Controlling Your Company's Growth

Controlling the Growth of Your Company

In this episode of Startup Hustle, Andrew Morgans and Dave Fink, Founder and CEO of Postie, dive into what it really means to be in control of the growth of your company. Andrew and Dave share some hidden gems about how a business can grow with the right marketing tools in place.

Covered In This Episode

Customers prefer direct mail more than any other marketing channel. To take advantage of this preference, Postie was created, helping businesses to run multiple direct mail campaigns.

Join Andrew and Dave as they talk about marketing campaigns and the importance of controlling the growth of your company.

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Highlights

  • A little back story about David Fink (2:46)
  • David’s entrepreneurial journey (5:08)
  • Stepping into digital and internet marketing (9:59)
  • Using direct mail to reach and engage consumers (14:58)
  • Reinventing direct mail (18:02)
  • The importance of controlling your company’s growth (26:00)
  • How Postie can help businesses grow using modern direct mail campaigns (38:33)
  • Summary and wrap-up (43:39)

Key Quotes

I’m rethinking how to talk to brands, about their scaling problems. You know, first they’re there to get you to prove that you’re gonna help grow them. And now I need to tell them that, hey, after I grow you, when you don’t think I’m gonna grow you, and then I grow you, you’re gonna have these problems, and so that you don’t let me go. – Andrew Morgans 

When Dollar Shave Club launched, which was, you know, a blend of great storytelling and, and being really thoughtful of distribution channels and whatnot, you know, it blew the roof off from a customer acquisition perspective. And while there was inventory available there, they weren’t prepared for customer service needs, they weren’t prepared for packaging and shipping needs. – David Fink

And then other channels are not walled like, like direct mail, and to, you know, for us, it’s a really impactful channel, because A, it’s bigger than Facebook, and Google, every individual is reachable through their mailbox, as long as they have an address. You don’t have to wait for that person to engage, you know, with their news feed, or their Instagram feed or whatnot, so there’s a lot of great quality data that you can use, and mine from your existing first party, you know, customer data and insights that you have on those individuals can engage with your brand. – David Fink

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Rough Transcript

Following is an auto-generated text transcript of this episode.

Andrew Morgans 0:00

Hey, what’s up, Hustlers? Welcome back. This is Andrew Morgans, host of today’s episode Startup Hustle, covering all things eCommerce, Amazon, digital entrepreneurship, mindset growth, you name it, founder Marknology. And today, I’m excited about our guest because, specifically, we’re going to be talking about controlling the growth of your company. And as you guys know, like Marknology being in the spot, where we’re helping brands on Amazon and a lot of the fun craze around aggregators, buying brands growing them fast exiting. It’s just a fun time. And I think it is coming to the service side of eCommerce and what we’re doing, and I think even today’s guests can jump in on some of that from even a different angle, which I think is going to be really cool. So before I bring it to you, I would love to give a shout-out to our sponsor for today’s episode. Gusto has modern solutions for modern HR problems, whether it’s talent management, payroll, or onboarding tools. Gusto HR platform has it all for you to be smarter than your competitors. Try a three-month free subscription now. Just sign up at gusto.com backslash Startup Hustle to get started. That’s gusto.com backslash Startup Hustle. I have been using Gusto for two, maybe three years now. And honestly can’t remember life without it. So without further ado, shout out to our guest, Dave. Welcome to the show, Dave. Thanks for having me. Of course. Sorry. That’s a mouthful for me. Thanks, some of that out there. We were talking a little bit before the show. And I think my head was getting ahead of my mouth a little bit. Just excited, too excited to have you on the show and bring some value to our guests today.

Dave Fink 1:41

Look, I love these conversations. Yeah, I talk to other folks who kind of share the same challenges, potential successes, kind of think about the world from a growth perspective. It’s always a pleasure.

Andrew Morgans 2:00

Yeah, before we jump into some of the fun. You’re in Austin. You’ve got some rain and sleet going on.

Dave Fink 2:06

This is a fact. So we, my family, moved to Austin from 20 years plus in California. And I think we discounted what weather was like we’d heard quite a bit about, you know, the heat in the summer. And my sister’s family lives here. And we’ve heard all about 107 degrees for 30 days straight. I didn’t know that it got cold here. And it was a bit shocking. And last year, we moved in just in time for the big, you know, snowstorm, which was super fun. And little fact is different cities can handle weather differently. This doesn’t seem that rough. I live in LA for a long time. But I also grew up in Chicago, and yeah, there we go. Yeah, big snowstorms didn’t stop us. And here, schools are closed for two days, because, you know, it’s a little wet out. So

Andrew Morgans 3:01

yeah, I know. I was there for that snow Pagosa we were laughing about it kind of before I have a jeep. So the roads were like, you know, I crossed over into Oklahoma on day three because I didn’t have water or food and was out of cash. Honestly, like my three days in Austin because I was just like, just the circumstances led to like, ATMs don’t work, and I only bought so much cash and like, you know, those kinds of things. So I was just like, Screw it. I’m gonna drive like 30 miles an hour and go to Oklahoma. And as soon as you cross over and Oklahoma, it’s like they treat you know snow completely different they got trucks you know, salt on the road, like, everything’s good. So it’s just a Texas thing in regards to the budget and understanding how to handle that, but um, just a fun shout out like I, you know, hope you don’t get four or five days without internet or maybe that you’re wishing for that. But for me it was a joke because I was trying to get ahead and go to Austin instead. Got a week behind almost. So

Dave Fink 3:56

I wished for a week without internet.

Andrew Morgans 4:01

Yeah, it’s like dark ages in the worlds that we live in. But yeah. Usually before we like go into the company you’re doing now the project you’re on now and you know, bringing that to the, to our listeners. I like talking about just yourself and kind of your mindset and your motivations as a young man, like you know a little bit about your story, if you don’t mind. Like we’ll start with just like Did you always know you’re going to be an entrepreneur or a founder? Or do you just kind of like fall into it?

Dave Fink 4:28

So I definitely did not always know that but pretty early on in my in my career, I kind of did think I did recognize that. So I graduated college with a degree in psychology and focus on humanities and classical literature. And you know, I was gonna go off and save the world and worked for a service agency in Chicago that worked with pretty needy families, and kids and I love that one point I started working towards a PhD in Clinical Psychology and, and just fell out of love with, I think the path to getting kind of the degrees, you needed to be in that field. And I had almost like no applicable real-world business skills whatsoever. And just had a friend that worked at a internet, consumer internet marketing technology company in just probably 9099. And he encouraged me to send over my resume, because there were a lot of entry-level positions, and I had an opportunity to get some exposure in the business world, and set up a resume. And two weeks later started, and I was on my path. And really what happened that led me to entrepreneurship is, throughout the first couple years at this company ended up migrating into a sales role, and had the opportunity to, you know, to engage with, you know, dozens and dozens of consumer brands or consumer-based businesses, and some of those businesses were, you know, big fortune, you know, 100, CPG, manufacturers, and retailers. And, and those sales cycles were fairly uninteresting, and inspiring to me very linear. Yeah, it was all about, you know, one foot in front of the next, there was nothing disruptive happening, yeah, my conversations from one month to the next all kind of look the same. And then the other portion of the book that I got to work on were all these kinds of emerging direct consumer brands and lead generation platforms and online marketing-based businesses. And in those companies, I would, you know, I tell the story, often, in fact, I would like show up to sell, you know, you know, into one of these companies that I’d be meeting with the founding the founders, and, you know, maybe a 20 person in the office. And, you know, they had probably poor lighting and card tables and card folding chairs. And I, you know, I would come back six months later, and they’d be in a different office down the hall that was three times bigger, and maybe they had some real furniture this time. And I’d come back a year later, and there’d be, you know, Porsches and Ferraris, you know, in all the parking spots. And, and it wasn’t, you know, the wealth accumulation. But it was this idea of like, of, like, unlimited potential, limitless potential, and growth, and I was amazed by newness. And so I just I, over the next, you know, six or seven years that I was selling, I really use that as an opportunity to learn, you know, my way around, entrepreneurial, you know, chefs, and engage in-built relationships with all these amazing founders that were doing cool things and kind of learn from, you know, one step removed. And then, you know, I was just hit by that bog, and I

Andrew Morgans 7:53

knew that Chicago was that LA. So

Dave Fink 7:56

the company was based in Chicago, it was, it was called Cool savings was one of the first big lead generation platforms. And, and I moved into sales, actually, in the San Francisco office, I had the opportunity to try something different and help them open that office and so a couple of years and moved to San Francisco, and then a few years later, actually, with the same company moved down to LA

Andrew Morgans 8:19

was just out of curiosity, thinking about, like, you know, the early 2000s. And I’m 35. And but I was involved with computers, even in Africa, like at a very, very young age, like, when I had one of the first you know, in-home, personal computers, and, like helped me build them. And, you know, those kinds of things. I was always around computers and the internet, and I didn’t have a game console. But dad had a good computer kind of thing, you know. So like, I still, like kind of remember even like, when whenever we were trying to get music or games, we were in like, you know, we were doing rare files with 100 different files, you might grab images and compile them all together. And you know, I was I was dabbling. But what were you What were you guys selling in regards to, like, I know, all of the stuff that’s applicable today, you know, for lead gen and stuff for consumer brands. Amazon being a big one, even, but what were you guys, what were you selling at that time? Was your conversation with these brands?

Dave Fink 9:19

That’s a great question. And I can cover a bit there. I mean, first of all, it was really the awakening of digital advertising and I mean, it’s crazy today, but I remember having those conversations well first of all, I’m calling to some of the bigger corporations and ask like, is there someone there that handles your internet marketing? Like there were titles there was no LinkedIn there was no way to find this out. So you call the switchboard, and it was always like, I think you know, Tommy or Betty. You know, often the dungeon or the quarter in some back office is like playing around with that stuff like, like he or she doesn’t have any budget. But yeah, I’ll put you through that. I mean that like, that’s it, I guess I would say like, it wasn’t that long ago. But I guess it was kind of a long time ago at this point. And that happened, that really happened. And then I remember having conversations about how you’re like, like, you really should be allocating some of your traditional media budget to digital, you know, it’s measurable, you can have a one to one relationship with your actual customers, and especially selling into brands and sold mainly through wholesale, when CPG, or clothing and apparel, foods, products or services, you know, that was unheard of, right. And it all sounded good. But the reality was, like, even though it was just, you know, budding world like that was the fact that you could use some data and you could be targeted, and you could, you know, advertising the toy, your message, rather than relying on, you know, how the supermarket was going to promote your product, right, exactly the window or whatnot. Then, the product that we were selling, it actually ranged. And the business started out as actually a web destination to for where we distributed printed home coupons. And we discovered on the patent on the first UPC barcode, you know, print at home coupon technology. And, and that was actually something that was really appealing, you know, as a day when mostly, you know, coupons were distributed through newspapers and FSI and really traditional distribution methods. And this was a way to be a bit more targeted. But we actually it was more appealing to consumers, I think, from the brands themselves at that point. And so we built a really big audience, like we were, you know, an early property on the web that drove lots and lots of traffic and high-quality ads, or back then, and mainly soccer moms, that were, you know, the household shopping decision makers. And so what ended up happening is that, you know, we, we couldn’t really monetize this printed home coupons solution, but all these brands started coming to us and saying, like, hey, you know,how to move traffic around the web, you’re driving, you know, registration engagement with all of these high-value prospect consumers, can you help us, you know, build our own databases. And so that turned into, you know, a number of lead generation tools, and, and, you know, functionality to help brands build their own databases. And so, I love it. Yeah, I don’t know if I could say, like, we invented lead generation, on the web, but we were certainly there in the very, very pioneering,

Andrew Morgans 12:35

you know, and I think that’s where I’ve sit to, like, I’ve said that before, like, there might have been 10 years ago, when I was, you know, that’s about how long I’ve been in the Amazon space. There’s people that are 15 years, you know, 20 years, what we’re talking about, you know, 2001 99, you know, we’re around 20-year mark. And there might have been people selling on Amazon, or putting products or building a label for Amazon, but there wasn’t anyone that I knew of that was doing services for others, meaning like, there could have been people doing lead gen, or people like, you know, doing internet marketing well, but were they doing that for other people, that’s really where I feel like, I feel first, or at least industry-leading, you know, part of that first group of pioneers, so to speak, creating agencies around helping brands navigate Amazon and the marketplace and how it plugs into everything else. So I can definitely relate to that. It’s exciting. But it’s also like, you have this knowledge that you’re like, no one else is necessarily on board with, you know, and you’re like, This is a crazy, amazing opportunity. I mean, I can remember, you know, as like, being able to my dad was always forward with the computer, he was definitely a couponer like, you know, Best Buy rebates or micro centers, or like, you know, you’re always doing all these rebates and $50 back and mailing them in. And I can remember, when it went to that we were printing off stuff for the first time, maybe instead of like getting them out of the newspaper. So that must have been around that time. It definitely was a time where it went to like, Oh, this is something you can pray. I don’t even think about it being printing UPC technology. But yeah, the QR code at the beginning, right.

Dave Fink 14:18

Sure. Yeah. I mean, it’s funny, you know, 20 some odd years later, you know, in, you know, at post you were talking about leveraging modern technology, but to reach consumers through a more traditional channel, direct mail. We do get that question from time to time, which is, you know, how do you handle measurement? Can we print, you know, barcodes or QR codes on pieces of mail? And, and because, you know, everything that we do is quantitative and measurable. You know, we spend lots of time and resources and energy you know, optimizing towards the most clean methods of measurement. And, and at least in the US, the UK QR codes still are not a widely used It’s a form of media engagement tool, I thought maybe that there’d be some movement with restaurants and going menu lists and in training, you know, diners to use QR codes to scan menus, or open up menus on their mobile devices, like maybe that would drive some familiarity and consumer behavior change. haven’t really seen it much. But you know, I think that that probably plays into a lot of what you deal with, which is, there’s never anyone. So you know, one way to engage your consumer or one way to accomplish marketing goal, it does have to be a sophisticated, thoughtful blend of, of many different,

Andrew Morgans 15:40

you know, and like, this is like, I love this combo, because I can talk to him as other Amazon agency owners, or top Amazon sellers doing 500 million, or whatever the case might be. We can talk Amazon ads and Amazon advertising, but like when I’m talking to brands, it’s really what are all the other ways, you know, off Amazon, that we’re pulling customers in that we’re having that complete, holistic ecosystem with E-commerce that we’re getting those extra touches, how are we standing out from our competition? You know, I am a huge fan of direct mail, by the way. So this is this is good, I’m in your corner. But you know, these are all the things like when a brand is coming to us and saying what are you doing? And I’m pushing it back and saying, Well, what are you doing off Amazon? Like, what, let’s talk about this, bring all this together? Let’s try some new things. You know, it can be meetup groups, like you know, it can be direct mail, I love getting mail, the sign a bill or credit card offers these days, like truly, like if it’s a handwritten letter or a postcard or something, I’m like, wow, this is incredible. Just the day I’m in at my age, like I don’t get mail very often, you know, so if it is it feels like it’s feel special, it feels cool. Same thing with people in pack, like opening a package, you know, on Amazon, they can do the bare minimum and just have it in a polybag or brown box, or it can be this experience, you know, getting something and feeling special. So yeah, you’re walking my street to all of my like, I wish all my Amazon brands are the brands I’m working with, we’re listening today, I’ll make sure they get this one. But you know, huge opportunity, even as whether you’re an agency like myself selling my services, even with direct mail, or the brands themselves that are selling more goods? Huge.

Dave Fink 17:22

Yeah, for sure. I mean, Amazon is a particularly unique, I think you’re a beast in many regards. But, you know, we talk a lot about the part of the impetus between your behind launching posts, and building this kind of, you know, marketing automation layer to make direct mail behave more modern. What it wasn’t that, you know, our, you know, our passion stemmed from like, let’s reinvent direct mail, it really was a reaction to the walled gardens that we all rely on search and social, and those are beasts. And in the data is out there. I think the last last number I heard was 85 cents of every dollar spent in digital media go into Facebook or Google. And they behave like 10,000 pound gorillas as well. Some, you know, yep, platforms behave a little bit more noble than others. And that’s a real kind of bind for a brand. If you’re too heavily loaded on a channel that historically changes their algorithms and

Andrew Morgans 18:28

microwaves Amazon PPC is top of mind for us. Yeah,

Dave Fink 18:32

yeah. And so interestingly, specifically, with with brands that sell on Amazon, we’ve seen this interesting, this interesting kind of data point, which is, I would say it comes up a few times a month with clients that are new to direct mail that are engaging on a post the platform, we’ve deployed some campaigns and their initial reaction. Yeah, most of the time is very positive. Every once in a while a brand comes up and starts saying, hey, the results weren’t what we expected, the conversion rate wasn’t in line with what we would have expected the return on ad spend wasn’t there. And, and more times than not, when we dive in, we find out that they’re a brand that is selling on marketplaces, specifically Amazon. So we have methodologies to run attribution on conversions that took place on Amazon, not just on their own website, and all of a sudden, we find that the actual results were tremendous. They just had to prescribe, you know, purchases on Amazon because there is some portion of consumer behavior that instead of starting on a brand site or on a Google search starts on an Amazon search. And an Amazon happens to be quite good at Yeah, at indexing their own product page results on on Google

Andrew Morgans 19:43

and trust and convenience and like you know, all those things like and I think even before Amazon’s beta attribution, like you know, became available where you can put pixels and you know, understand where your traffic is coming from. We were trying to do things like you know, face For god’s with a redemption code or, you know different things like that to be able to track the attribution, we knew traffic was coming from, you know, big Facebook operations or Instagram or Google, just being able to say, hey, how much of that is coming? Was the difficult part. But there’s always going to be this layer of like people forget. Or at least I was here for it. And I’m an Amazon advocate, you know, in that way. So it’s like it, I remember, Amazon brought trust to e-commerce, for the record, like, you know, they were the ones that said, hey, without having to hassle with any of these websites, or phone numbers or whatever, we’ll give you a refund, no matter what, and you’re gonna have your package in two days, we’re gonna make it free for you. And you know, the reviews are truthful. And you know, even when, like, you know, Forbes, The New York Times came out with some of it being like, we think some of this is fraudulent, you know, they cleaned millions and millions of reviews and brought in a third party. So like, they’ve always been consumer focused, like customer-focused. And because of that, to me in a big way, they got, instead of having everyone with all these different policies and company culture, essentially, in websites, they brought some uniformity and trust eCommerce, which has paved the way for a lot of other stuff, whether they’re still they’re not I feel like they were the ones that brought like, I’m gonna order because no matter what I’m getting my refund, if it doesn’t work out, you know, kind of thing.

Dave Fink 21:18

Yeah, I don’t just agree with that. I mean, Amazon has, I think, continually impressed more than any other big tech company. And I think you nailed it, right, which is the difference between when you look at the Titans, there are a range, right, like, like, I think generally Google does good work. Obviously, we love their product and services, but they think they generally have a privacy-first consumer-first approach. They also know what they’re doing from a monetization perspective. You look at Facebook, it’s the complete opposite. Like Facebook’s not in the business of catering to consumers, they’re there. They’re there. Yeah, you can like image drug dealers, right? Like, there’s no shortage of, of content and data that’s come out to show the negative effects of self-esteem on, you know, teenagers, or even adults and the addiction and addictive quality. And

Andrew Morgans 22:12

everything about them is like connecting to other stuff, right? It’s always about, like, let’s make this easy for you to connect to Shopify, or to connect to this login, or this bank or this, you know, so it’s all about the data and connecting it, you know, making it easy versus safe and good.

Dave Fink 22:26

Yeah, but it all stems from hooking, you know, hooking, you know, users into fairly addictive behaviors. Yeah, Amazon, I think is more on the Google side, where, where they’ve been mission-driven. From what I can tell him the philosophies being it’s the consumer first we have, you know, I think they’ve had some issues with how maybe they treat employees, but it was always, I think, well, intention to serve the consumer first. And so you think about all the experiences that Amazon’s rolled out that we all said, like, no way this was gonna happen? Right, Amazon Prime and two-day delivery, everything same-day delivery, or one-day delivery, like, like, it’s insane, right? Like, in Yeah, I guess that’s, to some extent, an addictive behavior, but not in such a bad way.

Andrew Morgans 23:16

Because it’s time back to be with kids. Like, you know, there’s a lot of, I think, just like social media, like, you know, Amazon isn’t, it’s a robot, really, when you think about it behind, that’s why if there’s anything like, you know, with employees or whatever, it’s because it’s a robot. It’s a robotic machine, like with really small teams, and, you know, in a big way, but it’s not, it’s like, you know, I think a lot of times about, well, It’s not that I’m above getting my groceries or above this or that, or whatever, I would just rather have those two hours back and give them to my dog or my mom, or my grandma, or anything other than being in you know, Walmart walking around grabbing groceries,

Dave Fink 23:51

I get sucked into that all the time to you and be in being in the space. I do. Like, I think 30%. So I think about these brands, and I liked that. If I ordered your Amazon yarn protected through the return policies, as you said, I know I’m going to get them faster. I know, I’m not going to pay for shipping or return shipping, things that are better for me. But then I do sometimes feel bad that those brands if I order through Amazon have to pay the Amazon tax. But then I’m reminded that if there were sold selling through traditional wholesale, they’d probably be giving up 50% of their margin, not 30% of their margin at the end of the day, look, I think the expectation is that, that your life is hard. There is very little time. I think maybe people who had the luxury of working from home during COVID learn that right? You think you’re working from home, you eliminate your commute, and all of a sudden you have all these hours available to film. And at least for me, I look around at the end of a week. And I’m like, like I’ve literally lived in the same house and work in the same house all day, every day. And I saw my kids, I think less than when I was had some work-life separation. So then you translate that to like, am I going to use Google to get direct auctions before I leave the house to ensure that I don’t get lost, like, Absolutely, I’m doing that. And by the way, if I can do you open the app and know exactly how to search for the product that you’re on Amazon, you get it within two days. So I don’t have to drive the store or I have to fumble with another third-party website. Like, like, darn straight, I’m doing that. And I don’t think those are bad things.

Andrew Morgans 25:20

You got to pick and choose for sure, you know, got to pick and choose, like, convenience over you know, a lot of people think, Oh, I’m just buying from Amazon, well, there’s a lot of small brands that survived the pandemic, because the efforts we did for them on Amazon, you know, and then getting exposed to customers all over the US that they wouldn’t have found if they hadn’t been on Amazon, you know, so there’s a lot of good, and I think just like social media, there can be I follow a lot of great accounts, you know, and counsel inspire me way, before I had a mentor, I was like following some, some leaders that like, you know, it speaks some, some wisdom or some positivity in the day. And, you know, I was consuming that kind of stuff and feeding my brain. And so, you know, there’s positivity, I think, in anything. You know, just like, you know, direct mail is dead, or, you know, emails here, and it’s coming back. And it’s better than ever, because it’s just instead of it being overdone, just like social media can be overdone, or, you know, any of these mega companies. You know, it comes back to center kind of feels like a lot of times and really finds the sweet spot. And really like the best companies that are producing at a high level are the ones that remain. I want to talk on our topic. You know, as we round out, just kind of the show, we’ve already been talking a little bit, but I got to make sure we stay on track here. Before we do this, this show wouldn’t be possible without our sponsors. So thanks, again to Gusto for showing up for us. Are you tired of long hours because of payroll? Save more time with Gusto. With its automated processes, you can file taxes and manage payroll in a matter of minutes. What are you waiting for register at gusto.com backslash Startup Hustle to get a free three months subscription. Now that’s gusto.com backslash Startup Hustle. I’ve been working hard, you know, since my company’s creation, really to be as much in the cloud and be as remote, you know, as possible and efficient as possible, so that we could stay small, and I could give more back to my people Gusto is a big part of that. Alright, Dave, so the title for our show, is controlling the growth of your company. And I know, we’ve been talking about some other stuff, I honestly, like I get excited getting people like you on the show, because I can talk to you about anything forever. But controlling the growth of your company. You know, in that, in that, in that realm, you know, Marknology is growing a lot, we’ve doubled in the last couple of years going, you know, we’re working with brands all day, every day that are growing actually, like I’m rethinking how to talk to brands, about their scaling problems. You know, first they’re there to get you to prove that you’re gonna help grow them. And now I need to tell them that, hey, after I grow you, when you don’t think I’m gonna grow you, and then I grow you, you’re gonna have these problems, and so that you don’t let me go. As an agency owner, I need you to plan for these. Now, you know, whether that’s the E-commerce manager, they put in position because I was talking to a founder, CEO, and now they’re trying to scale and they’ve got somebody here two years later, after we’ve been growing, that isn’t up to speed, all these kinds of problems, they never ran, you know, trying to learn trying to position. Policies, let’s talk about that as talking about controlling your growth. You’ve been way before this company, you’ve done a lot in the space in business. What are some of the keys like, you know, food for thought key things that any founder should think about? Whether it’s that the company hiring policies or hiring Marknology? Or is it’s our companies ourselves? What are things you need to think about? You know, as you’re growing so that you don’t, you know, hit catastrophe?

Dave Fink 28:47

That’s a big, big question. Yeah, yeah, we could do we could do a whole ending, you know, weeks where the content on it, I would probably break it down into a number. A few buckets, and then, you know, start at the macro. You know,

Andrew Morgans 29:07

have you been let me be specific. I’m gonna interrupt you just real quick. Let me be specific. Okay. So have you been part of a company now or in the past where or worked with one where growing too much, like internally or whatever was a problem?

Dave Fink 29:26

Yes, I wouldn’t say that. It was a catastrophic problem. But look, I remember the launch of Dollar Shave Club. You know, that’s such Yeah, that was such like a textbook example of success and like the challenges that unexpected the fast success brings, but I was yeah, this is over a decade now ago, but, but I was a partner at a tech studio that was fortunate enough to make A seed investment and kind of nurture long like Dubin, who was a first-time entrepreneur, obviously brilliant marketer in mind and very capable individual. And, you know, he had this idea of bringing a really kind of fun right approach to launching and brand positioning his direct-to-consumer razor company going after a monster Yeah, incumbent in this space in July, and none of us expected, yeah, we were all entertained by the marketing. And we and it was, it was just the beginning of social media being what it is, right, YouTube was just becoming a place where advertisers realized there was value of engaging with consumers, and that, that it was a place to invest in content creation, storytelling, Facebook was, you know, barely a monetizable ad platform. And, and in when, you know, when Dollar Shave Club launched, which was, you know, a blend of great storytelling and, and being really thoughtful of distribution channels and whatnot, you know, it blew the roof off from a from a customer acquisition perspective. And while there was there was inventory available there, they weren’t prepared for customer service needs, they weren’t prepared for packaging and shipping needs, you know, within I think the first month or two, you know, we were all like literally using Zebra printer light printers and packaging, you know, razors, from our from the office space, you know, it’s like up and down every aisle, we’re just like labels after labels, record labels, after labels. Nobody expected it, it was so cool album, and there was a lot of potential, you know, risky, we could have alienated you know, every single customer that engaged with us disappointed in and how long it took to ship and and whether we got their product to them or not. Mike handle it just I think beautifully both by scaling his operations, but also by taking a consumer first approach and very quickly figuring out how to staff up customer service hotlines ended up turning that into you know, I think a story that every you know, every ecom one on one business class has has you know, studied now but that was there’s danger that right yeah, then you know, another example you know, got to be funny with the the founders over a Casper mattresses. And and there’s some really fascinating stories that I wasn’t there for. But the founders had shared with me that I believe to be true where they were oversubscribed, and mattress manufacturing does not happen overnight. They had no I think just they were blown away with expectation or by the initial consumer demand. And and I remember this crazy story that I hope it’s true, which is that, you know, Philip over there and team would as an apology for being two or three weeks delayed on a mattress would would add their own costs by and send it you know, customers who had pre-ordered air mattresses, you know, and you you kind of laugh that you’re like, well, so I’m gonna order to real mattress and icing in the air mattress. Well, there’s social media blew up with positivity saying like, what an amazing company, I just got this $100 air mattress because they’re, you know, deleting shipping me my mattress, and that built a ton of goodwill, which really launched that, you know, I think that the goodwill around that business and created champions and influencers that were really rooting for them and making lemon lemonade out of lemons. But those are those are like, unexpectedly, you know, good it for the most part problems, but problems nonetheless, that can happen if you’re not in control of your growth.

Andrew Morgans 33:45

Yeah, I know on Amazon is, you know, it’s it can be very practical. But running out of stock is something that is bad for the customer. And so Amazon penalizes brands for that, you know, so with all the issues we’ve been having, since the pandemic with supply chain, you know, it’s now the whole nations aware of it, I feel like the year of 2020 being in the world in the space. I mean, I was just about to freak out with how fragile the logistics and supply chain was. And now the world knows about him like cool, it’s not my problem to tell everyone. But you know, when you knew that before everyone else was you’re just like, oh my god, if they knew what was happening right now, you know,

Dave Fink 34:22

I got on an airplane and drove to another city to pick up a car. I made two weeks trying to find and I wasn’t gonna mean that particular right I decided I was gonna get into mountain biking this this year. And it took me a couple months to find you know, any one of a dozen brands version of a kind of a range of bike that I was looking for. Yeah, we certainly everyone can be experienced and forgot to have going a week without toilet paper or paper towel at the beginning of a pandemic. It does sometimes us as marketers we do take for granted the fact that, you know, product manufacturing supply chain logistics just kind of work. But I can tell you someone who’s been involved in, you know, over 70 different types of consumer brands at this point, like, that’s the hard stuff.

Andrew Morgans 35:12

Yeah, exactly. I just had a call for this one, you know, a big brand, making a transition, even from like a reseller, where the, you know, distributor was the one selling their product to go and direct themselves as the manufacturer and walking them through of all of the transition, like the supply chain, and the warehousing. The three PL is the one that I’m just like hammering home because I’m like, you know, if we are going to hit sales projections this year, it will be because you guys don’t mess up supply chain basically, like, you know, any regardless of what ideas we come across with marketing or advertising strategies and genius we deploy supply chain is that, you know, at the core of everything,

Dave Fink 35:52

and do most of the brands that you work with rely solely on Amazon fulfillment as well, no, okay.

Andrew Morgans 35:59

No, no, I would say, you know, FBA prime is a big part of it, but an advanced strategy so like any brand that’s maybe got their two feet under them kind of thing. You know, they have a three PL in place, just like website fulfillment pick Pack Ship where if FBA goes out of stock or pandemic happens, and only essentials can be sent in or Amazon’s limiting their inventories, you know, we can support those right away with, you know, either free shipping right from the brand, or, you know, something comparable to put us in play where we’re never out of stock. You know, so we were like, wrapping up, I feel like I have so much I want to say, so we’re going to have to have a part two. But one last question would be like, also, you know, I want to round it out with this one. But one thing I’m like, I built a lot of my brain on reputation, inbound marketing, I don’t do a lot of outbound. So it’s something I’ve been dabbling into in the last year, simply because I want to control my growth in a different way, you know, instead of just waiting on referrals, and like economics, and, you know, we grow, we’re growing as fast as we can almost that way already. But wanting to be able to control those levers. And maybe that’s deploying a direct mail campaign, maybe that’s deploying, you know, an email outbound or LinkedIn strategy, or YouTube or something like that. I want to be able to be in control of my leads and my sales in that way, even if I have an amazing inbound pipeline. And so that, you know, that’s something that I’m me and my team are trying to learn, we haven’t had the need for it. But it’s something that instead of just having to take the flux, we want to be in control of when our brand, you know, gets sales and when it’s our time, and when we’re ready versus when you know, it just is happening kind of randomly. Let’s speak to that just a little bit, you know, from the other side of the coin, maybe not growing to where you’re breaking that way, or you’re having to push the pause, but like being in control of your growth, so that you can grow when you’re ready.

Dave Fink 37:53

Yeah, so I think that plays really nicely into a thesis that we had, you know, when launching Postie, which is, there are really kind of two types of marketing channels or platforms these days, there are what I refer to as the walled gardens, the walled gardens are where you have to go and pay someone attacks essentially, to reach an audience in their world. And that’s Facebook. And that’s Google. Right? Yep, Facebook controls the marketplace, they have all sorts of levers that they can pull, you share, they give you direct access to buy ads targeting, you know, very sophisticated within their environment, but you are, you’re paying Facebook to reach you Facebook users while they are on Facebook. And same thing is true with Google. And then there are other channels that that are that are not walled gardens, no one owns, you know, the audience, you’re not relying on someone else with the same degree, you know,for us, that was a big appeal of direct mail. Direct mail, everyone has the same access to the US Postal Service, they don’t tell you, you know, we’re going to charge you more than we’re going to charge you to send the same you know, rates are, you know, are they can increase with inflation, but they’re generally consistent. They’re not up and down based on how much volume of mail the US Postal Service’s sending, you know, today versus tomorrow. And therefore, there is a lot of predictability in that. And what that means is that you can be you can, you know, you can rely on the efforts that you’re putting into testing and optimizing the channel to hold next month and the month after that, and the month after that, whereas we’ve all had that experience of thinking where, you know, so smart because we’re optimizing, you know, Facebook ads, and then all of a sudden they change the algorithm and change the algorithm or even you know when we’re being really targeted in the early days of our brand and our budgets are small. You know, we can be really efficient, and then all of a sudden we want to delve. Well, our budget to grow, and now all of a sudden, we’re, you know, we’re paying more to reach those audiences because they’re more people bidding for the broader set of impressions. But also, you know, it, we’re going after audiences that are harder to convert. So now you’re paying more than you have for these audiences that are converting at a lower level but probably have a lower, you know, projected lifetime value. And, and then we’re like surprised why, you know, our metrics changed, you know, this quarter over last quarter, and then, you know, rinse repeat the quarter after. With that being said, like, you do have to efficiency matters. And so if you can reach high volume, you know, highly targeted individuals on a specific platform, even if it’s a walled garden, your chances are, that fits a need in your marketing stack. But if that’s all that you’re doing, you know, I call it the kind of asymptotic approach to profitability, like, you never get there. Because every time you think you just need a little more scale to get to profitability, you find that scale, but the efficiency of the customers and the value of the customer, you know, increases, or the efficiency decreases, as does the value of those customers. And so you need to offset, you know, a substantial portion, I think of your media mix and your strategies, with things like earned media, you might not have as much control over distribution for media, but it’s super efficient. And then other channels are not walled like, like direct mail, and to, you know, for us, it’s a really impactful channel, because A, it’s bigger than Facebook, and Google, every individual is reachable through their mailbox, as long as they have an address, you don’t have to wait for that person to engage, you know, with their news feed, or their Instagram feed or whatnot, so there’s a lot of great quality data that you can use, and mine from your existing first party, you know, customer data and insights that you have on those individuals can engage with your brand. But also, there are great third-party resources to be able to do things like build predictive models from the look-alikes and programmatic approaches to audience development. And then, you know, it’s all, you know, the cost is consistent, and generally, you know, fixed with the rare, you know, annual or every other couple year, you know, postage rate increase, which is usually fairly immaterial. And the last piece is there’s no direct measurement, you know, who you’re reaching through direct mail if you’re an E-commerce brand, in particular, you know, who you’re shipping the product to, and you can triangulate that, you know, those data points to have a very clean read on, you know, which ads in which audience segments are performing. So you have tremendous reach, you have, you know, great quality data, you know, and ability to be very targeted, and you have a measurement, and you put those three things together, and you realize you actually can break away from Facebook? Yeah, there’s a reason that $50 billion a year is spent in the direct mail channel, just hearing. Yeah, so

Andrew Morgans 42:59

I mean, single point of failure is like a very common, you know, like, that’s been around since the beginning of time. But it’s so true, you know, dependent. I know so many brands depend on Facebook ads, and the algorithm change. They are dependent on just Amazon PPC to grow their brand. And so since sending traffic from Pinterest, or from blogs, or from YouTube or from everywhere, you know, a little bit here a little bit there versus one spot, okay? A bunch of aggregators come into this space and dump a bunch of money into PPC because, operationally, they don’t know how to grow sales. And you know, that seller is struggling to scale. I think Amazon has become number three, as far as the third biggest advertiser. So they’ve passed a few. They’re growing because they’re starting to do off Amazon stuff with Amazon display advertising, and then they bought twitch. So Twitch ads, and you know, all that kind of fun stuff. But the same kind of a walled city, in that regard to absolutely awesome stuff, Dave, I wish I could keep picking your brain, but we were up on the hour. So we have to wrap up. Before we do all of his tags, LinkedIn websites to you know where to find them, where to contact, where to learn more about posts, where to where to get in contact with Dave himself, will all be in the show notes on Spotify, or Apple Music in the bottom. So you’ll be able to find them there. We’ll make sure you can get in contact. Dave, it’s been an absolute pleasure on the show. And now we’re going to connect after this. We have some things to talk about. And I might even have to bring you back here for part two, so we can wrap it up. But before we sign off, shout out again to our sponsor for today’s episode, Gusto. Manage your HR needs with Gusto is the way to go. Make it easier to onboard talent, handle payroll and support your people in any way with this platform powered by advanced technology. So talent management and payroll processing will never be the same again. Try Gusto for free sign up gusto.com backslash Startup Hustle. Dave, thank you for your time. Thanks for being on the show.

Dave Fink 44:53

Thanks for having me. I enjoyed it.

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