He Built Janji To 8 Figures By Narrowing His Focus (Not Expanding It) transcript

Dave Spandorfer is the co-founder and CEO of John Gi, a runningbased apparel brand. Sells a lot of running shorts, shirts, that sort of thing to men and women runners that has existed for 13 years, but is growing the fastest now that it has ever grown. And we're going to talk about why. He's in the eight figures. He's profitable. Really cool story with a very sharp operator. Dave and I met on a call set up by our mutual friend Fan B who's been on the show multiple times.

I immediately picked up on the fact that Dave was a really insightful guy. I invited him on the show. He came. We're going to talk about how narrowing your focus onto a community is sometimes the right way when everybody else wants to broaden. How big things move to profitability, not just small moves. And how sewing shorts on backwards at some point almost broke their business. That might be overselling it. I'm not sure.

We're going to find out in a minute with Dave Spanorfer from John G right now. What's happening, Dave? It's great to be here. Thanks for having me. Thanks for Yeah. Thanks for taking the time. I appreciate it. it so much. Let's go straight for to show sewing shorts backwards. What you alluded to this in an email. I actually have no idea what the story is and I would like to hear you talk about how you sewed short how a shorts company sewed shorts the wrong way.

Yeah. So, our story starts in college. I was a history major. My co-founder was urban studies major. We were passionate about running. We ran on the team together. Uh yeah, Washington University in St. Louis. Um, but we were pretty new at this whole business thing. Uh, and we won a few business plan competitions to get the company started. And in our first year, we had this magical moment that every entrepreneur dreams of.

We peak magazine runners roll 2012 2013. We had an article that featured our faces delivered to all these runners. I think they had like almost a million uh subscribers at that point. And we were on the same day the article came out, we were launching our new collection. And that collection arrived at our house. We were going to ship it out with all these online orders that came in. And it arrived and every pair of shorts had their liner sewed in backwards.

So big moment completely wasted. I I will say this, like we we had we we had some orders come in before we knew that this was a problem and we told them like look like we're sorry we're literally picking this and packing these ourselves. The liners came in backwards. We're so sorry. And people were like, you know what, we'll wait till the liners come in sewed the right way. Uh and so it turns out when you're answering the customer service tickets yourself in the beginning days, you can get a little bit more leeway than we do, let's say, now.

Uh but it's been been quite the journey since then. Um why do you think grabbed people in such in a way that people wanted to feature you early? I think that's actually interesting. You you were able to it was a different world then. But it sounds like you were able to attract some attention to the product and to your guys' story. What what was that? We we had two things going for us. One is we were fresh out of college and we had theedu email address.

Anything that just opens up people, right? If I'm emailing someone now, they're less likely to answer email than if it's from like a brighteyed and bushy tailed college kid. The other thing is that we were we really focused the business in the beginning as a social mission, right? And I think the social mission part and we can talk about why we are still have a social mission, but we pivoted like a lot of our messaging and our marketing away from some of the social mission pieces.

People want to talk about that. People love writing about individuals who are doing good in the world which is I think we need more of that. Uh but that kind of captured we were in like this runners world section all about like runners doing good in the world and boom there you were. What's the what was the social mission? So the idea behind John was with every single piece of apparel sold we gave back in the place where it's inspired by.

So when we got started that was Kenya, that was Haiti. We gave back nutritional supplements in Haiti, irrigation water in Kenya. It was kind of a mishmash of places, but it was all inspired by some place and I went to that place. Um, today what we do is that every single season we go someplace around the world. We'll meet with an artist. We'll do a lot inspired by there. Then 2% of our sales fund water. But what's interesting, you're probably getting this, is that if you visit our site, that that mission is not super obvious anymore.

Whereas the beginning is front and center. I immediately just started sc I have your website open while we're talking of course and I immediately started looking to see where that is and I mean I've definitely gone down this road before with companies I've worked on too and it was and again 13 years ago was a different story in relation to how people thought about these sorts of things. Um just just quickly 2% 2% of revenue goes to revenue revenue that's fantastic.

Um yeah. Um and that's still so that actually hasn't changed. It sounds like to be honest like it has gone down a little bit since we since we got started like full transparency. Uh we we're really proud about the amount that we give today. Um but in terms of its its in terms of it's like where it lives in our marketing, it just it just it's that farther down the funnel. Um that's uh interesting. I so you know Tom's is a long time ago um and I remember seeing hearing an interview with the author of a book called the myth of the ethical consumer um or something and it was basically some academic who had written like a like a like truly like a dissertation like an ac academic monograph of some kind um and was and the point of the book is I didn't feel like I needed to read it was it was basically just that like that is not why anybody actually buys they buy out of self-interest um and Um, and now it may be that your approach to that in some way creates self-interest for them.

Like I think this is part of the Tom's thing was like that it became a symbol. First of all, it was like a weird cool shoe. But secondly, like it became a symbol of saying something about yourself to the world. You know, it's not really about giving back. It's about how you present yourself, which is perhaps cynical. Um, and I actually don't mean it that I think I this gets into my view of the world, but I think everybody is acting out of self-interest 100% of the time.

And that's actually not good or bad. It's just like saying that gravity is real. It's just it just is. Um and uh and so um so anyway, so you don't have to agree or disagree with that. You can say whatever you want. What I would say I think I think that the academic uh paper is borne out in a lot of our own lived experience. But I I look I believe that we don't just act out of self-interest. I believe that we are doing things for the general good, but I think we might buy out of self-interest, right?

Like why are we wearing the things we're wearing? We want it to say something about us, right? There are brands where I'm sure that if there's two black t-shirts, right? And for those who are listening, Andrew wearing a black t-shirt, right? I'll buy it from one brand, but I won't buy it from the other brand, right? And the only reason is because I like one brand of what they say and I don't like the other brand of what they say.

And and where we've pivoted and sort of what's been working for us is like we as a company believe this. I think we're able to draw and bring in better employees and have a tighter culture because of our missionoriented stance. And I think but when people like even though it says in the checkout and it says in multiple other places that 2% give back to clean water when we ask our customers our most loyal customers what they think about Jonie they're like John does some sort of good.

I don't know exactly what but like I you guys make me feel good about myself. Yeah. Yeah. Um and that's been an interesting pivot that's happened slowly over the past 13 years. Well, and just to clarify my my position earlier, uh I think giving to some something that matters like giving back is an act still of self-interest in the sense that you're you are doing it to meet you're doing it in response to a a vision you have of the world and a desire you have of the world and you want to um and you and you want to uh uh execute on that vision that you have.

So in a sense it comes back to your own view and um and that that's good. And so anyway, I um not to derail the conversation too much towards towards how I think about some of those things, but I again I I don't think that's good or bad. I think it just is. And that um in fact, I would say um in that it it's a good approach uh to uh to maximizing joy in your life is to is generosity. So I think it's great. Um but yeah, so so you had this kind of community aspect from the beginning around the mission component.

Um and then presumably around running as well. Totally. Running is wrapped into I mean talk about identity, right? Running for me was is like a core to my identity, right? I my coofer and I we met on the track and cross country team. Uh I did three seasons of it in college. Um it was like, you know, thankfully with running you don't have to practice too much. You do like your hour, hour and a half run, then you're done.

Um but it was it's you know I think for so many people that running piece is core to change right and our our thesis of why we started this in the beginning was like we loved running but we loved the change that running brought to us and I think you know you people who are running their first 5K or people who are running like a ultramarathon we can talk about how pivoted to more of the ultramarathon piece later on there are just there's a change that happens outside of you know when when you are able to finish those runs and become a quote unquote like person who runs.

I hate to use the word runner. And I think for why do you hate to use the word runner? Well, I'll use it for myself, but it becomes this for people it's like this this um it's this line in the sand, right? And people like I'm a runner. I'm not a runner. And people say, "I'm not a runner." And it's like, well, you run seven days a week, so to identify yourself as a runner is like totally okay here, right? You're amongst you're amongst friends.

Uh and and I think you know how we see it at Janji is like can we take sort of the the change that happens on the everyday run and bring that to to product to a brand and like when we got the company started there weren't a lot of businesses doing it to your point like we were inspired by Tom's and there's there's business even Tom's has sort of faded away like look at Bombas. Yeah, Thomas has done a great job with the social giving back and so we we really at the core like believed in that thesis and continue to to a degree.

Yeah, that's awesome. Um, so let's talk about the running thing because so you said something to me really fascinating when we started which is that you guys have existed for 13 years but now you're growing the fastest ever and separately you had communicated to me that you have um narrowed not broadened your focus while being at eight figures. You also just told me that you're focusing more on the ultramarathon kind of space.

Um, there's a lot there, but I mean, ultramarathon strikes me as a niche, a growing niche. I mean, people for sure. Yeah. Within a niche of running, both both of those seem, so far as I can tell, you probably know better than I do. I mean, almost certainly know better than I do, but it seems to me that running is growing and also that ultra like super long distance running, whether or not you would even go full ultramarathon, but like something like that is is running.

Um, so, so maybe maybe you could start by sort of like how the broader running market has evolved in your 13 years and then I want to talk about your strategy within that because you guys have gotten to this place now it's really impressive, right? Eight, it's very hard to build a profitable eight figureure business while raising you said some money but very little comparatively little and we can talk about that too if you want but um but but maybe let's start with sort of like the landscape around you and think about TAM um a little and sort of who your customer is.

So, um, so yeah, talk to me about running over the last 13 years and then maybe you can you can sort of, um, shove in there how you guys fit into that space. Look, I mean, when when we started this company, plenty of people had been running, right? When we started this company, there was a whole like remember the the the five finger barefoot shoes, the minimalist movement. Things have gone like, you know, the opposite direction.

You back then, I worked when we were getting the company started back right after I graduated from college. I was one of the first people in the country, one of the first stores to sell Hoka. Uh, and so we have been absolutely jani over the last 13 years beneficiaries of a tailwind. Like not going to sort of pretend that we have been it. Well, that's good. I mean, it's great if you like I people should think. Yeah, I you you just you just sort of talked said spoke that as if it was like somebody might use that against you or something like that.

I think I just think TAM is such a big deal and and like a tailwind like that is such a big deal. It's, you know, yeah, you are thinking the wrong way about hiring in the Philippines because you are probably thinking about how cheap can you go and thinking entirely about virtual assistant level talent. And those are both mistakes. Hiring in the Philippines is a has been a massive unlock, one of the crucial unlocks in my business.

And I continue to think that my investment in working with people from the Philippines through my friends at more staffing is a competitive advantage that I have at AJF Growth and in the brand that I'm starting. I am continuing to plan uh to build everything that I'm building with help in the Philippines. And that's because the talent level that is available at the price that available is unbeatable. And it's really that simple.

And on top of that, I love working with people that I work with there. More staffing connects you to incredible talent in the Philippines at every level of your business. So, like I said, if you're looking at just the virtual assistant level, you're thinking about it wrong. There is talent u certainly at intro in introlevel talent that's certainly available in the Philippines, but it goes way beyond that all the way up through executive level talent honestly um into all parts of the business.

There's um great people, especially around areas like supply chain operations, those sides of your business, even finance and accounting side. There's all kinds of available talent to you in the Philippines. And the key is don't just go and think about the question, how cheap can I go? Instead, think how good of quality can I find there? Because if you do that, the answer is very high and it and it will still be lower priced than hiring equivalent talent elsewhere, especially in the US.

And in fact, your dollars go so far that you can reach towards the upper end of markets and get the best talent available in a country of like 100 million people and that's really really good talent. So, you should be doing that with my friends at more staffing. More staffing is an amazing organization full of people founded by people who came directly from e-commerce. They understand how e-commerce businesses work. That is what they have built the foundation of their business on.

They're not just a general broad staffing agency. They will really help e-commerce brands, agency brands. They know the space. They understand the needs. And they will do that by helping you recruit, train, coach, onboard, do the whole thing to get great talent integrated into your system really, really well. You can go do that by going to morestaffing.co/af. Morstaffing.co/af is the place to get started with them. And they even have a one-year guarantee.

So, if you hire through more staffing, the talent doesn't work out for a whole year. They will replace that talent for free without charging you an additional uh head hunter fee. So, go to more staffing.co/af to get connected to the best talent in the Philippines for your business. It's a revolutionized mind going to really help yours. Yeah. I mean, look, I think it's good. Yeah. Businesses should ride the waves, right?

Yeah. Right. And you've got the the rising not to sort of mix too many metaphors here, but the rising tide like really is lifting all boats. And I think for us like what we've seen is the running market when we were getting started was a big market and the mistake that we made was that we wanted to make all gear for all people. I just say all all runners. So for instance, we had gear that was meant for high schoolers, price it for high schoolers, gear them in for college kids.

We sold to a lot of college kids. We want price for college kids. First time 5kares great. We wanted to sell to them. ultramarathoners. We wanted to sell to them. And when there's over 40 million runners just here in the US, right, or people who run regularly, it's just it's an enormous market, right? And and what I was saying, it's a niche within a niche. We needed to find that niche within a niche, right? To really be able to sort of hit hit our growth curve.

Um and and I think big, you know, our our big focus, I think, and I think for for every apparel brand is if you're trying to be all things to all people, even within your sector, you really become nothing to everyone. And I think there's a lot of brands even within like the run category that have done that, right? Right. That have just been able to sort of niche down on a niche. And for us, the lane that we chose was we want to make the best gear for the longest distance.

And you'll notice when I say that like our our slogan originally was run for another beautiful, right? Like this idea of just, you know, we're we're doing it for each other here. We're part of one one humanity. Um and that's great and all, but when we started making the best gear for a 250 mile run, that's when you're like, "Oh, if I even run three miles, I can wear those products." Totally. It's been an interesting product development cycle for us.

Do you have um do you have a sense of your Yeah. What do you know about your customer in relation to that? Like in terms of do you have any surveys or anything about like percentage of them by running distance? It's interesting because there's there's two different questions in there, right? There's like what do people run and then what do people aspire to run? Yeah, that's super interesting. Yep. And so our average customer, the majority of them, 85% of them are running on roads. over 50% of them are running on trails.

And as we've like we do this annual survey every year, so usually about like three, four thousand people respond to it. It's a 20-minute survey. The question that we've been asking more recently is, you know, what do you hope to run? And for for for what our customer hopes to run is they want to run uh less like half marathons, world majors, like a like a Boston marathon, New York City marathon, but more these like these like experiential runs.

So, think about like, you know, running a race like through the Alps um or rim to rim to rim in the Grand Canyon. Like that's where like our customer was interested in going. And so, it's like, all right, like let's outfit them for those aspirational activities. So, interesting. I that's so I actually um I've said this in a couple conversations recently. Some of this is reminding me a little bit of of talking to Isaac Merins from Flux Footwear.

Um you know that he's got the wide toe box shoe and that's been a a Yeah. Right. that's been a trend and they they've just like grown insanely fast. And he said something similar to what you said, which is like he actually didn't set out to ride the tailwind necessarily, but then he actually caught one at the same time in a way that ended up really helping them. But um around the move towards wide toe box, some of that, but um but one of the things I told him is like I just generally love subcategories within large categories as a way to build a really good business.

It's it's not always the way to build it's in the short term. It's not how you build a huge business, right? Like if you if you want to get from zero to 100 million as fast as possible, you're way better off selling black t-shirts than you are selling um running shorts for people who want to do experiential runs, right? It's just like if you want to do it on a four-year period or something like that, three year time period, something like that.

Um but but I think your business, first of all, first of all, just more suited to my interests. Like I think I just like being in communities like that, which actually matters a lot, right? It's going to be your life. You could live it how you want to. But secondly, um I think a lot of times you can build a really really solid really strong business with with very good tailwinds almost like I feel like the the the um the hit rate is more likely to be higher on your business as long as you can be authentic than it is on the black t-shirt business, right?

It feels like there's a bigger chance that the black t-shirt business is just going to go to zero. Whereas for you guys, you could do it sounds like what you've done, which is like steadily grow for 13 years to where we have an eight figureure profitable business that's now growing the best ever, you know, and and that pathway is um awesome. I mean, I think that's I think it's really strong. And so um so anyway, I I'm curious like how you guys have have thought about your relationship to that specific customer versus the broader market uh as you guys have sort of honed in on realizing it's the experiential runner.

Yeah, I mean there's definitely like a feedback loop to it, right? Where you talk to your customer, but you also see like what's selling, what's not selling. Um, and look, I think you can have like a nichy business like in our space. It's been Hoka as I mentioned like there you would think that these like big fat shoes was a nichy business and here we are and there it's like a two billion dollar in sales and growing at 40% annualized.

Um, for us it's it's the more that we try and genericize our brand, part of this is like again these are feedback loops. Like the more that we try and genericize brand to go west market, the more our audience says uh not even like they're not even saying with their words or saying this with their dollars. It's like oh we're not interested, right? So for instance, like we had a pretty basic like entry level short that came out last year and we're like great great price point. it's gonna sell well kind of you know it's more entry level they get they try this they get to the next level did terribly terribly right and so I think as an entrepreneur you're always looking for like where are those feedback loops for future product development and then where is that creative that you're building for us the athletes that you're supporting you know the the the the content that you're shooting that help support some of that feedback loop and for us it's just like you got to listen and talk and constantly keep your ears open for your customer and hire people who are your customer which is like we've been hiring people who are that we call like explore runners who have been instrumental in that growth.

Yeah. Do uh do you have a vision for how big you want Janji to be? Like what are you sort of happy with the current size? How hard do you want to push it? How big like what's the what's the end goal? Because I have some more questions about how you relate to that customer question, but some of it relates to what do you want the business to be? No, I mean to to an early point, we haven't raised that much money. We've got um two amazing sort of venturish comp businesses back to us um break trail and dig.

They're fantastic people and there's no like push for like an exit. And so I would love to grow this profitably at like a sustainable rate that isn't trying to go for like triple digit growth. And I think like when you start getting into those higher numbers or you're you know you're raising a prep stack that like threatens like if you don't hit those numbers everything sort of falls apart. It's risky. And I also think like today as we, you know, not to sort of use the buzziest of words, as we use AI, as we use like more, you know, to some of your sponsors, offshore talent, it allows you to build a more profitable, leaner company that still has like a very unique brand set and you can niche down while building this, loyal, wider, expansive company in a way that like seven years ago you couldn't really do that.

Yeah, that's right. That's a very interesting application of those principles essentially that it would free you to not have to go huge to generate a big profit, right? That you could sort of run at a higher margin at a at a more sustainable growth rate um and be a little more selective about what bets you take uh and and do that by running really really lean. So that's been a big part of your guys's approach to growth uh more recently or Yeah, I mean definitely in the last few years is like you know well for one the market is rewarding this uh Yeah.

Yeah. And I think yeah, we we we just our our team has been our our team is behind this, right? They know that like we'd rather grow profitably at like 30% than unprofitably at 50%. For sure. And even though people feel like they want to they want their career to sort of grow in these options, like they know where our vision is over the next few years to get to that point. And it's it's about sort of like building the vision and sort of lading up plans around that that gets everyone really really excited.

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You should at least get on a call with them. Go to moveupplychain.com, get on a call, see if there's an opportunity. They will be honest with you. If they don't think they can help you, they will tell you that. Uh they are really awesome. Go check them out right now. Moveup supplychain.com. Get started today. I'm curious to hear you talk a little bit more about then how you think about that that experiential runner market.

Do you is there I mean it seems to me that you attribute a lot of your success to narrowing. Is there a point at which you have to expand beyond that to keep growing or is that growing enough that you guys can just be a big part of that and own that and make it to however many tens of millions doing that? Yeah. I you know what is the what is the pathway for you? Yeah. I mean you're you're asking the right existential question here.

Uh I think for us and you have a and you have a clear and definitive answer that is guaranteed to work. Yeah. Totally. Absolutely. It's a back pocket. Um I think the way that I feel about this is there are two ways right like certainly like one if you're authent if you if you've built that authenticity your customer will allow you to sort of go in adjacencies that are um that's that that that that still I think fit within your overall high performance plan right and so like all right for example like let's say you are A let's say you're a running brand.

You're known for being a really fast running brand, right? You're all about speed, performance, like the fastest people. You know, will your customer allow you to go into let's say for instance like a cycling business, right? It's also endurance. It's also but it's, you know, it's not exactly the same thing. Or is like the next step a triathlon and then it's cycling. I think for us we believe that this market especially when you talk like globally is pretty big and if we went into let's say all right we sponsored this race and this is we can talk about the marketing side we sponsor this race that's a 250 mile run which I think we can all agree is psychotic a 250 mile run you usually think a 26.2 2 mile marathon is long and then you realize you can do 10 times that.

I have a life goal. I have a life goal of never running a marathon. Um, thank you. So far, I'm accomplishing that. Well, you need to run 250 miles, right? I guess is like a marathon within there, but like I'm not not going to blow right past the marathon. So, the idea of like Yeah. 100 miles, 200. I mean, it is I think psychotic is the right word. It is. It breaks the brain and it and it breaks people, right? Like let's be real.

If you're not sleeping and you're continuing running, it's it's just like, you know, your body and mind starts to fall apart, which is why I think it's like so cool and aspirational, right? Totally. It totally is. Climbing up, you know, a mountain type thing. What's your longest run? I have I've I've done I've done marathons. Um I've attempted a 50k and I dropped out because my body is uh my mind is weak, right? Uh but I I'll go give it another go.

Yeah. My cofinder was about to do he was he signed up for an ultramarathon and he he uh the training was was rigorous enough where he broke his foot three days three days before the 100 mileer. I know you're always riding that fine line these runs. But anyway, all to say like that these interest in sort of this this category is is certainly growing, right? But I think for us it's like as you look at these there's this there's this balance between like for most of it you're running but for a lot of it you're just walking, right?

Like you you literally can't be running for that long and you're just pushing your body forward. And so look, could we do some like throughhiking pieces that sort of capture a little bit of adjacencies? Like we'll see. But I I I fundamentally believe that that you can become a six-figure business if you create that authenticity, build that performance mindset, and then sort of have that the the under layer behind it.

We don't need to be a billion dollar business, right? Like we're not asking to do that. And I think you said six figure. Did you mean nine or did you mean eight? I meant nine. Yes. A sixf figure business. It's a nine figure business. Thank you. Um, yeah. You you so you think staying fairly narrow you can get to nine? I think it depends on how you like follow narrowness like the vast majority of our customers aren't running 250 miles, right?

Of course. Yeah. And so but people are aspiration looking up to it and then running four miles around their their block. And I think to that messaging you can. And like nobody who wears Nike is LeBron, you know? So, it's like it's it's like it makes sense in especially in apparel, especially in fitness apparel that like the aspirational component is still an identifier even if you aren't cuz like when I hear you say you like have attempted a 50k, it's like it's that's already that's enough for me.

You know, you don't have to get 250 for me to be like you're you're a super runner, you know, even even if you didn't get there. It's like it's like I said, like it's just not going to be me. And I'm active. I work out and everything. In fact, I run as part of my workouts, you know, but I just am not I'm not not Yeah. Oh, thanks. I appreciate that. I um I but but it's but I don't associate myself with running quite like that.

My wife is much more of like a loves to run. For me, it's just pure effort. It's just work. It's something because I just don't think you can be fit if you can't run. So, it's part of my training. But, um but I you I want to serve other points in my life. It's not an end in itself. My wife is like a I get a runner's high kind of runner. Um that runner's high I think people are making up. That's it can't be real. I don't I don't I just can't believe elements of it where you're like is this like delusional or is this like a physical experience that I'm having?

Yeah. Yeah. Yeah. Yeah. Well, I um I think um I but the point about saying that is like in both of those training mentalities there's a rel potential relationship to your product and your community that is real, you know. Um and and so like I probably wouldn't buy Janji personally if I didn't know you and talk about it and all those kinds of things, right? Um because I just don't relate to that customer and community the way that I see it there.

Even though I probably think it's better running shorts than what I currently run it, you know, like I would, in fact, I would look at that and say that there's like one half step removed from that. Maybe it is my wife or something where it's like, "Oh man, I'm not gonna go run an ultra, but like if these are the best running shorts and if it's this kind of runner, then I am gonna wear them, you know, and you can take that really far.

There's a lot of people like my wife in the world and who just like like to run as part of that, you know, and so, you know, I I don't do I don't tell me if that's the customer. Is that is that where the market is for you?" Yeah, I think it look I think if you're building an apparel brand specifically and we can sort of generalize this to like other consumer brands where the logo is important. Creating that sort of aspirational, you know, I'd say uh target customer and who you're building toward is really important to sort of get the base of the pyramid, right?

It's the it's the not to sort of use too many metaphors here, but it's it's the classic tip of the spear. And so yeah, I would say like a challenge like every sort of person who's building a brand like who is that tip of the spear and what are you what are you building toward even if like the market at the tip of the spear is 300 people running like a desert in Arizona once a year. Yeah, it it may seem to some that I am belaboring taking this point by taking the interview back over and over again to who the customer is and some of that.

There's two reasons that I'm doing that. I'm really conscious of it actually. One of them is that you actually cited it when we first started talking about something that has been really important for you guys is growth in terms of product market fit and some of that. And so I'm going to ask you one more question about it in a second. Um, but the other one is that I really believe it's the answer for most people. Um, you know, I love highly tactical stuff and I actually have some tactical questions for you as well.

But I I I think that brands being able to think about this question, particularly if they are anything I'll say the word niche. Niche sounds like it can sometimes mean small, but I don't necessarily mean that. I just mean some kind of a a clearly more localized community with a a clear identity in the brand. especially in those situations. I I just think it is a huge part of the ball game, including in things like product development going forward, which I think is like this massive lever in the way that businesses, GDC brands in particular, need to keep thinking about growing their brands, is like how many products can you launch effectively to both your past customers, obviously, this is especially true in apparel, to both your past customers, and then to use those as methods to acquire new customers, whether that's within the same niche or using product um product dev as a way to reach people who are new.

Um, in both those cases though, I I I just think it's it's a really really big deal. And that if you can get that right and the economics work, if they just work, right? If they just make sense for the business, that can get you extremely far by iterating sort of around that sort of core engine of like here is what product market fit means for this business and that's that. So, um, so yeah, I'm I'm really conscious that we're sort of sitting on this point for a long time, but I just think it's it's a extremely helpful exercise for operators because I see it go wrong so often, um, where people people want their customer to be different than it is or or or they don't or they haven't thought about it or whatever it is.

What were you going to say? Yeah, I think I'm a person who loves the tactics, who loves the hacks, right? Like if I can if I like it's it's it's the juice that gets me going. But I think it's also like you need those things for sure. You need to sharpen that spear, right? You need to be able to sort of ensure that like your product engine is going. At the end of the day, all that matters, you need to know where your customer is.

You need to have that perfect product for that customer at that right right price point. Right. And hopefully, you know, as you know, for anyone sort of listening to it, that that was something that we really struggled with for a long time. Like that lack of awareness. And we're not perfect at it by any means. But circle like five, six years ago, like we were just making bright colored pieces for everyone. We thought that's why people bought Jaji when in reality with a lot of customer interviews and a lot of this product feedback loop we've been figuring out like people shop at Janji for the best gear for the longest distance and elements of the brand people really love but like that's at the core of it and we need to build our product engine around that with like constant launches in there and if someone were to steal that idea and to sort of make it their own like that's not necessarily going to work for like who their customer base is, right?

And that's the beauty of e-commerce, right? It's that listening that iterative aspect and sort like feeding it right back to making that to your point like it's not just all about like look, you need to work with a great agency or or have someone in house who's able to market this exceptionally well. No question. But it's that it's that it's that that true product development engine where launching new products and just innovating that allows you to sort of get ahead and continue to build that community that loves your brand.

It's essentially part of the opportunity against which you apply leverage, right? Like it's like the tactics are some of the leverage in that you know but it really is not going to work as well if you if you have not identified some of those things about what the brand is and it's going to work much better if you can and then if you can make again the sort of core economics also be part of it then that's that's what makes the opportunity you know is is the product product market fit plus um plus the economics and so um so yeah is there just before I move on from it is there anything that we that we sort of missed on the front that you think has been important in your story that would help people think about this question for themselves.

If not, that's okay. But I just want to make sure I I didn't leave you sitting on an insight that you didn't get to to share about sort of how you guys thought about product, market, customer, etc. No, I think like one of the big takeaways that we we learned is see, you know, people want quality first, right? And like at the end of the day, it's it's everything else can be kind of like window dressing to that quality.

And if that quality isn't there, like it's it's not worth it. That's just something we just really struggled with up until like the last like few years. And that's like the full spectrum for us, right? For our for our category, that's like fabric, that's function, that's that's fit. And you kind of have to nail all three. It's interesting. Like, as you were talking earlier, I was thinking the whole game here is just like that somebody believes that when they exchange their dollars for your shorts that that is that that's that they would rather have the shorts than the dollars, right?

It's it's essentially like the value is in excess of the cost that they it's it's an ROI calculation in a sort of way. No, they're not thinking about it in those terms of course, but something like that. And so the the quality point is like is just so right. And of course that's also how they come back. Um is that they have they they did that and they thought like that was good ROI. I'm going to do it again. Um you know and and uh and so yeah having that right and then presenting that to to people in a way that they can internalize I feel like is is just like a very simplified way of thinking about it.

But it is it is what the fundamental exchange is, you know. No, I mean that's capitalism. You just like describe like what works within capitalism for sure. And there's a lot of benefits to that. Yeah. Yeah. Um let's talk about tactics a little. Let's go to one you brought up first which is like lean opex. Can you share anything about sort of how you guys have approached that? OPEX is a percent of revenue if you're willing to share the number.

I don't know. It's okay if you're not, but um what what has that amounted to for you and has that been a shift? Uh yes. So we I can describe it as like what our like different like levers of costing is. Um so on the fulfillment side we it's about like 3.8% of our revenue goes to fulfillment. Uh shout out Accurate Services in Fall River, Massachusetts. I'm happy to make an introduction uh to anyone there. That's your 3PL.

Yeah, that's our 3PL. Yeah, we've worked with them for a while and like that's solid. Yeah. With a with a 3PL, you need to know what trade-offs you want to make, right? Is it cost? Is it location? Is it like how much you want to manage them? It's the turnaround of the product and for us like we just know where we're willing to make those exchanges, right? And sort of a stack rank choice. Um yeah, I mean look, we do little things like we do we we do packaging redesign to save a little bit like on on costing especially on like the fulfillments on on the shipping side.

Um like our average cost is like it's um we're we're at like a really nice point. always just like the basic USPS ground advantage. But for us like that that is a core part of like being able to like turn around like and make a great inexpensive business here and we're just like cheap to to to ship things in the lightness of our product almost. I think people consistently underrate that one of the things about e-commerce that is core to the model is that you are shipping something something to somebody's house and finding efficiencies in that process is a really big deal for making the business work. it is the reason why uh it is one of the reasons why there are so many supplement businesses that smash in e-commerce right there's there's a lot of things about it but it's because that delivery mechanism for that particular product in that particular category makes perfect sense at the economic level at the customer experience level and all those things and so I this is one of those things I think about that's actually a core consideration for the brand that I'm working on starting is just that I I think there's a there's a way to make a product that has a reasonably high AOV relative to the cost of shipping it and it's like that kind of that simple.

It's like a it's like a major margin lever. Um and and if that isn't true in your business, it is extremely hard to get out from under that. Yeah. I know these guys who make a company called Slate, it's like milk company and a huge percent of company calls is is direct to consumer. It's like milk shipping over the internet. Like good for them for like making that work, but that's it's not easy. I mean, that is like the worst business ever.

No, they can do it pretty well. But yes, it's I'm sure they are. I it's it's like that's a that's a magical feat if they have accomplished that because it's like it's like yeah that's that's that's a perfect illustration of something I would never tell somebody to do. Now of course sometimes that's exactly where the opportunity is right and that's why there's opportunity there that's very impressive. Yeah. Speaking of somebody who's been in a business that has shipped heavy bottles of liquid around the country.

It is it sucks. Um yeah uh that's super that's super interesting. So you guys actually redesigned your packaging to make it uh cheaper to ship. Yeah. I mean our goal especially like post tariff issues is like we wanted to go line item by line item by line item and figure out how do we not increase costing and how do we not take away from marketing and product innovation like the two reasons people buy John and every other piece of our business like how do we make that as efficient as possible right and so it's from like a packaging it's from a shipping it's from like of course like the software fees where we're always like trying to cut them um but it's like you know it's There's there's lots of like little things in between, right?

It's like for instance like are you using can you have a certain billing cycles to use the right credit card to save a little money there. I mean these are like quarter% half percent savings when sort of do enough of them though. That's right. It allows you to just stay competitive within the market on like an operation side. Yeah, that's a great framework that you just laid out that I've actually never heard anybody say that way. uh which is you you give yourself the constraint that the thing that powers the business is marketing and product and therefore you're trying to do everything you can to not take away costs from those two areas because essentially like if there's a place to invest it's there right so then you say okay let's set those aside for a second how do we make everything else extremely efficient and I that is um that is really smart I think I think that's a really really clever way to to to to think about that problem a little bit um I like that a lot I'm gonna I had to follow up on that.

Um, thank thank you Liberation Day, I guess, for uh forging us, you know, into that. I I swear I've said this in a couple episodes now, the the the the the bull case for tariffs in e-commerce is the forcing function um to uh to getting people thinking and operating better, especially on the supply chains. Uh it will it's just going to make people do it. So, I I'm curious to hear more details about what else you did when you went through that exercise.

Like, can you just talk through what the other what what should people be looking at if they came to you and say, "Okay, we're going to do the same thing, Dave. We're going to we're going to try to not take a dollar away from our marketing. We're going to try not take away a dollar from product dev. Is there anything you can share publicly that you feel like has been helpful for you guys? I know that was recent enough to where maybe you haven't even solved the problems yet.

I mean, I think uh 42 or whatever, you know, and we're we're recording this a few weeks after that, let's say, but it already feels like, you know, about dog years. Yeah. Yeah. Yeah. Yeah. Um so, here are a few things that we we went through, right? We we went through all of our product line and said, "Okay, if these are like the core styles, where can we save money even from like a fabric production cost, right? There's these things called mini markers and you can make certain cuts as to where the fabric comes.

Our most expensive cost in a lot of ways is the fabric, right? Or the production of that fabric. How are we able to utilize the fabric?" So backing up a little bit, if you can sort of imagine a lot like a full horizontal sheet or vertical sheet, our our stuff is basically fits within that sheet in sort of the most optimal way and we use some software to make that happen. But there still is a little bit of like redundancy and excess of fabrics and we want to make that even more efficient.

That might save off like 5 10% of the cost of producing that product which is totally nuts, right? Huge amount. You're saying literally how much of the fabric you're able to utilize, right? Bingo. Yeah. Yeah. So, we we went we went through an exercise of ensuring Did somebody help you do this or did you work with the manufacturer? Like, how did you actually get it done? Yes. And yes, like some manufacturers were more open to it than others.

Um, we went to all of our manufacturing partners and asked for like look like you run a lean business. We want to be the best possible partner. We need to either have one of these three things. And like funny enough, I was actually in Asia right before all this program or meeting with our factories. We said like we need one we manufacture primarily in Vietnam. So we make like kind of one piece in China. There's a some stuff in Taiwan, India.

Um and if you look on our side, you can see where all our stuff is made. But but effectively we we went to them and asked them for like look these are the three things that are important for us, right? It's cost, it's terms, and it's kind of when you're shipping the products. Which of these three things can you help us with to be able to have save money? And this is especially around when the Vietnamese tariff was at 46%.

Um, we were able to save some money on it's at well, we're it's sort of in the 10% um category right now and then it should, you know, around like July 9th, it it's supposed to revert back up to the 46%. Um, so yeah, it was collaboratively working with our factories to figure out like a like what's really important for them and what are non-negotiables for them. And for every factory, it's different. For for some factories, it's going to be like they they're just short on their balance sheet is tight, but they could be more forgiving on costing, especially different sort of volume breaks.

And other ones don't want to give them volume breaks, but their balance sheet is very strong, so they can give more around like terms. And it's all about sort of what works with us. And there are there are a bunch of other small things that we did and if people email me davidj.com I can sort of share with you like my list. Um but it's definitely a um it's an ongoing process and we want to make sure some stuff's going to affect in 2025 but a lot of those things especially on the supply chain.

The goal is to really to your point like efficiently build a better supply chain in 2026. Were you guys already working on that kind of stuff or was that literally like a liberation day uh fallout? You know, it's one of these things like pie in the sky, but like, you know, liberation day like really kicks you in the pants and just Yeah, it's so funny. I Yeah, that makes all the sense in the world to me. I um yeah, I have a a sponsor of my podcast that um does this for people and and just you know, one of the things they always say is just that like um when they look at e-commerce businesses and they get on the initial call um they they're just like they just start kind of salivating because there's so much stuff to do that's like lowhanging fruit that brands just don't even know about.

I've just, you know, people who've paid attention to my content have heard me say this a lot of times, but I'm just convinced the supply chains are the most underoptimized parts of most e-commerce businesses at this point. There's actually very little. Yeah. And there's very little public facing content about it. Um, you know, and so I'm always glad when people are willing to go there. So do if guys, Dave just offered you his time for free, too.

But you're welcome to email me. I'm happy to have a chat chat as well. That's that's what I mean. Uh yeah. And now go charge a consulting fee, Dave. Um uh so um your time is worth money. You should charge that. Um the um what about what about actually on the fixed cost side of things? You said you guys talked about AI and offshoring. Any anything there that you guys are doing that has been super helpful to you? Yeah.

So, for instance, we um we've hired a we we've had like sort of these like customer service um people and we're hiring someone who's a little more senior in the staff who's who's fully offshored. Uh on the AI side, like you know, we're all we're also learning here. Yes, like Chad GBT is like my default search engine. They can they can put together like you know, it's as good basic documents as some of our lawyers. Um, and we're attempting some of those things like the the forecasting side as well, right?

Using a cloud. We're using like a a better tool called like row zero. Uh, shout out Row Zero for some of our like forecasting projects, but we're we're I I can't pretend like we're we're not using like AI for like our copyrightiting like on our site now like that that we want that there still like really come from like the human heart. Yeah. And yeah, I think that's fine. I was just curious if you guys had seen Yeah, I I totally get that.

Um what about just marketing? Let's Well, actually, let's do this. We've got uh just a few minutes left. And something I always like to ask people is, you know, uh I I don't know how much sort of DTOC content, e-commerce content you guys consume, you consume personally and some of that. But what I typically find is that people are always talking to each other, listening to stuff, hearing stuff, and doing stuff that's interesting in their business.

And so just with the last couple minutes, is there anything that's sort of top of mind for you that you're sort of hot on right now or that's most rolling around your head as like, oh man, this is what I think um is has been, you know, just sort of most top of mind. I think especially when things get hard, developing the right peer networks to support you in brainstorming some goods inight. Yeah. It's just more important than ever. like you feel you know whether it's sort of the post inventory crash in 2022 or it's uh you know the iOS change like there have been so many bumps in the road and for me like I think that like this starting your own business and yes I've got a I'm lucky enough to have a great co-founder you feel like you are like you're alone in the middle of the ocean but in fact like there are people all around you and I would say like many of the tactics and learnings like even Yesterday I was on a call and learned like a like a significant way to save on shipping um from like another like operator and the more that you can have those conversations the more benefit and like yes listen to this podcast are out there but there's nothing that'll replace that person to person nor would I claim that my content replaces that that I yeah I have Workspace 6 as a sponsor on this episode and that's the thing I say all the time like it's really hard to not make a return on an investment like that if you'll engage with the I think it's it's so right.

Yeah. I've been a big fan of e-commerce school for a long time. Like Yeah. There's just there's like a big there's a a big reason to do that. I think that Yeah. Yeah. Yeah. All right, man. Um, thanks a ton. I appreciate this. U, this is a really good conversation. I think went to some places that uh are under discussed in in this area in terms of what's actually driving success. Um, you should go buy some shorts from John and and some shirts and hats while you're at it.

All the rest of it. Go get yourself geared up to run 250 mi somewhere. or three, right? Or, you know, on your treadmill, whatever it is. And we've got we've got gear that, yes, is designed for the farthest system, but that means it can take you on the shorter ones, too. And for the record, it's it's like very reasonably priced in terms of all that stuff, too. So, so you can't make an excuse that it's over overgineered for your running life.

It is it is uh it is right within the range of everything else. So, jnji.com for that. Follow up with Dave um and uh and see what he's doing. Thanks, Dave, for your time. So much. Thanks for having me here. another great conversation and I got a bunch more good ones coming up that you are not going to want to miss out on. So subscribe wherever you are watching or listening. Very soon I have a Taylor Holiday mega episode, random show.

All kinds of crazy stuff in that conversation that we are debating about as usual. Um so don't miss that. Subscribe. You don't want to miss that episode. I got Bear Hanlin coming from Born Primitive, one of my favorite operators to talk to about a really cool story. I mean they actually really hurt their profitability. Got down almost to no profitability one year and the next year turned it around and got way back above um well, I won't ruin it for you.

I won't ruin it for you. got really profitable again while growing. Really cool story about what happened at Form Primitive. Uh so you're not going to want to miss those. You're also not going to want to miss things on my newsletter. Go to afgrowth.com. Sign up there. Get my four free essential e-commerce resources. Just drop your email address either in the pop-up or in the footer on the website. We'll both be fine.

I'll send you those. That includes my unit economics um calculation sheet, my cohort forecasting template, um my weekly reporting doc, which is the actual doc that I use with my clients. Uh really good stuff that you'll use. I'm not going to spam you. It's for free. just go drop your email address there. Thanks again to my sponsors for this episode, people I love and I love working with and trust so much. My own businesses, More Staffing, go to more staffing.co to get started with great talent from the Philippines today and Move Supply Chain, sister company of More Staffing.

Move will help you on the supply chain side specifically with an agency style service um that I'm just convinced you can use. So movesupplychain.com for that. Thanks again for watching or listening. I'll talk to you next time. [Music]