How We Make $200M/Year With A Wallet
$200M Ecom Playbook, Trends, and Product Expansion - March 10, 2025 (23 days ago) • 01:04:12
Transcript:
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Sean Frank | I'm glad you guys invited me here because you're slumming it down with the e-commerce millionaires again.
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Shaan Puri | This is like a Make-A-Wish type of episode for us, you know? There are really two things that I need to talk to you about.
First, I cannot believe that you sell hundreds of millions of dollars of this stupid little wallet. This is unbelievable to me! It's been blowing my mind ever since I found that out, and now you're here finally to give us some answers.
Second, I think you're very opinionated when it comes to e-commerce. You don't hold back; you don't pull punches. We like that! We like spicy guests, and I think you're going to be able to provide both of those things.
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Sean Frank | For us. | |
Sam Parr | I think you should smack Sean right now for calling it a "stupid little wallet." Did you hear that? "Stupid little wallet."
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Shaan Puri | I'm just trying to get him fired up. I told you he gets fiery; he gets feisty. So, I wanted to, you know, stir the pot.
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Sean Frank | Fire a. | |
Sam Parr | A little bit. | |
Sean Frank | You better play nice, or I'll dox your eCommerce brand.
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Shaan Puri | Oh, that's true. He knows he's got some.
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Sam Parr | He knows too much.
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Shaan Puri | He's got some compromise on me.
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Sam Parr | Dude, I've been a Ridge wallet owner since February 2016 or 2017. You know, Ridge sponsored The Hustle.
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Sean Frank | Well, dude, thank you for the support! You guys were super early for newsletter sponsorships. We probably run a pretty big sponsorship ecosystem now. We sponsor a ton of newsletters and, you know, YouTubers. Obviously, you guys were one of the first people selling that ad space.
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Sam Parr | Yeah, and you know what I learned about your guys' industry? Well, just any marketer who's savvy. It's people like you and Sean. You guys know how to find early, interesting stuff. You take all of the risks, and you understand the arbitrage—the underpriced opportunity.
So, we had a lot of smart people who would buy these ads with us, and I'm like, "I can't believe they're doing this! This is so unproven." Then I realized that that's like the theme of a smart marketer, which is to throw dollars at a variety of things and then exhaust it once everyone else comes and finds it.
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Sean Frank | Yeah, it's ad arbitrage, right? Like everything's tension. So if I'm giving Facebook $15 per thousand views, and if I can get a better price off of newsletters, influencers, or YouTube, it's all just an attention economy.
It's so funny to watch that pendulum swing back. Linear TV, like the TV your parents probably watch, is so cheap to run ads on because nobody's buying it. So, you know, I'll probably spend what's...
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Shaan Puri | The CPM of linear TV.
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Sean Frank | A dollar? Like, oh wow! It's like, because there are all these channels, right? There have been thousands of channels that have come out that have 800 people who watch them.
So, you just buy big blocks of random ad space that are very male-targeted. And like, yeah, literally, it's like a dollar to reach a thousand people. Sam, do you...?
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Shaan Puri | You know what our best performing ad channel is? Our marketing channel for my brand: **postcards**. You would not believe it—it's postcards!
It's not super scalable; like, you can't just spend to infinity on it. But you know, you put a dollar in, and you'll get $8 or $9 out of revenue. It's amazing!
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Sam Parr | That's great! You use PostPilot.
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Shaan Puri | PostPilot, yeah nice. So, okay, Sean, we should start at the beginning.
What's cool about your story is that you sell a simple product. It wasn't like some Mark Zuckerberg innovation or anything like that. You've scaled it up; you've built it brick by brick.
But you said you started in the service side of a sweaty services business. You didn't start the company, and you didn't start off in the product game.
So can we just go through your story for a little bit? Then I want to brainstorm other D2C ideas with you afterwards. But first, let's do your story.
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Sean Frank | Sure, yeah, you got that right. The show's "My First Million."
I made my first million dollars off of an ad agency. You know, Facebook ads came out in 2012. That was like when it was probably in an open beta; anybody could join. I learned how to do Facebook ads. I worked at an agency with my CMO, Connor, and the agency sucked. It was 200 people working there and probably 500 clients. Those people...
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Sam Parr | Were an employee. | |
Sean Frank | Yeah, I was just an employee, and then I thought, "Oh, I should do this. I could do a better job."
The ad agency I worked at had an average client retention of around four months. So, imagine that sales cycle: it takes sixty days to onboard them, they get thirty days' worth of work, and then they say, "This sucks," followed by thirty days to offboard. The average client was four months, right?
I thought, "Imagine if I just did this but kept them for a year. I'd make so much money!" So, I started an ad agency, and now I have ten clients.
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Shaan Puri | So, you're saying this like it's simple. You're working at an ad agency. How old are you, roughly, at this time?
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Sean Frank | I was 22.
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Shaan Puri | You're 22 years old. You're not like a marketing expert yet, right? You're, you know, learning on the job, I would assume.
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Sean Frank | Yeah, yeah, but like, it's kind of like TikTok Shop does today. Nobody's an expert, right? It's a brand new thing that came out.
Like, we were probably two and a half years into Facebook ads, and people still thought Instagram followers were the most important metric. They were wanting to run campaigns to get followers, right?
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Shaan Puri | Right, so was your agency super bullish on Facebook as a channel? Or was it kind of like this new thing that you got really interested in because it was new? But was the whole agency like, "Hey, this is going to be a really big deal?" | |
Sean Frank | Yeah, it was like a cookie-cutter DTC agency. This was probably around 2015, right? So, Facebook and email were the services we were providing. There were no other services; maybe there was one guy doing Google Ads, but it was really all in on Facebook as this brand new channel.
If I could go back in time, I would have been even deeper into Facebook. The biggest challenge with Ridge—I mean, we're skipping a couple of years into the future—but we tried to diversify too fast. I was doing newsletter sponsorships, and while they worked, I should have put all of my dollars into Facebook back then. Up until 2020, I would have just been better off putting as much money into that as possible.
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Sam Parr | And Ridge was one of your clients. Were they an early client?
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Sean Frank | Yeah, so I had 10 clients. I'm at an agency, and it sucks. I think I can do a better job. My CMO, Connor, and I ended up starting an agency together. We took 10 clients with us; eight of them you have never heard of. They've just gone extinct. One of them was Ridge, and then one of them was actually Mudwater, which has gone on to crush it. We did their Google Ads at some point, like in 2016 or whatever.
So, we ended up taking Ridge over. The father-son duo, best friends, started this business. They got to like $5,000,000 a year in sales. The dad was a special ed teacher, and Daniel was going to be an accountant. This thing just kind of caught fire, and he really didn't want to be an accountant. Their expectations for the brand, when they got to $5,000,000 a year, were like, "This is the best thing that's ever happened!"
Connor and I, being hella young, thought, "I think we can get to $15,000,000 a year. I think we can get this thing to $30,000,000 a year." I remember telling Connor, "I think we can do $100,000,000 a year selling this wallet." He looked me in the face and said, "There is no fucking way in hell we're going to do that," right? This was like 2017.
But they didn't really want to run it all that much anymore. They didn't want to manage people, so I said, "Cool, we'll do everything else." My agency kind of just got built around running Ridge Wallet. We do their customer service, we do their product importation, we do all of their marketing, we do their web development, and then I'm charging them like $200,000 a month. All of the money is coming from Ridge Wallet. They end up being like 60% of all agency billables for my tiny agency. | |
Sean Frank | They're like, "Hey, we should just merge." So, me and Connor take an equity stake. Everyone in my agency just goes in-house to Ridge. I ended up selling off the agency to one of the people who was running it, and that was probably in 2018. Since then, Ridge has gone from $30,000,000 a year to over $200,000,000.
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Shaan Puri | That's amazing.
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Now, back to the show.
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Shaan Puri | What I love about that story is that it sounds like when you were running the agency, almost nobody in a business school would recommend, "Hey, you're running this marketing agency, and then for one client, you're going to start doing customer service, logistics support, and all these other things."
It sounds like a wrong move. It's like, "Wow, one customer is going to make up 60% of your billables." From a business school perspective, that would be considered a bad move.
But Dharmesh said something once on the podcast. He goes, "With my first business, I got mixed up later. Just because I was ignorant doesn't mean I was wrong." Meaning, I didn't know the right way to do it, but my instincts were actually leading me in the right direction.
It just wasn't, you know, I didn't have some sophisticated game plan. Maybe it wasn't typical, but my instincts were correct. It sounds like your instincts were correct too, that you should just keep leaning into the right thing, even though it was maybe not what a normal marketing agency would have done.
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Sean Frank | Most clients suck. If you guys have ever done client work, you know that most clients fight with you, they don't pay you, and they're always trying to fire you.
Ridge, as a business, was run by really cool guys who didn't want to take any reins away from us. They were very happy with the $5,000,000 a year business. They said, "We could always go back to shipping the orders ourselves." I mean, the guys are like Buddhists; they were raised Buddhist their whole lives. I think that's part of it. They were very much like, "Hey, this is a good thing. These guys are growing this business. Let's give them more responsibility."
You can't really exit agency businesses for all that much. One reason why we went all in on Ridge and did the merger is that an agency is probably worth maybe one times client contracts, and maybe at the peak, it was two times client contracts. So, if you have a guaranteed million dollars in revenue, you might be able to sell it for a million or two.
Whereas Ridge, at the time, was like a $10,000,000 a year business. We were going to grow this thing to the moon, so it just made sense to put all our chips in that basket.
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Sam Parr | What was the metric that you saw that gave you the moment where you were like, "Alright, they're doing $5,000,000 now, but this could be $30,000,000; this could be $100,000,000"? Was there one or two metrics, or was it just a guess? What was that research process like?
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Sean Frank | It just seemed like they could always put another dollar into Facebook, and it could work, right? The limiting factor wasn't marketing or awareness; it was the operations of the business.
We ended up having a year where we didn't have any wallets because we couldn't keep them in stock. We went from 15,000,000 to 18,000,000 in one year, and that was just because we couldn't make enough of the product.
So often, demand is the thing that stops these brands. You can only get to so big of a total addressable market (TAM), and that wasn't the case here. We did a wearable, and it was so hard to get people to buy the wearable. The customer acquisition cost (CAC) on Facebook was $400 back then. It was so difficult to get people to buy these wearables, whereas for the wallet, it was like a $6 CAC. We could just put up a new ad, and they were just static images, and they were selling.
That was the metric, man.
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Sam Parr | That's an interesting process because a lot of people, myself included, will say, "Focus, focus, focus. Get it right, make it great." It's going to take a decade or more.
But your story is more like, "I tried this, I tried this, I tried this. None of it worked. This thing was clearly the winner. I should go all in on this." Is that what your recommendation is?
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Sean Frank | Well, my recommendation as a person trying to make it is that you should make the best decision at the time. So, whatever the facts are, when the facts change, make a different decision.
Right? Strong beliefs held loosely.
So, like, I'm at an agency. I could have just done that grind and be like, "I'm gonna be a VP at this agency when I'm 26. I'll make like $200,000 a year." But I was like, "No, these people suck." I think the best decision for me is to just do what they're doing better.
Then, from the agency to Ridge, I thought, "Running an agency business? Running an agency sucks." The Ridge thing seems to be going better, so I should just do that instead. I should find a way to encroach myself inside of this business.
At Ridge, it was just like... I mean, for so long, we did not launch any other products for eight years. It was just selling more of the wallet because that's what was working. As soon as it started to get a little hard, then we pivoted to everything else.
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Sam Parr | Which is funny because I would have thought early on that my process of analysis would have been like, "Well, there aren't that many wallets." Like, if you told me $200,000,000 a year in revenue, I would say, "Well, you've sold every man in America a wallet. There are no more wallet buyers." You know what I mean? That's like one of my uneducated, self-limiting beliefs a little bit. If you said $200,000,000 a year, I would be like, "Well, there are no more people who need a wallet." | |
Sean Frank | Dude, it's a weirdly big Total Addressable Market (TAM). In retrospect, I could tell you all the reasons why Ridge Wallet worked. It's a $10 billion a year TAM. Most of that is luxury brands. LVMH sells about $4 billion a year in men's wallets. They own Gucci, which sells a ton of men's wallets.
Then there's Tapestry, which owns Coach. Coach does a billion dollars a year in men's sales. So, it's men's accessories. No men are buying those products; they're all gifts that are given to them. Nobody's ever excited about getting those products.
The reason why I'm very public about thinking Ridge can get to a billion dollars in revenue is that Tapestry has a men's business doing a billion dollars a year in revenue with nobody loyal or passionate about that. I'm just going to make whatever they make in all of our cool colors and materials.
You know, I think it's been so sexy to talk about tech and AI these past ten years—tech for ten years, AI for ten months. But I was at the All In Summit, and I'm looking at those guys. The products they're talking about exist inside their phones, right? They exist inside some servers somewhere. But they're all wearing cool suits, watches, and leather belts.
I'm like, "Okay, I'll just sell them all that stuff." I'm just going to sell the most practical things ever because, also, smart people don't enter the space. The reason why Ridge Wallet was able to be so successful is that we were the only people running Facebook ads for wallets.
Then there have been a bunch of other people who started up and tried, but they've all ended up going out of business because it's really difficult to get right. There is no repeat business. You can't believe that the lifetime value (LTV) will come save you later. It's very much about whether you can tactically acquire customers profitably every single day. | |
Sam Parr | Hey, hey! Brown Sean... White Sean's got that immigrant energy that I love.
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Sam Parr | He's got, you know what I mean? Like, he's...
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Shaan Puri | Got the... what do you call it? The Korean restaurant owner.
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Sam Parr | I call it the "Korean convenience store owner energy." You know, it's just like there's not too much overthinking it. It was like, "Well, you guys are all wearing this, I'll just sell that."
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Shaan Puri | Right, right. Like, yeah, I think you'll keep wearing this.
So, you know, Munger has these great quotes where he's like, his main thing is: instead of trying to be brilliant, just avoid stupidity. Or he'll be like, "You know, the best thing in the world is stupid competition."
And we just have not much stupid competition. It sounds like that's part of what, in retrospect, made Ridge work. You were like, "Hey, look, we took this simple idea and there's not a lot of other really smart, you know, DTC marketers that were doing this." So we were able to make hay.
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Sean Frank | Yeah, totally, man. I mean, to this day, the best DTC marketers are working on stuff like AG1, right? They're selling supplements, and it's because it's a better business. Undoubtedly, if there's a lifetime value (LTV) tied to your business, it's going to be better. It's going to be more valuable, and it's going to trade at a higher multiple.
But the other thing is, the best marketers have more or less left the industry. In 2021, running an e-commerce brand was incredibly cool. It has gotten less cool every single year. So, there are fewer people doing it, fewer voices, and fewer people talking about it. It's because it's hard. I unjokingly call it like the blue-collar work. You know, everyone wants to be shipping cool AI products, or everybody wants to be shipping something that isn't physical boxes to people's doors. You actually have to make something. Everyone wants to build the services of whatever.
So anyway, over the past four years, it's gotten really uncool to do what I do. | |
Sam Parr | Do you guys, on $200,000,000 in revenue, are you able to make good cash flow and profit? I know so many friends who have these companies, and their numbers are huge, but cash is always an issue. Are you able to manage this well? Or at that scale, do you still struggle?
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Sean Frank | I think the reason why you guys asked me to be here is to talk about the fact that you can, in fact, make a profit running eCommerce brands.
So, Ridge has never raised any money. We have no debt. Every dollar in this business, every dollar on my balance sheet, is profit that has been reinvested. I've been able to make millions of dollars a year for the past couple of years running this business.
So, yeah, it can definitely be done. Man, like I bought a house in LA directly because of selling wallets on the internet.
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Shaan Puri | Give us a sense of the timeline. So, you said it was kind of like, I don't know, it was around 2016, right? When you guys merged or you took over the brand.
But can you just give us kind of a timeline? Like, year one was $5,000,000, then it went to $10,000,000, then it went to $22,000,000. You know, give us a timeline. | |
Sean Frank | Yeah, and I'm horrible at timelines, so I'll give it my best. It's basically been like a **50% CAGR** since I started working with the business.
I think they did a Kickstarter in 2013. In the first year, they did like **$1 million** in revenue. By 2015, they probably did **$2 to $3 million**. When I met them in 2016, they did like **$5 million**.
So, I think it went from **$5 million** to **$10 million** to **$15 million** to **$18 million**. That was like the hardest year for the business. When it went from **$15 million** to **$18 million**, we had no inventory and this massive tax bill that sucked. That was probably in **2018 or '19** when that happened.
In **2020**, we did **$50 million**. So, that must have been **2018**. It must have been **'30**. So, from **'18** to **'30** to **'50**. Then, **2020** was the COVID year, so it went from **$50 million** to **$100 million**.
Last year was a... I'll just say a **multi-hundred million dollar year**. So, yeah.
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Sam Parr | Let me recap that for the listener. So, you started in 2015. I didn't hear what you said, but in February 2016, it was $5 million. Then, each year after that, it was $5 million, $10 million, $15 million, $18 million, $30 million, $50 million, and last year being multi-hundred million. That's incredible growth. | |
Sean Frank | Yeah, something like that. So, it's been super fun, man. And Sam, you brought up, "Have I sold every wallet in America?" That was one of your concerns, right?
So, like I said, it's a massive total addressable market (TAM). I always say we're a great uncle gift. You guys are going to Christmas or a birthday, and you have to buy some guy in your life a present, but you don't know his size, right? The Ridge Wallet is a perfect price. You can get one on sale today for about $76, and it is size-less.
You could say, "Hey, look! It has your favorite sports team on it," or "It has carbon fiber," or whatever else, right? So, it's a perfect uncle gift. Most of our products are probably sold as gifts, with some woman in their life buying it for some guy in their life.
The wallets account for about half of our revenue right now. The other half of revenue comes from all the other stuff we've launched. The biggest unlock we've ever had was in 2022 when we started selling men's wedding bands.
Once again, this is a category where people thought I was so dumb to sell men's wedding bands. They said, "It is a commodity good. Who the hell is buying this?" But in the first year, we did 8 figures. It is the highest margin, fastest-growing part of my company—selling men's wedding bands on the internet. | |
Shaan Puri | So, let's talk about this because we're in this group chat that you have, which is like a bunch of DTC brands. I don't know what the cutoff is; I think I'm below whatever the cutoff was supposed to be, but you let me in, which was nice of you. | |
Sam Parr | You’re in the charisma hire.
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Shaan Puri | Yeah, exactly. I'm the personality hire. So, you talked about going into new categories, and like the wedding band was obviously a smash success. You've said the wearable thing maybe wasn't as big of a success, and you had this kind of interesting way of looking at it.
I just thought of Ridge Wallet as that kind of like the carbon fiber metal wallet company. You were talking about Mont Blanc and these other almost luxury accessory brands. That was the vision you had for the company. When did that vision kick in? When did you reframe what the company is?
Because I think entrepreneurs hear stories where somebody already has the vision, and they have the right frame. It sounds beautiful, big, and really appealing. But at the beginning, they don't always have that. You know, Mark Zuckerberg—there's a video of him on a couch somewhere, and somebody's like, "Are you going to expand past colleges?" He's like, "No, that wouldn't be cool."
Now he's got satellites above India giving people internet so they can use Facebook. You know, your vision expands as you grow. When did your vision kind of change, or when did you reframe it? And secondly, how do you think about going into new categories?
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Sean Frank | Yeah, well, I'm a very paranoid person. So, like, in 2018, I thought, "This is gonna end. We have to find some other stuff to sell." We got into backpacks and phone cases and all this stuff pretty early in 2018.
In the first year, we did like **$4,000,000** in backpack sales, or maybe it was **$3,000,000**. It was a big chunk of revenue. We canceled that program because I was too stupid to know that was actually a good amount of backpacks. I thought, "The wallet's doing **$20,000,000**. How come we can't do **$20,000,000** in backpacks?"
In retrospect, we've since relaunched backpacks, so I was just too stupid. We were always looking for new products to sell, mostly because I was worried that I was gonna sell every wallet to every man in America.
As you learn more about the industry, you realize that a very common thing is large holding companies (holdcos) owning lots of accessory brands. For example, **LVMH** is just an accessory brand; everything inside their portfolio sells accessories, mostly to women. But there are occasionally pop-ups of very strong men's accessory brands.
**Mont Blanc** is owned by **Richemont**, and they own **Cartier**. That is the strongest men's accessory brand, and they do **$500,000,000** a year. You might think it's gonna be pens, but pens were like **18%** of revenue. It's mostly just small leather goods.
Across the world, people buy each other gifts like wallets, backpacks, belts, and everything else. So, there's a playbook here: you have to find a group of customers who like you, continue to make products that they like, and sell them.
I am more ruthless with product expansion than I think a lot of brands are. I believe more people should just try. They're really worried about hurting the brand, but I'm like, "Your customers never think about you." You're lucky if somebody is mad about you launching something.
I always go to **BIC** as one of my favorite brands. They make lighters, pens, and razors. We buy all of those products independently, and they're best in class.
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Sam Parr | I didn't even think of those three.
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Sam Parr | Yeah, but you saying that, I'm like, "Oh, it's the same."
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Sean Frank | Yeah, and they're the best in class in all three of those. If you want a disposable razor, a cheap pen, or a lighter, that's the only one. They own those markets.
It's just because the guy had a plastic factory. It's a French company, and they're actually getting into tattoo removal now. They just bought a bunch of tattoo companies because they're like, "Yeah, whatever takes plastic, we're just gonna do those things."
It doesn't violate anything in your brain because you just think, "That's just the way it's always been." So I think it's more elastic than a lot of people want to admit. Brands die by being too rigid.
For example, Allbirds should have gotten into bedding or different types of products, but they didn't. Now they're just a dead shoe company. You should be so ruthless with product expansion. | |
Sam Parr | You're a very charismatic guy. You have a lot of interesting parts of your personality that I enjoy. What attributes would you say are most responsible for your success, do you think?
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Sean Frank | One, it's a very trust-forward organization. It's a very transparent organization. When I say "trust forward," six of us own it. You know, three of them are a father, son, and best friend—like literally would die for each other. Then there's me and my CMO, Connor. I lived with him for five years.
There was a time when we were running the agency where we did not have a thousand dollars. We would have to take his dad's car, which was a 1997 Honda Civic that smelled, the paint was peeling, and the windows didn't work. We would take it to meetings and have to park it behind buildings so people didn't see us get out of this junky car.
Tying it to that, it's about not being scared to go back to zero. I'm from a very poor, bad area where kids died of fentanyl overdoses. I lived in a flop house with like 14 guys living in bunk beds when I moved to LA. So I'm like, dude, I'm not scared to go back there. I'm just more willing to take risks. Things were never that bad.
Also, being willing to eat shit on my brow. If I have to be a waiter, we'll figure it out, right? So yeah, that fortitude—like not being so ego-tied to whatever the heck you're doing. If I have to pack boxes, I'm going to pack boxes.
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Shaan Puri | What are the ways people get e-commerce wrong?
So, we've talked about Allbirds, right? It was a product that was hot, and now the stock is, you know, dead. There are a bunch of other famous examples of that. Then there are companies like yours, which keep scaling profitably. You know, you never took a dollar of debt, never took a dollar of investment, and made it work.
What are the kind of do's and don'ts? Maybe just start with the don'ts—the dumb things that people do, the bad decisions that people make, or the common traps you see people fall into. Because I'm sure, you know, that's your network is e-commerce, so you see the full spectrum: people who totally flop, people who grind away for years and get nothing out of it, and people who excel and succeed.
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Sean Frank | Yeah, so you can't outmuscle a Total Addressable Market (TAM). You need to understand what you're selling and how good the market actually is. I see amazing operators waste time with horrible opportunities.
The TAM is what it is. If you're like the number one garlic press seller, that's kind of a meme in the community. You're executing ruthlessly to be the number one garlic press seller, but that is worse than being the twelfth best creatine gummy. The creatine gummy market is exponentially growing, and there's lifetime value (LTV) tied to it.
So many people just waste energy and time on these horrible product categories. You can't beat a TAM; you're not better than the trend.
Take bone broth, for example. There were companies that exploded, reaching $80 million in revenue, claiming, "This is the new way people are going to consume calories." Now, bone broth is at a thirty-year low because that's not the cool thing anymore.
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Sam Parr | Same with keto stuff.
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Sean Frank | Yeah, exactly. So there's a guy from IQ Bar, his name's Will. He's incredibly smart. He talks about his **trend surface area**.
It's like, look, people talk about their **luck surface area**. He's like, "I make products to have as much trend surface area as possible." So if keto's hot, I'll be keto. If gluten-free's hot, I'll be gluten-free. If sugar's cool or non-sugar, or like whatever, I'll make those products to just hit whatever the trend is. I'll just change my packaging so I'm always on top of the trend.
And you're not better than the trend, right? So that's the point I'm trying to make. You can ride it up, but as soon as it crashes, you'll crash with it.
Then my third one, the most controversial one, is that **LTV** (lifetime value) isn't real. Lifetime value only works if you're alive. So most brands die waiting for LTV, right?
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Shaan Puri | And what you mean by that is you have to be profitable early on with the customer you acquired. If you acquire the customer for $200 and you only made, you know, $20, and you're saying, "Oh, the LTV (lifetime value), it'll all pay off," that's kind of what you're talking about, right?
Versus the way you guys do it, are you trying to be profitable on the first purchase? Or are you guys profitable on the first purchase, or is it like, you know, a month or two later? Where are you guys at?
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Sean Frank | Dude, I have to be profitable on the first purchase. You think people are coming back to buy a second wallet in a month? I'm like, dude, the lifetime value (LTV) from wallet customers is like maybe in ninety days I get 10.
So, like, it's very much that I have to turn—not just a contribution margin per sale—but actually cover all my fixed costs every time I sell a wallet to somebody.
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Sam Parr | Can we play a game called "Change My Opinion"? This is for both of you guys. I have a bone to pick with your industry. I think Sean's heard me give this spiel before.
What frustrates me sometimes— not exactly you guys, but I'm going to use you as an example— is that people worry only about metrics like CAC (Customer Acquisition Cost), LTV (Lifetime Value), and TAM (Total Addressable Market) in these industries. They don't spend any time actually thinking, "Is this product awesome? Is this the best? Is this truly solving a problem?"
It bothers me sometimes that it's more about arbitrage rather than thinking, "Can I create a widget that makes a customer's life better and is of high quality?" I wish that more people in this industry talked about that a bit more.
Do you think that's a fair criticism, or where am I wrong on this?
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Sean Frank | Do you know what I mean? I think it's a fair criticism. My industry's been washed out, though. So, like, the people you're talking about probably have all left.
There are so few people left in e-commerce. Like, Sean brought up the group chat, and maybe two people respond every single day, and one of them's me.
It's like we're at a multi-year low of interest in the industry. So, yeah, all those people have left. The people who are still here in shipping... Dude, I bring up HexClad. You guys want to talk about amazing? Yeah, so like, I'm very close.
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Sam Parr | To that, you tweet about them all the time. They inspired me because you said they worked for three years finding the perfect pan.
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Sean Frank | Okay, so when I met Danny, it was 2020. They didn't have a website. He says they did, but you couldn't check out on the website. They were selling pans at trade shows and county fairs, cooking up eggs themselves right in Costco roadshows. So, not even in Costco; they had to pay to show up at Costco and cook up these eggs.
From 2020, it's documented that they made over a half a billion dollars a year. They got to hundreds and hundreds of millions of dollars in annual turnover with over $100 million in profit. Danny will shoot me for saying all this stuff, but I think it's all pretty rare public knowledge. You know, Gordon joined the brand, and they have Fox as an investor now. Pre all that, they were doing nine figures in EBITDA a year.
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Shaan Puri | Didn’t Gordon Ramsay write a huge check? He didn’t just sort of join the brand; he invested a pretty sizable amount. Was he part of a round, or was it him personally investing in it? That’s all public.
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Sean Frank | There's like a thing. He came in with Fox on something. You know, because Fox, it's like a three-way deal. Fox wants to give him money to make shows, and he wants to get more equity in HexClad. So it's like a big three-way deal.
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Shaan Puri | Gotcha, gotcha! Dude, I have like 12 HexClad pans in my pants now.
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Sam Parr | Are they awesome, Sean?
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Shaan Puri | They're great! You know, I don't know if they're the best pants because I haven't tried a hundred pairs, but they're way better than the pants I had on the floor. I even bought a second set of them because I was like, "These are great! I'm happy with these pants."
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Sean Frank | Yeah, and they put years into that product development. They actually care about their customers. What it comes down to is respecting your customers.
That's why I don't like info products. If you don't respect your customers, if you're just trying to "arb" them... you know, we have a customer name. Our customer's everyday dad; we call him Ed. Almost every meeting, I'm like, "Are we respecting Ed? Are we delivering value to Ed?"
Right? Everyone has an Ed in their life. Think about your brothers or your dads. He's just a guy. He likes widgets, loves fishing, and enjoys the NFL. That's Ed.
Look, Ed has paid for everything in my entire life. We need to take care of Ed. We want to make sure Ed gets the best, coolest stuff possible. We want to give him great value and great deals. That's what HexClad did.
When we're talking about this industry, it gets a bad rap because so many people have entered it, and so few have left with any amount of money. The people who did leave with money often did so through the "greater fool theory." They were just tricking somebody into giving them money and then bailed out.
But then there are companies like HexClad, where they'll be a fifty-year brand. They'll be a generational brand, and they're crushing it. It's possible! They're buying Super Bowl ads. They were bootstrapped up until like two years ago. A bootstrap brand getting that done? It's amazing!
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Shaan Puri | Yeah, I think Sam, what you said is true: that marketing skill is the core competency for most of the winners in this space. There are a few who just really nailed product or community, right? They built slowly, brick by brick, over a decade.
But for the most part, the people you'll hear about and the people you'll meet are great because they are skilled at doing Facebook ads, Google ads, or now TikTok content. So that's true. But at the same time, you're like, "Oh, I hate that it's this CAC to LTV thing." Well, guess what? When you sit down with your team and ask, "How do we raise LTV?" there’s some natural gravity. Like Sean's saying, you buy a wallet every seven years; you're not really going to change that.
But for my product, you do buy it way more often. In the first six months, we double the amount that they paid us on the first order. So it's a movable number; we can actually affect that.
Then you're like, "Alright, well, how do we increase LTV?" You could spam them with emails or text messages, but guess what? The better way to do it is to make an amazing product that they're going to want to buy again.
And how do you lower the return rate to get more profit? It's like, make a better quality product. So I think that for anybody who's actually going to try to win, you will have to make an amazing product. Otherwise, you won't be able to do the ad arbitrage you're trying to do. How else could you increase the LTV if everyone hates your product or if it's not doing anything for them?
So, you know, I think the people who stick around and actually win in the long run are the ones who do what you...
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Sam Parr | Yeah, I think those are good answers to the question. I think that, like, you know, when I see someone making a "boost your testosterone" product, I'm like, "Dude, I don't know if any of this works or if they're just really good at making a label that's appealing." So, I start to lose confidence in the industry as a whole. | |
Sean Frank | Oh, totally.
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Sam Parr | What actually... and that's actually... I'm curious if you guys have any of these like DTC (direct-to-consumer) brands where you're like, "This product is amazing." It's really good to hear that HexClad is one of them. Do you guys have any other favorites?
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Sean Frank | Well, going back to the supplement side, a lot of it is... I mean, a lot of this work is being done for the co-manufacturers, right? Like, there are co-packers that actually do all the formulation. So, a lot of times, people are just showing up and buying stuff off the shelf.
If you're getting any sort of supplement, it's probably the same supplement white-labeled a hundred times. That's just the way the industry works.
So, I would put hard goods in a special category. And like we talk about DTC (direct-to-consumer) brands, I mean, all of my favorite fashion brands are small and independently owned, right? Like, does that count? This is Buck Mason; these pants are James Perse. I just got a suit from Billy Reid. These are all small, independently owned companies, right? They have Shopify websites, which kind of is DTC.
It's very much like there's a black box of bad rap products, and I think a lot of it is supplements that come from co-manufacturers or anything to do in the health and wellness space. That is typically where there's a bunch of... you know, questionable products. But if you buy a Ridge wallet, you're gonna get what is on the package.
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Sam Parr | You know what I mean.
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Sean Frank | It's like a **phone case**, man. It's pretty good.
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Shaan Puri | What... who else is crushing it? So, what are some DTC (direct-to-consumer) brands that we wouldn't know or we wouldn't really realize how well they're doing, just because we're not in the space and we're not paying attention?
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Sean Frank | Yeah, the other reason you guys called me here is to talk about the Wubbles.
Okay, the Wubbles is **fucking crushing it**.
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Shaan Puri | The Wubbles. Okay, so what are the Wubbles?
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Sean Frank | So, we are three young adult men. We're not the core customers, right? It is a crocheting product. You make little characters, and they have licensing and a little education. It's basically for either young people doing it to have less screen time or for parents doing it with their kids so they have less screen time. And that's awesome!
Yeah, dude, when I met them, they might've been doing $10,000,000 a year. In two years, they've gone from $10 million to probably $150,000,000 in revenue, with no capital raised. I really like them and respect them, but they will not launch subscription boxes. They're like, "Yeah, we don't think it's that important." I'm like, "Jesus Christ!" If I could shoot these people, I would because they won't do subscriptions.
It's the perfect product! It's educational, it's fun, and it connects with your family. It's this movement against screen time, which is a big trend they can take advantage of. Every month, they could have new characters that just show up at your door. You do them, and there's a little community aspect.
It's the single best brand and execution that I've ever seen. This will be a billion-dollar exit because they're so good at it. They've never raised any money; it's just two people putting it together in North Carolina. | |
Shaan Puri | How did they even think of this? Like, how did this get on the... Were they big crocheters? What is the origin story of this?
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Sean Frank | Yeah, so I think it's a husband or life team. I think she was just crocheting and she's like, "Yeah, I would love to have little guides." There was like an Etsy community of people selling crochet guides, and she's like, "She would buy them and then she'd be like, 'Okay, I'm gonna make my own.'" Then she would release them, and it's like, "Oh, maybe I should just sell my little crochet kits." And bam, it explodes, dude!
So if you're listening to this and you're thinking, "Okay, I'm not washed out. I want to try e-commerce," I highly recommend getting into services first. You should learn how to make money on the internet via services. If the show's called *My First Million*, you'll make your first million dollars delivering good value to people like me or like Wubbles, whoever else.
Then, find a trend that's very fast emerging, right? I think no screen time and creatine are the two biggest ones for the next two or three years. If you can do a no screen time, creatine, crochet kit, something... you'll figure it out, right?
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Sam Parr | Dude, I've spent so much money on Legos lately for that no screen time trend. What are other no screen time products?
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Shaan Puri | I feel like the microplastics is another trend.
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Sean Frank | Right, like... | |
Sam Parr | And air quality. | |
Sean Frank | Yeah, dude. So, like, just glass—everything glass: glass bottles, glass containers. Just imagine if you could buy a backpack and they say, "We guarantee there's no plastic in it." That would be **fucking awesome**! Just wrap it in paper and ship it to people.
That's another trend I think is going to be fast emerging.
Yeah, no screen time—just more physical, tactile toys, right? Like bringing back the fidget spinner but as a focus tool. I think there's a bunch of things you could do in that area.
But anyway, those are fast emerging trends right now. Protein was a trend that's basically probably dead. Pre-protein was collagen. There are always these pockets of success you'll find, and that's the beauty of the space. It's like... you.
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Sam Parr | Know what it is right now in that space? What's the early breast milk? What's that called? **Colostrum.** Colostrum.
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Sean Frank | Yeah.
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Sam Parr | Oh my God, I'm getting so many ads for colostrum.
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Sean Frank | Yeah, you know, the other one will be like, I think raw honey had a small moment. I'm sure it's going to come back, right? There's a bunch of New Zealand honey companies. So, yeah, there's all of these like...
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Shaan Puri | And if you were a founder, where would you kind of look for these trends? Are you a proponent of looking in your own life? What are you doing, or what is your wife doing that seems unusual but actually has a passionate community?
Are you the type to scour Etsy and Reddit? Is that where you would look? How would you approach this if you didn't know which trend to start with?
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Sean Frank | Right, so you should look in your own life because you probably don't have the skills to actually go out there. I'm assuming you have no resources to pick a trend, double down, and deliver on those promises.
You should find something in your own life that you actually know and are passionate about. If you're a more seasoned professional, I think you can find those things.
Really, what it would be is that I think Reddit's dead. I think Etsy's dead; that's AI slop basically at this point. The **identification** of the internet has happened to those two websites.
I would look at literally what's happening inside of Erwan. I would just move to LA and go to Erwan every single day because those are the best people at catching trends. They were anti-vax in 1997, right? They are very, very early on those things.
If you're not going to do that, then you just have to follow the girlies on TikTok. The other one I bring up is Pilates. Pilates was a thing in February, and it's having a massive resurgence right now.
And like, once again, we're three young men. How are we going to make a Pilates brand? But Pilates for guys could probably be another trend. | |
Shaan Puri | Just needs a new name.
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Sean Frank | Yeah, totally. Well, **Laplace** I think is what the actual name is, or no, **Lagree** something like that. My wife knows.
But yoga is very much a downward trend, right? Yoga was just a synonym for health and wellness, and like, you know, non-just jack dudes waitlisting. I think that's actually changing, and it'll be something else, like Pilates or something else.
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Sam Parr | What are some other trends, both going up and going down? Give me a topic or a trend and tell me, is this a buy or sell moment?
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Sean Frank | Well, look, this is not a hot take. This is not Scott Galloway talking, but all big box department stores are really struggling. We just saw Joann Fabrics go down, we just saw Container Store go down, and we just saw Party City go down. This trend is going to accelerate.
We are over commercial real estate; there are too many big box stores. Even Target is having a really hard time. My biggest wholesaler is Best Buy, and I crush it there, but all of that is probably the "fear, uncertainty, and doubt" (FUD) that isn't real enough. It should be even more real.
Nordstrom's and Macy's are also struggling. I think small independent brick-and-mortar shops really do work. If you're in LA, you can go to Century City. But I was walking around Bloomingdale's, and ten years ago, or even twenty years ago, it was the number one place to buy women's contemporary fashion. It was the coolest thing ever.
Now, I'm walking around, and they have blouses that are $800, and it's dead on a Saturday. Nobody is shopping there at the best mall in LA. So, I think the FUD isn't even enough; we should be even more scared that there are going to be more collapses in any sort of commercial real estate that is 10,000 square feet or larger and selling physical goods.
On the other hand, there's a trend towards "better for you" products. Venture capitalists have really backed these artificial sugar brands. If you go to a Target, there are all of these weird artificial sugar brands. I think it's going to come out that those cause cancer, and RFK is going to be pretty against it.
So anyway, I'm probably not launching anything in that space. I'm probably launching real sugar, and that's a very hot take that could age really badly. I believe real sugar is going to make a massive resurgence. | |
Shaan Puri | What do you think about, like, you know, these other people who would do the same model you did: services to products?
For example, I think the guys behind Brez, which is that... I think it's a... I don't know what it is. It's like a mushroom drink or it's like an adaptogenic drink. So basically, it gives you a high, but it's not alcohol. It's like a weak or something.
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Sam Parr | Their website says Brez is micro-dosed cannabis and mushrooms in a can. Yeah.
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Shaan Puri | So, we drink. Okay, great. So, it's a... we drink. Those guys were agency people, right?
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Sean Frank | I begged to be the first check-in. There are screenshots where they said they were working on it, and I'm like, "Let me be the first check-in."
Aaron is incredibly smart. He was the first person to figure out how to work with Meta to have controlled substances advertised. That's like his specialty. If you had a cannabis company, you had to go through him and his agency called We Are Lucid to actually do the cannabis advertising on Meta. He found a compliant way to do it, so he's incredibly smart.
Nick's an amazing operator; he ran a great agency. That's the best model. The other person is Zach from Homestead. He has a company called Hollow Socks.
I don't know how much time we have, but to unpack the history of e-commerce:
- E-commerce 1.0 was selling random stuff on the internet, like whatever, pets.com.
- E-commerce 2.0 was marketplaces, it was eBay versus Amazon versus everything else.
- E-commerce 3.0 is what we consider DTC (Direct to Consumer) 1.0, which was like the first brands coming online, the Allbirds, whatever else. Then you get DTC 2.0.
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Sean Frank | Zero, which was the COVID hotness, the peak, everything exploding, right? We are now in D2C 3.0, which is small service providers pivoting the brands with very lean teams.
**Create Gummies**, **Hollow Socks**, and **Brez** are the three best examples. Create Gummies has a team of eight people, and I think they'll do $40,000,000 this year. Hollow Socks has a team of five people, and they'll do $30,000,000 this year selling socks, mostly through FMA ads. Then there's Brez; they're public with their numbers. Follow Erin on LinkedIn, and I think they did $5,000,000 last month in revenue.
Okay, in beverage, in a controlled substance, that's **fucking insane**. That company's worth $300,000,000 today, and I think their team is incredibly small—maybe 20 people at this point.
So yeah, that is the best bull case for e-commerce right now: service operators who've seen the rise and fall of all these different brands have learned from them. They have spent their money to get good at ads, launching targeted, hyper-specific brands, and the three I named are the best.
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Sam Parr | Sean, you should go to **drinkbrez.com**. Do you see their website? That's the prettiest website I've ever seen in my life.
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Shaan Puri | Yeah, that's usually not a good thing. The prettiest websites are not usually the ones that work the best. | |
Sam Parr | I hear you.
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Sam Parr | And I am on board with that. This is one of the exceptions. Look at this.
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Shaan Puri | But, you know, I think what happens is you see the front of the house is not always where the traffic is going. The front of the house is kind of the hero; it's the brand, it's the aspirational aspect.
However, you run your ads and maybe you're running straight to a PDP (Product Detail Page) or to a TikTok shop or to different things like that. I think they're very heavy into TikTok, right? Their model is the TikTok blueprint, which we just did an episode with Rob from "Rob the Bank" about, like, the TikTok blueprint that a bunch of brands are using right now.
I think Brez is doing that where it's organic. It's kind of the TikTok affiliate/organic model where you're getting really cheap CPMs (Cost Per Mille) because TikTok videos can just pop off. You're putting out thousands of pieces of content a month, and it's driving sales.
Unlike the way you know I've been doing it or you've been doing it, Sean, which is a lot of Facebook and Google ads. You know, you put a dollar in, and it's attributed exactly how much that ad generated in revenue, and you just sort of optimize from there. The TikTok game is a little bit different; it's a bit of a spray-and-pray game for the most part. | |
Sean Frank | Yeah, so I just sent you guys this. This is from Aaron from Brez. They did **$4,600,000** in revenue in month twenty-one, January. This is their LinkedIn post, so this is all public information that they share. TikTok shock was **$37** and Amazon revenue was **$3.42**. I'm not going to read this for the audience; maybe you'll just show it. But dude, they're **killing it**! Bryce is awesome.
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Shaan Puri | Well, they post their P&L basically every month. It's not an actual P&L, but like, you know, sort of a marketing P&L on Twitter and LinkedIn. It's great!
Listen, we could read this. So, total net revenue: $4,500,000.
Let's see, that's in... you said month 21 now?
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Sean Frank | Yeah, dude, like... and literally.
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Shaan Puri | Then, their ads: they spent a million dollars on Facebook, $400,000 on Google, and on TikTok ads, they spent zero. But I know that they must be spending on the affiliate part of TikTok because if I'm on TikTok, I see Brez's stuff all the time, and it's always an affiliate link. You know, swipe up and you can sort of buy it from there. Applovin: $472,000.
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Sam Parr | It really seems like one of the keys to this business— and this is not always the case— is picking the right idea and the right angle. It seems like there's no other way to explain how something can get to $4,000,000 in monthly revenue in twenty-one months.
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Sean Frank | Yeah, I mean, the reason they were able to be right is because they're both agency operators. They are the right people to launch a product like this.
Also, it's so hard. The reason why they're willingly sharing their P&L is they have nothing to hide, and they don't think you can beat them. I think anybody listening to this can't beat them because...
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Shaan Puri | Are they shutting down their agency, or are they just going to keep trying to do both? Why would you run your agency once this happens?
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Sean Frank | Yeah, I mean, you end up just like, you know, selling it off or hiring operators. I mean, Nick Shackelford, who was the partner in Brez, had an events business, an agency business, and an email business. I think you just find partners to take that over and you put more time into this. But I mean, early on, I was like bullying about these guys because they're the best.
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Shaan Puri | Sam, I want you to Google "Nick Shackelford tattoo" and tell me if you want to compete with this guy.
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Sam Parr | Oh my God, his whole body is covered.
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Shaan Puri | Every inch of his body, from the neck down to his toe, is covered in a tattoo.
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Sam Parr | He looks like a... like a... he looks like.
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Shaan Puri | The guy from *Prison Break*, dude.
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Sam Parr | Yeah, he looks like a Japanese murderer.
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Sam Parr | like you know | |
Sam Parr | How they do, like the Yakuza, they do. | |
Sam Parr | That's insane.
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Sean Frank | Include it with Nick. I mean, he actually got it done. Man, he said it was so painful.
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Shaan Puri | Oh my god.
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Sam Parr | It looks horrible. I mean, it looks great, but I don't want to do it.
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Shaan Puri | It looks painful.
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Sam Parr | Yeah, that's what I mean. That's insane! What do you think Ridge is worth right now?
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Sean Frank | Oh man, I mean, the market for a brand like us is at an all-time low.
And like, look, what's the all-time low number? We'd probably say a market clearing price is around $300,000,000. I could probably clear that at the market with our growth and everything.
It's really hard to sell my business right now, and I'm not trying to sell my business right now. I think by the end of the decade, we'll be doing like $500,000,000 to $600,000,000 a year in annual revenue, really driven by this big tech rollout.
So, we're really big in Best Buy already. We're going to be in Apple and Verizon, selling power banks, phone cases, and cables. We already sell our wallets in a lot of those places. So, that's like the next evolution of the brand—just more product expansion.
But it's hard for me to sell my brand when Solo Stove is a public company. I think they're worth maybe $100,000,000 on the public market, right? They peaked at $2,100,000,000, and now their market cap today is around $100,000,000. They have like $400+ million in revenue and they own Chubbies.
It's very hard for my brand to go to market when, if you squint, we kind of look like them. They just need to be taken private. There's a lot of take-private needs to happen, and interest rates are still too high to take a lot of stuff private. So, we're just waiting... waiting for all that.
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Sam Parr | What would you want to sell if you weren't doing Ridge? If you had to sell Ridge today, what other product would you want to sell? I mean, you're not a guy who would stop. What other product would you want to sell?
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Sean Frank | Yeah, my goal for Ridge eventually... I'm not the long-term shepherd of this brand. If it's going to go public or whatever, or most likely get bought by one of the roll-ups in our industry, that's the exit path. There are 10 strategics that end up buying brands like ours.
I would like to net **$100,000,000**, and then I would like to start a portfolio of brands and services. Basically, you know, everyone wants to have their own little PE [private equity] or their own little family office type thing. So, I would launch a bunch of weird little e-commerce brands that I think are going to be trend relevant and hire service providers to run that as businesses.
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Sam Parr | I love that you know what you want. You've mapped this out, like what your ideal setup is. I love that! I love people who call their shot.
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Shaan Puri | Do you talk about trends? Like, you know, bone broth—it's hot, then it's not. Keto's hot, then it's not. So, why go after a trend if it's ultimately going to do what trends do? Most trends don't last forever.
Is that like building your sandcastle, you know, building your castle on quicksand or something like that? Why go after a trend when trends have this shelf life? Are you trying to time an exit, or are you trying to pop trends? What's the plan if you're going to build on top of a trend?
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Sean Frank | Yeah, dude. Going back to Will from IQ Bar, trend surface area... like you create a product and a trend because that's the best way to grow.
In a growing market, you can be average and grow very, very fast. I was an average operator when Facebook ads were growing, and that's why my business grew. Now, I can be a good operator because I have to be.
But when a market's growing very fast, you could just be average. Once you get some sort of success, it's about pivoting.
So, if I was in the bone broth business, I would have told them, "Hey, we have to do protein-focused bone broths or bone bars." I'm that guy coming in here trying to disrupt whatever business I'm in.
I'd say, "Look, if I was at bone broth, that's fine. We should do that. We're going to do bone bars, and we're going to get some jack guy to talk about how they're great." Then I'd be in the bars business.
Then it would be like, "We gotta do bone supplements. We're going to be the only guys doing bone marrow pills." That's the type of stuff I'd be pitching to them.
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Shaan Puri | I love that that's your answer because it's like that's the attitude you have to have to win in that game.
My takeaway is, man, what a horrible game to play! Like, you know, I was just doing a podcast yesterday with a guy, and he goes, "You don't want to be in the fresh produce business." He's like, "You want to be YouTube, not a YouTuber," right? Just as a simple example.
He's like, "You take the best YouTuber, and they're in the fresh produce business. They have to keep running as fast as they can on that treadmill, and then the treadmill gets faster and faster every year. If they stop, they fall behind, and there's a thousand other people on that treadmill."
So, same thing. If you're on a trend, and a trend, you know, almost by definition is going to sort of peter out, then the new trends will emerge. That just seems like a really hard way to win in business when there are other styles of businesses that don't have that problem. Right? But I think...
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Sam Parr | But, Sean, I think you both could be right. I think the right answer, though, is that whichever path you take should fit your skill set and interests. You should commit to it.
You know, we had Moiz Ali from Native Deodorant on, and we asked him, "Why don't you do something easier?" He replied, "Because I'm a merchant. This is what I do."
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Shaan Puri | I think that stuff is silly, dude.
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Sam Parr | No, it's not silly. I actually disagree. I think committing to a path is significantly better than not. If Sean Frank is committing to this trend thing, then yeah, it's exhausting for you because that's how you're interested. | |
Shaan Puri | To a better path... that's not true if... | |
Sean Frank | There’s a way to be safe.
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Sam Parr | How much better a path could it be? He's got a ten-year-old company that's doing $200 billion a year in revenue. That sounds like a good path.
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Shaan Puri | Yeah, I'm not saying what he's doing is bad. I'm saying he's an outlier winner. Even he's like, "Yeah, there's a company that's like us that does $400 million a year and is probably worth $100 million on the public markets."
We have to continually hop from one category to the next, and he's in a better one. It's more enduring.
But let's say you're on the bone broth type of thing, where it's a wellness trend. The wellness trends or the diet trends change very, very, very rapidly. It's like that's a hard game to play compared to, you know, look at the other possible set of businesses you could go into.
That's definitely on the hard side, dude. E-commerce is definitely on the hard side, and e-commerce on top of a trend is the hard version of the hard version. | |
Sean Frank | Oh dude, look, I understand completely. But the reason why I'm in it is because it's **permissionless**. When I was 22, nobody would let me build **Nvidia** servers or whatever, like, you know, a more robust infrastructure-led business.
Right? If I was going to provide, I don't know, **routing cable services** or some random stuff like that, maybe now I could get to that. But **e-commerce** is permissionless, and that's why I like it. Agencies are permissionless.
It's like the reason why we sold on **Shopify** is because nobody would give us a **Nordstrom's** purchase order, right? Like, there's a level of data... but there's...
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Shaan Puri | A lot of things in SaaS are permissionless. Communities are permissionless. There are a lot of things that are permissionless. Newsletters are permissionless as well.
The agency model is actually more permissionless than e-commerce because, you know, for e-commerce, you have to buy inventory. There is a capital requirement. The agency model is different; it's just about hustling your skills to generate cash flow.
Then, what you do is use that cash flow to invest and continue to grow the brand. However, for most people, I know a lot of individuals who got excited about e-commerce but didn't realize how scaling works in that space.
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Sean Frank | Yeah, it's like people squint and think it's SaaS, but it's not. It's like your problems get harder the bigger you get, right? Like it's bigger problems, more management, it's everything else. Where, you know, if you're SaaS, it's like, you know, if it's 10 zeros or a thousand zeros being processed through your thing, who the heck cares?
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Sam Parr | Hey Sean, you've gotten more... you're a great follow on Twitter because you're hilarious. But you're this perfect combination of being hilarious and also, I think you're right. You've been there, done that.
But has being as opinionated as you have been, and your willingness to call people out, ever held you back? Do you regret doing that, or do you think that going all in on being a strong personality has benefited you?
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Sean Frank | I mean, the only tangible negatives of being a public personality on the internet are if and when you get sued. Because you will be sued, right? Everyone gets sued, and it's the cost of doing business. They will read your tweets in depositions. So just like that, that is the reality, right? I think a lot of people don't want to offend you both in...
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Sam Parr | A, you're... | |
Shaan Puri | Like shot nursing. | |
Sam Parr | What did you mean by saying you want to shoot the Wobble family?
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Sean Frank | Yeah, dude, no. Like, I mean, I was deposed. I told someone I was going to drop a nuclear bomb on them, and they read that. They were like, "I don't have to explain; I don't have access to nuclear weapons."
But, like, I mean, you should be yourself and authentic. My Twitter has sold like $300,000 worth of wallets, so definitely it's a net positive.
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Shaan Puri | And your podcast, right? So your personality and being public about how well you guys are doing with Ridge, and being funny and opinionated, led to you guys doing this e-commerce podcast.
The e-commerce podcast pays you a bunch of money, right? Like, you guys are doing really, really well off that. So that's paid off in a different way. Right? You want to talk about that?
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Sean Frank | Yeah, so I only have like four minutes. I gotta go to a call and do my real job. Maybe something you guys don't know anything about, but... yeah, what?
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Shaan Puri | Are you talking about? I take naps after this.
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Sean Frank | Yeah, so look, the reason why I got public on the internet is because in 2022, all of my friends moved across the whole world because of COVID. I didn't hang out with anybody, and it sucked for everybody in 2021 and 2022.
I used to have a community of people who talked about e-commerce, and then they all moved, so I was just by myself. I thought, "Let me just get on Twitter and start talking about e-commerce." Through that, I made a bunch of great friends because it's a very lonely thing running a big business.
You know, my best friends from high school—one of them goes to crime scenes and cleans up when somebody kills themselves or whatever, and the other one does garage doors. So imagine trying to tell them, "Yeah man, I spent $8,000,000 on Meta," but I probably should have spent... | |
Sam Parr | They told me to shut the... | |
Sean Frank | **So, you want to find friends who can have some sort of sympathy for what you're building. I got on Twitter and found those people. They're all like, you know, Jason from Hexaclad is on there, Mike Beckham from Simple Modern—he has like $200,000,000 worth of stolen water bottles—and Matt from Pela Case. We started a podcast.**
**Yeah, dude, what's it called? It's called "Operators." It's a niche e-commerce podcast. We have spinoffs; we have marketing operators. Dude, I think it'll bill at least $2,000,000 to sponsors, but it might bill like $4,000,000 to sponsors. It's just us talking about e-commerce.**
**Probably one-tenth the listenership—I mean way less, maybe one-hundredth the listenership you guys get. But because it's so niche, it's like way more of an actual community. I think people want to be you guys because you guys are like an entertainment show. You guys have a big show with massive reach, entertaining people.**
**But if you're listening to this and you're an expert at something, do an incredibly niche YouTube channel because the sponsor integrations are just so much deeper. Our sponsors fulfill the ERP [Enterprise Resource Planning], right? And like, you guys don't know what that is, but if you're an e-commerce merchant, you need an ERP. The annual contracts are $150,000 a year, and we've probably sold 100 of them. So it's like they'll give us $600,000 a year because we're the only marketing channel for them. Right? Anyway, yes, we do a podcast.**
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Shaan Puri | I think that's great advice. Alright, we'll let you go. We know you gotta go sell wallets, rings, and other great things.
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Sean Frank | Where should... | |
Shaan Puri | People always shout out your Twitter, shout out your URL. Where do you want people to go?
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Sean Frank | Okay, go to **ridge.com/sean** and buy a wallet. That's the best way to support me right now. In this moment in time, never stop selling, guys.
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Sam Parr | We appreciate you, man. Thanks for doing this. Alright, that's the pod.
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