Building An 8-Figure DTC Brand By Ignoring The Rocket Ship Growth Story (With Edward Wimmer IV) transcript

Edward Whmermer IVth is one of my friends in the e-commerce space, has been for a long time and is building a really fascinating holdco with three brands in it right now. Road ID, a longstanding e-commerce brand, 8 figureure brand. Dog ID is alongside that where there's a bunch of growth and he's launching Rack Rabbit, another brand soon. And on the show today, I want to talk with Edward about the strategic and capital allocation decisions, about why to invest in additional brands, why to start additional brands, how they're thinking about the potential growth of each and how that's dictating their decisions.

Edward's been in the game for as long as anybody I know in the e-commerce side and has a lot of wisdom and experience to offer. You are going to like this conversation. He's one of my favorite people to talk to in the space. Edward Whmer IV from Road ID Brands. Let's get into it. So, you're telling me that background is not fake? You're There's not simulations of cars behind you. There's like beautiful looking architecture and trees and Kentucky skies.

And that's real. >> This is Kentucky, everybody, right here all the time. That is That's a real car, real building, real real house, real clouds. >> Like, I honest honest to goodness thought you were messing with me earlier when you said >> here we go. Let's see. >> Just a blind. >> That's amazing. Thanks for doing this. First of all, you are in Kentucky, right over the border from Cincinnati. What year did you start again?

I think, like I said, I think like the earliest of anybody I know. >> The business started in 1999. We sold our first product online in 2000. If you consider fax machine selling online, then we sold our first online order uh in 1999. >> You sold an order via fax machine. Do you have any uh fax machine order like uh optimization uh things to tell people? People who are in the fax [laughter] game. No, I think uh there's not a lot of new stuff in the fax game.

Uh and in fact, you know, I think we just lost half of your listeners because they don't have any idea what a fax [laughter] machine is. >> That's really funny. You've been in the game for a long time. I mean, I know that you your whole site was hardcoded for a long time and you eventually finally moved to Shopify, right? >> Yeah, that's right. Um my my terrible joke about being in the game this long is that back in 2000 there were only two websites selling product online.

One was us, the other one was Amazon. One of us clearly figured out something that the other one [laughter] did not. >> But uh yeah, we were very early days hardcoded. First website that we sold product on didn't even have a shopping cart. Like you place the order straight to checkout. We would get an email when the orders came through that would trigger us to fulfill the order. In fact, when we launched our first store in 2000, we launched it, went to bed that night, woke up to 19 emails that said we had 19 orders.

And I thought, "Oh my god, like this is like e-commerce is the greatest thing ever. This is going to be so easy." And then realized it was one order that had been duplicated 19 times. So, the first order of business for me as an e-commerce entrepreneur was to figure out how to credit a credit card 18 times. [laughter] So funny. Yeah. Turns out e-commerce has been hard pretty much since probably. [laughter] >> Um do you go ahead?

Yeah. Yeah, >> that's a good point. >> Yeah. Um okay, so so Road ID is a really cool product and I've like it's just one of those products that I've always thought like this is just cool. Like it makes a ton of sense, makes sense for your community. Do you want to do you want to just tell people like what it is really fast so that people can have a sense of kind of where things came from? >> Yeah. A road ID is a wearable ID that communicates who you are, who to contact, and how to access medical information in an emergency.

Our core audience started with runners, cyclists, triathletes, people that go out and and train and compete and race and typically aren't carrying any form of ID with them. This can make all the difference in an accident. But the genesis of it goes back to my senior year in college. I was a soccer player trying to figure out what was next with my fitness or athletic life and some buddies of mine decided they were going to run a marathon.

I was like, "Count me in. We'll do that." hindsight, training for a marathon your senior year of college is a terrible idea, but uh but we did it anyway. And uh during that training, made a pretty fateful call home to the uh to the folks. And on that call, I was talking to my dad about marathon training. He was like, "Well, what's that?" And I was like, "That's a 26.2 mile foot race." He's like, "Well, why would anybody want to do that?" And >> uh how do you train for that?

And where do you train for that? And it was during that call I told him, "Long runs, country roads." And he was like, "What? Like long runs, country roads? That sounds dangerous." And you know, he I told him about, you know, all the safety measures I was taking. And in spite of all the safety measures, he's like, "I'm not sure I'm I'm a fan of you running on country roads. Please, by all means, take some ID with you in case you get hit by a car.

I, your dad, want to be notified." Was 21, of course, dismissed that. And that call was on a Wednesday. On Saturday, I was run off the road by a pickup truck and found myself. >> Yeah. I was in a ditch on the side of the road when my dad's comments about carrying ID came back to me and I I it was it left me with two scary realizations. One, I could have been hit by that truck. I could have been fighting for my life in a local hospital active on campus.

People wouldn't miss me for a while. Uh and I thought I could be fighting for my life and nobody know would know who I was, who to contact or how to access medical information. And the second way scarier realization is that at the ripe age of 21, I had to admit for the first time in my life that my dad might actually be right about something. So, [laughter] the the second one even scarier than the first. Uh, but it was shortly after >> I for sure thought you were going to say the second one was that life is short and you could die in an instant, but no, it was a joke about your dad. >> Defy.

Yeah. Uh, so, you know, as a dad now, I can appreciate that even uh even more. But it was it was shortly after that I graduated. You know, I always knew I wanted to be an entrepreneur, but I was broke. My dad was broke at the time. It was I considered it his idea. He was kind of a lifelong entrepreneur but uh also broke. And we decided to join forces. I had two credit cards. Each had a $5,000 limit on them uh untapped.

And that was all the money that I had. And my my dad had a fax machine and a basement. So we got uh we got to work on this idea of road ID. Bootstrapping with only two credit cards was tough. Lots of lessons that we could we could get into there. We had slow growth and we were, you know, there were definitely times when we wondered if this was worth it, if this, if we could make this thing, this idea of wearable ID work, if if there was going to be product market fit and all the things.

And then one day I got a fateful phone call from a guy named Michael. And I answer, it was just my dad and I at the time. And I answered I answered the phone, my customer service greeting, and Michael asked to speak with one of the owners. So I said, "Sure, just one second." Put the phone [laughter] down, picked it back up. And Michael proceeded to tell me a story about how his son was hit by a car while training for a cross country season.

And because of his road ID, mom and dad were able to get to the hospital in enough time to make some critical care decisions. And >> unbelievable. >> That Yeah, that guy Michael was just calling me to share share a story to say thank you. Um, but by the time I hung up the phone, I, you know, he changed our lives and he changed the, uh, changed how important >> we thought that this product was and we knew that, you know, we were, we were going to find a way to make it work. >> So, leap for, you know, fast forward a bunch of years, we hear one of those stories near nearly every day.

Uh, somebody's reaching out to us to say thank you. And some of them are pretty simple. trip over a curb, hold the road idea up to I'm alive today because or we got reunited with our kids at Disney because, or you know, one story I tell that I have a hard time getting through without choking up as a uh as mom posted on our Facebook page that because her son was wearing it when he got hit by a car while riding his bike, she was able to be at the hospital enough time to hold her son's hand and tell him she loved him one last time. >> Wow. >> So, like there's like Road ID has been around in part for 26 years, uh surviving lots of ups and lots of downs. uh because we have a an immense amount of passion for for what we're doing.

I mean, it's a really helpful, first of all, like one of the things that stands out to me about a lot of ecom brands right now is it's just that like a brand with the longevity of Road ID that has the chance to get to the scope that you guys have gotten to, support your life and business and and be a good profitable brand for a long time, which I, you know, you can correct me if that's not totally true, but like that's my sense that you guys have like really had like a really good run for a while.

You know, it's been like a good business for a while. I'm sure challenges along the way, but that's my sense. Like there's something to be said that I think people overlook about just how much care about the product and about the customer in these ways really really matters, you know. Um it's just it's just really hard to replace. Obviously, your your product uniquely has this thing that's important in people's lives because of the significance of it.

But I yeah, I just I think there's a real thing there where part of the reasons brands struggle and fail is because there's just there's just not there's none of that. It's just a way to make money, you know. Um and the product ends up not being that good, you know. >> Yeah. I I may be stealing this from Seth Goden. Um, I think that's the source. But I firmly believe that if you're going to do this entrepreneurship thing, if you're going to be a founder, uh, if you're going to create a startup and have some longevity, that you really better love it.

Like you better, you got to love it. Love it. You got to love it so much that you feel like you'd be doing the world a disservice if you didn't do this thing. Um, because it's hard. Like we it's we're 26 years in and yes, we've had lots of great great years. I I think the you know the the the the structure that I put it in is that in any 10ear business cycle you're probably going to have two really great years. You're going to have two really crappy years and you're going to have six like okay years.

And that's been like relatively true for uh for us. If you don't love what you're doing, you're going to hit those hard times and go I'm out like yeah I'm go find something else to do. So at the same time what you've told me is that you're investing less in road ID now in some respect in the future and I'll let you define what investing less means because I actually don't really know but instead because you guys have other brands in your space and this is sort of the question that animated this this conversation for me.

It's the reason I wanted to talk to you. You have another brand Dog ID that's sort of the sister brand to road ID uh in a in a more direct way and then you're also starting another brand called Rack Rabbit. And so I want you to start to talk me through the assessment of your time and capital allocation on that set of brands and how you're thinking about that portfolio. So u road ID is this good brand but I've heard you reference sort of a maybe a plateauing of its growth because you've sort of already hit so much of your market.

But yeah anyway I won't put any more words in your mouth. Talk through that set of brands and the decisions you're making right now around where your time, dollars and energy are going. Yeah, I think I I've gotten to this space where um I try to understand what a good brand is or where where to invest uh time and and uh resources over a a journey. So perhaps it makes sense to share a little bit of that journey. So road ID started a long time ago.

We we covered that you know we uh bootstrapped the the entire way. So growth in the early days was slow but we we eventually picked up steam and you know by 2009 2010 we were an eight figureure business doing you know selling just identification products you wear on your on your wrist and we did everything we could think of to to drive that growth. I mean early days we were buying tiny little ads in the back of Runners World and bicycling and triathlon uh publications you know as as we grew those eventually became fulltime uh full page ads.

We had a retail program that we operated. We had an event sponsorship program at its peak. We were sponsoring 8,000 grassroots running and cycling events across the uh across the country. Uh performance marketing like in those early days wasn't even a thing. Like uh but when when it started becoming a thing, we were advertising on the predecessor to Google ads. And I'm not talking about Google Adwords. I'm talking about this thing called Overture uh which uh distributed I've never heard of that. >> Yeah, you probably right. most people wouldn't uh but overture uh you know actually I won't get into whole the whole history there but it's essentially a vote overure became what is today Google ads you know Facebook advertising back in 2007 we sponsored newsletters uh race registration sites like active.com back in the day would sell us dedicated newsletters to the tune of like $50,000 a newsletter and we were we were doing that and it worked. we were doing organic back when organic like having followers mattered and that's a long time ago too but we built a community of 250,000 uh fans on Facebook uh over 50,000 fans on on Twitter back you know again back when all that stuff mattered we had an ambassador program we sponsored professional athletes professional runners and and cyclist and we had TV shows on on NBC we had commercials on uh on TV shows like the tour to France on NBC as part of that we you know we had the commentators wearing road IDs.

We had a a giveaway in connection with that. Our biggest giveaway, we attracted 300,000 entries for from cyclists wanting to win a a premium bicycle. Uh we had an an experiential marketing uh uh thing called road show where we would go to major marathons and we'd be on site and you could order uh order on a touchscreen uh system that we had and we'd deliver a road ID to you out the out the door of our of our giant trailer within minutes.

You know, the point I'm making in all those things is like we were killing we have killed oursel looking for for growth for this brand. And why why are we doing that? because like this thing actually matters and we really wanted people to understand just how important it was and that this is a life-saving device for people. Uh but we were we were really spending lots of money. Um and as the years went by that money wasn't turning into meaningful growth.

So I don't believe that road ideas maxed out per se. Like there's still growth opportunity. Uh but you can suffer a lot of brain damage banging your head against the wall trying to figure out where that next level or the next trunch of growth is going to to come from. And what I've eventually through this whole journey have realized is that most businesses have some sort of like natural or optimal size that you're going to hit a a plateau or a ceiling and like that's probably where you should be for that company.

And from there, how do you, you know, the the question turns to like how do you become really efficient and really optimal and make sure that the uh that the brand stays steady? Um because you've heard the adage like you're either growing or you're dying. I don't necessarily believe that. I think I think you can achieve an optimal size or a sta stasis and not die. And so when I when I finally came to that realization, oh, there's a there's a limit here.

Like where should we if if we're if I'm still an eager entrepreneur and want to grow, how am I going to do that? So the the first the next step I had was dog ID. It is time to take your website split testing beyond the basics and you should do that with intelligence. Intelligence is a tool that literally every one of my clients is using and using regularly. I myself am in intelligence often with my clients and it's because it allows you to do so much more than simple like you know headline and uh button color testing.

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Intelligence allows you to test that and it goes beyond that too. What about like your sitewide offer? There's this thing that is on almost every e-commerce website I feel like that I bet very few people have actually tested which is the 10% offer [music] that new customers get uh when they submit their email address on your website. Is 10% off the right move or is it just cannibalizing your margin or should you be offering a stacked discount to encourage larger cart sizes or whatever?

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Like one of the things I would say to a lot of people if they've hit the phase of sort of you know diminished growth is like well have you actually especially in a brand like yours where there's this like subculture element of it you know and sort of community element of it you know runners or or cyclists or something like that represent you know they converge around the same events and celebrities lifestyle choices and some of those things that make it so that you know part of the way I would think about growing in in a space like that is investing beyond performance advertising into the community itself in all these ways, you know, and and I've I've watched that play out for a lot of brands that do this really really well and end up having really good performance because of it.

The thing is you just can't say you haven't done that to you, you know, when you talk about that is like you guys have done all of it. And so if you're seeing sort of like the then the if you just think about this from a sort of ROI perspective like if there's just sort of a some return but it's smaller uh on your investment and your time and money in there then you say okay well how do we expand TAM instead of trying to keep hammering this TAM for forever.

Um and so that is the beginning of dog ID. I assume I don't know if Dog ID was a direct answer to that question or if it was just sort of an obvious product spin-off, but um but yeah, maybe you can talk about sort of how that has played in as well. And then I'm I'm very curious to hear about how you think about the future of that relative to this new thing you're starting and and the rest. So So start with dog ID. >> I guess foundationally I'm the type of entrepreneur that just likes to do good things. uh yes there's strategy behind some of the thinking but the the way I think about way I generally think about it is if you want to grow a business and now the business is really bigger than road ID um it's m it's multiple brands and seem to be another like how do we you know what what good things are we going to do to to facilitate uh uh growth and you know to to color in some of the dog ID story you know about about circa 2018 uh we had this pet product on our store we had had it on our on the road ID.com store for a long time.

It was initially called the Scout ID. It was named after my dog. The genesis of the product was I was tired of my dog waking me up in the middle of the night shaking her neck and having her her uh ID tags clang around and then she'd plop back down on the hardwood floor to the foot of our bed and those tags would hit the floor again like like a symbol was crashing to the ground. >> Yeah. And uh you know that was the like that that wanting a quieter ID is what caused my wife to look across the breakfast table uh at me one day said and say don't you own a company that makes ID [laughter] tags like can't >> you idiot >> can't you do something you the best positioned person in the world to solve this problem [laughter] >> so that's so funny >> I can't say that like it did hadn't occurred to me completely before But like like her looking across the table like pointing a finger saying do something like >> uh we got off of our butts and we did something.

But again, we were so focused on this this >> for people that we just kind of built the product and then put it on the dark dusty e-commerce shelves. Uh and if you were a cyclist coming to us for uh for yourself then and you happen to own a dog and you happen to like trip over this product in your journey, you might buy one. And so that's where it lived for a really long time. For an embarrassing number of years, it stayed right there.

And as we were struggling with trying to find the next level of growth on Road ID, somebody said to me like, "Hey, what if we tried to promote this pet product?" And I had always been super resistant to that because we weren't a pet company. We were we were saving lives, delivering peace of mind, and fueling adventure for humans, not for pets. Uh but because we were struggling uh with with finding the next level growth, I I finally relented and said why not?

Um and uh the the product I think you know had changed from the name Scout ID to pet ID at that to at that point and we started promoting pet pet ID and within a few months literally a few months the that product sales 10xed a few months after that 30xed from its uh from its starting point and uh the the long and short of the story is that I I came into the office one day I looked at my computer the screen pulled up our our the our website and looked at the the default page and said, "Hm, if I were if I were a cyclist coming here today, uh, and this I'm looking at this homepage dominated by, uh, by pet messaging, I might think I showed up to the wrong place." >> Yeah.

Yeah. >> So, I, you know, I coupled that with this notion of like if there's an opportunity here to be more than just ID products, too. So there's an opportunity to grow product grow through product expansion and I wasn't going to let that happen under the road ID brand because it would just it would make it would would make things too murky. >> So we peeled off peeled that product off into uh to to dog ID uh moved it to dog ID.com >> and uh started expanding the products >> and that's been a place where you have seen and are continuing to see a bunch of growth.

Is that right? we are but different types of growth and like so we came from this like very challenging heritage of a demand generation like you know this requires some storytelling like you have to tell people what it is and why they need it >> uh with an ID tag you know it's it's like I always you know liken it to selling hamburgers like everybody knows like they like hamburgers you just got to tell them why your hamburger's better u and that's the so that demand capture nature of dog ID made things a lot easier >> and >> um because you're getting inbound like search traffic like >> correct I mean with with the with the name dog ID and dog ID.com like if you were to go search >> for uh an ID for your dog what do you search >> Yeah right yeah right it makes sense so that's interesting so at the tactical level was that like a uh did you get a bunch of organic Google search volume there and then also had a had a big and pumping Google ads account. >> Yeah.

Um and coupled with that is that through the you know 20 years of of Road ID we amassed a very large owned audience. >> Sure. >> Um and so just being able to promote to the Road ID audience that this thing existed. Um >> was a we were able to accelerate growth pretty quickly because we already had the customer. You know so many of our customers our running and cycling customers also own dogs. So it was natural for them.

They had already they already trusted our brand. They trusted our brand in large part because we work really hard to deliver a product, service and journey so blindingly awesome. People can't help but share it. So there was that because we work really hard on that. There was that trust that then we were able to share that trust over to a new brand. >> Do you now have a large focus on demand generation for dog ID alongside demand capture? >> We do.

Yeah. So I mean we're doing we're doing all the all all the things all all the tactics that your other guests talk about pretty regularly. >> Yeah. Yeah. Uh with with some help from Dave Recook, right? That's right. >> Shout out Dave. Um, yeah. Uh, yeah, he's the man. So, when you assess the future of these two businesses, well, I don't know if you can speak to this, but what is the relative size of Dog ID and and Road ID at this point?

Like, are they similar in size? Is one of them materially bigger than the other? >> Road ID is still the bigger brand, but uh, Dog ID will be like it's uh, it will catch up and surpass. the addressable market is bigger uh because there are so many dog owners. People spend an obscene amount of money on their dogs. They are parts of of the family that uh get get a a share of the of the family wallet and we are on the premium side of things.

So all of our products uh carry a lifetime guarantee. Even if a dog chews up a leash, we're going to we're going to replace that. So >> that that's the the positioning we're coming from is is lifetime guaranteed built to last >> in that. Do you assess the growth potential? So you're starting here's what I'm really asking. You're starting another brand now and I like it. When you sat and told me about this brand recently, I like immediately see it.

I'm like, okay, that makes sense. especially given your audiences and we'll talk about that brand more in a second. But why not just keep investing in dog ID for all of your energy? This is like the classic hold code question is like why spread out the investment of your time and resources if you think dog ID has more potential. And I I really I want the real answer to that question because it may be rational, it may not be.

It may just be like I don't know. We're interested in doing that thing. But uh but like I I am not asking it in an accusatory way either. I'm like curious how you're thinking about this question. >> Yeah. I mean part of it is that I just like uh I like the pain associated with uh [laughter] with business. >> Um so maybe a bit of a a satist in that way. >> But I I the >> I'm a I'm a true product guy. Like I love inventing product.

Um, I have dozens and dozens of product ideas, things I would like to see brought to market. Um, so and you know, so inherent in that is you got all these waves that you could surf. It's like how how do you decide which waves to surf? And I think fundamental first is like I'm going to go surf a wave. Maybe this is a bit selfish. I want to see this product come to market and I want it so bad to come to market that I'm willing to maybe sacrifice uh other opportunity to to see that happen.

So, back to my earlier comments about you got to love a thing so much uh you know to that you're willing to suffer in order to to make it happen. Like I'm willing to suffer in order to make to to see this product come to life. So, it is a wave that I've determined I want I want to serve. now to surf. I that said I'm I'm now thinking more intelligently about which waves we ought to surf. Um and maybe before I get into that I'll say that fundamentally I think we've got a a a strong structure here with our holdco environment if you will to support this type of thing.

So, I wouldn't fold in another brand that I didn't think fit inside the existing tenants. And I'll call that like, you know, uh we have a shared sense of core values. Like, yeah, we're not changing core values from one brand to another. Operationally, like it has to work like we have to use this, you know, the same uh the same backend needs to support everything. The same customer service team needs to support everything. the same uh the same pick, pack and ship team needs to be able to pick, pack and ship uh the orders where we where we will peel off um where they where the the brands are separate is really on the marketing side.

So we have a we like we like to we've come to this notion of building a team a small team >> around each brand on the marketing side >> and that consists of a of a of a marketing manager who is has a wide skill set and a creative that has a wide skill set and then those those twoerson teams report up to a a marketing director if you will. So we they do get one of the things that I've always been concerned about in a in a holdco strategy is like how do you decide where the resources go and from a marketing perspective the way I've always looked at is like there's an unlimited number of funds available to to the marketing team provided they're first order profitable. >> Yeah.

Right. Right. >> I'll I'll back up the dump truck of of money if you can deliver first order profitability. So I'm not really concerned from a growth perspective about that. And we're fortunate on both brands that, you know, we our um you know, we we have pretty relatively low product cost relative to our pricing. So, we're able to keep a lot of stuff on on on hand without too much cash invested in inventory. >> How much of your decision- making around all of this and your goals for growth in the future have something to do with your like personal financial goals?

And what I mean is like how rich do you want to get? Um, that's what I'm really asking. That's what I really am. I'm asking like how much do you care about getting a lot richer than you are right now? Again, I mean it you don't have to say how much you know you mean net worth is. I just mean like as a percentage as a as a relative to your current state status like how how does that play into your goal setting as a somebody running these businesses? >> I think that's a I think it's a great question.

Um we've always been a our cornerstone. So I mentioned core values earlier but we have this thing called cornerstone which is purpose over profit and that extends in a couple of ways. Uh one is that we are committed to uh to a first fruits approach of giving a a percentage of every order of revenue to causes that we that we believe in. Uh that doesn't come out of profit. It's not an afterthought. It's a it's coming directly out of profit approach. and we've been doing that for a really long time.

But that that notion of purpose of a profit also extends to your question of like how how rich do I want to be? Um and and to you know to what my dad and I started the company together. Uh he has since retired. My sister uh is is an owner now. And we I think we have this shared set of family values that yeah money is nice but it's not the it's not the only thing that that drives us. um you know there is uh you know part I will say that part of the realization of of road ID hitting a ceiling and uh trying to and allocating resources to something else is because like eventually I don't I don't have any plans on retiring soon but eventually I'm going to want to retire and I'm going to need to like I'm going to want to be in the best financial position uh when that day comes >> and So while we are purpose over profit uh profitability is really important and we need to make sure that we're serving the uh uh you know we got to serve our team and an effective way but you know a business also is there to serve its owners. >> Yeah I what I hear in that is there's a desire to generate more total income but it's not a desire to get fabulously rich.

That's what I That's like the way I hear you saying it is like there's is like at least that's not the thing. I mean it sounds like fabulously rich would be fine but it's not the thing that's really motivating you uh in the way you're thinking about it. Yeah. >> Um I relate to that. >> I am very excited to tell you about a product that I have never used and there's a reason I've never used it. It's because I'm not allowed to.

That product or service [music] really is Workspace 6 which is a closed private Slack community for e-commerce operators and executives in the organizations. And wonderfully, they do not allow agency people like me or other service providers like me in the community. That's because Workspace 6 is built to be a place for sharing real information honestly and getting real help from other operators without people selling you stuff.

And that alone is really awesome. Uh and so Workspace 6, the the reason I'm so happy to promote Workspace 6, even though I haven't actually [music] ever used the product myself, is is because first of all, I've seen the value of this kind of community in businesses. Just having people you trust and [music] can ask for answers and get help with the things that you're facing as an e-commerce store operator uh really quickly and easily without somebody selling you something is incredibly valuable.

It's in fact very very hard not to get more value than the cost [music] of the the um community membership uh for something like this. And by the way, the cost of membership is very low. It's $1 [music] for your first month. There's no long-term commitment. So you can go actually check it out really really fast. Uh so there's that first of all, but then um secondly uh I am a huge fan of the Workspace 16 team. They are really out there trying to help other e-commerce entrepreneurs, e-commerce operators get the most out of their stores, have the best businesses possible, the best lives possible.

Uh Workspace 6's uh newsletter is one of the only newsletters I read really really consistently when it hits my inbox. Uh they're just great. My friend Sam Mandlesson has helped recommend guests on this show, including people who have been on the show recently who he's seen be great uh contributors in the Workspace 6 store. So, just really awesome community. You should go join that community. These communities uh community like Workspace 6 all in Slack, easy to use, easy to interact with, uh just just part of your kind of regular workflow is it's just a huge differencemaker.

So, go to workspace 6.io, go check it out today. I wish I'm hoping that when I get my brand off the off the ground and and up and moving enough I can uh get into Workspace 6 myself that they'll let me in there as long as I promise not to sell because it really is really valuable to have these kinds of relationships and uh and for people who are running seven and eight figure [music] stores. There's just a whole bunch of community there for you and your top executives to get the answers they need really fast.

Go to workspace 6.io workspace [music] 6.io to get started today. Okay. So, Rack Rabbit, tell people about that first so people know what you're talking about. >> So, this is and and tell people when it'll launch, too. >> Okay. Launching Q1 Rack Rabbit um is born out of a personal frustration of mine. I'm a cyclist. I ride bikes way too much. I ride mountain bikes. I ride gravel bikes. I ride road bikes. Um I, you know, I'm your typical mammal, which is an acronym most of your audience won't understand, but middle-aged man and Lycra.

Um, that's uh that's who I am. I uh so I have this garage. >> I bet you look great in Ler Edward. >> Yeah. Yeah. No, no question. Uh then you like add in my kids and my wife and and like there's a bunch of bikes in the garage. And as a as a mammal like I've got a lot of gear. I've got, you know, I've got my helmet. I've got my glasses. I've got uh I've got my heart rate monitor. I've got special psy cycling shoes. I've got a bike computer that needs to be charged.

I got charged. I got a bike safety light that needs to be charged. Uh some of my bikes have electronic shifting and they have uh they have batteries that need to be charged. And inevitably what happens is I come home from a bike ride. My bike goes one place. My helmet goes somewhere else. My shoes go somewhere else. My heart rate monitor may land on on the steps. And then I got to take all this stuff that needs to be charged and I take that somewhere else and charge it.

And then when I decide at, you know, 9:00 am on a Saturday that want to go that I want to go for a bike ride, I've got to go around and collect all this stuff. And uh, you know, from all the different areas, and I'm I'm very much a a life hacking process snob. Like I like things to be easy. I wear the same shirt uh every day. I have not the exact same shirt. I have lots of these shirts, but I wear the same shirt every day. >> I'm the same.

Yeah. >> Yeah. To decrease decision making and to make things faster. So, I want to be able to go out for a ride faster. I said, "There's got to be a better there's got to be a better way to store all this uh stuff." Uh, and uh that's the that was that's the the insight behind Rack Rabbit, which is a garage storage solution. One stop. You place you put your bike in the rack. You've got a place to put your helmet. You got another place to put your glasses.

You can take your cycling gloves off, put it there. Your heart rate monitor. Uh your shoes get get hung on a uh on on hooks. And it's all right there. And the other thing that this does for cyclists like me is that if I want to go for a group ride and maybe the group ride's starting, you know, at the bike shop that's, you know, 15 minutes away, and I'm going to go to I'm going to put all that stuff in my car. But what happens all the time for for people like me is that we get all the stuff in the car, then we show up to the bike shop only to realize that we forgot something.

We forgot our bike computer, we forgot our shoes, or we forgot our helmet. And so the the idea behind this rack is it'll be a visual checklist like I've got all this stuff. So that's the initial insight. We think the addressable market is much bigger because it won't just be for people like me. It'll be for, you know, the the small family. Uh if you just have a couple of bikes and the kids have helmets, like that's there'll be a place for the helmet.

So it can be fully built out for people to have all the things or it can just be a an amazing bike and helmet holder. Um, okay. It's a really cool product. I'm also seeing the vision for your need for uh financial independence entirely to support all of your bike [laughter] stuff. Sounds like so much bike stuff. Um, I'm not a cyclist, so uh yeah, I didn't I didn't realize there was that much stuff. Um, okay. What is the potential uh revenue generation of that of Rack Rabbit relative to Dog ID and Road ID?

Which of the three, which one can be the biggest? >> I think Dog ID can still be the biggest. I think Rack Rabbit has a bigger addressable market and at a much higher price point than any of the other two brands. >> Um, >> really? Because it sounds it sounds sort of niche to me. >> Well, it's it's niche in the way that Road Idea is niche for the like the competitive male cyclist, right? The the mammal, right? >> But I I I see it beyond that.

That might be our That'll be our entry point because it's the customer we already have. >> Got it. Got it. Got it. >> But you'll make other racks for other things. >> We will make racks for every garage. >> Um we will be a a target customer. We start start on the cycling side of things. So not just for your not just for your competitive male cyclist, but also for mom and dad that uh have have one kid and three bikes in the garage. >> Yeah.

Um, and so, so you actually think Rack Rabbit think could be the biggest business of the three? >> I I think we I I think we'll sell more volume through Dog I think eventually if we're looking down the road a few years, >> there'll be more volume coming out of Dog ID. >> Uh, more unit sales. >> Sure. >> But at because of its price point relative to Dog ID, Rack Rabbit has the potential to be and from a from a pure revenue standpoint the biggest brand. >> What will Rack Rabbit uh cost?

Like what will the AOV be? You think? >> Uh we're trying to hit a sub $200 price point. >> Okay, that's not as much as I thought it was going to be. Okay. Um yeah, that's interesting. And dog ID is one. >> Customers will need multiple because you'll be able to link them together to store all your bikes. >> Yeah. So, who knows the actual AOV will be relative to the price. The the uh what's what's a dog ID cost? >> Uh 30 bucks. >> Okay.

Um, so you got you you know you're like one rack for every uh every five dog IDs, five to six dog IDs or something like that. Yeah, >> makes sense. and you will launch that obviously to your li your 20 year built list of cyclists and I think that will be very successful probably right like you got to feel really good about that right >> in the same way that we felt good about launching dog ID to that that that same audience right um >> yes it's I think launching this brand without that is much challenging starting from zero >> uh is much harder than starting from where we are which is this uh very largeowned audience that we can tell the story to.

And on top of that, on the road side of things, we have we have sponsored athletes. So, we're working some with some of the most well-known cycling pros. Uh this is a this is a product that um we may have to modify their contracts to talk about, but uh it's a product that they'll be able to talk about uh as well. This is one of the potential cases in favor of hold codes for me is the idea that that like you would actually be multiple brands that have shared audience.

This where there's an actual synergy and the owned audience component of it. Uh that become becomes really compelling to me as as a potential way of doing this because it is it's not it's not too unlike in some ways like an influencer launching a brand and having a big owned audience to launch it to. you know, if it's it's like you can they can sort of draft off of the reality of the owned audience on uh on launch and then also some authority built into it.

Now, I I don't know how Road ID's authority will play into Rack Rabbit because it's a different enough product that you might, you know, but I yeah, I would I would think would be at least some positive brand shine on on Rack Rabbit from Road ID. Uh so this this makes sense to me. It's almost like in a different world you could have launched a pro a brand called uh the complete cyclist or something like that and you would have both of these on the same thing like I don't think you should do that of course like I think [clears throat] they're so different and the different price points and all those things but they could certainly be in the same retail store you know uh and so like yeah there's a there's like an interesting thing here where that that becomes it makes more sense to me that you'd say this is the next opportunity for us to grow this business in a space and with a customer that we understand really really deeply and in fact that you yourself are like this has all the markings to me of sort of the subjective measures of like yeah this can really work and then you add the unit economic profile that you feel good about where you're saying like we're at a margin spot that we like and probably gets better with volume like usual and all that stuff like I think uh I'm a believer I think is what I'm saying >> I that means means a lot to me did you use the phrase brand shine I >> I I think yeah >> I think yeah brand shine I like that >> yeah yeah Yeah.

Yeah. Yeah. [laughter] Yeah. Yeah. >> We can have one brand shine a light on the on the other. I like that. Yeah. >> Yeah. Yeah. It feels like there's a good case for it. And the the the failure of a lot of hold codes is the assumption that there's so much similarity when there isn't for some brands. I've experienced that personally. Right. So like uh they're they're actually really different and they have different approaches and some of those things.

But when you actually have this customer that you've spent 20 years getting to know, uh the idea that you could launch more stuff to them that they like, I think it uh it makes sense. >> Yeah. I I think that that's um you know, one of the one of the tests that uh a wave has to pass for me in order to justify launching it as a whe whether it's a product inside of one of our brands or whether it's an entirely new brand like we have to be able to le leverage the existing audience.

Um otherwise you it's um it's too hard to get that boulder moving uphill. >> Are you do you have a revenue goal for the first year for Rack Rabbit? >> I think if we hit seven figures in year one I'm going to be happy. >> Okay. >> On launch. >> Uh >> I think that should be relatively easy for us to do. But >> yeah, >> uh I I want to, you know, for the team to feel good about the outcome, I think a seven figure goal in year one is uh >> is very achievable. >> It's not too unlike how I'm thinking about the brand that I'm launching.

Uh is like you get seven figures or or close to it in that first year, especially in this case, I'll have no owned audience. I would feel really really good about that. Um, >> and also unlock some of the uh I mean as I mentioned before with our marketing teams like there's two people that we want to have to make up an ideal marketing team for the brand and you know being at that scale kind of unlocks the opportunity to put the that uh uh to justify that team. >> That makes sense.

Um, and I think you're thinking about the the structure correctly, which is that each team the the place where there is the least synergy between the brands is in a sneaky way is marketing. You actually need dedicated support for each one of them. Um, just because the >> it's just the work requires too much time and effort to get to know the customer and Yeah. And yeah, when I hear you talking, I hear this intense focus on product and purpose at the center of everything you're doing.

Um that is that is sort of guiding what you focus a lot of your time and attention thinking about is how do you do that? How do you create a great product? You said deliver a blindingly amazing customer experience investing in the actual communities you care about. Is that your secret sauce? Is that what makes the whole thing work? If you and it's easy to say yes, but do you think that's right? Is that it? Or is it just like your margin profile is awesome too?

You know, [laughter] like you know I it's probably both, but like >> Yeah. So, you know, back to the one phrase strategic plan of delivering a product, service, journey uh so blindingly awesome that people can't help but share it. I that um that's kind of how I define brand. Like if you don't have if you don't have people sharing, if you're not delivering a great product and a great experience of high of high quality and high integrity that people are willing to go out and talk about like then you like you don't really have a brand.

Um, I will also say that talk about piece I find really important because I believe that there has there has never been and there will never be a marketing lever as powerful as word of mouth. >> Yeah. >> And so if you don't have that if you don't have that brand people that brand piece that people talking about you piece uh then you know business is going to be a really really tough slog. Um, so yeah, I think you know, yes, if I if I try to remember your initial question, I >> that's the difference.

Yeah, >> that that's the the the special sauce. >> Yeah, but I'm on a kick right now thinking too about like growth rates and expectations and I just think people >> like Have you talked to Silh Agraal? >> I haven't. I know. I know who he is. Yeah. >> Yeah. Well, so so he, you know, I just had him on and it's like really easy to put up his numbers. $400 million business, you know, publicly traded in India, $240 million lead brand in a hold and they just started a new brand from scratch.

So they're still starting other brands. It's crazy. You got a $240 million brand on your hands and you're still starting zero on another brand. So there just all kinds of stuff. Similarly, all in the jewelry space, jewelry and some lifestyle stuff. So like similar to you where that like they really understand certain elements of this customer and they're doing these things to meet those needs, launching new brands when they need to.

But he started in 1980 and I and so it's as easy as this to promote the foreign million thing. You I think of as like eight figure been eight figures for a while. That's a really hard road to get to for a lot of people. That's a big marker, you know, uh with a bunch of growth still in front of you. But but you know, you started 20 some odd years ago or 25 years ago almost now. You know, it's like there's there's this element of it that I look at and say like that's probably the right expectation for most people when they think about the problem of growing a big business and how to solve it is like you just you don't act you most people should not expect the sort of like Twitter story or whatever of like super rocket ship growth that like does that and and and if they do see that story and are motivated by it, the story they don't see is the the rocket ship that explodes midair uh in the attempt attempt to try to do that, right?

Uh there's a survivorship bias to the stories that get told. And so I I just I think there's something about the way you're approaching this whole thing that I'm really attracted to, which is this notion of like we're going to keep putting out great products for the customer over a very long period of time and in the end we're going to end up with a really good quality business actually that generates a bunch of profit and um and that we're proud of and that we're happy to talk about and that we feel invested in deeply in the customer.

Um, I don't know that's that's sort of a a broad reflection as just like towards the end of this conversation and you can respond to that any way you want to, but u that's kind of one of the things I hear in your story. >> Yeah, I think one of the things you mentioned there is, you know, you you hear the survivorship bias and you hear these amazing success stories. Um, yeah, there there was a time when we were growing 50% year-over-year.

Uh, real, you know, for we did it for nine straight years. Uh, yeah. You know, and >> I didn't think we were gonna grow, we were gonna keep growing like that forever. Like, that would be silly. But I think that's what that's what I see a lot in the in the DTC uh space right now. It's like, oh, we're crushing it and we're going to keep doing this forever. Like, no, you're not. Like, at some point, you hit that natural limit to uh to the business.

And yes, you can do all the creative things to try to expand and grow and you know all all the different tactics and and approaches, but at some point you're going to find the ceiling and uh then what do you do then? Uh we've been we've always been very conservative in terms of uh being of debt and profit, right? Like we we've been we've been a profitable debt-free uh company for a very very long time. And so you stack that over a bunch of years and you get to a point where like, okay, if we want to invest a lot of money into a new brand, like let's go do that. >> Yeah. >> Um and we don't have to we're not going somewhere looking for for financing to do that.

Like we got our the owners are just making it happen. They're putting up the funds. We're and doing it. And we have that freedom. We have the freedom to do so because we've we've stacked um we've stacked 26 years. Not every year a success, but we've stacked a lot of successes over over 20 26 years, and that's put that's given us a lot of freedom. >> Yeah, I love it. Um, all right. I think there's value to the rocket ship stories.

I think those people tend to learn things in those situations or unlock something that's really worth like paying attention to. I just am not sure most people should expect their stories to be the same. So, >> yeah, kudos to those that can that can do it. But that's you're you're absolutely right. Like that's the >> that's the exception, not the rule. And you can be you can be very happy like yeah be very happy owning a uh a business that never reaches nine figures. >> All right.

Uh sometime I need to get to Kentucky so that uh then next time we have a glass of bourbon together it's uh it's in person in Kentucky right there in the in the in the right place to drink bourbon. So uh until then thanks for your time. I appreciate it. Uh and uh people should go to road ID.com dog ID.com. I myself need to get a road ID. I don't know why I haven't gotten one. I I was it's because I don't think of myself as a runner.

I'm definitely not a cyclist, but I actually run as part of my workout stuff regularly. So, it's time it's time to get one. Um, and uh and all those things. Anything else you want to promote, Edward? I know you're not a big social guy, but is there anything else you want to send people to? >> Um, you you can find me uh I'm most active on Instagram, Edward Whmer 4. Probably going to be talking about cycling u uh more there than than anything else. >> Yeah.

Uh but yeah, check out the websites and if you if you want 20% off uh Andrew Ferris 20. >> All right, look at that. I got my own discount >> till the end of October. I >> use that right now. >> I know. I'm gonna [laughter] go use it. >> Enter into Shopify immediately because I'm going to go buy something in just a minute. That's great. Um All right. Thanks, Edward. Appreciate it. >> All right. Bye. >> Thanks for having me.

Right after this call ended, I told Edward he's going to have to come back in like, you know, six months into 2026 and tell us how Rack Rabbit is going, what he's learning, what he's seeing as he launches that store from the ground up and how that's coming along. I love Edward. He's a great dude, uh, and just a real help and contributor to the community. So, um, so I hope you enjoyed that interview as much as I did. Uh, I thought it was great.

You can email me at podcastjfgrowth.com if you have any questions or thoughts or guest recommendations or anything like that. I would love to do that. Um, always looking for questions to answer on episodes. That's a great way to reach out. You can also go to afgrowth.com if you're interested in working with AJF Growth um, in future at some point when we start taking on new clients. Just fill out the intake form on the website there and uh, and I'll get in contact with you.

Even if I can't be a help to you, I might know somebody who can. So, so go to afgrowth.com, check that out. Don't forget to subscribe wherever you're watching or listening. I've got a bunch of great episodes coming up. Jordan Menard is coming. We just had that pig debate with uh Charlie T, Charlie Tickora and uh he's gonna come on the uh really soon. The guys from Popsmith who have a crazy story um about the the near bankruptcy and then growth of Popsmith are there are they're going to come soon as well.

Uh just reschedled with Nazarin Jafari who's going to come back and talk about her first uh uh seven figure month ever, million dollar month ever. Uh so just just all kinds of good stuff coming up. Don't don't miss any of it. Subscribe wherever you're watching or listening. Thanks so much. I'll see you next time.