Episode 71: Masterclass in eCom-Economics + Finance with Bill D'Alessandro of Natural Dog

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Transcript:

Announcer:
Welcome to Nerd Marketing, an original podcast for e-commerce operators and marketers looking to level up. Drew Sanocki and Michael Epstein will bring you actionable strategies from their decades of running eight and nine figure brands, along with interviews and insights from the leaders of some of the most successful brands in the world.

Drew:
Hey everybody, today's guest on the Nerd Marketing Podcast is the one and only Bill D'Alessandro, the CEO of the Natural Dog Company, which is a dog food company, and Elements Brands, which was one of the first e-commerce roll-ups. So he shares what worked and what didn't about the roll -up model, how to think about roll-ups, how to ensure that they succeed, or some things you need to do to help them succeed. We also dig into how to finance a business, what to do, what to avoid.

So I hope you enjoy this podcast with Bill. He's just a treasure trove of knowledge, just a great operator. He's been there, done that for about 10 years in the biz and look forward to talking to him next. You want to start with aggregators, the rise and fall of aggregators? What do you want to know about aggregators? Because fortunately or unfortunately, I have a lot of experience with that.

You've been in this for a while. Why don't we start with like how you got started, how you sort of ended up acquiring a number of these brands?

Bill:

Yeah, so I started out in e -commerce in 2010. I started with one product, it was a skincare product called KP Elements, and it was like your classic four -hour work week. I read the four -hour work week, I was like, I could do this, and I did it, and I got it to the point where I was making, I vividly remember I made my number, which was $50,000 a year of profit, and I quit my job because I felt that pays for beer and rent and I was 25 and what more do you need?

So I quit my job and I kind of went full time Tim Ferriss lifestyle, skied a lot, et cetera. But then I kind of got this itch where I said like, is this all there is? I kind of have this skincare product in a small market, how do I get bigger? And around the same time, I started seeing some businesses for sale. Before my e -commerce journey, I was in investment banking. So I was kind of familiar with how businesses were bought and sold. And I saw a couple of businesses for sale from brokers that were e -commerce businesses.

And I thought, wow, these are all terribly run. So I kind of developed this thesis where it's 2010, right? E -commerce is coming, but it's still kind of the bad old days of e -commerce. Like Shopify barely exists. You know, most stores are running on custom carts. Most brands are terrible at Facebook ads, right? We're actually about to go into the golden age of Facebook ads and we don't know it yet in 2010.

So I basically said, I can make money one of two ways. I can either open an agency and help other brands not suck at e-commerce, or I can buy brands and work from my own account and make my own brands not suck at e-commerce. So, I could take the same brand and either work for them as an agency for salary or buy that brand. It's a difference between being like a kitchen remodeling contractor or buying the house, remodeling the kitchen, and then selling the house. I chose to be the house flipper, although that is a terrible word. Flipper is not a word that I would associate with the way we did it, but I wanted to own equity rather than sell my time. And that was how I got into it.

Drew:

Very smart. And I remember being in my, I was in my New York apartment and it was around the time, I think, I didn't even know if I had my first kid then, cause I was at the small apartment with my wife and talking to you, I met you, I don't know, Euderian might've put us in touch and you sent me a pitch deck on you're raising money to buy businesses. And I don't know if it was.

Bill:

Did I send you that deck?

Drew:

Yeah, I don't know if it was like to roll them up at that point or if it was just to buy them. I can't remember, but I remember getting off the phone and being like, this guy knows his stuff. Like he's onto something here with this concept. And I don't know. Do you remember that deck?

Bill:

I vividly remember that deck. So that would have been so at that point. So what I did is I kind of came to this thesis that I could buy other brands. I had one brand. So I bought one more kind of classic SBA loan, every penny of savings that I had. It was another skincare.

And that was the one I kind of cut my teeth on. It was bigger than the brand that I owned. That brand was called Nurture My Body. It still exists. We've since sold it. And then I bought a third brand. So we had three brands in the portfolio and I brought the third brand kind of with profits from the first two. So, but at that point I was tapped out. You know, I realized I could either, you know, buy a brand every three or four years just when I could save enough money up or I could raise money and go faster. So that deck you saw Drew in was in 2016 was basically the, we've proven this model.

We've done it twice, it's working, we would like to raise some money and go faster so we can run at break even and still acquire brands rather than having to save up every penny of free cashflow to acquire brands. So that was the deck you saw. Did you raise money off that? We did. We raised a hilariously small amount of money by today's aggregator standards. We raised $3 million in 2016 to go buy brands and that's what we did. So from 2016 through 2018, we bought in aggregate eight brands.

So we got eight brands in the portfolio by 2018. And the reason we stopped is because multiples got bananas because all of the other people who had raised $3 billion, the aggregators, as we now know them, the Thrasios of the world, came in and kind of bid up the floor on all e-commerce assets, right? All Amazon, 100 % Amazon brands basically are the floor of e-commerce valuations, right? Like those are generally the lowest valued businesses because they're not on the channel. They're usually not that big, right?

That's the floor. But when you have this really strong bid on the floor and the floor gets pushed up, you look at, and if you're selling a really great DTC subscription consumables business and you look at garbage Amazon brands going for 6X, you go, my business got a worth, be worth 8X or more, right? So it pushed the floor on e -commerce brands so much.

some of these account, these acquisitions didn't pencil. And I'm here going, I think everybody is drunk. It's very frustrating though, when you're the only sober one and you can't execute your business model unless you pay through the nose. And that was the situation we got into in 2018. By the time we had eight brands in portfolio and I couldn't buy anymore because none of them pencil. It's like the big short all over again. It was, it was, it was bananas. They're buying, people are buying these yoga mat brands for seven times EBITDA or SDE.

And they're all, it's all the same Chinese garbage. And I'm going, this is not going to end well. And so you hit pause on acquisitions and just focused on operational efficiency and running the brands that you had. Yes. And we were very lucky in that sort of the last brand we got in the door in 2018 was a brand called Natural Dog Company. That was the last one we bought in 2018. And in retrospect, I look like a genius because from 2018 to today, the pet market has just exploded and now everybody wants to be in pet, et cetera.

Drew:

You had like a laundromat, like a laundry cleaning product.

Bill:

Yeah, we made laundry detergent. It was called Rockin Green. We scaled that brand. We bought it. It was doing like 400 ,000 sales. We scaled it to like 8 million in sales. So 20x on the top line, basically through Facebook ads. And then we ended up selling that. We sold that business and I'll get into when we divested all of them. But at the time we weren't in pet. The Nashville Dog Company was the only pet business we bought. And I just liked it because it was consumable products and it was small and light products and they had good gross margins and they were terrible at marketing and had the great name Natural Dollar Company. And I said, this is my thesis. I know how to not suck at marketing. Here we go. So we bought it. That was a, that business was doing about 4 million in sales at the time we bought it. It's substantially larger now.

And so we kind of, at the same time as we couldn't buy any more brands, we had luckily bought one that was lightning in a bottle. And so that brand scaled so aggressively, you know, from 2018 to 2021 that it was 75% of our portfolio, you know, by revenue. And then we started looking around going like, what are we doing messing around with laundry detergent and skincare and everything. Which I think brings us to a second pivotal call between the two of us. I'm walking through the mall here in San Diego and I'm talking to you and you're like, people are buying off of forward multiples that are insane. I'm going to sell. I'm a seller now.

It's like the two pivotal calls, one, you know, five years earlier, you're like, I'm a buyer, I'm buying. And five years later, you're like, I'm selling, sell everything you got. And to be honest, if I were a little bit smarter, I would have been a seller in 2020 instead of 2022.

Drew:

Okay. I don't remember when that second call was. I thought it was '21.

Bill:
Yeah. So like to break down the timeline, I was a buyer from 2012 to 2018. We bought eight brands. And then in 2018, I said, I'm not a buyer at these prices anymore. And what I should have done is said, well, if I'm not a buyer, I'm a seller. And I should have sold the whole thing down from in 2019, 2020, like peak aggregator boom, right?

And then I wouldn't have to deal with all of COVID and all that misery. And you know, I would have been on a beach. That would have been great. But I didn't do that. It was not smart enough to go from, well, if I'm not a buyer, I'm a seller. I just went from, well, I'm not a buyer, we'll just hold, right? And then I didn't get to where a seller until late 2021. And that was when we had that conversation, Drew. And I said like, this is crazy, let's sell.

And it sounds like I was simply trying to time the market from a multiple perspective, but to be totally honest, it was because I was so fried. I mean, we were running eight brands in parallel in the holding company. We'd just been through COVID. And to be honest, like we go into all the different ways I screwed up, but the biggest way was that they were not all big enough, which if there is like one thing I could go back and do, I would buy bigger brands because each brand needs to be big enough to support a highly compensated management team.

And if it's not, you're the highly compensated management team, which means that I was functionally CEO of multiple brands at once. And that was not a great lifestyle decision.

Drew:

Just literally what every private equity partner ever has told me goes like as big as you can. Yes. And not in only like in terms of doing a transaction, it costs the same same amount of lift to buy a small brand is a big brand. You know, the diligence, the lawyer, the time.

Bill:

Yes.

Drew:

And so you've got to calculate in your own management fee. And it really requires a business of a certain scale in order to throw off some cash where you feel okay, taking it out of the business.

Bill:

Yes. And also when you're small, it forces you to play money ball with people, right? It forces you to like try to find the hustler who's early in their career and see if they blossom into the director of marketing, you know, and then that in every position in your company versus being able to just go out and hire the guy who's already crushed, who knows how to crush DTC marketing, right?

Like I can't hire Drew on a shoestring, right? Cause you can't, cause you just can't get proven players, right? Right. And that was what was so hard is that you're constantly with small brands. You have always have to play money ball with employees.

Michael:

What did work? What would you say was the successful part of the model for a while?

Bill:

The successful part of the model was we were disciplined on price. We did not get over our skis on multiples. And if we had, I think we probably would have lost the business.

Cause if we had gotten over our skis on multiples, it would have meant we had too much debt. And then when things got tough or COVID and all that stuff, you're flying so much closer to the trees when you have a ton of debt. And what leads you to have a ton of debt is paying too high prices. So we were very, very disciplined. We never paid more than 4X SDE for anything. And then we were pretty good at Facebook marketing. We were able to buy customers and bring them in the door and scale revenue. Also, one of the things we did is we did our own logistics, which we don't anymore. We can talk about that too.

But at the time when you have eight brands, especially if some of them are small, 3PLs don't want to mess around with, you know, small brands, especially if they require custom things, custom kitting or custom manufacturing or whatever. So we got to the point where we had a 50,000 square foot warehouse doing a lot of custom stuff. And that is, I think, the only reason we survived COVID because we controlled our own destiny. And the bills that went the best were the ones that were the biggest when we bought them, you know, including Natural Dog Company. Whenever I bought a bigger brand, we did better we're cost disciplined.

And then to be honest, and this is the thing that you can only control if you're buying a business. And I didn't do it on purpose, but we bought in a great market. I mean, we bought in the growing market in pet, you know, with natural dog company. And that has papered over a lot of mistakes, you know, with just this huge tailwind. So I mean, be in a great market. That's my advice.

Michael:
If you're a company today that's looking to make an acquisition or if you're thinking about sort of pivoting into thinking like this roll up model is super sexy and I can do that. What would you tell somebody today or would you say don't do that?

Bill:

I mean, I would say don't do it unless you buy businesses with at least $2 million of EBITDA period. I mean, it's one thing to go from one to two, like, okay, I'll allow you to buy a second business maybe. But like, if you want to have eight, they've all got to be two plus million in EBITDA because they've all got to have a CEO, right? And a CEO makes several hundred thousand dollars.

And if your business doesn't have, and then they probably need to have marketing, they probably need to, you know, et cetera, et cetera. So before you know it, you're spending between 500K and a million bucks on a management team. And if you've got a million bucks of EBITDA, that's your whole cashflow.

Now you materially change the cashflow profile of the business, your ability to service debt, et cetera, et cetera. So I would say if you've got to build like a true whole co, you got to buy bigger businesses.

Drew:

Did you ever try one management team for the whole thing?

Bill:

That's what I did the whole time and it was terrible.

Drew:

Oh, I see what you're, okay, got it.

Bill:

Yes, that was miserable. I do not recommend it. And Drew, I know you've had some experience with the spin out of auto anything and you guys had sub brands and whatnot, right?

Mike:

We had GMs at the head of every business who owned the P &L. We had some shared services across the org and that did help, but it was key. I think similar to your point, these businesses were at a scale where you could have senior leadership that had P &L ownership of each of those divisions.

Drew:

If I had to describe them, they were more merchandisers than marketers. They knew the customer and they knew we'd acquire a Jeep brand. So they just knew Jeeps in and out. They knew what the Jeep owner wants. They knew all the players in the Jeep category more than how to set up a Facebook funnel. I don't know if we set out to do that, but the natural GMs were all merchandisers.

Bill:

Yeah, I think that's the only way to not die because otherwise you have to get so schizophrenic, especially if the brands are not all identical.
‍
Right. Because you've got to pivot from, I don't know if the mind of a Jeep owner is the same as the mind of a Corvette owner, but like that copy is probably different. Which brings me to kind of my other advice, which is buy big businesses and buy companies that have the same customer base because it creates so much value when they have the same customer base because your employees don't have to be schizophrenic and you can cross market to them. So it drives your tax down, which is just a phenomenal free lunch that you don't get if you buy businesses in different industries.

Drew:

And the glaring contrary example right now is what solo brands because they've got a bunch of outdoor stuff and then they bought Chubbies. Yes. And yes, it allowed them to IPO at a very opportunistic time. I recently read that they're trying to offload Chubbies.

Bill:

Yeah, they were just trying to get big to IPO. But yeah, all their pain is that they've got their portfolio doesn't fit together.

Drew:

Yeah.

Bill:

And you could say it's all outdoor brands, the fire pits and the swimsuit, the chubby swimsuits. I think they own a paddleboards brand also. Yeah. But like that's not the same. Like don't fool yourself like Solo did into thinking these are the same customers. When I say the same customers, like the same customers for Solo Stove would have been like, I don't know, grills or like backyard, I don't know, landscaping or something like the same customer who the same person will buy both products. Right. And that is so key. So bigger brands and in the same category or very, very adjacent.

Michael:

Now you're all in on Natural Dog and you've also expanded into retail. What are your thoughts on making that move? When's the right time? How's that going?

Bill:

Okay, so retail, so yes, to catch us up in 2021 and 2022, we sold seven of the eight brands and went all in on Natural Dog Company. That has been a great decision from a quality of life point of view for me, for sure. Natural Dog is doing better because of it also, because it gets all my focus.

One of the things that we have been working on for the past several years is expanding that brand into retail. So think, you know, Petco, PetSmart, you know, those types of places. I've also done some business with Walmart. We also work with over a thousand mom and pop independent pet stores. So we have a team of, I think there's four or five people, six people that just do retail now at this point. It's about 25 % of our business by revenue, but it took years. So the way we did it is we started cold calling mom and pop pet stores,you know, giving product away for free, getting on the shelf. And we built that up to a thousand or so.

And then the regional chains start calling because they start seeing it. Right. And then you kind of beat your way into those doors. And then eventually Petco, you can make a case to Petco. Look, it did well in independence, did well in these regional chains. It's going to do well in Petco. It's very hard just to go to Petco and say, trust me, this product is great. You know, they want to see a track record. And the other thing, by the way, you want to have a tracker because you're going to goof up a lot. Retail is.

Totally different than dot com, you know dot com you get the money up front you mail them one thing and All the mailing is standardized, right? It runs through ship station and runs through 3pl like every box that goes out is the same and they never functionally never return it now in retail whole negotiation up front on pricing billbacks Marketing spend trade span co -op. So like the price you might you go to the retailer and you go our wholesale price is 50 % off retail.

You're gonna sell a thing on your shelf for 10 bucks, we're gonna sell it to you for five bucks. And the retailer goes, okay, that's great, sounds good. But we also have, we require a 15% marketing co -op and a 5 % allowance for returns. And so that's 20 % that we're gonna bill you back. So now your $5 you thought you were selling it to them is now $4, right? And now, so all right, you grin and bear it. And they go, also there is a $12,000 per SKU slotting fee.

And that's one time and you're like, well, that was my whole profit for the year. Right. And you go, okay, well, you know, I guess we'll make profit in year two. We'll go for it. Right. So now you're in year one, you're not making any money, but you're on shelf. Okay, great. Now they call you back after nine months and they go, it's not selling. What we're going to do is we're going to put it on our contract allows us to put it on 40 % off. And now instead of selling for 10 bucks, we're going to sell for six bucks that extra $4. Our contract allows us to charge it back to you, the manufacturer. So you owe us $4 a unit and you go, I don't have it. I already spent the money. That was my, I sold it to you for $4 a unit. What do you mean I owe you $4 a unit?

And you're bankrupt, right? And that's how Walmart bankrupts brands because brands don't realize what it means to go into Walmart, how much margin you have to build into it. And also that you are still on the hook for that product until it moves through their register, you know, cause in dot com, like you're done, you mail a box, you're done, but you're not done with retail until it moves through their register.

And there's marketing around that and there's in-store merchandising around that. I got all kinds of horrible stories about in -store merchandising. It's just a very, very different business than e-commerce.

Michael:

Yeah, I think that's really helpful and interesting how you approached it. We've talked a number of times about the risks of going blindly into retail and the gotchas that exist there, but having that approach of starting with more mom and pop and getting validation for yourself that it's going to sell through at retail. I think a lot of brands are thinking like, "I just need to go straight at Walmart. I need to go straight at Kroger. I need to go straight at Target."

To your point, the risks that exist there could be catastrophic. Whereas you've built up validation and data among a less risky group of retailers such that you could then pursue big box mass market more intelligently.

Bill:

You're proving to yourself and to your future retail customers that this product is going to sell through.

But you're also learning how to do it because I mentioned like on DTC, all the boxes are the same. Every retailer is going to send you what's called a vendor routing guide, which is basically you send us a palette. It needs to be on a plastic palette, not a wood palette. It needs to be wrapped in black plastic, not clear plastic. Each box has to have EDI labels like this. And the palette on top of the black plastic has to have a label on all four sides and it must be delivered within a four hour window when you make an appointment. Oh, by the way, did you know you had to make an appointment to have it delivered?

So like that, like you wanna do that on a small scale, like not at Walmart to build all of the muscles in order to deliver an order that way, right? Even though muscles at your 3PL or your own logistics before you cannonball on Walmart, because guess what? If you ship it on a wooden pallet instead of a plastic pallet, they're gonna charge you $500 and they just take it out of their bill, right? So there's all these muscles auditing their bills. Like we had PETCO for example, they just short paid us by 30 grand a few months ago.

And we said, well, WTF and they go, oh, it's a bill back for such, such, such. And we go, well, actually, if you read the contract, that bill back is not in our contract. And they go, oh, sorry, here's your 30 grand back. Like that's, that's how they do business.

We now have a bill back auditing process. So there's all these parts of going into retail that you don't see coming as a DTC brand. And that's why you got to start small because you want to hit these things when they're speed bumps, not brick walls in front of you.

Drew:

But it's worth it eventually.

Bill:
Oh, yes, we were very profitable in retail, but it's because I knew, you know, for example, a retailer that shall not be named, which we launched into recently came into us. They asked for $200,000 slotting fee, just pay upfront.

And because we had a whole bunch of experience in other retailers, we looked back across tail woman said, no, zero. We paid instead of a $200,000 slotting fee, a $20,000 slotting fee because we knew what we were doing. Right. But that's in everybody's best interest because that relationship is profitable for us now.

Right? If we had been paying them $200 ,000 to get in, we're not making any money like it's treading water. And by the way, the slotting fee is never one-time. If you're listening here and have agreed to a one time slotting fee. The reason why it's never one time is they come back to you next year and they go, do you want to keep your shelf space? And you go, well, of course the product's selling. And they go, well, that'll be a $200,000 stay-on-shelf fee. And you go, that's BS. You said the slotting fee was one time. And they go, well, "I don't know, man. This other brand is willing to pay us a $200 ,000 sliding fee to take your space. So would you like to pay the $200,000 stand shelf fee or goodbye?"

And that's how they get you. So yeah, the slotting fee was one time, but now they just changed the name to something different. It's the stand shelf.

Michael:

Interesting segue to something else. I know you've talked a lot about is financing and businesses taking financing, whether it's raising, but specifically through financing options based on receivables or cashflow or other things. And I could imagine a lot of brands thinking like in order to support my retail launch, I need to take on some debt. But once I do that, I'm like golden because now the stuff's going to sell through a ton at retail. I'm going to start generating a ton of cash. I'm not no problem servicing that debt. They only tell me it's like, you know, prime plus a couple or whatever. How do we get into trouble there too?

Bill:

Okay. So I feel like this is like my soap box, which I'll keep to a minimum, but it cannot be told.

said enough because I'm what I see more brands. It's now February, 2024. I speak to one or two brands a week now who are crushed under these merchant cash advance loans, the Shopify capitals, the clear Co, all that stuff. And they go and they're crushed. People are losing their business because they're buried between two, three, four of these, right? Oh, pay back only 17 % of sales until you have paid back the principal amount plus 9%. And, you know, you without a finance degree goes, oh, I'm going to borrow 100 grand.

I'm going to only pay back 109 grand. Seems reasonable. Seems like 9 % interest rate, but it's not. You will notice they do not call it a 9 % interest rate because it's not. They call it a 9 % fee and is very different than a 9 % interest rate. Because if you borrow $100 ,000 at a 9 % interest rate and you pay it back tomorrow, you will pay back like 100 ,001 dollar, right? You will pay one day of interest at 9%. If you take a merchant cash advance loan of $100,000 with a 9 % fee and you pay it all back tomorrow, you will pay back $109,000.

Right?

Because it's a fee and the effective APR on that $100,000 that you had for one day and paid back 109 is thousands and thousands of percent, right? It's preposterous. And that same logic extends because you pay back a fraction of your sales every single day, right? They take $109 ,000 in this example and they divide it over several months of daily payments.

So that first day you paid back, you know, $1 000 of the 100,000, but you really pay back $1 ,000 plus $90 of that 9 % fee. So the same logic applies. You had that money for one day and you paid the 9 % on it. And that's how these people get crushed because they think it's only a $9,000 fee, but the payback is so fast that they're paying a whole lot of financing costs. And then what happens is they need to take another.

I have seen people take one and survive. I have almost never seen people take two and not end up in a bad place because they're just so slippery.

Because you take the second one to pay off the first one and the number just gets bigger, which means the percent of daily sales gets bigger. And it's just a horrible, horrible slope, which comes down to don't use the merchant cash advance loans. They're playing with fire. There are many cheaper ways to finance your business, including putting this crap on a credit card, by the way, which your mama told you never to do.

But I'm telling you is cheaper than immersion cash to advance loan from it on an APR basis. So be very, very careful financing. If it's easy to get financing, you probably don't want it.

Michael:

You mentioned credit cards. Like, how else do brands who are in sort of a cash crunch orneed something to fuel growth? Like what are the recommended places to go?

Bill:

Okay. So the freest way to get money is to go to your vendors and ask for terms, right? Because if you're currently paying, and I meet all these brands who are paying 50% when they place the order and 50% at ship, right?

That's like the standard terms any vendor will start you on. That is terrible because you got to float 50 % for your three month lead time. This is money you don't have that's in your vendor's bank account. And then you got to pay the other 50 % when they ship it before you can even start selling it. Then it's got to go all the way across the Pacific or even across the country or wherever, get received in your three PL. And then maybe you start selling it. So you've had to float that.

for the entire lead time plus however long it takes you to start selling through. If that vendor would just switch you to net 30, it would change the whole cashflow profile of your business. Because you could keep all that cash in your bank account until the product was already selling through in the marketplace. You could actually use the revenue from selling the product to pay for the product. So the number one thing all brands should do is go back to their vendors and try to extend their terms. If you're at 50% at order, 50% at ship, try to go 100% at ship.

After you do that a few times and they trust you, try to go 50% at ship, 50% net 30. Oh, they won't do that. 50 % of ship, 50 % net 15. Right? Just crawl out the timeline until you can get to net 30 or even better net 60 or in rare cases, net 90 changes the cashflow of a business.

Drew:

Love it. It's certainly something we are pretty familiar with. It's the first thing that the private equity overlords do when they buy a company is like they go right to terms and negotiating the terms and extending them net 30, net 60, something like that.

That was week one at Auto Anything. You see the cash at the business just kind of skyrocket. It's really nice. I guess what's now, like now you're focusing 100% on Natural Dog. You're also doing some consulting.

Bill:

So I spent 100 % of my time on Natural Dog, but I was previously running eight brands at once. So 100% of my time on Natural Dog leaves me with a couple hours a week. And the way I like to spend it is I work with a couple different brands and it's really more...

I kind of frame it as financially savvy board member for hire.

Drew and Michael, I know you guys have worked at businesses where you had boards. Boards can be really great. They can be kind of mentors who are aligned. They can also be a pain in the butt. But the thing that sucks about boards is that they can fire you. The thing that's great about boards is that they have a lot of experience. So my hope that I can provide to people is, hey, look, pay me with money, right? You don't have to give me any equity. Just pay me with cash. I will act as that experienced advisor who is financially savvy and can teach you how to finance your business and can teach you how to not lose money.

And what metrics do we run? Did I have I run as across eight brands? I can teach you all that. And guess what? I can't fire you. Right. So I can help you. You pay me only cash, not equity, and I can help you out.

So I take, you know, up to four clients at once. I actually have three right now. So I got one spot and I get kind of deep with the founders. You know, I've been with the three folks I'm with now. I've been with almost all of them for almost a year. So I get to know their business, which is really cool.

Rather than doing random 30 minute calls with people I don't know, giving out free advice every week, I can get deep with three or four people, which I've found to be a lot more fun.

Drew:

All eComm.

Bill:

All eComm. Yes. Yeah, I should have one SaaS guy, which is cool, because a lot of stuff tastes like chicken as you guys I mean, you guys are ex ecom guys now SaaS guys with post pilot, like a lot of the stuff does taste like chicken, especially on the financial side.

Michael:
Yeah, we we talk about how in some ways SaaS feels like a cakewalk for a hardened D to C marketers like been battle tested in Facebook ads for like 10 years.

Bill:

Yes. You mean you have a hundred percent margin? What's that like?

Drew:

You don't have to acquire all your customers every month.

Yeah. We like to ask, like, what would you start today if you were starting from scratch? You know, what do you see as the opportunities right now?

Bill:

I'll tell you what I'm not going to say as I go back into eComm. You guys, you guys were like, oh, this is the SAS is way easier, but everybody goes into SAS. So if I were going to start over and I will do this at some point, you know, know that I'll run Natural Dog for the rest of my life here.

The next thing I'd really like to do is I would love to go work in human fertility. Here's why. You know, we were fortunate enough to conceive three children naturally, but I know a ton of people who have had major fertility challenges. And unfortunately, it's getting more and more common, you know, with all the  microplastics in our water, all the terrible food that we eat, you know, etc. I mean, all kinds of reasons, right? People waiting longer, cultural reasons, more and more people need fertility assistance. Have you guys known anybody who's gone through fertility at all?

Drew:

Yeah.

Bill:

Isn't it just universally like the worst consumer experience you've ever seen? Expensive in the worst. Yeah. Yes. It's so expensive and they treat you like dog crap. Like you're paying, you're buying a car every time you go through IVF and they're like, you're lucky to be here. So I think this is a huge growing market. It's all cash pay, right? So you don't necessarily have to mess with insurance. I would love to just do like a full audit of the entire value chain, everything from at the top level, like a coaching service for couples who are going through IVF all the way through the contractors who provide staffing to the IVF clinics all the way through who makes the pipettes all the way through outsourced freezer facilities for the embryo, you know, all the way through like this value chain.

I think it's just ripe for improvement and is super lucrative. The market is growing. And by the way, it helps people have more kids, which I'm just really in favor of. I think.

A lot of people need to have more kids. I think there are a lot of great parents in the world who are not having kids, right? More people should have more kids. And I feel like it would really, I would be pumped to pursue that as my mission and hopefully make a bunch of money as well.

Michael:
Not the typical expected answer, which is really awesome. I love how you're thinking about it.

Drew:

"I'm going to go sell stuff on Amazon."

Bill:

I've sold enough stuff on Amazon, right? You know, like I, I'd like to do something. I want to try to improve the world a little bit. That is in the future. We're going to stick with dogs for a while. Natural dogs. We're going to stick with dogs. Sell it someday.

Yeah, we'll exit at some point. I mean, we're not not in a huge rush. You know, as you guys know, there kind of are seasons in a business when it kind of starts to make sense to look for an exit. You know, we're not in that season right now. We're kind of in the grow, launch more stuff, get to the next level phase. But when we do, you know, there'll be a time to to sell the business and then maybe I'll go work in fertility.

Drew:
Well, that's it. Those wrap up our questions. Mike, do you have anything else?

Michael:

No, this was great, Bill. Somebody I've respected for a really long time in this industry. And it's been around a while, like us old guys and.

Bill:

It's great to have you on. Thanks, man. I appreciate you lumping in with "us old guys." Nice of you.

Announcer:
Thanks for listening to Nerd Marketing. Don't forget to check out all of the other great episodes, some of which include interviews with e -commerce marketing masters working with Mr. Beast and Joe Rogan, plus Drew and Michael's experiences in private equity, advice from VC firms on what they look for in investments, and so much more. Like, share, subscribe, and tune in every week for a new episode.

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