably have a Recess hat, a Not Pot hat. I just have all this and I don’t wear it because I’m like, “Oh, I want to go represent the brand. I wear it because some of it just looks cool and it just looks good.”

But then, when I walk around, on my back, there’s a big logo and people see that logo. Obviously, it’s not directly attributable marketing, but it is that brand awareness or it’s another touch point of frequency in marketing.

But I mean, when Vogue launched their subscription ads last year, one of the big things was you’d get a free tote bag. And I was like, “Hell yeah, I want that Vogue tote bag. And I signed up and I’ve just never canceled, but I got my tote bag and I was happy with it.” It also creates the sub-community within a brand. So when you have one of the 5,000 tote bags or Cha Cha Matcha did a very limited drop of maybe 500 Brandon Maxwell and Cha Cha Matcha sweatshirts, it creates this sub community among this community of already super fans of the brand. And if you map it backwards, those are probably your customers that spend the most money at the companies.

David: Yeah. So I always think of YouTubers as the people who figure out marketing before everybody else does in this day and age because they’re so creative and they’re internet native and they’re just desperate for attention in a way that makes them really creative. And one of the things that YouTubers got really right that everyone else is just figuring out is collaborations.

And YouTubers, since early on, they would make videos together. And then they would tell the fans to go follow the other person. So if it was Casey Neistat’s channel, they’d say, “Go follow David Dobrik.” if it was David Dobrik’s channel, they’d say, “Go follow Casey.” And I think that there have been some brands that have done particularly well with collaborations. I look at Supreme has done an amazing job and also they’ll just surprise you with stuff.

So, they’ll do the classic stuff like the Louis Vuitton collaboration and stuff like that. But when they did the MetroCard collaborations, the New York City MetroCard, they broke the Internet.

Nik: People were going crazy.

David: People were going crazy. And what is it about internet culture that you think makes these collaborations so popular?

Nik: Well, it’s like playing the algorithm when you put up a LinkedIn or Instagram post. When you get that initial pop from your … When you have enough people who go, like and comment or share within the first very short period of time. And it just amplifies. I think it’s very similar to what happens, for example, if Supreme drops a MetroCard collab and there’s only so many of them. I could give two shits about it, but when I see it, I’m like, “All right, now I want to go and get that,” for no reason, but I want to be a part of it. And it’s like when the initial crowd or group is so loud, it almost just attracts this other secondary wave of people just from pure FOMO.

David: Yeah. What direct to consumer companies have done a good job with collaborations.

Nik: I think actually Madhappy does probably one of my favorite jobs. So Madhappy is a clothing brand out of LA all around this idea of creating clothes that are comfy and they have a complete other side around mental health. And so they’ll basically do collabs that really keep touching back to their pillars of mental health and whatnot. Their last one they did was with Headspace where they created this amazing collection of products, sweatshirts and sweatpants with using the Headspace logo in different ways. That looked really cool. And I think it sold out instantly.

But Madhappy is probably one of my favorites in terms of actually … There’s collabs of let’s launch a product together and there’s collabs of let’s just cross sell to each other’s email lists or there’s collabs of let’s do a giveaway on Instagram together. But the best ones are always the ones of let’s actually launch a product together using both the brands’ ethos and fusing them together.

David: It’s interesting. There’s something very 21st century and almost hyper capitalist about the way that people are happy to be shilling brands now. It used to be that that was selling out. If you were to go back 20 years and somebody would become sponsored, often, it would be like, “Oh, they sold out, they’ve lost a lot of their creative soul.” And now I see Instagrammers who have like 3,000 followers who are like, “Look at me, look at me, look at me, I’m sponsored.” As if, oh my goodness, it’s amazing. Check out my Topo Chico water bottle right now. What it means to make it is to start representing brands and people are so proud to do that in ways they didn’t use to be.

Nik: Yeah. Well, it’s interesting. Right? In 2013ish is when a company like Dirty Lemon could pay an Instagrammer to post a photo holding the bottle. And if Dirty Lemon was tagged and the Instagrammer had 50,000 followers, Dirty Lemon might gain two, 3000 followers just from one photo. I don’t think you really had to specify that it was even sponsored. Then came this time of brands were really sponsoring influencers and they’ll have to tag it and people hated it. Right? They just saw it as basically an ad in their feed.

After that came the segment of the complete opposite of that when you would see somebody sponsored in an Instagram post that was sponsored by a brand or if you go through the comments, they’re just like, “Yeah, you go get that bag, get that check. We’re so proud of you.”

And then now, we’re moving to this time where it’s like really big influencers and creators don’t just want to have a sponsored post anymore. I was FaceTiming with a friend last week who, I think he’s got like six and a half million or something on YouTube at this point, he turned down a $50,000 sponsorship deal because they just wanted to do one thing with him versus something that’s like … He was like, “I’m building this and they didn’t want to support this. They wanted me to just do one post with what they wanted. So I said, ‘No, I don’t need your 50 grand because if you’re not going to align with what I’m trying to do, I’m not just going to essentially sell out to one post to give you my reach and my audience for some quick cash.'”

So now there’s this convergence of basically people with big audiences want to be deeply integrated in something. And I even had calls with CAA and WME over the last couple of weeks and their investment arms and their Corp Dev arms are essentially doing the same thing where they’re looking for companies where they can essentially pair up a massive influencer.

WME did Ryan Reynolds and Aviation Gin. It wasn’t like they just said, “Hey, we’re going to give Ryan this massive chunk of equity or this big check.” It was the fact that Ryan saw it and said, “I want to be behind this and be a part of it and actually get my hands dirty with it.” So there’s this like interesting shift now to … People with audiences are now able to do-

Interesting shift now to people with audiences are now able to just basically, they’re starting to understand that they can build themselves. They don’t have to go get a sponsored post or they don’t have to seek their next brand deal. They can build these companies themselves. I mean, even if you look at like what Sara is doing, she’s launching her own software company, and she doesn’t need to do it with a company that’s just going to pay her to sponsor one Instagram post or one YouTube video. She knows that she has her audience, she knows what she wants to build, and she’ll go get the resources to build it.

David: Yeah. I think Sara Dietschy is very savvy with things like that. I mean, even talking to Sara, I think that what she has is a very keen understanding of how long-term the relationship she has with her audience is. And I think that that speaks to a lot of the trends that you’re saying; it’s not trying to build an audience and get a quick buck, because I think a lot of people felt that their audiences, they weren’t maybe as stable as they do feel now. Now you have these relationships and there are so many different ways to monetize. It’s more culturally accepted to monetize your following and it’s become much easier now.

Then you have Patreons and Only Fans and all of these companies that are helping people go direct to consumer and basically get money directly from your subscribers. So I think that there’s with that a long-termism that I think speaks to a lot of what you’re talking about, and that also factors in with the WME. I think that where we’re moving is towards a better and better understanding of how you build a company from having a large personal reach, into having a company around you. And I think that there’s not a lot of knowledge around how to do that right now. How do you start with Ryan Reynolds, move up to Aviation Gin and then end up selling that to, I believe it was Diageo.

Nik: I mean, I think, the other interesting thing too, is everybody kind of has their own way that they get in, whether it’s through- I tried to get a brand deal with Amanda Cerny at the time when vine was huge and Amanda Cerny’s career was just starting and her agent’s response was, nope, we want equity. We don’t want cash, we just want equity. And it was interesting because she was the only person who wanted equity, but it was her agent, who was a sports agent for a long time, who kind of knew this game inside and out. And then you have someone like Ryan Reynolds who has, an entire talent agency behind him. But I feel like the, the biggest thing is it’s like, who do you have in your corner that helps you get like, what, even when we were, we were with Chris Zarou you can’t imagine that Logic would have gotten to where he is without somebody like Chris in his corner. And I think it’s just it’s serendipitous and it happens one way or another, but I think that’s the key almost.

David: Yeah, there should be a lot of cultural knowledge that develops around this in the next decade. I’m excited to see what happens from it. So one final question about business, and then we’ll move into some just personal stories, fun stuff that you and I just like to talk about. So what do you tell your clients about when, and if they should worry about Amazon? So say you’re launching a t-shirt company. Well, Amazon is just going to launch the same one or other companies who say, well, no, we got to own the customer relationship, if we’re dependent on Amazon, we really can’t be certain about the revenues that we’re going to get because they could pull the rug from under us so fast.

Nik: Yeah. I go back and forth with Amazon all the time. Okay. So there’s the underlying statement that regardless of what you do, Amazon’s always going to have way more money than you ever will, right? So there’s no, it’s not like you are in any way going to compete with Amazon, but it’s that you have to figure out for your business, what’s the best way to position yourself. So I’ll give you a couple examples. So I always think when you launch a brand, you should not launch on Amazon. You want to focus on driving people to your owned and operated platform, whether that’s Etsy or whether that’s Shopify or whatever it is, your own transact, the place where you own the data and the customer. And that’s how you should launch. You should launch with simplicity in mind for the customer. You know, they know one place to go get it.

On your own site you can control the messaging, you can control the experience, you can control how they receive the order. There’s just a lot of things that you can own. Now, if you take a brand like Black Wolf Nation, which is a men’s skincare brand, they are probably doing eight figures this year in revenue. And just as a by-product of it, they have searches on Amazon. So if you’re doing eight figures in revenue and you hear about this brand Black Wolf Nation, I think some somewhere around like 33 to 40% of customer searches actually start on Amazon because it’s so easy, right? And if you’re not there and somebody else is bidding for your brand term, now you’ve just lost customer.

So it’s like, are you going to just say no to Amazon forever and potentially lose a very solid chunk of people who would be your customers? Or would you rather let that customer get the product, experience your product, and almost figure out a way where, maybe you only put, if you have seven skus, maybe you put your top two or three on Amazon and you leave your new releases, you leave your other product, your other four or five products on your site. So that, there’s a way, there’s a reason for them to come back and come back to your site. In the first place.

Another example this year was with Judy. You know, we launched Judy at the end of January and Judy had a ton of celebrity firepower behind it. Because of that, when people would see a Judy kit on Kim Kardashian’s story or Kris Jenner’s story, or Martha Stewart’s story, they would go to Amazon to search Judy Emergency Kit. And if we’re not there, we’ve now lost a customer that could have gotten a Judy in the first place. And so we decided, okay, well, let’s launch on Amazon and let’s put our flagship, our top two products there and we’ll leave all our special collaborations that we do, all our, lower price kits, everything else we’ll stick to the Judy’s owned website, but we’re going to have, I mean, there’s no question. You have to put it there. Otherwise you’re losing to competition.

David: What kind of companies do you think should launch on Amazon? You know, they might not be the ones that you work with, but is there a certain kind of company, a certain kind of person that does a really good job of just saying, Hey, I’m going to make this product. It’s going to be good quality. I’m going to make it for super cheap. And I’m just going to try to game the Amazon ranking so that they become recommended products. And I have 12,000 reviews at 4.75 stars.

Nik: There are so many kids I know who just make millions of dollars selling a backscratcher, a tongue scraper, a head massager. And they do exactly that. They sell it, something that’s like essentially a commodity, but they’ve understood how to game the pages and the reviews better than anybody else. And they, they might fulfill it by Amazon, they might fulfill it themselves. But exactly like you said, there’s a lot of these commodity, like if you were to search Tupperware on Amazon, you have no clue who’s actually behind all those Tupperware brands. And it doesn’t matter because if you’re just trying to get Tupperware, you don’t really care for, a brand behind it. You might just want to get some actual Tupperware and it could just be some 14 year old kid in Ohio in his basement, just selling the shit out of this Tupperware.

I think that’s also why you want to, when you do, whether you decide you want to create something for Amazon, or you want to create something for like an actual brand, there’s a very clear separation as to which one you’re going for. Commoditized products are huge on Amazon. Things like cookware, spatulas, Tupperwares, tongue scrapers, back scratchers. There’s so much of it.

David: Yeah. I’m just sort of looking around my room and thinking, what are the Amazon Basics products that I have? And there are things like white noise machines. There are things like my sleep mask is an Amazon Basics product. Amazon Basics office stuff. So like, post-it notes and things like that. And I think that there’s a couple things that stand out about these products. They’re things where the variance between something really good and something not as good isn’t very big. So if I have like a mediocre sleep mask versus like the best sleep mask ever, well, I mean my sleep mask, as long as it’s comfortable, I don’t really care what brand it is. I actually don’t even know what brand it is and no one else is going to see it. So I don’t have any sort of flaunting of, oh, I have such good taste with that product.

And then things with office stuff. I mean, I’m looking at some post-it notes right now, as long as they stick on the wall and the Sharpie doesn’t bleed to the next one, it’s all good. And I basically know that that’s going to be the case if there’s enough reviews, whereas when you take things like things that are either really important to you, where there is a big difference and you want quality, like I have a lot of Lululemon pants and I just love Lululemon pants. I don’t really care that other people know that I’ve Lululemon pants. I mean, I’m saying that on a podcast. So at some level, maybe I do, but they’re just amazing pants. They are, they stay in really good shape. I get them because custom fit so they fit me amazingly. They’re super comfortable.

And then of course my technology, Amazon Basics doesn’t make smartphones because maybe if some supply chain reasons the blue bubble is of course a big status symbol. And so I think that there are certain categories where Amazon Basics just by virtue of the products that are sold, that category lends itself much more or much less to Amazon Basics.

Nik: Yeah. Well, one thing I started saying this year too, and really noticing was that brands that are probably going to survive even just not directly competing with Amazon, but you are always at some level competing with an Amazon search bar, are the brands that really have a moat within either their product, their distribution, or their own operations. So, maybe operations less so because Amazon has really optimized operations, but, for example, Judy, Judy has a huge moat within just the marketing itself. When you think about who’s behind the brand. And also just the fact that it’s got everything you might need in a very organized manner. Whereas the Amazon emergency kit is just a bunch of stuff dumped into a backpack or like my knife set, my first knife that I bought was from Amazon Basics. But then I saw this really great knife set on a Taluk, which just had a much better set of knives. And so I bought that and replaced it with the Amazon set I had.

But the brands that I think ended up surviving are going to be the ones that they just have to have a moat. You can’t have another moisturizer that competes with the other 3,400 on the market.

David: Yeah. So, let’s have some fun now for the rest of this podcast. Let’s just talk about personal stories, the kind of stuff that you and I would riff on if we were just hanging out. And-

Nik: People are going to think we’re so nutty.

David: Let’s start with the time that you met… I know, honestly, this is what we do when we hang out. Talk about the time where you met Mark Cuban, you cold emailed him. He responded two minutes later, what happened?

Nik: Yeah. So actually the first time I had cold emailed him was probably in 2014 or no, maybe 2015. I basically emailed him and I was like, Hey, I have this like tiny little social media agency that I’ve just kind of been doing on the side. And I think that if I hire one person at 50 grand a year, that I would be able to double the revenue that I bring in. And I emailed him and said, would you want to invest $50,000? And own like, 10 or 20%? It was crazy. This is like kid version of me. And so he responded back very quickly and he was basically like, look, it sounds in theory that that’s a good idea, but in reality, you actually just need to like sleep an hour less and work an hour more. And you just, that’s something that you have to do yourself.

It’s agencies at that stage is not really an investible business. And I was like, okay, that’s good advice. But I think it was earlier this year, I saw, Mark Cuban is obviously very loud in politics and he’s great on Twitter. And I was just up in the morning, browsing Twitter. And I saw he tweeted something that was kind of controversial around politics. And I saw Austin Reef who we both know, and I saw Kinsey Grant, the host of Morning Brew’s podcast, respond to Mark and basically say, would you like to come talk about this on business casual? Now, obviously Mark has millions of followers. And so the chance of him actually even seeing that notification was close to none. If you have a verified account on Twitter, you’re able to see a separate section of your notifications, which is just people who are verified.

So when I saw that, I liked it in hopes of, Oh, maybe if he checks his verified, he’ll see that a verified person liked this tweet and maybe that’ll call attention to it. But even then I was like, there’s no way that he’s going to see that. And so, I remembered his email address and I just sent him a quick email. And I basically said, Hey Mark. One of my best friends has this company called Morning Brew, they send an email out every day to about 2 million people. They have this podcast that around business that reaches a million people each week. They would love for you to be a guest on it. Something kind of similar to that, but basically like one, two, three, no fluff, no like, Hey Mark, love what the maps are doing. Just no fluff, just, hey Mark, this is my best friend, he’s got this, this is the podcast, a link to the Spotify and Apple podcast. So he can, click it and look at the reviews and make sure it’s legit.

And I think within like 10 minutes, he responded, yes. And I just responded back and I said, great. I’m looping in Josh. Who’s the producer and Austin, who’s the founder and they’ll set it up. And literally that afternoon they taped it. And the next morning it was released on Spotify and Apple podcast.

David: Unbelievable.

Nik: It was insane. And what’s funny is, you’ll laugh. I’m laughing. Cause I know you’re going to laugh, knowing me. What’s funny is like the second I saw the reply to Mark Cuban, my first thought was, oh, I can easily make this happen and in a week, this is going to be a great tweet. I just knew it, I just knew it would happen because Mark is one of the fastest responders on email. And I knew he would probably say yes, why would he say no to reaching a million people in their ears directly?

David: Lots of good lessons in that story about how many successful people, cold emailing, how many successful people respond ridiculously fast? How just a deep understanding of how social media works will allow you to create these opportunities that most people who are just casual users of social media wouldn’t really understand, sort of like what you’re talking about with dimensions. And it reminds me of, remember of the time where we went to the morning meeting at Front Office Sports and you and I were sitting all the way in the back row and we’re watching the talk. And we were like, Jason Stein was speaking. And we were talking about all the cool people in that room who we could meet. And so what you did rather than waiting until the end of the talk, what you did was you search the event that we were at and you looked at all the people who are tweeting about the event, then you clicked on every single profile of the people who were there and you ended up finding the director of social media for the Minnesota Timberwolves.

Nik: Yeah. There was a ton of people. Yeah. Basically I just went to the Front Office Sports account. They were obviously live-tweeting the event. So people who would respond and engage with the tweets, I would click on their profiles to see if A, they were already following me or B, they had their DMS open. And I mean, that room was literally packed with like the top of the top in all of sports and business, you know, the sports business world combined. And I was just like, all right, well, if we’re both fortunate to get a free ticket to that event, let’s make the most of it rather than sitting in these like huddles and circles or just sitting in the audience idle, let’s see who we can just connect with a bunch of these people. And in between these breaks and these talks, we can just go like, go to the little counter over there and just talk to somebody new and yeah.

David: Well, it’s funny because you direct messaged the director of social for the Timberwolves while the talk was going on. The talk ended and then you already had the meeting set up. Whereas most people would have waited, gone up to the person, other people could have gone up to them and you just skirted right through that.

You know, it’s funny because I, that a lot of times people see the internet as a way to create relationships with people who are far away. And of course there’s merit legitimacy to that. But in this instance, you use it to talk to someone who was 20 feet away in a way that you wouldn’t have been able to had you just kept on listening to the talk and you just weren’t following the rules. And I’ve always liked that about you, you see the rules often as suggestions rather than rules themselves. And what you’re able to do is you have this very keen sort of subconscious understanding of the way that the world is now. And you’re just not, in a good way, you’re not that aware of the way that the world used to be. And so you’re able to create all these opportunities for yourselves that other people would miss.

Nik: Yeah. It’s a funny way of putting it, but it’s very, very true.

David: And then let’s talk about, as we begin to close our process for writing articles together. You want to talk about what we do whenever we write and just how we come up with new ideas?

Nik: Yeah. I mean, so if you take the last five minutes of this, just discussing this story, is probably something that would end up as an article. But, basically our process, I think our process is genius. It’s essentially the same way that we would test into launching a brand, but for writing. And essentially the way we do it, so you found this app Otter, which is, it just basically records everything that it hears on your phone and it transcribes it in plain English. And so what we’ll do is, the last one was in Toronto, right? When we were like eating a burrito. And we, actually the one before, that’s more fun in San Francisco when we, we had burritos and then we went to a diner cause we were still hungry and we just put one of our phones on the table and started recording this conversation.

And basically we recorded the conversation the next morning we look back at it and we were like, wow, that was a smart conversation. This sounds like something really interesting here. And we took basically the main points of what we talked about and turned it into, I think, one or two different threads on Twitter. And we blasted it out on Twitter basically as a way of, hey, is this something that’s interesting to the audiences that we both have? And it was extremely interesting to a lot of the people that follow us. And so then we decided let’s take what we wrote about and obviously using everything that you know, and teach in Write of Passage around leveraging the second brain, but basically combining those to the notes that we had, the insights from what people wanted to hear most about through the tweets, and also all the information that you had stored in your second brain, we created this article.

Oh, and the, actually, another really interesting thing that I learned from you was before you even start writing the article, you want to figure out who that article is for. So it’s not like we’re putting an article out for a bunch of people. We picked one specific person, and at that time it was Kirsten Green, and said, that’s who we want to write this article for. And then we just started writing it. And when we put it out, it wasn’t just an article of our thoughts, it was an article of our thoughts that were validated and past examples because we had access to your second brain. And I think it did like 40 or 50,000 views in a week. Just organically.

David: Yeah. I think that there’s a couple of principles there that I think are worth hitting on that I always talk about with my writing students. And one of the first one was yes, we pick one person to write for, but we always go for the smartest person that we can. Who’s also interested in what we’re saying. So we’re not really writing for a friend. We’re trying to write for the Kirsten Green, who is an investor in the direct to consumer space and both of us really admire her. And so we said, if we can write an article that is insightful to her, then it will end up being insightful to a lot of other people too. And then, what we do is rather than sitting down to actually write what we do is we just talk out the conversation before and we just try to get a bunch of ideas transcribed.

And then from there we begin to narrow and distill and compress those ideas into an article. So we just have a lot of information that we bring into a Lidl. And there’s two examples that I really like with that. So, you know that it takes 50 gallons of Sap to create one gallon of maple syrup? And so that’s what we’re doing. Our conversations are sap and then the article is maple syrup. And the way that sap goes into maple syrup is basically through some kind of distillation process. And it’s actually kind of like a diamond. The way that diamonds are created is they’re ultra concentrated carbon. And what happens is they’re created like a hundred miles below the earth at temperatures of like 2000 degrees Fahrenheit pressure exceeds 725,000 pounds per square inch. And then what happens is the carbon becomes super compressed. And what you end up with is a diamond, right?

Like that super hard element. And that’s why we pay so much for diamonds, right? That’s why they represent sort of eternity and all these sorts of things. And that’s what we’re doing with our writing. We’re basically just taking a lot and compressing it into as few words as possible. And every article is just like one hangout session that we put into 2000 words.

Nik: Yeah.

David: How have you thought about becoming the direct to consumer guy in New York City for fast-growing startups? I think this is a really good place to end the conversation. You started off doing marketing for a fast growing water company, Hint Water. And then you sort of worked your way up through Vaynor Media. And then now if someone wants to launch a direct to consumer company in New York City, they’re going to come to you first. How have you thought about developing that brand and that reputation?

Nik: I haven’t, that’s the funny part because everything that I try to put out on the internet is never like, oh, this is a very great thought leader quote, or, I need to write one article a week or I need to put out a blog. It’s more just, if I walk up, you know, some, some weeks I have really good meetings and I’ll walk out of meetings thinking, that was a really interesting insight. I’m going to put that on Twitter because I think a lot of other people would benefit from it. Or, a couple of weeks ago I did, we’re actually a couple of months ago Trends by The Hustle, asked me to do this presentation on how I think about launching a D to C brand. And it was basically just a massive compilation of examples from things, like just work I’ve done over the last couple of years. And also curating really good examples of what I thought other people did really well.

And it ended up being like a 40 page deck. I gave that presentation live to The Hustles audience and I realized the feedback was overwhelmingly positive. And so then when I went to Sara’s podcasts, for example, I said, I’m going to take the exact same deck and I’m just going to make it like completely open to the public. And I gave it to everybody who listened to that podcast. And then I decided a few weeks ago that I’ll just put this out on my Twitter and whoever wants to see how I think about launching a brand can just enter their email here and they’ll get an email with a link to the deck. And it’s never been like, oh, I need to put out this or I need to go make sure that I’m mentioned in these articles or I need to like, there’s, there’s no pro activeness to it at all, which you’ve probably come to learn.

In fact, I’m probably extremely lazy about it. And it’s just like, whenever something, if I come out of something and think that’s really cool, or that’s a great insight, or, like sometimes I’ll have a glass of whiskey and I’ll be writing copy. And I’ll just think, the best copywriting comes from two glasses of whiskey. I’ll just put that out on Twitter. And like all these random, like tips and tricks that I kind of pick up on myself or become aware of. I just put them out in the public and then other people see that and they just kind of gravitate toward it because they’re also, they might be the same space. They might be a reporter in the space, they might be an investor in the space, they might be another entrepreneur in the space. But it’s more just building, I guess you could say, it’s kind of like building in public where anything I do or any kind of insights that I figure out, I just put it out on the internet to kind of just share with the world as well.

And I found that, initially I used to think like, okay, if I take my best ideas or the things that I’ve learned that have, just crushed and put them out, then I’m essentially creating my own competition. Or I am stopping myself from getting to the next level because somebody else might do it faster than me. But it’s actually quite the opposite where, if you put it, like we actually wrote, we wrote that article, the Customer Acquisition Pricing Parade, and two weeks later, we were in an office with Emmett Shine from Gin Lane. Like there’s no way we would’ve just been able to say, “hey Emmett, can we grab a meeting?” He would have been like, “yeah, in three years, maybe.” But like you put out your thoughts and in just kind of, I put them out in a very candid and authentic way and you just kind of find this really, you find yourself immersed in a very interesting community or a community builds around it, which is also really interesting.

David: Amen man. Well, awesome conversation.

Nik: Till next time.

David: I look forward to jamming on these in person sometime soon.

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