From A 65% Decline To All-Time Revenue & Profit Highs — With Richie Mashiko From She's Birdie transcript

You have heard the story perhaps before of Richie Mashiko and She's Birdie. At least you did if you got it before the episode was deleted from my podcast uh for a number of reasons. And I hope you did hear that story cuz it is a crazy turnaround story. We'll recap it really briefly [music] today and talk about the incredible work that my guest, Richie Mashiko, did helping She's Birdie right-size itself after getting into a very deep financial hole.

After we talk about that a little bit, I'm going to tell you about how we did the incredible work of making Birdie's revenue decline by 65% year-over-year. We're going to maybe post that all over the AGF Growth website to tell people we can we we can help your revenue decline that much, too. I'm joking. We actually did do that, but [music] it was good for the brand. And now, after that, that win of a 65% year-over-year revenue decline, now we are actually up to all-time highs in the business only a few months later.

It is a crazy story. There's insane debt. There is insane drop-off in revenue. There is insane restructuring. And now there's insane growth and scaling happening again. It is insane. It is insane on every level. That's why I keep using that word. Let's get into it with the CEO of She's Birdie, my great friend and financial wizard, DTC wizard, Richie Mashiko. >> [music] >> What's up, Richie? >> What's up, Andrew? How's it going? >> Good, man.

I got the energy coming in hot today. I'm feeling good about this call. I'm ready to do it. >> You're so good at the intros. >> [laughter] >> Like a true like a true podcast host. >> I know. >> Well, I've I've done 7,000 of these now. Not really, but I've done a lot of them. So, I hope I'm better at it by now. Uh hey, tell people what She's Birdie is in like 1 minute. And then tell people what went bad in like 3 minutes. >> She's Birdie, we sell personal safety alarms.

The brand has been around really um almost 7 years now. This will be the 7th year. Uh which is insane to say. Um I think I started working on this uh brand when I was like 22 or 21, something like that. And I'll be 29 this year. Holy crap. Um but anyway, so yeah, we sell uh personal safety alarms uh for women. Um the two founders had this like um really like tragic story that you can read about on our website that turned into like this massive um positive um Yeah.

Uh which is which which is essentially Birdy. Um we uh have always been like a really good business, and then just things just kind of took a turn in 24 where there was like lots of things that was kind of like the perfect storm um that caused the business to kind of to to to struggle a little bit. Um and yeah, essentially what happened is, you know, we lost, you know, call it uh low seven figures in in in EBITDA. Um uh where we normally would have been, you know, positive.

Um and uh racked up a bunch of of debt on the uh obligations on our balance sheet. Um and then we essentially restructured the entire business. Um And really changed a lot of the philosophy and kind of the direct uh the the direction. Um maybe from like a product perspective, but then also like it from a um uh uh a growth marketing perspective, which, you know, you guys, spoiler alert, have been like an instrumental part of um since we started working together last October.

Um and yeah, I mean, it was it's it was it's the last almost oh 11 months, the last almost 12 months have been kind of a whirlwind. Um Super low lows, um and some like really high highs really like like over the last 6 7 months. Um and yeah, the business is in a much better spot. We're super profitable again. Uh like you said, we decreased our revenue like what, 65% last year? >> Yeah, Q4. Yeah. >> In Q4. In Q4, yeah, on here. >> cuz Q4 is, you know, you're one of these brands that's highly seasonal.

And so the Q4 revenue spike is gigantic. Like, like, you know, quick back of the napkin, it's like, you know, 40, 50% something like that. >> Yeah, yeah, something like that of your year. That's That's Yeah, that's right. It's It's a huge percentage of your year um on the whole. Uh yeah, looks like it was like 60% in 2024. So yeah, it's So having a gigantically lower Q4 and having it be good is crazy. But uh but it's it's a good It's a good moment in the story.

So anyway, keep going. >> Yeah, and literally since I would say the um uh middle end of February, um you know, I mean, we had a great Q4 given our circumstances, um which really helped accelerate the turnaround, I would say. Um but now I think we're um uh really like like since I mean, there's this one ad that Andrew knows about that literally like changed the the direction of the business over the last call it 60, 90 days.

Um and I think the one thing I'd say before we get into all the details of of how, you know, you guys are making happen, you know, some of the stuff we're doing on our side is um I think it was actually like going through this has been such a huge blessing. Um in fact of, you know, you like when when you really like you know, restructured a lot of like the OpEx and um um some of that stuff on on that side of the business.

But what I didn't really like fully appreciate or fully like um expect was that we've just been able to restructure essentially how we thought about marketing. And it's a lot of like the same tactical not the same tactical work, but like the same, you know, marketing channels. Like we're not doing anything like crazy like new or revolutionary. Um but the way that obviously you guys are approaching it um and the way that we're thinking about, you know, uh margin on each channel, um you know, creative stuff that like we've never like really built before.

Um It's just awesome to see that um it's how how everything's working. >> So, let's let's break all that down, right? That's a great intro to where we're at. First of all, just to give people the scope of this. I don't know if you want to quote this number. We'll bleep it. It will should be fun if if uh if we need to bleep it. What was the EBITDA swing as a dollar number year over year that you showed us in January? It went from from how much like it went from minus how much to plus how much? >> Minus plus That's Yeah. >> million-dollar EBITDA swing in a year for a business that is not that big, right?

It's like a It's like a, you know, low mid-eight-figure business, right? So, um so, it's like a huge percentage of it. Do you want me to bleep that? >> Yeah, let's bleep it. >> Okay, great. >> I just don't want to get in trouble with the >> Please, please, please. No, of course, of course. Go ahead and bleep it. Uh and so, also bleep me summarizing the number, all of the times the numbers I just mentioned right there.

Uh let's bleep it. And maybe we can get a little blurry on Richie's mouth. All right, so everybody see behind the scenes there. But the point is it's a very big number and it's it's crazy. Um so, uh so, yeah. Um you see, you had this crazy swing uh of of that. And then at the same time, um you know, let's let's go back to Q4 and talk about what happened there. So, you you were at a place where you had you the team at Birdie had built and made a bet on the idea that uh Birdie has very low repeat revenue.

And so, they built like a software product on the back end of it to try to drive a bunch of value and a bunch of LTV on the back. That did not go well. We don't need to belabor that, but that's that's the basic point, okay? So, from there, you come back to having a business that uh that is now much more of a one-time purchase, not not entirely, but but low LTV business where you got to make your money on first purchase, and that changes the calculus entirely on your marketing calculations.

Cuz now you got to go first order profitable, etc. So, we have this huge swing, this huge swing in revenue, but not only that, but you have to function at a much higher MER before. So, Q4, um you know, you first came to us and we're like, let's do a few hundred thousand dollars for November and December together, which is like which would have been like 5% of your previous revenue or something like that. Uh we ended up blowing that number away, and everybody felt really good about it.

But, can you talk about sort of the state of the business in Q4 or what we were trying to accomplish that was different than the past? As basically, you know, we we had our ad spend totally turned off before essentially November of 2020 uh 2025. When we got it back going again, can you talk about sort of your state of mind, what you wanted to see happen at that point? >> Oh man, I will uh give a little anecdote. So, I uh you know, Q4 is always like, you know, you're watching the ad account, you're watching the the the revenue.

And like you like you said, you know, we weren't we literally weren't spending money until kind of call late October uh late October of last year. And I remember >> March through September it's zero dollars in ad spend while you're renegotiating outstanding bills to them and all that kind of stuff. >> Yep. And essentially, I remember sitting in my car with uh my mom and my my my friend. We're going to watch a USC football game.

I think it was a Friday night. And it was like the first week of November, and you know, we we turn our sale on early just to try to scale to to scale spend. Um and for that week, you know, things weren't scaling. And then I remember starting to see like inklings of hope, like inklings of like, oh man, this is this is this is coming back. Um and long story short, um you know, A, I think we'll get into it just focusing on um marketing efficiency, making sure there's positive contribution to ROAS that are coming from from our website, which really didn't happen for like, you know, a few years.

Um um and yeah, I was just I was just literally ecstatic. It it really like did help you know, accelerate, you know, what I thought the payback timeline of of all this, you know, obligation that we had and we're just like in a really good spot right now. >> Yeah, we moved to um restrained approach, make money on first purchase. Uh did this the playbook I talk about all the time, run manual bids. We were I think you I mean this business like you said has existed for a long time.

When we reset that account, we took every piece of creative you basically ever had in your ad accounts as long as Facebook hadn't deleted it cuz it was too old and relaunch literally all of it. Like it was there was like nothing off limits. We used to a bunch of flexible ads just to like get ads in the account. But you're talking about like I remember you and I first met right before the pandemic in 2020. So like you were that's and that's when you got into Facebook ads.

And so so that means you had, you know, six or seven years worth of ads or whatever it was in there and and we didn't have access to all those, but we had a bunch of years worth of ads. A brand spending millions and millions of dollars on Meta. So there's a lot of content in there. We relaunched all of it and started doing our creative at the same time. And we launched all of it in bid caps, all of it in target ROAS.

We did not worry about any creative testing or anything like that. We just had a target and we said like this is how much money we hope we can spend. And I I again, I remember I think you gave us like a target of a couple hundred thousand dollars and we uh in revenue. Like if we could just get back to there, that would begin to build hope again. That would be really awesome. I mean, we started working with you in October.

Like it was just like hoping to get something out of Q4 once you turn the ad account back on. Um and you know, it's just two things were kind of incredible about that. One of them was uh it worked, right? Uh not that wasn't super shocking to me that we were able to generate a bunch of value uh that we hadn't generated for a while. And that that I had no problem sorting through that giant bulk of ads. That that that approach actually works.

But secondly, we were launching all of our new ads into that same ecosystem with with like as we were making ads now we came on, right? We're doing full services, Meta media buying, forecasting, and and ad creation. And as we did all that, we had no problem getting our ads to spend. In fact, cuz one of the things we found was that most of those ads were just not able to generate a return at the performance that you wanted.

So So, as our ads started working, you started seeing this this crazy thing happen, which is like, "Oh my gosh, the business is existing at a high MER." Now, you had like twice the MER you'd been at before, for the record. Like, much much much better than than previously. Maybe maybe I guess at that point not quite twice the MER. Maybe maybe 50% better. So, still really like way better. Drastically less spend, much better MER.

Now, we're inventory limited. We kept going out of stock on stuff over that time cuz you were after turning the ad account off completely, after being in a tight cash situation, you were absolutely not buying inventory at that time. You know, you didn't even know if you could sell it. But, you also had another couple good things going for you, which was you had done some work, and I think this is a really critical part of this story.

You you guys had what I think is maybe the most valuable asset in the business in some ways, which is this Amazon account that rips. Alongside some other things you were doing to generate revenue while you were in a down period. So, can you talk about those things a little bit? Like, what else were you guys doing as we started ramping up ad spend and and doing sort of methodology that we do? >> Yeah. Yeah, so like um we like like like you said, Andrew, like this I think like one of the core reasons why I thought there was like hope to like make this business Why why this is like a good business, I think, is this Amazon business, right?

And um knock on wood, Andrew, he's not This is not directed at you, but like my Amazon agency that I work with over like like almost 5 or 6 years at this point is literally the only marketing agency I've never fired and do not plan on firing them. Shout out. And hopefully uh keep AJF Growth in that in that same >> Do you want to name check the Amazon agency cuz they're they're great. I like them, but I don't know you know, I don't know if you want to like send them all the business. >> Oh, no problem.

It's Tide. Shout out Tide. tideco.com. Thank you. These guys are awesome. >> We got to meet them in January. They're great. >> Yeah. They they've been awesome. So So, we we have an Amazon business um that for you know I I think the the the one the reason why the Amazon business works actually is literally just is like the brand differentiation. Um and you know, a lot of the work that's been done over the years, but like there's you know, Chinese knockoffs and you know, competitors etc. that have entered the ecosystem um that sell it for half the price.

Same pro not the same product, but like a version of um But [clears throat] for whatever reason that that that business is super durable. Um and there's there's the the um you know, people call it the halo effect of of the shop the you know, the meta spin that we didn't have last year. So, there was some there's a little bit of degradation, but not but not much in the Amazon business and that just is super profitable because you know, you're not we're not spending you know, 50 60 70% of revenue on on ads, right? >> Yeah. >> There's that.

But then like the other big thing that really helped us last year and if if anyone's we put on let me know. Um you know, we uh >> You're going to get a lot of outreach about this. You should be careful. [laughter] People are going to want this. >> Yeah. Um was it's not it's not a not a secret, but like um we did pretty well on Good Morning America last year. So, we have this partnership uh with this wonderful broker.

I also could um uh could connect anyone to. She's awesome. And we work with um a lot of the uh ABC uh platforms or shows on shows on ABC. Um and essentially we have like a deal segment. Um this is kind of I'm actually surprised a lot of a lot not a lot of people in e-com like kind of talk about this channel. Um there's also competitors that you know, I've worked with in the past and you have you know, had a really good experience with.

Um but you know, those are those are kind of like the the two two drivers of revenue outside of the business in the business that, you know, when we didn't have the ad spend going um on Meta, which is the main driver of the of the dot com business. Um but um yeah, and then I think the last thing is that we have um kind of a unique thing where uh the product makes sense to be able to sell like B2B. >> Yeah. >> Um >> Yeah. >> not industry wholesale, right?

These are like organizations that come inbound. So, if you have like a a product like this and I I think I remember like getting a uh you know, getting inbound. Well, we get a lot of inbound for it. But then I just remember seeing like um do you remember that brand like 5-Minute Journal? Like the uh the it was like a Tim Ferriss like productivity journal. >> Oh, yeah. >> like a page um on their site that was like corporate sales and stuff like that.

So, if your product could could do it, you know, um that's great. And my brother actually runs that that side of the business for us and he's been he's been crushing it. >> Yeah. >> Um So, all these are just like high margin, high contribution margin channels for us. >> I told you last month I hired somebody from uh this month actually, from More Staffing, placed the new person in AJF Growth to help us in one part of the business.

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And they'll even give you a one-year guarantee on somebody that that you hire with them. [music] Just a great partner to have in the company. For the next job you're looking for, at least go open up a job description with More Staffing and and a search and then see what's possible with them. morestaffing.co/af morestaffing.co/af to get started today. And I The reason I want to draw attention to that is that there's I think two things happening at the same time here that is sort of interesting.

One of them is right-sizing your unit economics in the core strategy of what you're doing and combining that with with what I would call, you know, best-in-class media buying and things like that, right? Uh shout out Daniel from our team, who uh who's the man. Um uh that like goes really, really far uh and and in terms of your D2C business, understand these things. The other thing that's interesting about it though is that in some ways, all of that money you had spent over all those years that got you into a hole that you almost couldn't get out of, right?

Like, speak clearly, this is not a good strategy. The one upshot of of it is that you had a whole bunch of volume in an Amazon account and you had the kind of volume that got attention on something like Good Morning America and made that kind of thing work to where there was some some some name awareness and some of that so that you could actually go then and and and still have once once you like immediately downshifted all the meta stuff you were still able to generate some value and some revenue in the business and start paying back bills and all that stuff.

Now, that's it's not a long-term strategy but there is this way in which on the one hand you really needed to right-size your uh the economics of the business and and change strategically what you guys were doing uh and and you you went to your credit and did all that work but then secondly, at the same time all of the spending in the past and the growth did actually create a certain like a really valuable asset in that Amazon account that would have would have made it really hard to like start this over from scratch because that provides a bunch of value and what we know now too as we've measured this really clearly is that our meta spend definitely does uh generate a bunch of value back onto Amazon and I think part of the reason for that is because the Amazon account is so like built up that when somebody goes over and sees your bajillions of reviews and five-star, you know, ratings and all that kind of stuff, they're more likely to buy.

So, essentially like the existing Amazon account being in really good shape makes it so that the meta halo effect is actually better than it would be otherwise because when we see the same thing for brands that are just launching their Amazon account, they don't see anything like the halo effect that you guys see uh on on meta, you know, it's just it's just not um it's just not the same. So, uh they see some halo effects but it's just not nearly as big as the one that you guys see.

So, so that ends up being like this really valuable asset in the business, this this Amazon account. Um and you know, you're you're shipping a uh a low AOV item relatively speaking um and and therefore Amazon also has some favorable unit economics for that um and it's just a it's just a good part of the business. Um Okay, so we declined dramatically but we right-sized on profit, uh sell through a bunch of inventory. You probably could have gone harder actually at holiday last year but, you know, um inventory had to get back.

And then uh and then from there, then Then the new game which is like, all right, the business is right-sized, you have the giant swing in the EBITDA year over year, the the bleepable the the bleeped out EBITDA swing, okay? You had all that, but now the question is like, okay, can this business not just like kind of sit at its current level, but can it actually grow again? Can it actually do that in a way that's actually smarter, runs at a higher margin, uh you know, a higher contribution margin, you know, lower percentage of ad spend relative to your revenue, in a way that makes more sense for the business?

And so, we all got to work on that problem. Um and so, uh why don't you talk a little bit about um about what you guys have pursued on your side of the fence? Cuz cuz sort of after Q4, I think you were you were already texting me like, "Wow, you guys are doing a great job. This is awesome. This is a big part of the business. This is going to work. Now what do we do?" You know, uh you weren't saying "Now what do we do?" to me.

You you're saying You you you were you were expressing that you had the freedom to start thinking proactively about other things to do in the business. So, um so, uh as we were working on our side of things. So, I'll talk more about what we have done since then and how we've actually been up in revenue now, uh not just profitable, but actually up, uh up and way more profitable at the same time. I'm going to tell the story of what I think has happened there at the Meta side, cuz I think it's relevant.

But, start by telling me what you guys have done internally to start generating more of that value sort of since holiday last year. >> Yeah, so I think there's two core things, right? Um one is I think we're working pretty closely on together, which is A, like a marketing calendar, right? That is something that I uh did not take super seriously in the past. And we have uh a marketing calendar with offer testing, with promos, etc.

And just having that has like I think that's been a huge lever for us, um yeah, year to date, which has been awesome. >> guys realized, right, that that you can be pretty promotional and like and it works fine. And so, so then building in a bunch of promos has worked really, really well. And it's crazy to think back like that you guys sort of just weren't doing that before. Um but it's so important. Like a working marketing calendar with a good promo schedule for a brand that can be promotional is just like it goes really far.

Um you want to say I'm curious if you want to say anything more about how you've arranged that marketing calendar and sort of the time how often are you on sale versus not versus what it used to be like before, you know, talk through some of those details. >> Yeah, so we used So I think there there's two components to the marketing calendar which is like the promo stuff which is what you're talking about. Um which yeah, has been really important and and we were like really hesitant to do, you know, um and I um to do these uh to do these promos and I think that was partially like on my end trying to like quote unquote protect like brand integrity or or whatever.

Um but I I think the other side, the way that I'm I'm kind of framing it, um is actually our like our business has some really culturally relevant moments. Um when the product is when the product um uh I would say is relevant, right? So one of those is like International Women's Day. Right? So in the past, you know, we may have sent an email or made like an Instagram post or really nothing much to move the needle. Um but actually taking making making that like a larger moment of the brand um is something that we actually did this year and I I I think I think we saw the results.

So, you know, we're we're doing promos like, you know, I'd say decently decently often, but you know, we're also giving um us us the brand time to breathe to be able to do like offer testing. So, historically we've had this like one offer structure that we've never like really te- it worked and we never really like tested out of it or tried to test above it. Um and there are just things where like buy X get Y that that we're testing, a more more tiered discount structures, um you know, uh pre- like uh bundling products, et cetera, that are all like this road map.

Um and I I think like I think I've I've I listened, yeah, probably one of the 700 episodes that you've done. Um but, uh like I I truly believe like the offer and that includes like promos. The offer is like one of like the biggest needle movers. >> Right, yeah. We're actually at a point where we're going like increasingly trying to put ourselves into the offer creation and testing process more for the kinds of things you're talking about, right?

There's like the thing that agencies do, which is build landers and test sort of offers within those landers. But, there's also another kind of offer that's more like the kind of stuff you're talking about where it's like try site-wide stuff, buy X get Y, like that you're just applying to a broader set of PDP or whatever. And you guys Birdy has a a a pretty small skew set overall. There's sort of three core products and and then, you know, sort of different colors and stuff like that.

But, but basically three products. Um so, that allows you to sort of play with with a an a narrow um a narrow set of options that allows you to test widely within those, actually. It sort of makes the sandbox of testing a little a little simpler, um even though there's like a ton of stuff you can do. You could do a straight discount, you could do bundle all three of those products together and and get that. There's just like a lot of ways to to frame it.

Um but but the the offer as a core thing is just something we're trying to find more ways to do all the time with brands because I agree with you. Like it can have a really, really outsized impact, especially again when you're sort of when you're doing what you guys are doing, which is not only not only testing a lot of offers, but every offer ends up being limited time relative to a certain moment in the calendar, relative to a certain seasonal kind of focus in the world or something like that.

And that allows you now to like create urgency on every offer that you're doing, um and just drive a whole, whole bunch of a bunch of value and and uh basically just by increasing conversion rate a whole bunch at different moments of the year. So, yeah, that marketing calendar makes a really, really big difference, um in terms of what you're doing. Do you have um we've talked about this a little bit. You and I haven't talked up this caught up about this for a while.

Is there um any forward-looking for product development as part of the calendar at this point? I know there's only so many things you can do at once. So, if the answer is no, it's okay. I know we've kind of kicked it around, but um because I know where some of the rest of your team's effort is going, but have we have we started to play with that anymore? >> It's probably the answer is very very minimal minimally. I think the goal is to really see um new product dev come to fruition probably in '27. >> Yeah. >> So >> That I think that's the right call, actually.

Like doing the marketing calendar stuff we're doing now and then some of the creator stuff you're doing is enough for your team to push us really far forward as we've seen. Um but yeah, so um so yeah, that calendar is a really big deal. I'd kind of forgotten about that in the story, actually. I'm glad you brought that up. Uh it's made a huge difference. I think it's huge. >> Yeah. >> Yeah, it for sure has been. And you're even playing with back and forth on Amazon sales versus versus D2C and like moving things around that way, that's been um it's been a really really big deal.

Um yeah, promotional calendar matters a lot. >> Yeah. So, there's that. And then the second thing I think that you're hinting at. I I know you want to we want to talk about the the creator stuff, but I'm going to frame it in a little bit of a broader term. >> Yeah, so yeah, frame it however you want. Yeah. >> Cuz I I think I think it's I think it it's true is like our creative and I think this is a um a term that that Taylor probably uses, creative supply chain. >> Yeah. >> Right?

So, you know, there was a buddy that I brought in um right before we we we had our our our meet up, right? Um and I think um executing on, you know, what I would say and what I what I what I mean by creative supply chain, I mean like I think in the past I've done like a really poor job of setting up like our our infrastructure to get new assets into the ad account, you know? And I think um over the even though we've been running media over like the last 6 years, there's like a ton there's just like a ton of and still a ton of opportunities in terms of new angles that we haven't tested that you think would be obvious.

You know, trying to source that creative. Um you know, I think in the past I didn't really know how to work with different agencies or how to think about creative budget, but I think um now we have a really like uh clear thesis on you know, on on ad creative and how do we source that and and what I'd say is I I think don't want to fret it fret it tweet, but like Taylor put out this thing where the best way to get creative diversity, which I think is is you know, generally a good thing.

Um is to have different sources of creative, right? So, over the past Yeah, over like the past call it 3 to 6 months we've stood up, you know, I would say like three to five really like good sources of creative. Um so, one is all the work that you guys do obviously with the edits the edits of our stuff. Um we have what I would call more like act UGC actors. So, we're part of this group. Um where it's like really easy to source to source um talent um who who who are like, you know, UGC creators.

Um and you pay them a you pay them a fee. And and um we have spun up >> Briefed Briefed or scripted from that group? >> Briefed. So, you guys are actually doing the briefing. >> Yeah, yeah. No, no, I know, but I just I just I didn't know if that group was it was was doing scripting or briefs. Yeah, okay. Keep going. >> Yep. So, we have we have Yeah, the briefs um they go to that to that group. And then um uh kind of like the last like major pieces I would call like our affiliate/creator network that we work with, you know, affiliates.

You know, we work with TikTok affiliates and I feel like this is the standard way everyone does. And then we also work with um uh creators in a in a in a different in a different way. And I think um we could we could definitely double click on that, but you know, one of our our our creator ads or affiliate I think it was an affiliate video actually. Literally, when we started running that and what was it like the end of February, Andrew? >> Yeah. >> Um I just remember seeing like the revenue going up like day on day and like doing some like six-figure days, which don't happen for us outside of outside of uh Q4 just because of this one ad.

And um yeah, it was crazy. So, we're starting to see the benefit uh we're starting to see the benefit of that. >> Great operators test the value creation of their website traffic with [music] Intellijem. Richie talked about it on this episode. Offer testing is just a critical part of how you grow your brand and how you create value for your brand. [music] You create profit for your brand. And there is no better tool for on-site live split testing of your offers than [music] Intellijem.

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You can also do checkout testing. Uh you can see the impact of your test on subscription take rate. All the stuff that makes this a great and robust tool is there. So, go to Intelligems.io, use the code Ferris 20, f a r i s 20, intelligems.io/ferris uh with the code Ferris 20 get 20% off your first 3 months. Just a great tool that you should be using. Go to Intelligems and you get it done. >> Yeah, I was just looking at the numbers while you were talking to to some of this because it's really fascinating.

Like I I've thought a lot about you guys' pathway as a blueprint for other D2C brands. That's why I'm I'm really glad we're getting to every little part of what you guys are doing differently. Let's talk about like the results for just a second because it is crazy. So, like I said, like the Q4 decline but profitable is a good story but is not really the story anybody actually wants in the long run. I I I think it was necessary for She's Birdie to get to that point in Q4 and as a part of the rebuild to where we wanted to go.

Uh that was that was really important to get there. And like I said, there was like an inventory limitation. We couldn't have scaled more. Like if you had that at hand then, there there was no ability to actually scale it further from there. And then it was like then it was like turn around, okay, we can start ordering inventory again. We can start trying to scale this business up. And once we did that, Q1 of this of 2026, we're now not only dramatically more profitable like at a at a CM percentage basis, right?

Than we've been before, but we're actually seeing like literally the highest revenue in this time of year that we've ever seen. At least that I have on my document. Uh you know, like I'm looking at numbers that are just like really crazy compared to compared to where you're at before, particularly in February and March when the whole machine was really really starting to pump, you know? Um you're looking at those two months together being better than 2024 the entire first quarter.

Like just those just those two months, you know? And at like twice the profitability, you know? So, you're talking about way higher revenue, ad spend growing at the same time, more profitability at the same time. Like just everything you'd want to see to to have like to show success in the business all happening at the same time. So, the question is like, "Well, what did you do to go from right-size the business financially to actually growing the business now at the same time to where it's actually generating more profit than it was before?" And you we've hit a couple of them.

Like And if you if you think about this, right? The first one is uh is financial intelligence. And it's a really easy to miss that, but just getting your head around the financials of the business and what makes it drive What makes it work is really critical. You you have to do that to grow the business really really well, right? Um so, what were you going to say? >> Well, yeah, and I think like I mean, I had a couple calls recently about this, but like I think that's what makes AJF, to give you guys a lot of credit here, right?

Is that's where you guys are super connected, right? To to the business, you know, and I work with, you know, like I said, I work with like a lot of agencies and media buyers. So, like granted on respects, right? But I think that's what one thing that makes you guys unique. Um is is the fact that um you guys are so tied to essentially the financial performance of the business >> Yeah. >> that it just translates It translates to the entire philosophy of how you guys like buy media, how you guys market, etc., I think.

Um so, that feels really good. >> I appreciate you saying that, and it's definitely one of the things that we want to be doing with brands all the time, but it's not even It's barely even a conscious decision so much as like I just don't know another way to think about it at this point. Like when what you know, I've put out some content recently saying that, you know, and and actually Connor McDonald tweeted about this recently, too, saying that sort of media buying is dead is a lie, and there are people who say media buying is dead.

And people mean all kinds of different things by the phrase media buying, so it's it's hard to figure out what you lump into that, but one of the reasons media buying is very far It's very alive and well is exactly this, which is actually being tied into the financial realities of the business is so core to it. And like one like a really simple example of this that is extremely down to the details of actual campaign structure and stuff is that if we are going to um buy ads on a highest volume basis, which is what everybody is doing when they're buying ads sort of on an auto bid or or whatever else.

We're buying highest volume ads, whether that's auto bid or with a bid cap or with a cost cap, then your CPA on your ads must be considered relative to the average order value of that you are driving cuz that's the actual factor in ROAS, right? So for us, we take that to another level and we say, "Okay, we believe in bid caps." So that's like a that's a media buying strategic decision. Um we think bid caps is are are the are generally speaking the most useful tool for this.

And then from there, we tie that bid cap to the average order value we're driving. And when you have like you where there's three different products with slightly different price points and bundles that you're changing all the time, the media buyer must be tied into not only the forecast what's happening in the total business, but but to assign and distribute spend within that forecast, must be tied into the average order value that your ads are producing.

And if they're not, they're going to lose money or they're going to underspend the moment for for the brand. Now, of course, we're never going to hit it exactly right, you know, that it's it's probabilistic forecasting, but but but that all comes down from being laddered to the unit economics of the brand and everything else. And I just don't know another way to do it. So that's the reason why we structure our media buying the way we do and why we like sort of insist on doing a forecast for brands.

It's not cuz our forecasting is actually best in class. I think it's pretty good, but it's not We're not the greatest forecasters in the world. I wouldn't say that's the real distinguishing feature of our business. It's just because we want to say like we want to understand how these things are impacting the business, build strategy and targets based on that. And then when you get down to media buying, you have to do that.

That starts with you as an owner in the business having some financial intelligence and then us coming alongside and saying, "What are we trying to accomplish here?" If you aren't thinking that way either on the owner side or the agency side, you are you are I I said this a million times, but it's the it's the most helpful simple way to illustrate this point. Meta ads is very likely the largest single line item in in your D2C business.

If it's not the largest, it's one of the largest. And therefore, it is incumbent on the people managing that spend to understand the financial impact it has on the rest of the business. It's also probably the biggest way to grow the business. And so again, it's incumbent on the people to understand the relationship of your spend and the actual growth of the business. Uh it's just too important to not be tied into the rest of the financials.

So that starts on your side, you getting clear about what you guys are trying to do strategically, and then us saying, "Okay, here's the timeline for value creation. Here's all you know, here's the timeline for Here's how you're funded, all that kind of stuff." And then you guys have that clarity, and then we come in and say, "Okay, here's what we think we should do. What do you guys think?" And we have that conversation and set targets accordingly. >> Yeah, and I think I think the the last thing I'll say to that is you know, how does that translate to like my emotional state on a day-to-day basis? >> [laughter] >> When I log into Shopify, I can just look at the revenue number.

I know I don't need to log into I mean, I should, but I don't know if we need to log into the Facebook account to see how much we spent, cuz I know that spend is going to be profitable. >> Yeah, right. Yeah, cuz we're just not going to spend it badly. And also Daniel's going to jump into Slack and tell you right away what happens, so you can just look at that there. Uh yes, yeah. We keep it you know, the little daily report and stuff.

Um okay, so that thing is really important, and I think it is a nice illustration of this. I'm I do appreciate you sharing that out and noticing it, Richie. Like we we put a lot of time and effort into that. So I I appreciate you saying that. But secondly, secondly from there, right? Um there is the marketing calendar like you said. Um we talked I mentioned you know, I brought up product development, and you said probably next year.

I think that's fine. But I think I see two elements of the marketing calendar. One of them is basically product, the other one is promotions. And I would and I would somewhere put both of those into just sort of like baseline seasonality as like an overarching thing on both, right? Which is like just the reality of like a more gift-oriented business or not. That's not really about product or promotion. That fits into the seasonality of the calendar.

Um product and promotion both fit into that seasonality. Um but but that's also an important part of it. And so um great brands understand that and sort of where they fit into the seasonal calendar and how they're using promotion and product as levers within that. Some for some brands it's more important that you're developing and launching product all the time. Think like apparel or jewelry or whatever it is. For some brands it's more like we can be promotional all the time.

I know I felt a lot more freedom to just like be pretty promotional when I heard McCoy Merkley and Portland Leather Goods saying that they're on sale 6 days every single month. You know, it's like great. Like that's that's like okay. That's a really big business that has plenty of brand value. They're saying they're on sale that often, you could be too. Like you you don't need to be super precious about this in most brands.

Um and then um And so we already talked about that marketing calendar, but I do want to flag that and say like financial intelligence and marketing calendar on the brand side are two really important things. And then when you get to the actual ad account, there's a couple things that I see that really matter for most ad accounts. The larger bucket that you put it all under is right, which is creative diversity by generating creative from different sources.

If I could boil that down further, I see two core sources of that creative diversity for most brands. One of them is creator content, the other one is what I've call like traditional performance marketing content. We are going to be in bucket two. And we we're we're briefing your creators and stuff and we're happy to do that, right? Um it's it's pretty easy for us because we already have the message of the of the ad into our creative process, so we could just sort of have an automated version of turning that message into a creator brief and kicking it over to them.

No problem. Happy to do it. Um but uh but on the second side, right? It's like we then also go and generate like traditional performance creative. And it is amazing how much when you get both of these in an ad account, how critical it is to the success of the ad account. Cuz you mentioned that one ad, right? Um and in February it's like 50% of the spend, right? Uh it's like it's a it's a gigantic bump. We never predict that any any ad, whether we make it or a creator makes it, is going to have the kind of impact that did.

It went from like 5 grand in spend to like 50 in a couple days, you know, it's a crazy, right? Um just just insane performance that you don't expect. Manual bids made us made it so that it was really easy to scale it really fast. That was really great. But >> manual bids don't scale. I'm just kidding. >> Yeah, yeah, yeah. Manual bids definitely scale. Um but um but if you look at the ad account now, it's what's really interesting is is how much um, of a mix of that kind of content it is with like our like performance creative content.

So again, like shout out here to Nikki from my team who's the who's the creative strategist on your account who's just writing good ads um, to to generate this stuff. And now if you look it's like that top ad is still spending. It's like uh, this month it's the number three ad, but now it's like uh, 5% of the ad spend, you know. Now you've actually got bunches of ads all spending a few grand a day because you got winner after winner after winner after winner all piled on top of each other instead of one super dominant ad in the account.

We'll always take it when you get that super dominant ad. And that is what an ad account should look like I think is generating a bunch of creative from budget sources to create diversity in the ad account and to have processes and systems set up for both. This is critical, too. We have a process for generating performance creative at scale. That's what you're paying us for. What you have done is gone internally and brought people in, hired them, assigned them roles, given them clarity to how you're generating creative content at scale.

So can you say anything about what you guys are doing to to do that cuz we don't do that for you. We're I like I said, we're happy to brief, but like uh, you don't have to go into all the details here and Rich, there maybe some alpha here that you don't want to share out, you know, like I don't want you to feel pressured to do that, but talk about the big stuff that is like sort of translatable for everybody else. In fact, I'll say really quick, sorry, that um, I've actually seen people generate creative content a million different ways and a lot of them can work.

I've seen pay for posts that turn into ads, I've seen mass seeding, I've seen people pay hourly and rent a house and shoot all the content in the house with a bunch of creators all at once. Like I've seen everything. And and you've heard of Comfort, the affiliate kind of thing that they do, like there's just a lot of ways to do it, but I'm curious to hear you talk a little bit about sort of what how you guys are approaching that issue and um, and why that has yielded results for you. >> 100%.

Yeah, so the big the the the the three the three ways we generate like quality creator content are A um, uh, I think I mentioned earlier like that kind of like that UGC briefing. I think one of those ads actually like this Discord ad um, is one of the top is is a really high is a really good spender right now. So, I have that where we call it working with um, five to 10 uh, like UGC like actors a month. And and we're paying them.

The second thing that I think a lot of people are doing um, and actually probably for us to make sense because our product works is so small and cheap uh, small and cheap to ship, right? And make. Um, is we're doing like a ton of like affiliate seeding. So, like that's where like that that home run ad came. Um, and we're calling it seeding call like two to 500 creators a month uh, affiliates a month on TikTok. And then the third one is I think kind of like maybe a little bit unique um, that not everyone um, is is maybe doing that that we could double click on is this I call it like uh, retain creator model where essentially I have um, someone another person who I like like like you said someone who I've hired to essentially uh, reach out to um, influencers and um, um, pay them like X dollars per month and we're not talking about tens of thousands or even thousands of dollars.

We're literally talking about I think I saw something like that was like under a hundred dollars a month. And and we um, we get call it 10 videos from them on a monthly basis and that's >> you getting 10 videos for less than a hundred dollars a month? That's crazy. >> Yeah, so part of this is just like really like shrewd negotiation. You know, I know we get a lot of people who are applying aren't aren't the happiest with us.

Um, but it just takes some tough skin and enough enough digging and you know, there are people, you know, out there >> you're willing to pay. >> Yeah, it's it's we >> We just say no if somebody doesn't want to, right? >> Yep. Yeah, and there's a there's a price we're willing to pay and I think some of the alpha like you said, you you Andrew, it's like how do we figure out how much to pay and I mean it's not that complicated, but um figuring out how much to pay and and and um you know, we have call it like I think almost 50 60 creators at this point.

Um you know, each generating call it 10 to 15 videos per month. And the beautiful thing about that is we could see you know, um you know, we could see um uh how these videos do organically. Yeah, right. And then um port those over into the ad account, right? So, like that video that went that that just rocketed the ad account um was it it it it went viral on organic on on Tik Tok. And surprise, surprise, it really worked in the ad account. >> Yeah, right. >> So, you know, between that um between that and the affiliate affiliate stuff and the seating, you know, we're we're getting you know, hundreds or thousands of pieces of content on a monthly basis.

And what I think this is such like a a almost like a alley-oop, right? You have the the assister and then the dunker. >> Yep. >> Is is your media buying philosophy, right? Is where you can just literally take There's literally like unless you know, correct me if I'm wrong, like there's very little downside of taking all this content and just throwing it in the ad account and seeing what works. >> Yeah, that's why I drew that out with the old content you had in the ad account before.

It was like we're not we're not afraid. Let's take it all. Let's turn all of it on. Put it all in there and see if any of it works, you know? And the same thing with this with this um Yeah, the Kinship guys are great about this point too with with their kind of approach to this. Um where it's just like launch everything that anybody posts for you. Put it all in the ad account. You never know and there's no downside, basically. >> And and the other reason why I like this this kind of what we're doing here is you know, we we're probably spending 25 maybe $30,000 a month on creative.

I've no problem saying that. Like, you know, but the way that we're structuring these deals with creators and um actors, et cetera, and even like the affiliate stuff, is the way that I'm thinking like uh the way that I kind of think about like creative budget now is I think before the way that I used to work and maybe I don't know if like a lot of people work, maybe I was just like the dumb person in the room, which is very possible.

Um was that, you know, I would just pay like uh an like a uh a retained agency to like create, you know, to to make uh creative every month for us, right? And it one I think there's like a cost per asset thing, but then two, like I think the thing is if you keep working with like the same people over, you know, over and over again, I think um we're actually like shooting the content, et cetera, how much net new swings are there, you know, or is it like does it become to a point where it's like the fifth iteration of like kind of like the same concept, you know what I mean?

Um so the way I think about how do you deploy creative budget is more like mobile artillery versus like stationary artillery, right? >> Yeah. So where I could >> take swings, if something doesn't work, I could pull budget back easily and redeploy those dollars into, you know, another creative source, right? So just thinking about that more like, you know, how do you configure like uh processes and systems and getting the right people in like and I think you you you guys have seen it like when I brought, you know, Matt and Lex and, you know, Ramy and you know, um really on this side, that's where we're getting a lot of the um uh uh that's where a lot of this is getting carried out, you know what I mean? >> Yeah.

Yeah. It's going to be really crazy to see what happens when we do get to holiday this year and you've got now a year's worth of that kind of content in the account. You're already profitable and you're going to have 50% of your revenue or 60% of your revenue coming in 2 months, while you also have all of that content in there. It's going to be it's going to be nuts. Um awesome. Uh I love it. I think it's great. You've got a whole bunch of cool stuff happening here.

Um Richie, thanks for talking to to people about it. I really think it's sort of um the the the blueprint right now for what great DTC looks like. Um thanks for for uh including us in it. We're grateful to be part of that part of the journey. Any last things you want to say? Is anywhere you want people to follow you or reach out to you for consulting or anything like that? >> Uh you can follow me on Twitter, Richie Machico.

Um but then also uh want to say a big shout out to you, Andrew, for not only like the work you guys have done in the past um 6 months, but you know, I always say it you're the one that told me to get into Facebook ads. >> [laughter] >> 6 years ago. >> you'd have I think you'd have figured that out without us at some point. >> about that. Um but no, you just been a great uh friend, mentor, all that stuff throughout the years.

So, I appreciate you a lot, man. >> All right, man. I appreciate it. Right back at you. >> AJF. >> Thanks, [snorts] Richie. You don't need to You don't need to shill so hard. We'll leave forgetting to Richie's Twitter in the show notes. You can DM him there. Um and I'll follow up with him afterwards and see if there's anywhere else. Thanks so much for watching, for listening to this episode with Richie. I'm going to do a little outro stuff at the end here in a second, but otherwise, Richie, see you later. >> [music] >> Huge thanks to Richie for coming on and sharing all of that.

It really has been a crazy story to see just incredibly low lows, incredibly high highs, uh and it's been really fun to be a part of [music] it. Richie's just a great dude, too, so it's been really fun. You should follow up with me podcast@ajfgrowth.com to uh email me with any questions, thoughts, anything you got like that. Leave a comment on this video if you have any thoughts about it. I would love to hear what you have to say.

I would love to interact with that comment. I see every comment. I read every comment. Do that. [music] Actually one of the best ways to reach me. Uh and subscribe wherever you're watching or listening. Uh I got all kinds of great interviews coming up soon, too, including the great, legendary Ezra Firestone uh coming very soon, so that's going to be really good. And uh go to ajfgrowth.com to see anything and everything that we are doing all the time, including if you want to work with us uh whether or not we have space for you.

We may have a great referral for you even if we don't have space for you somebody we trust as well. Fill out the little form tell me about your business and I'd love to get back to you. So, >> [music] >> thanks so much. Oh, thanks also to my sponsors for this episode. My sponsors for this episode who are great and who I love as always the sponsors are more staffing and Intelegems and both the links for them are in the show notes.

Thanks so much. See you next time.