Cuts Clothing Scaled Past $50M With His Operations Playbook (With Sean Christman) transcript

Sean Chrisman the VP of operations at Cuts clothing Cuts is a over $50 million a year D Toc brand in the apparel space monster of a business you guys have been really really successful and what you were saying to me ahead of time is that it's all been easy at every step of the way never any problems never any challenges no uh you have basically been a core part of the process of scaling up this business from launch on Kickstarter uh way back in 2016 all the way to over 50 million still growing uh you know probably going to be a n figure brand here pretty soon 95% D Toc like really really good business with a lot of different stuff that has happened along the way and for me probably the number one thing I've been thinking about in e-commerce recently is the way that needs of businesses change at different stages of business and we're going to talk a lot about that specifically in your role in scaling that business from an operational perspective um is just a really really hard thing to do before we get into all of that Sean um tell people a little bit about cuts a little bit more so they can understand kind of who you guys are what you do what makes you distinct as they hear the rest of the story yeah thanks for having me on Andrew this is going to be a lot of fun um so yeah Cuts started with a Kickstarter in 2016 really on the notion of uh being able to solve a problem of work wear attire um identified the casualization of the workforce uh coming upon us um and and really set out to solve that need now over the course of you know the next couple of years as we look to expand the business plenty of opportunity in front of us being a an apparel brand and and and we did just that now you know joking uh aside it it wasn't uh it wasn't straightforward hasn't been easy uh but we've learned a heck of a lot from it um growing that to the brand uh you were just referencing a uh full-fledged uh lifestyle business across plenty of categories in in men's um also included in women's and and um recently uh launched into Athletic Apparel as well so um yeah plenty of stories to talk about um that's the uh condensed short version of eight years building this brand um but yeah we'll we'll weave the rest of it into this conversation there are problems and there are distinctions at every step of the journey when I when I hear essentially like really got work going on ads and things like that in 2017 we're now in 2025 you've crossed that barrier one of the things I hear in that right away is you guys have grown you know if you just average that out you you didn't do that in two years or whatever right um you know it's not that kind of story and I actually think it's one of the things that's most compelling to me about your guys' story is that it fits what I think is a reasonable and probably smart timeline for growth relative to what some people expect in DED to see which is like build a big I mean a 50 million is a lot of money uh build a big business but don't try to do it mostly overnight for all kinds of reasons um even when I think about some things I've been saying recently about how I believe that e-commerce right now is in the best place it's ever been I think it's an incredible business uh to be in um and that a lot of the sort of Doom and Gloom comments about e-commerce I part of the reason I think there's some Doom and Gloom is people have absurd expectations I think part of the idea is that like yeah so you can't go from five million to 40 million overnight or whatever um that's not because the business model is bad that's because your expectations need to change so I want to actually break down a little bit about that Journey first then kind of talk about how you guys have managed um every step of it because businesses in each of those stages along the way are really solving different problems this has become very clear to me at a lot of levels is that the problems you solve at five million and at one million are really different than at 50 million and 100 million whatever else so um so let's let's talk about that has that growth been kind of steady has it been I'm sure you guys got a CO boost um you know in your category but like can you can you sort of break down the key inflection points on that Journey so we can understand what the Mover the needle movers were yeah um you in those those early days um it's uh it it's it's a Gold Rush right Facebook is a is an Arbitrage and and growth happens quickly um or you know like uh a lot of those Brands growing up during that time uh a lot a lot of those uh year-over-year growth uh numbers uh were were were massive in those early days I think you mentioned covid and and getting that boost um during that point in time you know we we saw um demand become incredibly finicky um and and we we took that into account as uh we progressed through the 2021 2022 and and up until today and and look to understand um and you know rather than just diving headon into those with purchase orders getting bigger and bigger and bigger um or uh you know and and needing to take on Capital uh to be able to do that and bringing risk onto our business um it it was a matter of understanding how uh you know as much as we're looking external to understand what other brands are doing how do we respond to the market that we're in um was really uh working internally and understanding how we solidify our processes um our systems to be able to understand how we make this sustainable because you know uh we didn't we didn't set out to be uh um you know five-year business we set out to be a uh a household brand one day and and and knew that we wanted to capture the moment understand what that demand looked like um but uh in ensure that we weren't getting out over our skis um like like we saw some businesses do during that period of time so um still standing here today uh probably because we didn't take uh all that opportunity that was presented to us um and we able to you know navigate that that post covid uh time where uh you know the consumer was was um you know on edge or uh less receptive to uh the the way that we were marketing um previously or or in that period of time yeah um do you so when you say not getting out over your skis are you thinking specifically about essentially like seeing the moment and then placing a gigantic inventory like forecasting that Co moment out placing a huge inventory order and then ending up with way too much inventory on your hands because that that is like especially in apparel like that that's just that can kill you really fast yeah and it was you know uh yes it was exactly that it was it was understanding that um you know the the likelihood that it was going to go on forever um you know partly it was we hope this pandemic doesn't go on forever and uh if that is the case um what do we do when demand slows um so it was uh part um you know looking at some big numbers both from a purchase order standpoint from a team capacity standpoint and what that uh Opex was uh potentially going to be and and understanding what the downside risk was um being able to you know compartmentalize uh that you know uh that that risk could be real and uh you know ensuring that we um didn't find ourselves in a spot that we couldn't get out of yeah um so let's let's I mean was that a was that a margin consideration I have you guys targeted some like like bottom line margin percentage that you want to maintain as you grow because there's this tradeoff that is represented in moments like this and both both in the major moments of covid and in the longer term steadier growth like you you just said you know you want to be a household name you don't want to just have a big moment and go try and capture it right so it's like um do you guys Target some kind of a bottomline margin as a percentage of your Revenue that you try to grow and if you and I'm curious however you think about that if you don't tell me how you guys do think about that because there's this growth and efficiency tradeoff that I think a lot of brands are dealing with and uh it's a very hard it's a very hard existential question for Brands like what it it comes down to kind of what you're trying to accomplish um so and then maybe I'd like to talk a little bit about the notion of margin in a business and how you think about that as it scales sort of both at the gross and net level so maybe we'll start there though um that growth efficiency trade-off how have you guys thought about that do you have a bottom line percentage Target how are you thinking about it yeah so we um we've been a bootstrap business from the beginning um so any any uh Capital that we brought on has has been debt debt and so we're looking to manage that um you know uh especially in a a post uh zero interest rate era um and and I think there's this there's uh you know a common misconception that that uh growth has to come at the expense of profitability um and and that's you know um you can you can take out the outliers the um you know DDC 1.0 era that was is growth at all costs and raise as much as you possibly can and you know ultimately IPO or sell that thing and and that becom someone else's problem um but but really in the uh the way that we thought about it and I think the way that a lot of brands are thinking about it now is back to what you were saying that margin um growth and profitability at any stage um doesn't doesn't need to be a trade-off or doesn't necessarily need to be a long-term tradeoff um those two things aren't mutually exclusive um even though sometimes it's thought that way um and if you have to resort to that fact um that that you are going to lose money um it's probably a better time to look at your margin and so to answer that question of what what are we targeting um it's it's really relative to the opportunities that we have in front of us whether it's a new product launch whether it's uh um you know coming into a h a period of time where there's High consumer demand like like you know the fall buying season um and and understanding how we um are able to afford that pay for that through our margin um so you you know the way that we think about margin um more than just focusing on negotiating those common costs down now that's that's a big part of it making sure you know you're bringing on a partner you're bringing on a new vendor you're developing products that you're um doing your due diligence and ensuring that you can bake as much margin as possible but it's also being disciplined about and this is the way that we think about it it's it's also being disciplined about decision making and having an understanding your leverage um so what what we look to do and we were talking about this before we hopped on is is um understand where our Opex stands at any point in time and planning for those Peaks and valleys so our business like many of you know directed consumer business are sick iCal in nature but there's Peaks and valleys um and so planning you know your margin around a peak can have you really suffering in those valleys um and so it's uh understanding how we uh are are able to have uh add more variable costs into our business rather than fixed costs into our business and as you scale as a brand is making sure that you're understanding your leverage and how you can have downward pressure on those margins um um you know I I one way that we we think about it is you know like I was saying fixed cost versus variable costs and we're reviewing those on a on a very routine basis with the goal of um you know understanding our health not only within a year but how we're planning for the future um and you know uh being able to see when fixed costs are potentially scaling ahead of Revenue and being able to look around the corner and and uh anticipate that that that could be the case one of the key ways to build margin in your business as you grow is to optimize your customer 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trying to get to 50 uh really you could do any stage of this that you want what are the things that I should watch out for that are actually going to um potentially create downward pressure on my margin in a way that's going to hurt my ability to keep growing yeah so I uh a big one for us lessons that we've learned um you know over the course of these eight years is is trying to buy a solution so um you know understanding and and let's use uh we can use product as an example right where um hypers seasonal product trying to force an opportunity um onto our consumer um and and um you know uh uh having a a significant impact on gross margin and and potentially contribution margin understanding that uh uh product margin opportunity um vers relative to your contribution margin during that period of time so when we're bringing on a highly seasonal product in a moment in time where we want to capture that opportunity is is is not just doing the gross margin calculation and and understanding that contribution margin should increase over that period of time um and instead understanding how we um are able to uh utili understand what a product can do for us um and through that being able to leverage not only a new opportunity for us but without taking on huge costs um bringing on big costs into our business yeah so so if I can walk that back a little then I think what you're saying is that like the Temptation is like okay holiday's coming it's really seasonal and so you're like how do I go maximize this opportunity you go put a bunch of resources towards something and really it's just a cash crab um and that that is the mistake that Brands will make which is they try to do that instead of essentially take the moment and and maybe you do release a product but uh you know for that moment and try to capitalize on the moment but you have to be be be doing some kind of a calculation at the level of product consideration of like is this actually high margin is this actually High opportunity is there is there Tam for this at this moment or am I just trying to grab something because I'm trying to chase a moment or something a little bit more you know um and maybe the way that actually looks in a business is that what you want to see happen in highly seasonal moments is that your contribution margin goes way the heck up and it the way it goes wrong is that that you try to capture the moment try to go make it bigger than it needs to be and in the midst of that what you actually do is just torpedo your contribution margin even if you capture a bunch of Revenue did I walk that back correctly yeah that's perfect and and and another way to another way to look at that is I just did this with a brand of mine Sean we we just we are walking through right now a challenge of I think I I'm sorry to cut you off there yeah there's it's such a Temptation I think what you're saying here is extremely important which is that like you essentially get greedy and it's because you have this expectation I think you're really right about something that's it's it's not really a business problem it's like a psych it's like a psychological problem it's like it's like there's just especially you're growing you're in a community you're on X and you're seeing people do stuff you're in you know e-commerce fuel or something like that and you're seeing all these people talking about how great these moments are and you're like ah we got to go get this and so you rally the troops and you go try and and actually like if you just take the moment as it comes to you now granting you know you have some obligation to create some volume relative to your forecast especially in a business like yours where there's a cash consideration cycle issue you can't be stuck with apparel you can't be stuck with you know if you get stuck with leftover inventory it's hard to move past the moment you're screwed right like so you have to actually do that at some point but even that like what you have to do then is just be realistic about the timeline don't go try and go too big it's almost like what you're saying is just take the growth as it comes to you take the profit as it comes to you and don't cash grab don't like resist the temptation as much as possible to to like try to go triple your growth one year or what you know I mean triple put that in Brackets like that number could mean anything for anybody you know um yeah I I I think that's I think that is hard one wisdom it's gonna be very hard for anybody to receive that who hasn't done it but once you've done it it's I think it's a very good thing you're putting your finger on because it is a major Temptation yeah yeah and it's uh there's shiny objects everywhere right and there's there's success stories all over the place and being able to compart mentalize that ingest that and and understand how um that would work in your business um understand the economics of other businesses are different um understanding you know other brands are capitalized different um and uh you know there there's no way to necessarily Peak behind the curtain and understand how well it did um for a different brand right and so yeah it it's similar with with uh discounting um and being able to understand the contribution margin uh lift that you're going to see um and so yeah answer to answer maybe the original question more directly it's it's we have contribution margin targets that we're working towards and um you know on a yearly basis and uh being able to understand tradeoffs in our entire margin stack um you know gross margin versus Am customer acquisition and and how how we can leverage all of that to have the most favorable outcome not for a short term but for the long term on the other hand the sort of Counter Point to that is that um whereas the pursuit of scale can compress your margins by making those kinds of mistakes um the the reality of scale can also expand your margin because it builds advantages for that from you are an in the operational side of the business um I am curious to hear how that has changed for you guys over time like how you know how has margin increased in the business as there's more scale it's something that when I'm working with smaller Brands a lot of times it's something we sort of dream about in the future it's like what will happen with our conversations with our manufacturer once we are three times as big as we are now you know whenever that day comes um so how has that change for you guys yeah um you know I think that comes down with comes down to a couple of things one is having a long-term Vision you know us as a product business and a lot of my examples or you know analogies today is going to revolve around that but I think it's um you know similar across the board but um H having a having a product plan um and being able to leverage uh that plan with our vendor base um building great relationships and having a long-term transparent Vision uh not only for you know the the brand but the products that are included in that brand what what we've seen is being uh you know upfront about those things and working with our Partners um on our product um has a has a you know shared goal has a shared uh excitement that uh is is not just within our walls but is you know with our partners as well and so yeah there's there's um a couple of key places where you know you can you can um on the cash flow side in in increase your conversion cycle um or decrease your conversion cycle and then on the margin side um with economies of scale as well so that first one is you know being upfront about what our expectations are as we um we don't have a ton of vendors but as we on board new ones and work with our existing ones is is having that um you know transparency around what increase in net terms would do for us um what it uh looks like from a production plan from a business forecast um with 30-day terms 60-day terms 90-day terms and how that um uh risk can be shared between us and the partner um same how do they respond to that when you do that like do they yeah sorry I just want to put my finger on that a little bit because I think this is something also that I think people think about with vendors but like if you go to them and say like hey we we want you to float our business for twice as long um what do they what do they say I have a I have a hypothesis but I'm curious what you're say yeah it's in theory it sounds incredibly easy hey um you know yeah give us some credit and uh we'll pay you back later right uh but uh re really what it what it takes is um uh time um takes paying the vendor back takes placing those bigger orders um takes uh sticking not to the nice big round numbers but but seeing that progression um and being able to be transparent about the response from our consumer base and what it's doing for our business um so so you know th those early conversations um are are goal setting understanding hey this is this is a place that we want to get is that even in realm of possibility you can do the product you got the cost we're looking for but it's it's you know there's three facets for us of a good relationship um but there are there are certainly uh partners that can't do that um aren't willing to do that aren't at the um size that they're able to be a part of that financing uh effort so um yeah it's it's uh really really takes some diligent on boing and we've certainly found ourselves in situations where we should be eligible for things that um you know we got no answers for I think your comment about onboarding is a really good uh place to start which is like setting expectations accordingly I'll just say as a vendor uh myself right I'm I'm an agency um it's really helpful when everybody's clear about that and when we get out in front about it and and actually when there's a sense from the from the brand side that like they want my agency to do well as well um that just just makes me want to give better service it makes me again I just did something with my clients where I like sort of took a step to say I'm going to provide you a better service by reducing by increasing my resources against your business is going to create cost for me for sure it may it make commit significant cost for me but I'm gonna do it because I believe the clients that I have and I'm pretty selective about my clients like actually are actually going to deliver on things they say we've built some relationship like this is not my first day with any of them that I'm willing to make that step with them you know it's precisely because there's been some trust built in that I'm able to go able to go back um yeah so I um I so anyway I think that really works and I I think the thing that's particularly with the manufacturer that I think people don't sometimes think about is the notion uh is the notion that manufactures businesses it work via scale like scale is the thing that makes that that business work that that is what manufacturing is as a business like it is all about getting to scale that's where their margin is and um and so if you can actually offer that to them um and it's something matab Bogle said on my show before which is that like essentially a lot of Manufacturers actually have access to better better credit than you do um and so they're they're pretty willing to do that especially if you show them that like hey look you have access to better credit than I do we can work together here if you guys use that and we use and then you provide this to us that creates better cash movement in our business and that allows us to actually come come back around Place larger orders with you and you know um by putting more cash in our pockets we're you know we're not going to just put in our pockets we're going to turn around and invest it back more into product and stuff like that so um it seems like to your point like people aren't going to do it right away you have to build credit with them just like you do with a your your credit card vendor or whatever you know but um but once you do that that people are pretty pretty understanding of like okay yeah let's do this together yeah yeah and the the changing cost um is shared as well right um if if we have to change and go to a different vendor um there's upfront costs there's time involved in all of that and the the um same same happens with the manufacturer right um if if you're a good business a consistent business one that can to your point keep their Factory full um and allow them to do the headcount modeling and forecasting um and and make that process easy for them um there will be advantages and and leverage that you gain as uh you know as brand what's what specifically have you guys negotiated over time like if you can if you can talk about that like what what are the ways that scale specifically in your business has created better um margin for you guys yeah um you a couple of different places um you know one I referenced net terms earlier um being able to extend those terms um comes with time comes with consistency comes with um uh you know paying um and paying on time um builds that trust um also from a from a margin standpoint um being able to uh you know uh continue to hit forecasts uh with our volume products um will'll drive cost down naturally as as they're able to Stage the raw materials stage the trims um be able to buy things more in bulk um is is margin that we've been able to to bake into those products um and then on the time side um if if we're uh again I think i' said consistency a number of times but if if you're consistent in your ordering consistent in your paying um paying those vendors back um there's uh even additional staging that they can do in terms of you know raw Fabrics that cut down lead times um cut lead times in half and allow us as a business to make decisions later um making decisions later allows us to be closer to the time that we're going to sell it more information coming in have a better marketing plan be able to respond a heck of a lot more um and ultimately it just had it results in less product sitting in product form um and uh and tying up cash flow so yeah really across those three um net terms uh product gross margin um and then time to Market are all are all three three things is over the course of time you know again open and honest St front with our vendors uh our manufacturers but things we were able to work towards if you have not seriously efforted making your supply chain better in precisely the ways that sea and I are talking about in this episode you should do it with move supply chain you can go to mov Supply chain.com move is a supply chain project-based agency type service built in the Philippines a sister company of more Staffing who you've probably heard me talk about on this show before I've used move to set up my supply chain for the brand that I am starting on the side right now they have been an incredible partner to me um and I've also watched move do uh a bunch of work for other people like I recently talked to somebody who saved 30% on their cogs and a door a dollar off of every order and their fulfillment costs like just amazing work and it's because they know where to start they know how to effort these things in your business in a way that probably you don't when I started working with them on my brand that I'm starting uh move uh sourced 60 manufacturers reached out to 45 of them eventually we Ned out down to one the product cost is coming down coming below what my target was which is amazing um and the product quality is really awesome like they really just are great and it's because they use years and years and years of knowledge of e-commerce Supply chains to get you going um on yours they know exactly how to negotiate how to think about finding the right vendor vendor partner for you and if you talk to some folks there like I have one of the things that they have said to me is they love getting on calls with new clients who come in uh with them because uh Supply chains are so under optimized e-commerce that they sort of start giggling to themselves on calls because they know that very quickly they're going to be able to make a very large impact in these organizations it's also at an affordable price because it is based um in the Philippines and because also they've just done a great job building a service it's high efficiency and they can deliver it at a price that makes sense for you um if you want to negotiate your supply chain build more efficiency in your business have those kinds of outcomes go to mov Supply chain.com to get started today they are really awesome tell them I sent you you're going to love working with them I just think there's some people who are going to listen to this who do not understand how important that that three things is like especially in apparel business with their seasonality like just just such I mean it's just so much easier to run your business if you have those things and and as and as you grow it's a huge deal um let's move to the way that um that not just margin has changed in your business but um time has changed in your business and the way that um you think about the sort of timeline of your business you know now looking eight years into it um or 9 years into it or whatever that is um and and uh and sort of where your time goes now versus before um like talk talk a little bit about sort of how you think about the timeline of the business and how that's impacting your decision- making because again we've sort of hit a couple times this idea that you're trying to build something over the long term yeah yeah and and over the long term feels like a long time the uh you know the most direct way forward always feels incredibly long um and and we touched on a little bit earlier but you know through that long period of time shiny objects pop up people get bored um and you you can you can quickly lose what do you mean by that people get bored like I think this is a real thing uh like can can you do you have an example of that like or or something yeah yeah yeah um you know so we we started out as as uh just a t-shirt brand a men's t-shirt brand um and you know have have expanded retracted expanded retracted our assortment over that period of time um and the the especially as a bootstrap business um you know we we answer to ourselves and and that's a a fantastic thing um it's it's also you know a uh uh you know we give ourselves a little bit too Li too much Liberty from time to time and you know being able to um uh go into anything um develop any product and be able to put that forward um is something that we've really uh um you know be became more disciplined about um over the last couple of years um you the the uh creating a physical good paying for that physical good and then need needing to sell that physical good is is a full process um time intensive um expensive process process and we've we've certainly had products that were off the uh the product road map um that we did because we wanted to try it um we did because we thought it was a good idea that we that we did because we saw other brands seemingly having success doing those things and so that element of um ensuring that we're take you know we're taking on the right right amount of risk that we're progressing the the brand that we're looking to increase our total address Market um uh but also staying focused on what our mission is uh is the result of uh not not not allowing ourselves to get barded yeah yeah I think that's I think that's very helpful there's a lot of uh conversation on e-commerce dcx right now about product development and how that is the thing and I think the temp the the way that that the the right push there I in my view there is a good push towards product L growth there is a wrong the way it goes wrong is that Brands start getting antsy and they they start thinking they have to do something crazy to do it as opposed to kind of what you said which like you guys had a a product road map you could see a clearly laid out thing of what was going to push you guys forward and then you're like oh what about this brand over here doing this thing we got to do that too you know it's like yeah and I I think I think it does the the stages of the business do feel different they are especially for people who've been there from the beginning when everything's exciting and you're growing fast or whatever it is and you're it is kind of more boring to run a more midsize business Everything feels a little more buried in process or whatever even if it's even if you're still passionate about it so I I think it's a again I think it's a very good Insight that like one of the problems that brands have as they grow is that they just get bored um yeah you were you were go ahead yeah with with because within our walls um you know we're talking about a today that we're not going to launch for 12 months um we're going to see those samples come in we're going to go through the wear test we're going to select colors for it this summer we're going to get it into produ and and by the time that that launches um we're like yeah fantastic now what's next right yeah but but what what we work to do is is compartmentalize our consumer compartmentalize the cohorts understanding that you know we're through the time we were talking here we just acquire customers they're trying cuts for the first time um and uh having that same excitement having that providing that best Journey that we can for those consumers over the first 30 days of their um you know being being a Cuts consumer over the first 90 days over the first 120 um and and uh looking through that lens allows us to to have that understanding of you know we've uh we we've uh got to service that individual just as much as we're servicing that guy or that gal that's been around for three years for four years um and you know having that having the ability to um make that cognitive um you know understanding of yes there are people that have a ton of crew curves um have you know that that did buy our new sweatshirt that we launched uh last fall and so that new color is going to be another opportunity for them as much as the person that just bought the crew curve today that hasn't tried the jogger yet even even though those products have been around for a number of years is is being being able to um yeah compartmentalize those those two activities at the same time yeah yeah makes sense um what about uh how do you think about the short-term you just kind of brought this up a little bit but how do you think about that sort of like short-term execution verus the longer term planning you've got to get a product release right and that product release has to be within the framework of something you mentioned earlier which is like a product road map you know like how do you guys how you guys do the trade-off and those things as you guys are growing yeah I think it's it's um what we focus on a lot throughout throughout our business and you know we're we're we don't have a ton of bureaucracy but there are you know some some levels to our businesses really understanding relative impact and where we should be spending our time and ensuring that we do spend times in those pockets and so you know with the goal of understanding where time is best served so you know one way that we think about this is um you know attaching a percentage to your focus um let's let's say my impact in this business is 10% so if I'm and and let's say you know $10 million brand just use nice big round numbers yeah if I'm focused on tomorrow how do I have a impact on tomorrow we're talking thousands of dollars um if we're focused on if I'm focused on next month we're talking now in the hundreds of thousands of dollars and if I'm focused on next year you know the story goes on right it's over a million um and so making sure that we're not too heads down focused how do we you know how do we optimize the account today right okay you know we're behind on returning customers how do we get more tomorrow let's send double the emails or let's launch that product earlyer things like that th those are important those are tactical those those are necessary for especially in our space um but also making sure that we pick our heads up and and we look out further because we understand that that's going to have the biggest relative impact is um especially as a leader in a business being able to be out there as your team gets there to execute um and have a solid plan have a solid strategy um so that those impacts can ultimately come home and and be worth that 10% um in those different uh time ranges yeah yeah I I I really relate to this I I actually just sent a communication to my client saying I'm gonna add daily tracking to my reporting but I've actually resisted doing that for a long time because I think especially for smaller businesses it can lead to a kind of short-termism that I think is is actually not very good for businesses like I sort of think businesses sometimes need to accept a um a forecast either under or over performance both in the short term as long as it's not going to it's not as long as it's not a death threat to your business right um for the sake of actually trying to build longer term initiatives even something like sending a second email I look at and go like you can send a second email that day and that's fine and I think that I think that's good too I think sometimes I'm a little too long-term focused and and sometimes don't pull the trigger fast enough on things um but I also sort of respond to that by saying like what we should actually do is have a system set up for for when we send a second email you know what I mean like I would I would sort of like try to solve that almost before I send the second email um again as long as that second email is not going to be there so so maybe that maybe the daily forecasting and the daily revenue actually is the system and that's that's fine but and and I am adding daily daily reporting to to my clients because I've kind of come around on this but um but I I just think there is a real danger of short-termism and it I think actually relates back to the initial thing which is the sort of like people run their businesses extremely hot they they they they are barely profitable while growing very fast because they feel like they have to chase a moment they're not long-term enough in their in their total Viewpoint of their business and therefore a Miss for a day is like a much bigger threat than it should be to the business you know um and and so yeah I it's just it's just an interesting TR if I know you you think a lot I think about systems in the business and how those scale I'm sure the way you think about systems and what you guys have built today is very different than we were at two million bucks or whatever it is um maybe we can dive into that a little bit like um what are the biggest differences in the ways that you guys operate today versus the way that you guys operated when you were a little bit smaller yeah yeah so um yeah when you're when when you're an early stage um you know it's it's speed um it's survival those are those are the things that are prioritized and and um nowhere will will I ever say those are wrong or those are the the wrong things to focus on it is um the uh the where we've come around where we've improved is in those you know speed to Market survival mode type actions that were taken um is just making sure that we document those things we understand the impact of those things and this doesn't mean full blown out Sops and all of that but it's trying to Benchmark as much as possible um so that we can understand you know when a manual process should be you know uh automated um when uh something is going to be you know a quick shortterm solution and doesn't need a hire for it for longterm um and you know the the the the way that we think about systems processes all of that is um it's much more than just people Sops operating rhythms meetings uh you know it's an organization of those things and that that's really you know uh fostering that um consistency over time um because as we're as you were going through that you know the the just hearkening back to times where we're so focused on doing uh the thing that we're doing better that we don't understand we should be doing something else completely like we've fully optimized what we're doing uh but it's no longer working and so you know we've we've established systems to be able to kick out um those things tell us where um we're being uh uh less efficient and you know but we're putting in twice the effort um we're better than we've ever been but it's still not working um and so yeah when we when we think about systems or or understand you know when we're getting to a point in time where we might have some breakdowns coming is you know you know uh things like growth becoming unpredictable um we find ourselves firefighting way too much um we're living way too far in the business than than working on the business um overstocks underst stocks all those things uh cash flow getting tight things like that are signals to us that hey we've you know we got to tighten up um we've got to understand um how we eliminate uh some of this manual effort or um how do we eliminate some of these processes that we have um and and uh understand the tactics that we're doing um which ones aren't being as uh you know efficient or effective anymore like you know we we can send another email this afternoon um but sending a third and then doing the same thing tomorrow there's there's diminishing returns on that and so um usually those types of things are are signals to us okay let's zoom out and let's understand the inputs a little bit better yeah are there any um are there any particular systems you guys have uh put into place that have been particularly valuable to you like whether it's around something like your inventory ordering or your marketing plans or your creative you know just anything that you feel like man we have this thing dialed and the system is then producing the tactic outcome that we want you know uh yeah yeah um I I think a big you know early stage it's easy to have an all team meeting right there's there's two of you in a room yeah everything is like okay just spin around in your desks or you know let's let's hop on a call um and let's just you know we could spend all day just getting on the same page um the you know as we started to grow and you know I'll use like uh you know retention as an example right marketing there wasn't a you know a a director a VP a CMO or what it was it was just marketing there there was one person doing it um and as we brought on you know somebody to focus on one aspect of the business um there's a there's a natural communication gap that occurs um and uh you know you get to a certain point maybe that's eight people 10 people 15 where you're all still sitting there but communication is just Screech to a halt um because you get siloed in your business and so what what I would um you know for us and you know at the scale that we're at and the the learnings that we've taken in is what we really focus on is is and and where we have a a you know an a a well oiled machine but one that continues to evolve every single month is our go to market strategy making sure that all the way back to product development we're having those conversations and uh you know uh ensuring that that growth Loop that we live within um that there's no gaps in that um and so it's it's a maturing where yes we have functions that are primed throughout that full calendar um but we're having that go to market conversation not the month before not the quarter before we're having that consistently and that's just become part of our business where there there aren't shocks there aren't surprises um and you know over that period of time a product doesn't just show show up and we're like oh that's right you know we learned so much over the last 6 months I wish we wouldn't have done that we're able to instead adapt all those learnings those weekly monthly things um into that to to make that go to market strategy much better so um yeah I think it's it's uh it's much more than just good communication it's understanding how everybody has an impact even if that's you know nine months out in some of these cases a long time ago I read a leader of a of an organization that had grown a ton it wasn't a business but it was a leader of organization that had grown a ton talking about the way his teams had changed over time and anybody who's paid attention to my content for a long time has heard me use this analogy before but it's been a but it's been a long time since I used it so it's probably time to bring it back um it's really helped me think about this problem that you mentioned this sort of go from a meeting to something like your go to market strategy you know in your process for that that you have just uh described um what he said was um every organization as it changes and adds team members it it goes it starts off as golfing buddies where literally every Everybody actually stops and watches each other shot basically you know when somebody does something cool it's like you press you press go on something and everybody can be like hey let's see what happened you know everybody pulls up the shopy account whatever um and it's really it's super fun it's it's everybody kind of does their own thing you talk about it as you go everybody analyzes the shot whatever you go from there to a basketball team um and when you become a basketball team there's Five Guys on the floor but there's 12 guys on the roster and um there's still a ton of improvisation there's still a lot of things happening in real time but now you've begun to introduce somewhat of a Playbook um and there's a little more specialization so everybody still needs to be able to score everybody still needs to be play defense but there's increasing levels of special specialization within roles in the team um and there's increasing Playbook uh sophistication but it's still not nearly as sophisticated of a Playbook as when you become a football team which is the next stage when you become a football team the quarterback has to know the exact route each guy's running that all the everybody on the offensive line has to be going the same way and on top of that the offensive lineman honestly may have like zero relationship with um uh like I don't know the the one of your safeties or something like that right like now you've got however many are on a roster was a 60 or something like that on a football team 55 um and then a bunch more on the practice squad or whatever and now like the Playbook is everything and because you can't talk about it you actually and you have so little time and so everybody 11 guys on one side of the field have to know exactly where to go at the same time and if one person blows their part of it it can actually screw up the whole thing for everybody but it has to be written down it has to be decided on and I I think that's that's like a very helpful way to think about what happens to organizations over time is increasing specialization increasing Reliance on a Playbook and on system um decreasing Reliance on real-time communication um and and uh yeah it's part of why I have said I don't I'm not trying to scale a large organization it's like I it's those those parts of things are uh The Playbook building and and and implementation is really hard for me um and it's probably hard for everybody but I just don't I don't really enjoy it that much so um so for me it's just kind of been stayed away from what I've wanted to do and I've always thought like if I was going to try and build something bigger I would need somebody like you you know sort of an operations person who's really going to take it on themselves to think about these exact kinds of things in the business um as they change you know um so anyway that analog has always been helpful to me to think about how organizations change do you um do you have anything else Sean that you think is like crucial in your guys' story that you just would want make to make sure that uh if I if I asked a dumb question or the wrong questions that people would hear about um what it is like to scale an organization over time from an operational perspective yeah I think um yeah maybe I I'll leave you with a um just a last thought exercise framework that we that we like to do to to understand our operation how we're leading whether we have a plan whether everybody's on the same page and uh you know we call it the the bottleneck audit um and it's and it's you know understanding whether you are the bottleneck in the business and and and we do this from from from time to time just just to make sure um that we you know we've added a new distribution Channel we've added a you know a new product that we're keeping our our systems and our processes and therefore our communication tight and and so what that that that thought exercise pretty simple but it's if if you were to leave tomorrow uh what would your business would would your business be able to operate with you gone for six months and if you came back after six months would it look the same um would it still be there um and you know being able to say you know okay yes I'm I'm you know we need to shore up our processes on wholesale effort or on corporate or on you know direct a consumer or this new channel I'm too over indexed in it um to where if I remove myself um it's uh something that can't service itself so helps you understand is it a people uh you know capacity issue is it a process issue is it a tool issue um and then you can get that On Your Horizon to be able to understand whether that's something that you need to solve now in the midterm in the long term obviously you you're not going to find yourself going away for six months unless unless you you know you want to but um it it simple thought exercise that just help helps us understand uh you know the the fact that we understand where we're going but we've got a team we've got uh expenses going out uh are those are those paying themselves back and are they on the same page yeah yeah that's a really helpful thought I like that idea a lot um Sean it's been a great conversation thanks so much for taking the time to do it um I want to tell people where to follow up with you um couple spots to follow up with Sean what first is on X um I'm going to put the link in the description in the show note so if you're if you're active there do that it's at Sean Chrisman but without the eye um so there's that but also I think maybe a great opportunity for some people who maybe want that bottom knock audit uh in their organization or to be thinking about that would be to book you on Mentor pass which you're available to do some coaching Consulting via Mentor pass um and again I'll put the link there uh in the show notes so that people can do that um definitely spend some time with Sean the way this conversation started is that Sean and I started interacting on X and I was like whoa this guy is really thoughtful and we've never met before and suddenly there's like a few replies back and forth on some things and um and this was a not surprisingly uh thoughtful episode in light of that so uh it's been good to get to know you a little bit Sean and um thanks again for your time man of course Andrew thanks for having me on and uh anytime you want to chat yeah thanks so much for watching or listening don't forget to subscribe wherever you're doing that I got more great conversations coming up all the time with very smart people in our space like Sean with demonstrated success scaling organizations you're going to like it also a bunch of really good solo episodes coming up including some stuff on how to manage two row ass campaigns like just a bunch of stuff so um thanks again for doing that like I said you should sign up for my newsletter where I am sending out tactical input every single week without spamming you just once a week and then also some links out to some recent podcast episodes things like that so you don't miss the best content that I've got all the time you can do that at alf.com just put your email address either on the popup on the site or on the footer um that will get you access to that and of course you can email me at podcast ajg.com I'd love to hear from you on that don't forget to follow up with my sponsors including move supply chain to get your supply chain negotiated uh the links for that are in the show notes um as well as intellig who has been a great partner to me so you can work with intellig to get great cro testing build your business for margin intellig gems. and use the code uh fs20 FIS s20 to get 20% off your first three months with intellig so thanks again for watching for listening I'll talk to you next time n [Music]