Today, we’re joined by Kai Luttrell of Kreator.ai, an entrepreneur and innovator who has built experience at the intersection of e-commerce, subscription businesses, AI-powered marketing, and creator-driven growth.

Kai has a unique perspective on what it takes to identify the right market, build a compelling brand, leverage influencers and creators, and use AI to move faster and create more effective marketing content.

> Here’s a glimpse of what you would learn….

In this episode of the Ecomm Breakthrough podcast, recorded live at Kevin King’s Market Masters event, host Josh interviews Kai, founder of a loose leaf tea subscription box brand launched in 2017. Kai shares how her passion project scaled rapidly through Facebook ads, BuzzFeed features, and organic buzz. They discuss subscription business economics, including customer acquisition costs, churn rates, lifetime value, and the importance of choosing the right product and market. Kai also reveals how personalization unexpectedly increased churn and shares networking insights. She concludes by introducing her new AI content creation platform, Creator, designed to streamline marketing for e-commerce brands.

Here are 3 action items that Josh identified from this episode:

Timestamps:

00:00:37 Podcast Introduction
The host introduces the podcast, recorded on-the-fly at an event, and welcomes his guest, Kai, an entrepreneur.

00:01:23 Kai’s Entrepreneurial Journey
Kai shares how she started her loose leaf tea subscription box as a passion project that scaled rapidly after BuzzFeed coverage.

00:02:42 The Subscription Box Money Model
Discussion on the importance of lifetime value in subscription businesses versus front-end acquisition models common on Amazon.

00:03:17 Challenges of Subscription Boxes
Kai explains the initial financial challenges, like not being profitable on the first few boxes, and the importance of shipping costs.

00:04:45 Understanding Customer Churn
Kai discusses typical churn rates for subscription boxes and how adjusting the amount of product sent can increase customer retention.

00:05:49 The Personalization Paradox
Kai shares surprising results from an A/B test, revealing that non-personalized boxes led to longer subscriber retention than personalized ones.

00:06:53 Customer Acquisition Strategies
Kai details her initial customer acquisition methods, including Facebook ads, blogs, influencer marketing, and promoting within Facebook groups.

00:09:32 Packaging and Fulfillment Evolution
Kai explains how unique packaging helped her brand stand out and how she scaled fulfillment from her garage to a warehouse.

00:11:39 The Economics of the Tea Box
A breakdown of the subscription box pricing, cost of goods, shipping costs, and overall profit margins for Kai’s business.

00:14:59 The BuzzFeed Effect
Kai explains how a Cratejoy marketplace feature led to BuzzFeed coverage and how she nurtured that relationship for continued exposure.

00:16:46 Experiences with PR Firms
Kai reflects on her mixed results with hiring PR firms and what she would do differently if starting over.

00:19:20 The Power of Networking
Kai discusses the importance of finding a network of fellow entrepreneurs for support, connection, and learning.

00:20:50 Advice for E-commerce Entrepreneurs
Kai offers advice on choosing the right product for a subscription model and selecting a market with a large audience.

00:24:54 Staying in the Game
The host and Kai discuss the importance of persistence in entrepreneurship, as big breaks can happen unexpectedly.

00:28:17 What Kai is Working on Now
Kai introduces her new venture, Creator.ai, an AI platform that generates content for Amazon, Shopify, and Meta ads.

00:32:39 Three Actionable Takeaways
The host summarizes the key lessons from the conversation, focusing on business models, market selection, and life-goal alignment.

00:36:32 Final Questions
Kai shares her most influential book, favorite AI tools, and the e-commerce entrepreneur she admires most.

Resources mentioned in this episode:

Tools and Websites
“BuzzFeed“: “00:00:02”
“Shopify“: “00:02:13”
“Facebook Ads“: “00:07:49”
“Cratejoy“: “00:15:06”
“kreator.ai“: “00:28:17”
“Helium 10“: “00:29:35″Books
“They Ask, You Answer by Marcus Sheridan“: “00:36:42″Influencers and Personalities
“Alex Hormozi“: “00:38:50″Key Concepts
“Lifetime Value”: “00:03:15”
“Customer Acquisition Cost”: “00:11:12”
“Total Addressable Market (TAM)”: “00:22:04”

This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures.

I started my business in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then email me at josh@ecommbreakthrough.com and in your subject line say “strategy audit” for the chance to win a $10,000 comprehensive business strategy audit at no cost!

Transcript:

Josh Hadley 00:00:00  How did you know you were onto something?

Kai Luttrell 00:00:02  Oh, that’s a good question. I feel like I knew I was on to something when people were posting about it, without me soliciting them. Does that make sense? So people would. And then BuzzFeed to. I feel like that was such a kind of wind under my wings essentially. And it was so lucky. Good timing. Like everything. And you know what? What does Einstein say? It’s like luck is when preparation meets an opportunity. Yeah, and that was exactly what it was.

MC 00:00:37  Welcome to the Ecomm Breakthrough podcast. Are you ready to unlock the full potential and growth in your business? You’ve already crossed seven figures in sales, but the challenge is knowing how to take your business to the next level.

Josh Hadley 00:00:51  So we are here at Kevin King’s Market Masters event, and I’ve ran into Kai. And so this is a new format. I haven’t ever kind of done podcast episodes on the fly, but as I attend all of these different events, I figured, hey, there’s no better time to meet and interact with smart people than when I’m in the room with the rest of them.

Josh Hadley 00:01:12  So I ran into Kai and Kai. If you want to just kind of give an introduction about yourself, you started a brand and we’ll dive into your brand story, but tell the listeners a little bit more about yourself.

Kai Luttrell 00:01:23  Yeah, absolutely. So I started a brand back in 2017. It was a loose leaf tea subscription box. And it you know, when I first started it, I didn’t really have these like big aspirations for it. I was like, hey, if it brings in some money. Awesome. It started as a passion project because I love tea and tea. Ivana had closed and I couldn’t find the tea I love. And so I ended up, you know, my okay, long story short, but I found awesome tea and I was like, you could only buy it in bulk. And I was like, I wonder if I could create a brand, right? And so I found some cute packaging, put it together, and then all of a sudden BuzzFeed picked me up and I became this, like BuzzFeed darling, I was on all these listicles, and I was just scaling so quickly that I didn’t know what to do with it.

Kai Luttrell 00:02:13  So I ended up getting on Shopify then and scaling that up. And luckily I think my background was marketing and kind of sales before doing this. And so I definitely had kind of a skill set there. And so I was able to apply that and like I said, scaled it up. And then kids came along. My husband wanted to start his own company, and he’s like, I need marketing help. And it was kind of the perfect time to exit, honestly. And yeah, I would do it 100 times over. It was so much fun.

Josh Hadley 00:02:42  Awesome, I love this. Okay, so there’s a lot that I want to unpack there, because one of my favorite things that I’ve been sharing this with the audience a lot lately, which is the money model that sits behind the business, is actually one of the most important things. And for a lot of brands that get started on Amazon, it’s very kind of like just front end acquisition heavy. It’s hey, yes, I, I made a sale.

Josh Hadley 00:03:04  Great. And there’s a lot of people that even have $100 million brands, but they’re just doing front end sales. Whereas what I love about what you talked about is kind of this subscription box idea.

Kai Luttrell 00:03:15  Yes, we love lifetime value.

Josh Hadley 00:03:17  Tell me, tell me a little bit more about that. Tell me, what are some of the challenges that come when you’re running like a subscription based brand and especially like subscription boxes? What were some of the challenges you ran into?

Kai Luttrell 00:03:28  The challenges are the main one is don’t expect to make money off of your first two boxes that you send out to the. So you have to be okay typically. Yeah. So with mine, I was really lucky that the T itself weighs practically nothing. So the shipping costs were very low, where a lot of subscription boxes kind of get hung up on is that cost of shipping. And so I lucked out with that Definitely being just a lighter product. But yes, you just think about how much you’re spending on marketing and the kind of the cost per acquisition there, right? But you have to look at that lifetime value.

Kai Luttrell 00:04:03  So if you know that people stay on average for a year and a half and each box cost $25, and you know, your the the profit margin on each box is roughly 40%. So, you know, like for cost of goods, you just it’s reverse engineering some math. So I think that’s a thing that scares a lot of people in the subscription box world, because I ended up being a coach for a subscription box. Oh, did you really? Yeah. So people kind of starting up kind of a mentoring process, and that’s where people freak out. They’re like, well, I’m losing money. I’m losing money. I was like, no, no, no, you’re not. Your job is to make the sale. But then really, your job is to provide enough value in that box that they want to stay.

Josh Hadley 00:04:45  Yeah. What’s the normal like? When do people typically churn? You were saying like, hey, maybe it’s a year and a half. Maybe that was for you.

Josh Hadley 00:04:52  I think that’s probably. That’s really good. Yeah. I think what did you see is like the normal subscription box churn. Is it like after month three four, you know.

Kai Luttrell 00:05:02  So there’s a couple ones that I helped mentor. There was a pet box and they had about an eight month I think. And the hard part too is balancing how much you’re giving the person on the other end, because and I had toyed around with it a couple times. Like I when I first started out, gave way too much tea. And it’s really important to have like a, a temperature check on why people are canceling. So for example, like, you know, when they’re exiting, I have too much product was my main issue. And I was like, oh, we’re sending too much tea. So it became new subscribers. We lowered the amount of tea, but didn’t even change the pricing, and they stayed for way longer. So.

Josh Hadley 00:05:43  Interesting.

Kai Luttrell 00:05:43  Super interesting.

Josh Hadley 00:05:44  Yeah. So I mean, there’s a lot of it sounds like there’s just a lot of variables that you have to look into.

Kai Luttrell 00:05:49  Totally and personalization. This is another thing that I found out through my own box, but then also other people’s boxes. There’s this idea of like, let’s personalize the box for them. So we did this whole like a quiz that people had to go through and tell me about what taste profiles you like and this and that and this. And when one, when a person didn’t get a tea that just like, blew their mind, they would get upset, write me an email, do all this and then cancel. So I did kind of an a B test. I took people through this quiz. So it was a different landing page quiz and looked how long the subscribers who did the personalization stayed versus the non personalization. And you would think and you know I’ve thought and I’ve been wrong many times and this is a really good example. But you would think that if they personalized it they would want to stay for longer. They like you’re actually curating their experience. But it was the opposite. people’s trade for less because it won’t wasn’t right on the mark, you know.

Josh Hadley 00:06:53  Yeah. And so it was. Yeah. When their expectations were different I guess when they would come through policy wise. Okay. Tell me more. So let’s talk about fulfillment and also how you’re attracting customers because I think that’s the biggest thing. You know the money model makes a lot of sense. I love the idea of reoccurring revenue. Right. Somebody subscribed. And every month you get to charge them and you get to compounding customer base. Big fan of it, but it’s not without its kind of challenges, as you mentioned. Not only from the fulfillment side, but especially on the market side, because you are going to have to like even go into the red to acquire the customer. And then you’ve got to have enough capital and cash flow to float that. So let’s dive into let’s talk about that first. So talk to me about how did you get started. Like what what was your monetization method or I guess your traffic method. How are you getting customers? I know BuzzFeed blew you up, but even before BuzzFeed, what was happening.

Kai Luttrell 00:07:49  Before then, it was Facebook ads. That was my background. Like, I had managed other brands Facebook ads for a long time. So like, I had that kind of background set up, which was really helpful. Blogs, a ton of blogs. And then I started dabbling into the influencer space as well. And I say dabbling because that was it is a struggle for me at least it was for me. And you know, I even hired somebody to take over that side. And I just never got the results I was hoping for on the influencer side. And there wasn’t like platforms at that time that kind of created that connection between seller and influencer. So it was really just like hold DMing and like, here’s a Google doc of a negotiations. And, you know, so very like loosey goosey. If I were to do it all over again, I would definitely go harder in the influencer space.

Josh Hadley 00:08:43  Interesting. So what worked like, was meta working for you then?

Kai Luttrell 00:08:47  Yeah, meta was great.

Kai Luttrell 00:08:49  Another thing that really worked was, I know this sounds weird, but Facebook groups. So I would literally go in into tea lovers group or.

Josh Hadley 00:08:58  Just joining a bunch of these groups.

Kai Luttrell 00:09:00  Yeah. And just saying, oh my gosh, you guys, I just got this box. I’m obsessed. Take pictures of it. And people bought from those. It was so crazy. So I almost became like a stealth influencer in these spaces.

Josh Hadley 00:09:13  Fascinating. Yeah. So you’re like pitching your own product in there, but as, like a customer? Yeah. Amazing. Did you were you, like, dropping links in there? Because I’m surprised you didn’t like. Because I feel like that’s there’s always a bunch of those hackers that, like, join groups that are then promoting a bunch of whatnot. So, like, how did you fly under the radar, I guess.

Kai Luttrell 00:09:32  So I didn’t do links, but my box branding was so beautiful and so on point. And just like really eye catching, I love design.

Kai Luttrell 00:09:40  So that was another kind of like Part of my passion project is like, how do I make this t look so freaking cool? So one of the things that was my differentiators is everybody puts T in like, bags, right? Like, oh, cool, another bag of T, I put them in vials. So I’m like, cool. Initially they were glass and that had its own issues, as you can imagine. So yeah. So we ended up switching to plastic. And it’s really cool to see like the evolution of the packaging design. And yeah. And then I got I just remember this, I didn’t have like a warehouse at the time, but we had a pretty big house like we actually started out of, you know, I think a lot of brands kind of start micro. They start out of their house. And I made my husband take the garage, gym out, take the car out because I was like, I have a shipment coming. And he’s like, what do you mean, a shipment? And I was like, I’ve got a shipment.

Kai Luttrell 00:10:35  And then all of a sudden these pallets showed up on my house. And there were these because I found a manufacturer in China to do them for like these, the vials that I needed for like $0.02 before I was paying $0.50 a vial. So you can imagine, like the margin. I was like, we’re buying in bulk. And yeah, I ended up having to get a storage unit to say the because it was not fitting in my garage.

Josh Hadley 00:10:59  But I love it. That’s every entrepreneur. Like we’ve all been there and I’ve had pallets in my garage in the past as well. So and very, very much relate. Okay. So Neta was working. Were you front end profitable?

Kai Luttrell 00:11:12  Yeah. On the first two boxes. No. Okay. So I had to like freak out about that for a couple of months really because I’m like, here I am burning money. But yes, I mean, all said and done, like cost of goods, marketing fulfillment, the profit margin ended up being around 34, 35% consistently.

Kai Luttrell 00:11:34  So I was pretty happy with that. And that included labor and. Yeah.

Josh Hadley 00:11:39  So walk me through. Let’s talk about the economics then that sat behind that. So what were you charging for the boxes.

Kai Luttrell 00:11:46  28 for the large one, which was for teas. And then it was 19 for the smaller, which was two teas.

Josh Hadley 00:11:54  Okay. And then how much was your cogs that your your bid low.

Kai Luttrell 00:11:59  It was for the for just the product, not the package.

Josh Hadley 00:12:04  Product.

Kai Luttrell 00:12:04  Yeah. Each vial ended up costing me like $0.08.

Josh Hadley 00:12:09  Amazing.

Kai Luttrell 00:12:10  And that’s, like, landed. You know what I mean? Yeah. So. Okay. You can imagine.

Josh Hadley 00:12:14  Margin.

Kai Luttrell 00:12:15  Incredible margin.

Josh Hadley 00:12:16  Then how much was shipping? I mean, it’s light. So like, what was that?

Kai Luttrell 00:12:20  So we were lucky to be in Texas. And so we’re kind of central. So the shipping gosh sorry you’re racking my I think it was like $3.15. So something pretty low.

Josh Hadley 00:12:35  Yeah okay. And then are you fulfilling this yourself?

Kai Luttrell 00:12:37  I was it was a it was a production my I.

Kai Luttrell 00:12:42  So I retired my, my in-laws essentially. And they just worked with me and then they’re like my hands hurt because you can imagine just the repetitive movement and it’s a ton of stuff. So then I actually ended up hiring and getting like a warehouse and doing all doing it that way.

Josh Hadley 00:13:00  Interesting. Very fun. Classic entrepreneurial journey. Yes. Okay. So excellent margins. However, despite that, you’re in the red for two months. So like what was your cost to acquire a customer then I’m assuming like what, 50 bucks?

Kai Luttrell 00:13:14  I mean, it ebbed and flows because it was like T itself is such a like with the time of year. So like the September to February, I was raking it in. You know what I mean? That was such a good time. Luckily, that people stuck around until the next season, and then that’s after the next season is when they would, or the next year and season. That’s when they would kind of drop.

Josh Hadley 00:13:39  Off 18.

Kai Luttrell 00:13:39  Months, about 18 months.

Kai Luttrell 00:13:40  And I tried my best to switch up the marketing like iced teas, this, that, but that didn’t quite hit as hard. And yeah, so we actually included an infuser. It was loose leaf tea. So it’s like it, you know, you need a little infuser and all this. And even then I even tried like changing the infuser for iced teas. I tried so many things, but it ended up being a more so a winter product. Yeah.

Josh Hadley 00:14:08  Interesting. So talk to me about so you, you were doing the meta advertising. What allowed you to say, hey. Yes. I’m like because you were bootstrapped. Right. And you’re just doing this out of your house. What gave you the confidence that like, hey, let’s stick this thing out, even though I’m losing money, like your first couple months, how did you know you were onto something?

Kai Luttrell 00:14:28  Oh, that’s a good question. I feel like I knew I was on to something when people were posting about it without me soliciting them.

Kai Luttrell 00:14:37  Does that make sense? So people would. And then BuzzFeed too. I feel like that was such a kind of wind under my wings, essentially. And it was so lucky. Good timing. Like everything. And you know what? What does Einstein say? It’s like luck is when preparation meets an opportunity. Yeah, and that was exactly what it was.

Josh Hadley 00:14:59  So so tell me how. So BuzzFeed obviously was a massive win for you. So how did that come about and what happened?

Kai Luttrell 00:15:06  Yeah. So that was actually on crate Joy. So crate Joy is at marketplace. And I guess they had some type of relationship with like, you know, PR relationship with BuzzFeed. And I got posted once and I think this is what made the difference is this little extra step I took was I found the author of that BuzzFeed article. I found them on Facebook. I personally thanked them And I said, can I please send you some tea as a thank you, and I did. You know, and then she posted me a ton more.

Kai Luttrell 00:15:38  And you can imagine, I think, BuzzFeed when, you know, I did some research on them. They were like they were working in-house. So it’s as simple as like, you guys, this girl who I wrote an article on about me, on Facebook thanked me. And then then other people started in the office writing about me. So I it’s just do extra where most people don’t. I think is something that a takeaway that I took from that experience.

Josh Hadley 00:16:03  Oh, I love that. Yeah. I mean just the simple. So this talk like we can now dive into a little bit of like affiliate influencer marketing because like those little steps go a massively long way. And that’s what we’ve seen.

Kai Luttrell 00:16:16  Because there’s still people like it’s relationships really it’s relationship building.

Josh Hadley 00:16:20  So did she just keep posting articles like I mean, how many articles did you end up getting from BuzzFeed from this? And like over the course of what time?

Kai Luttrell 00:16:28  Over the course of like five years. And it wasn’t always her. It was, I’m sure, people that worked with her.

Kai Luttrell 00:16:34  And then great Joy also did a lot of like the PR stuff as well. but I would say at least 20.

Josh Hadley 00:16:42  And every time it would post, you would see a massive like like.

Kai Luttrell 00:16:46  Yes. And so I actually and this is a, this is a pain point. Again, if I were to do it all over again I would have tried harder at this is I tried a couple PR firms that didn’t quite work out, and I just wish I would have kept trying. It was super expensive though. I think like the PR firms that I ended up hiring were close to 4000 5000 a month. And you know, to a small business owner, you’re like, what? Like I want to see return. And I would stick with them for six months and not really see the return. And so and maybe it was my expectations too, like, well, it’s not BuzzFeed. Do you know what I mean? So could have been that too. But that is, if I were to do it all over again, I think I would have leaned more into PR as well.

Josh Hadley 00:17:30  Really? So even though you’re looking back at that and you’re saying, hey, it didn’t work out with some of these PR firms, if you were to do it over again, you would still go the PR out.

Kai Luttrell 00:17:40  I would, I feel like.

Josh Hadley 00:17:41  What would you do.

Kai Luttrell 00:17:42  Differently there? I think I would have been slower to hire an agency. And this is something I’m still learning with my new ventures that I’m in right now. But I am quick to hire, slow to fire, and I think I’m just very I’m an optimistic person. And so I’m like, oh yeah, they’re going to do great. And then it just doesn’t. For whatever reason, I let it linger for too long. So that is something I’m personally on, like a personal level working on. And so now that I’m building that skill set, I feel like I could use that with the kind of PR firm as well.

Josh Hadley 00:18:16  Yeah, there’s so many principles that we could dive into with that, but it is so important.

Josh Hadley 00:18:21  Like I’m a big fan of hiring internally, right? I think agencies can, like prove the model for you first though, because otherwise you’re just hiring a bunch of like overhead and you’re like really banking on the fact. But yeah, being slow. I think that’s really good advice. If you my recommendation, if you are to work with an agency, go with somebody who has lots of case studies. And ideally, if somebody you find through your network.

Kai Luttrell 00:18:47  Totally.

Josh Hadley 00:18:48  Like I’m just talking out loud, you tell me what you think. But like, I’m just thinking, like, if I need to go find a PR firm, the best ones are always, you know, occupied. They’re not the ones that are the loudest in marketing. Yep. Now, with PR, they should be good at PR. So you would think they’re out there. But.

Kai Luttrell 00:19:05  But sometimes agencies are that way too. It’s like they’re so focused on.

Josh Hadley 00:19:09  Servicing the client.

Kai Luttrell 00:19:11  That they don’t. Yeah they don’t water their own cup or.

Josh Hadley 00:19:13  I think the best ones are honestly like they’re kind of like hidden gems that you only get in contact with them through relationships.

Kai Luttrell 00:19:20  Totally. And that’s something I was lacking at the time is like that network, right? And especially because then Covid happened and everybody was like awkwardly shut in. And yeah, if I were to do it over again to is really finding that network. Yeah. I ended up finding like an online network but it’s just not the same. I don’t know, I’m like I’m an in person kind of gal sometimes.

Josh Hadley 00:19:44  Yeah. So tell me, what online network were you a part of and tell me what you’re kind of a part of now?

Kai Luttrell 00:19:51  Yeah, it was called the Product boss. And so it was two women doing it, and I kind of they I started as they had two tiers. They had like a mastermind group and like a lower group. And I remember talking with them and they’re like, oh no, you were not. Here you are in our mastermind. We’re just going to put you in here.

Kai Luttrell 00:20:09  And I was like, okay. And you can imagine this was like my first e-com venture. I’m like very malleable. I’m like, yeah, I want to learn everything. Like I’m a sponge and made some really good connections in there. And I was like, wait a second. Like I love. And somehow everybody started DMing me like, hey, what are you doing for this? What are you doing for this? And it became very much like, let’s jump on a it wasn’t zoom at the time. I think I was FaceTiming people, but I was like, yeah, let’s jump on a call and I’ll just walk you through everything I’m doing. And I just loved the like helping other people aspect more than I even enjoyed running the business anymore. And so I kind of transferred into more of like a coaching role that way.

Josh Hadley 00:20:50  Interesting. Okay. Very fun. What would be the biggest takeaways you would share with like the listeners knowing that you’re speaking to, you know, seven figure entrepreneurs, most of them started on Amazon.

Josh Hadley 00:21:01  A lot of them are trying to diversify, getting onto their own website. I think subscription is something I’ve been a big advocate for in terms of how do you remove yourself from just front end acquisitions, only to being able to acquire customers and then have a compounding effect with customers? It’s like this month I brought in 100 minus my churn. I’ve still got 50 next month, but then if I bring in another 100, then I’m at 150 the following month. Like that’s a business that like I think just gets super interesting. And that’s why you look at some of the big supplement brands that are like grains just sold for $1 billion because it’s like they are a supplement brand that everybody is on subscribe and save. And so like their cohorts just keep stacking. Yep. And if they’re lasting for 18 months plus, I mean, you can see how big of a business you can get. Yeah. So what would be your advice recommendations for somebody that started on Amazon. They’re interested in the subscription thing. Yeah.

Josh Hadley 00:22:04  What would you say?

Kai Luttrell 00:22:04  I would say well I think subscription is really dependent on the type of product you have to. So I guess step one find a product that is subscription. All right. Because it’s like if I buy a wrench I’m not going to need a wrench next month. It’s Yeah. So find. Find a product that people will come back for. I don’t care if that’s toilet paper. Like, make a way to make toilet paper fun, but you know.

Josh Hadley 00:22:26  Yep. The other thing that I’ve, like recently learned that I think is so important is also like go into a, a larger total addressable market. Right. So don’t just go into like a very niche, like, hey, like maybe you’re I’m just thinking out loud here. Maybe it’s like very specialized teas for arthritis or something like that. I don’t know, but I’m just saying, like, if you’re sometimes the riches are in niches, but also like you eventually will reach like a total addressable market where you’re like, okay, I like meta.

Josh Hadley 00:22:57  Can’t find any other people that are in this demographic. Tea is so broad. That’s why you had a large Tam. So number one, pick an opportunity. And a market that is expanding and growing has a large market but is also growing. It’s kind of hot and trending. And that’s why again going back to grains. They have gummy supplements. And that’s like so many supplements are now going towards gummies. Yeah. Right. And so they just rode the wave of what’s working. So that’s my biggest advice is like yes product, but also like the market that you’re about to serve because so much easier having like the wind at your back rather than, I’m just on this mission because I believe in this niche so much.

Kai Luttrell 00:23:41  Yeah, that’s and I’ve seen brands fail that way too. So yes, I agree for sure. Find the niche, but it has to be large enough that you’re not going to burn out your crowd, essentially. The other word of advice I’m not sure if I mention it, but find your people.

Kai Luttrell 00:23:57  Find your people for two reasons. Obviously the referrals and you know, things that are working for them and just but also connection. And being an entrepreneur is super lonely sometimes. And, you know, you’re constantly doubting yourself if you should do this, should do that. Like, should I let this person go? Or this the wrong person in the wrong seat? Or is it the right person in the you know. It’s like managing people, managing pipelines, managing so much and just having another entrepreneur you can like chit chat with about it, who’s probably gone through the same situation as you multiple times is so helpful.

Josh Hadley 00:24:33  Yeah, I’m a big advocate for being in the right rooms, connecting with the right people. Yeah, that’s why I’m here. That’s why I talk to people like yourself. Yeah, because you never know who you’re about to meet. That a massive door opens for you, for sure. And I think that’s another big takeaway from your story here, which is, you know, luck is when opportunity or preparation meets opportunity.

Josh Hadley 00:24:54  At the end of the day, that’s where you’re like, hey, you are lucky. But at the end of the day, it’s like, well, you were prepared, you had a good product and you reached out and so you were prepared. You took advantage of that opportunity. And so here’s the lesson I’ve continued to remind myself as well, which is sometimes even when you’re going through the ups and downs of entrepreneurship, it’s just about being in the game. And the longer you can stay in the game, good things can happen. Yep. And you’ve got to ride through sometimes the valleys where it looks like this business is about to collapse because like you’re just one conversation away, or some creator finding your product, blowing you up and going viral, or some celebrity find your product and blows you up. Or a BuzzFeed editor. Like there’s just what I love about the world is like, there’s so many like, unknown variables where it’s like any brand could hit exit velocity at any point in time.

Kai Luttrell 00:25:48  So and that’s the real way, right? It’s like I consider exiting and a successful exit, which I’m super happy about. Like the the win for me. But I when I was in it, the wind was always chasing numbers and I was never satisfied. And that’s looking retrospectively. I think I had to look at it more like a game that has no win until you actually exit, right? It’s either exit successfully or exit. Or unsuccessfully. Like you run out of money, right? Because that’s the game. So it’s like, be okay with those moving goalposts. And I think that’s just a very entrepreneurial thing as to like, oh, once I hit 2 million this year, I’m going to be happy. It’s like, no, you hit 2 million. And you’re like, I want five. Let’s let’s go five. Why what are we doing at two people? And that has a lot to do with being in the room with the right people as well. Because when you’re around the right people, they expand your mind, like in the sense of what’s possible.

Kai Luttrell 00:26:45  So because you can see somebody be like, oh, they did 25 million this year, they’re just like me.

Josh Hadley 00:26:50  Like, yes, that’s the key.

Kai Luttrell 00:26:52  You know, I can do this too. It gives you that like that confidence that you can do this.

Josh Hadley 00:26:57  Yeah, 100%. I know it’s been the rooms that I’ve been in where I’m like, wait, you have $100 million brand? And I don’t even think here that could have an operator like, I don’t know how you’re doing it, which that’s been my lesson learned is sometimes like as I compare my business to others, which again, comparison is like thief of joy for sure, for sure. But as I look at that and I’m like, wow, like, what a bummer. Like, why am I not at 100 million? It’s like, well, the vehicle that I chose to play in. Like, if I’ve already captured a good portion of the market share, like you may be limited in your Tam and your total addressable market.

Josh Hadley 00:27:33  So again, they just chose a better vehicle at the end of the day. And that’s what I’ve learned. It is what you can. Alex Ramsey talks about this. You could have a bad operator but in a growing quickly growing market smashing it, whereas you could have a very experienced, an excellent operator in a limited market. And the bad operator still wins. Yeah. Just because of the market.

Kai Luttrell 00:27:58  The market is.

Josh Hadley 00:27:59  Yeah, at the end of the day. So those are some of my takeaways. But before we wrap up, I would love for you to tell kind of the audience, like. So what are you working on now? You said you’re into some fun ventures. You’re with Boylan as well. You’ve got an experienced team that you’re working with.

Kai Luttrell 00:28:15  Yeah.

Josh Hadley 00:28:16  Tell us a little bit more.

Kai Luttrell 00:28:17  So we just went to market with a platform called creator and it.

Josh Hadley 00:28:22  Creator spelled.

Kai Luttrell 00:28:23  Creator with a K with a K. Yeah. Creator ai k. And it is an AI platform that creates content for you, for Amazon, for Shopify, for meta ads.

Kai Luttrell 00:28:35  And it connects now with meta ads manager, you know, via like an MCP, a chat that you’re using, like Claude, for example. And you can connect it to something like helium ten, and you can grab info from these different places and create ads based off top keyword searches and what ads are currently working for you. So it takes a lot of that. It basically maximizes creative velocity. Does that make sense? So you can just do things quicker. Like for example, with the tea company that I owned. Finding the influencers, managing them, sending out product, all of that. It was a nightmare. It was a nightmare.

Josh Hadley 00:29:16  And so a lot and even take. That’s why TikTok shop is like so good because they built the one ecosystem that ever like, amazing. There was a nightmare, like reaching out to creators and then paying and facilitating payments. And hey, your order came through. Who I need to ship.

Kai Luttrell 00:29:35  Affiliate platforms to.

Josh Hadley 00:29:36  TikTok shop does it all like in one.

Josh Hadley 00:29:38  So anyways.

Kai Luttrell 00:29:39  That’s amazing.

Josh Hadley 00:29:40  Yeah, so that’s why TikTok is all all that it is because like, influencer stuff is like you’re getting in the weeds.

Kai Luttrell 00:29:46  Totally. And yeah. So this you can create digital influencers now which is insane. Like AI influencers that are talking about your product. And there’s just this AI wave is amazing, as you say. Just take a peek at our socials. Some of the the things that we’re running and you can’t tell the difference. It’s just amazing. But it’s not only AI and.

Josh Hadley 00:30:12  The product and stuff like how do you factor in product?

Kai Luttrell 00:30:16  Yeah. So on the platform you basically upload either your Assam or, you know, your Shopify link, whatever, and it pulls everything. So the more data you can give creator different, you can even use your iPhone to take photos of your product, but the more info you give it, it’s basically a creative agent inside of there doing so much heavy lifting for you. So a click of a button. Five minutes later you’re going to have a huge product photo shoot for you.

Kai Luttrell 00:30:45  So you’re going to have hero shots, you’re going to have lifestyle shots. You’re going to have infographics like it’s insane. And then we do the same thing with videos too.

Josh Hadley 00:30:54  So that’s exciting.

Kai Luttrell 00:30:56  Yeah, I say just get around. Just, you know, play around in there because it’s amazing.

Josh Hadley 00:31:02  Yeah. No, I’m a big advocate for that. And especially I think that the way it works when you become omnichannel, I think that’s the challenge that if you started your business on Amazon, you know, keyword opportunities, you know, Amazon Pay per click advertising. But the skill set to succeed on Amazon is arguably a different skill set compared to the one you need to win on TikTok shop. And it’s a different skill set than winning on Meta to Shopify, because on Shopify it’s like we all like the idea of like, oh, I wish people would just come to my own website. It’s like, your problem is getting people to your website. And then that’s all about your hooks, your angles, the creative story.

Josh Hadley 00:31:45  I mean, you were doing a lot of meta advertising and it’s a lot of testing and that’s that’s a different mindset than, hey, here’s this keyword opportunity and arbitrage opportunity on Amazon.

Kai Luttrell 00:31:56  Yes, it’s very different. And that’s why I love the connection now with your clod. Because your clod. I’m sure you know any. You guys are probably talking to your clod all the time about your product and ideas and this and that. And then it takes data from your meta, from helium ten, from whatever else you connect it to, from your Shopify, and then creates new thoughts that you didn’t even have. And then you could say, yes, click go. And it just makes the content for you. Yeah.

Josh Hadley 00:32:23  So very fun.

Kai Luttrell 00:32:25  Yeah.

Josh Hadley 00:32:25  Well, Kai, this has been a fantastic conversation. I’ve got three final questions that I want to walk you through. And I didn’t prep you for these, so I’m going to put you on the spot. But I’d love to leave the audience first with three actionable takeaways from every episode that I record.

Josh Hadley 00:32:39  Okay, here are the three actionable takeaways that I noted. You let me know if you have anything else to add, but action. Item number one is look at your business and see whether you are just a front end acquisition machine or if you are, if you have built in compounding customers into your business. And I say that because that’s one of the fundamental like money models that can really impact your growth rate in e-commerce. Everybody talks about, yeah, I want a $100 million brand. Cool. Do the mathematics and see what it looks like when you actually have compounding customers that sit behind your business. Otherwise then just know the money model. I think that sits under your business. That’s the first insight and make the necessary adjustments, because there’s a lot of businesses that maybe our front end acquisition heavy right now that could just simply by tweaking their framework and their offering could actually turn into a compounding customer base. So that’s actually item number one. Action. Item number two is it comes down to the products that you talked about in the market.

Josh Hadley 00:33:43  And so if you do have bigger aspirations like make sure you find a market that has a much bigger total addressable market and is growing at the same time, or there’s also a good number of people that are just comfortable with, like the entrepreneurial lifestyle of like this gives me a couple million dollars a year. It’s easy. I don’t want the headache of $100 million business. And I think that’s the important thing. Like going back to what’s the money model, what’s also like your growth rate, what do you want to be getting into? I think you can architect a lot of that well beforehand.

Kai Luttrell 00:34:17  Oh for sure. And I think anybody too. I think one more thing we didn’t even really talk about, but reverse engineering, what you want your life to look like. And so you kind of touched on it a little bit. But yeah, maybe you’re happy making 2 million a year, right. But what is your lifestyle? What do you want it to look like and how much does that cost.

Kai Luttrell 00:34:35  And then reverse engineering and go, okay, well how much do I actually need to make. Like, does that make sense?

Josh Hadley 00:34:41  Yes.

Kai Luttrell 00:34:41  So much because I feel like a lot of people and I did this first in my entrepreneurial journey. It’s like, oh, if this just makes a little money, how cool is that? But I did not factor in. I just got lucky. Like, again, I got very lucky and that was a lot of hard work involved. But I think if I had looked at it a little bit differently, I’m like, this is what I want my lifestyle to look like, what do I need to get there? The journey would have been a little bit more linear, I guess. Sure. Yeah.

Josh Hadley 00:35:08  Yeah. I don’t think there’s ever any linear path in business. There’s always so many ups and downs. But you’re right. I do think that this is something that even when people reach out to me and they’re like, hey, Josh, can I pick your brain? One of the first questions is like, so what’s the end goal? What do you want? Like, what are we optimizing towards? Are we optimizing towards $1 billion exit? We optimizing towards a $100 million exit? Are we optimizing for just a lifestyle business that’s like bringing in a cool million dollars a year? Sweet.

Josh Hadley 00:35:38  And it’s and it’s lifestyle oriented.

Kai Luttrell 00:35:40  Because if each one of those are okay.

Josh Hadley 00:35:43  200%.

Kai Luttrell 00:35:44  You know. And I think sometimes when we get placed in rooms that, you know, the, the social currency is maybe something that doesn’t quite align with what you want. That kind of feels awkward, but that’s okay. That’s okay for people to want different things and aspire for different things. So that’s another message I think, too.

Josh Hadley 00:36:02  Yeah. Well, I think that would be our our third takeaway there, which is like.

Kai Luttrell 00:36:05  Like 6 or 7.

Josh Hadley 00:36:06  Yeah. Reverse engineer. Like what is it that you want in your life. Because that is going to it predicates what type of org chart you’re going to try to build out. Because like arguably more people, more problems, but like just the lifestyle that you want to set up. And sometimes being comfortable with, like the growth that you’re at is, is good enough for you. And then there’s other people that I just keep moving the bar higher and higher.

Kai Luttrell 00:36:31  And totally.

Josh Hadley 00:36:32  Even $1 billion to maybe not even be enough. But anyways, final three questions for you, Kai. What’s been the most influential book that you’ve read and why?

Kai Luttrell 00:36:42  The most influential book? This is just on my mind. I wouldn’t say it’s like the deepest, most influential book, but right now, in our current, because my husband and I also own other businesses, the. They ask you wait, you ask, they answer, okay. And it’s all about basically hearing what your target demographic is quite like, what questions they have, and then creating content to rehab those questions so they’re already ready to buy the second they talk to you. And so we’ve noticed a huge difference with that but influential book. Now you’re going to keep me up at night. Are you thinking about this impact.

Josh Hadley 00:37:22  But that is a good book. And I think like very pointed, especially with like AI because like if you come out with like even YouTube content, answering those questions, like that’s where AI is pulling the law from Reddit, YouTube content.

Josh Hadley 00:37:35  So yeah, you’re in a good spot there. Love it. Second question what’s your favorite AI tool that you’ve been using and how have you been using it?

Kai Luttrell 00:37:43  Definitely creator. I’ve been making so much content, even my friends businesses and my dad also owns a business. And so I took his product and put it in there and he was blown away. He was like, how did you do this? And I was like, it literally took me five minutes. And he’s like, can you make more? I’m like, I got you, dad. So definitely that another one that I’ve been loving is Victor. And so Victor is our kind of a slack robot, and he handles all of our numbers for us. And so in for specifically our service business, we own a gym and physical therapy office and I’m like, hey, what’s the closed rate the last 30 days for this person, this person, how’s how’s our churn rate going? You literally just talk to it and he goes into your system, pulls all the data you need.

Kai Luttrell 00:38:30  And it’s taken so much off of my husband’s plate because he was doing all the numbers. But yeah, we say it’s our best employee. Hopefully nobody’s listening to that.

Josh Hadley 00:38:40  But no people probably.

Kai Luttrell 00:38:42  Yeah.

Josh Hadley 00:38:42  Fantastic. Third and final question, who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why?

Kai Luttrell 00:38:50  This one’s kind of easy. I love Alex Moses content. When I first started following him, I couldn’t get over the like the persona. The persona. Yeah, it just wasn’t for me. But when I kind of peeled that onion away, what he was saying was super valuable. So definitely Hermosa. He’s helped me elevate my mindset a lot. Love that. Yeah.

Josh Hadley 00:39:16  Great takeaways. Well, Kai, thanks so much for your time. And if people want to follow you, where could they reach out in the contact yet?

Kai Luttrell 00:39:23  Yeah. The best place to reach me right now is kind of a creator with the AI.

Josh Hadley 00:39:29  Well, thanks again for your time today, Kai.

MC 00:39:31  Thank you for listening. Visit Ecomm breakthrough com for more information. If you’ve enjoyed today’s episode, the best way you can show your appreciation is by clicking the subscribe button and quickly leaving a review. See you again next time!