Kelcey Lehrich 5:01
So six years ago, my partner and I, his name is Justin, kind of the ideas guy, and he’s kind of the executor for ELS, I bet they have a visionary CEO role. And he’s kind of the integrator or COO. And he and I’ve worked with for a long time and prior to ecommerce, it was kind of like the same idea. However, instead of ideas and strategy and like execution, it was like I was the sales guy, and he was like the ops guy and all of our prior businesses, but we weren’t online, we’d never never run ads never shipped products. But we had sold a business for just enough money to make a downpayment on an SBA loan, we had sold a business for $100,000 was a lot of money. We did not hold any weight aside for taxes, we put all 100 grand down on the $900,000 loan divided a million dollar first business that was like how we got started. In 60 days later, we drained the checking account and next at the line of credit and bought another one. And that’s because of the compounding. So yeah, six years ago, by two that spring and summer, we’d always had a vision of better the whole comp topic, wanting to run many businesses, we wanted to have diversity, I guess he asked like, hey, what if you focus on what you just did one thing? Could it be bigger? And my answer is like, I don’t know, probably by this is the business I want to have. I want to do many things. One of the things that’s financially for me diversification perspective, too, I think it’s fun. It’s like what I want. So like, Yes, this is what I’m doing. I’m sure it’s like slightly less optimal than I don’t know. But six years have elapsed. And today we’ve got at some employees, six brands. We’re in Akron, Ohio, and heavily vertically integrated. So we do it as customer service, and aspect that can ship we have a 60,000 square foot warehouse, we build our own supply chain content creation, marketing media, buying those traditional little market items for E commerce. We also do a little bit of in house manufacturing two of our food businesses, we have products that value chain under our roof. And the future for us is focused on food, baby and consumable. So we’re really focusing our E commerce practice into those three verticals, and continue to find brands we can acquire and grow.
Josh Hadley 7:06
I love that what a great rundown and exciting everything that you guys are, are working on. So tell us about that first brand that you guys acquired, you know, when you guys formed your partnership there? Is that still a brand that you guys have is one of your holding companies today? Yeah. So
Kelcey Lehrich 7:23
today, it’s called Steel River, which is a private label line, that door tools, mostly knives, backpacks, flashlights, stuff like that kind of tactical gears, the category we’re in, that was the first one that we bought six years ago. And we still own it, we’ve sold and bought a few along the way that aren’t in the portfolio today. But everything we’ve done that’s been meaningful, has been operated and maybe sold. We’ve only ever had poor success when I got bored. And we bought something too small. So in our history, there’s been a couple of brands where like, I wouldn’t spend 30 grand that quote unquote, buy a company, we were already doing millions of dollars in revenue and added a dozen people or whatever, whatever we were doing. But like me as founder goes and buys a $30,000 asset that those 50 grand in revenue, like that’s a terrible idea. And I did it more than once I did it like, awesome four times. And just like we can’t like never again, like it is not big enough. I don’t care how bored you are like, take a week off, do something but don’t find this moment,
Josh Hadley 8:23
go on to go on a $30,000 vacation,
Kelcey Lehrich 8:26
which Yeah, instead of burning our money on inventory, correct?
Josh Hadley 8:29
What so tell me a little bit more about that. Because I think that’s important for many entrepreneurs, myself included, like that shiny object syndrome, you’re like, Oh, I see a good opportunity. And you’re like, I gotta go, I gotta do it.
Kelcey Lehrich 8:41
So like, on the flip side, the last time that happened, I started the conference. And apparently, you’re a satisfied customer. So it can work. It can work. It’s just not. not advisable. And
Josh Hadley 8:53
so but I think that’s a good principle, though. And I want to dive into this a little bit more, because you like you and mentioned, you are already doing millions, right and some of your other brands, and then you kind of look at these other guys and you’re like, Oh, this is a good opportunity. It’s much smaller. But you know, we’ve had kind of a similar experience with our own brand is one of the mistakes that I shared in my earlier podcasts of my top five mistakes, go check that out if you haven’t listened to those. But one of those things is like we started we hit seven figures on Amazon. And then I started distracting myself with like, what we need to go create a blog now. And let’s go it’s like, dude, like you don’t know what you’re up against right now, like, and so we diverted all of our time and attention to something that you know, really ended up actually never paying off. But anyways, I think some of those same principles apply. So would you mind sharing maybe some of the, you know, the history of what is that you were looking at? Why? Why was that mistake?
Kelcey Lehrich 9:48
There’s this weird balance of leaning into your strengths on one end of the spectrum, and then the other end of the spectrum. So leaning into your strengths or focus is like one piece of it right and on the other end is like, what got you here won’t get you there. And knowing the difference of where you are in that spectrum, at a certain point in time is a muscle that I really didn’t have figured out but has been exercised a lot in our business. And it’s a, it’s probably the biggest inflection points are knowing when to calibrate for change versus leaning in and doing what works? Well. It’s been an interesting journey in that regards, I certainly won’t say many times where we’ve had to make intentional decisions about team structure, organizational design brands, we are or aren’t going to buy initiatives we are or aren’t going to take on to move towards goals. And the more clear that I can get as a leader, about our goals, the vision and the actual economic engine that drives the business forward and what the most important levers are more clearly, I can communicate those big ideas that make a lot of sense in my mind. But I tend to oversimplify and under communicate and be light on details, the marketing fight against that and give us a synced, very clear, very direct execution path for the team to better meet, even if it’s a change, I still need to have that level of detail there for them.
Josh Hadley 11:10
Yeah, I think that’s so important. I mean, what a great principle there a leadership principle. And as an entrepreneur and visionary of the organization, you’ve got to be very good at articulating what that vision is. And then as you mentioned, Kelcey, like identifying what are the big levers, right, the big rocks that are actually going to move the needle in the business, because it’s way too easy to get caught in the thick of thin things, right? Where, Hey, this looks cool. Or, you know, if you look at all the big brands, they’re everywhere, right? So Well, naturally, we should be everywhere. We should be on Twitter, and we should be on tick tock, and we need to have this full on content strategy. It’s like okay, yeah, that’s, that’s well and good. Let’s strive to get there. Like, let’s take it one piece at a time, you know, so great, great advice. Now, Kelcey, one of my previous podcast guests was Roland Frasier, and he talked a lot about, you know, acquisitions, as ways to, you know, grow your business, especially if you’re looking to exit and you want to add multiples to your business, like, what a better way, if you want to double yourself, there’s no better way than to go acquire another business that’s equal to what you’re doing right now. And bam, you’ve just doubled your business. Now, much easier said than done, obviously. But Kelcey, with mature businesses that our audience here, mergers and acquisitions, I think are an important topic. What advice would you share with maybe a seller right that has an E commerce brand? They’re doing well, right now seven figures plus, but they have no experience in acquisitions or mergers, they’re considering it sounds fun? What advice would you be giving them? And do you think that that is a good way to help them get to the next level?
Kelcey Lehrich 11:21
It definitely can be I think the most important thing is kind of being true to yourself and your goals and understanding whether or not it is I don’t think there’s anything I can say on the podcast that will show should decide that for you. Because a few tidbits that might help you make a decision. Whether it’s raising money from investors or buying a business or like insert kind of a big objective in there. I think that having self awareness around your own skill, set your own goals, your own priorities, what do you value what’s right for you and your family? Financially, situationally, all those things rolled together, is and unlock. And so I look at what we’ve done. Historically, we have been very opportunistic, we’re going to be doing let me some content. If somebody listens to this, and a few months, they Google us, like they’ll find some changes in the 365 ecosystem are getting more intentional, more determined and focused in a handful of things. Whereas historically we’ve been pretty opportunistic and pretty open to a lot you’ll see that in our content is some branding, you’ll see that this new projects that we’re gonna be working on and so for me, it was a light bulb this year of knowing that was time to switch that near. What got you here won’t get you there. I was on that end of that spectrum of decision making. And so to answer your question, really directly, like if you are an entrepreneur that likes negotiating like deal making like strategy wants to put down a couple models, if that’s interesting to you, like absolutely, you should go to do it. Just because I say it’s a good idea that does not mean everybody should I am not a creative person Justin and I have never been good at starting things that the zero to one part of business is not our sweet spot, or the one that end guys and whatever. And it’s hopefully it’s a big big thing. But that’s like the small ideas we want started a brand so the next one of ours and like that was a cash and time suck it didn’t go well. We are micro PE we are operators who want to take capital that we can access from ourselves and our lenders and we want to go buy and operate and grow businesses. That’s what we’re good at. If you’re a product person. If you’re like the idea guy that takes and invents physical products, you probably don’t want to buy someone else’s business. You probably want to go and bet more of your own physical products but probably that’s why that’s your core competency your real skill set. If you’re really good operator, it’s like scaling teams like buying media, you understand different channels and attribution and go to market and supply chain like that skill set is very different than you might be more suited towards going and buying another business, it’s definitely a spreadsheet job, like you need to be really good at financial modeling. It’s also a sales negotiation job of figuring out what you’re going to buy and how you’re going to do it. So for me, it’s great that I’m not good at starting things. So they have some clarity around that. And if you identify with some of the things I just said, like, yeah, go viral on scores, follow some people on the internet like me to talk about it a lot. There’s no shortage of resources to do that. And it’s a great way to achieve growth financially and like big outcomes. So the biggest businesses in the world, create their own products and build great things and the other big businesses buy those companies and do financial engineering. So know, well, which one’s right for you, I guess.
Josh Hadley 15:55
Yeah, I think that’s a great takeaway. I think that’s so important for every entrepreneur to understand, like, where is your zone of genius, you know, really doing self introspection, and being able to identify like, Am I just the idea guy, and I love starting something from scratch and, and just bring it to life. And that’s my enjoyment. But as soon as it gets to the point where I need to start building out teams and processes that’s just draining for me. And I’m, like, done, like, let’s just get rid of the business. Like, I’d rather go start something new, like, then yeah, obviously, like, acquisitions is probably not something mergers and acquisitions is not something you should probably be diving into. But on the other hand, if you get, you know, kind of your thrill and a lot of energy, from watching something that’s already got a good foundation, you love building those systems, processes around that business, and you have a good vision of what it can potentially become, then I think acquisitions can be a great solution for those people. Because I think there’s a portion of like, I know, you said, you’re not necessarily creative, Kelcey, but I think like, as a visionary, you still have to have like a little bit of creativity to come up with that vision, right? of, hey, maybe the initial entrepreneur brought it to, you know, let’s say, half a million dollars a year, maybe a million dollars a year, but then you see potential in it to say, Oh, wow, they’ve got a great foundation. I think this thing can go even further. Would you agree with that assessment? Like you’ve still got to have some creativity,
Kelcey Lehrich 17:23
right? Yeah. Creativity can mean a lot of things. Maybe when I think of creative, I think of the people that work in our organization that like draw pictures, and come up with colors and patterns and create content and are like creative. Whereas when I think of what I’m good at, it expresses itself differently. It’s not like visual arts or communication, creativity. It is like idea, creativity and business model creativity. I would 100% agree with that.
Josh Hadley 17:49
Yeah. Yeah. It’s interesting. You say that too. Because, you know, I myself would not title myself as a creative person, right? My wife is our graphic designer who’s incredible. She’s creative, right? But I had a friend tell me, he’s like, you know, you’re very creative, you know? And I was like, Oh, why do you say that? He’s like, just the way you approach business. You, you approach it in a very different way than I think many people look at it with, you know, a cookie cutter approach. And I was like, ah, you know what, you’re, you’re right, like, so that, that meaning of creativity, like, let’s not do ourselves a disservice entrepreneurs and think that, hey, we’re not creative. Like you have to be creative.
Kelcey Lehrich 18:27
I think entrepreneurial creativity is like thinking in 3d. You can like see parts of a business, different levers, whether it’s like literally financial statement model, or it’s just like this theoretical abstract idea of like, well, we have this product line, and they have that product lines and put them together. And like, that’s a creative idea. I call that thinking in 3d. Everybody can think in two dimensions. Thinking of third dimensions is a very entrepreneurial, very visionary skill set to be able to observe circumstances kind of hold it up and twist it around in the light of looking at different ways. And literally in your mind’s eye, like, recreate a reality that other people literally just can’t see. I used to think that the visionary thing kind of sounded pompous I didn’t like the title. It says ELS like, moniker that like as like as little potential or something. I realized, like I literally do see things other people just don’t see. And it’s not me bragging. It’s like, that’s actually how it works. My business partner Justin calls it like throwing a grenade over the wall like, Hey, guys, we did this. He’s like, Well, we were like, I was really steady clip and everything was going fine. And he threw grenades in the mix. And I think you’re gonna it’s better but it now caused a bunch of problems. It’s really real. So if you identify with that, who listening to this, I would encourage you to embrace it. I probably should have embraced it sooner for our partnership and our team.
Josh Hadley 19:43
It’s pretty real. Yeah. I love that. I think that that is so important. I know. We spent a lot of time talking about that like self identification process, but I think it is very crucial. The next thing I want to dive into Kelcey here is if somebody has determined that Hey, yeah, acquisitions is for me, this is something I want to get into. You know, I think with your experience, why don’t you go ahead. And I think the best way to do this is by experience, you know, maybe share a couple of case studies of, you know, hey, what’s a brand that you guys acquired, and you guys were able to explode its growth, right? It was a great success story. And then on the flip side, what’s been a mistake that you guys acquired, something didn’t pan out, and why let’s kind of break those things down.
Kelcey Lehrich 20:27
We have historically bought most of our businesses on the market. So there’s a broker or intermediary that has a contract to sell the company that the owner wants to sell it. So for a long time, I guess, pretty wide net and looked at a variety of things. One of our best success stories, our biggest business today is our emergency food business. We bought it for not a lot of money, it was pretty distressed, it was not healthy. We had a bunch of reasons that we don’t have time for today’s podcast, to think that was a good idea. And so we executed on that plan, and it went sideways, okay, for 12 or 18 months. And then this like global pandemic happened, and being an emergency food during global pandemic, is a good thing. So we had a couple of good years, and we’re still chugging along in a good place. On the other hand, we have a business we bought, about the same time that valley took off with the pandemic, we bought our cloth diaper business. And we were incredibly distracted with a backorder List of 7000 orders that we didn’t have the inventory to fill, social distancing warehouse, all this weird stuff by trying to seize this demand that we were able to capture. And then also by relocate and integrate this new new cloth diaper business. And we made a lot of mistakes, I just really basic operational stuff that just went really poorly. And we were about two and a half or three years delayed on like the original business plan, like we wanted to do with that by we thought we were buying a very old established brand, which we did. We had a bunch of ideas about ways to improve it, modernize it, bring it forward. And the two and a half years, it took us to get our arms around it, the market shifted, some things changed and as a much tougher hill to climb. Because we had this outside circumstance of Coronavirus, and the explosion and growth for our food business. I think the punchline to all that is I don’t think there’s a tactical like piece of advice that somebody should should do something the aggravation I take away from it, every time I go through this is in our business of buying a portfolio with the desire for diversification, I believe we will have powerful outcomes will be some that are phenomenally great, a bunch that are average, and some that maybe even go poorly. And so for us number of mats and number of reps is most important because on average, we will have plenty of winners. But we need to keep swinging to ever connect to hit the homerun because though the baseball analogy. And so for us, observing that dichotomy of planning versus reality, and getting enough at bats has been a really important learning from me.
Josh Hadley 23:00
Yeah, I love that takeaway that you shared there. It’s the number of app that I think it’s similar for our own business where we have 1300 different skews My wife’s a graphic designer, we can put designs on multiple products. And so for us, it’s the same thing I was telling my team, hey, like, even if this, this particular product that we’re going to come out with is just going to hit a single, like, that’s okay. Because if we’re still always striving to launch new product after new product, after new product, some of those are going to hit homeruns. Some of those might be triples or doubles. And that’s okay. But like at the end of the day, and some of them I might strike out on, which is all good. But you’ve got to keep being consistent showing up swinging at the plate. I love the whole baseball analogy here. But it’s vital. And so whether your growth strategy is you have unlimited, you know, future products that you can launch, then it’s kind of the same thing, keep launching those products, testing stuff out, see what sticks, but also on the flip side sounds like with mergers and acquisitions. Sometimes we’re gonna be about the same thing. Sometimes you’re gonna win some, sometimes you’re gonna lose some. But I think obviously Kelcey, with your experience, I’m sure that as you look at deals on the marketplace, right, because you’re, you’re going through brokers most of the time, like you said, they’re live, you know, public listings, you know, what, what have you learned from that experience of things to avoid?
Kelcey Lehrich 24:29
Yeah, things to avoid lots. There’s lots to avoid. We really look for businesses that are diverse, stable and established. That’s just what we’re good at. We’re not incredibly I’m missing the word here. We’re not incredibly talented growth marketers, we’re not going to take something that’s muddling along and just send it to them. And it’s not to say that we don’t know how to grow this. Of course we do. Like we’re running marketing all day long. Every day. I don’t think that I’m gonna sign some For Sale and presume I can just 10 Acts it, we’re much more likely to look for things that are very diverse, very established, very repeatable, and then just try to make a bunch of incremental improvements along the way and let those compound that’s really our playbook. And so when I look at all the things that I see, to get back to your question, I’m looking for many, many, many little things that all of which together have a compounding effect at the time.
Josh Hadley 25:27
It makes sense. So you’re looking for something that’s more stable, you’re not looking for an innovative product that you’re like, oh, my gosh, if I just employ my tic tock strategy, we’re going to take this thing to the moon, right? Chris? What are some of the core strengths that you feel like you guys have in you know, 365 Holdings then that as you look at acquiring businesses, you see as opportunities for yourself that you’re like, hey, you know, what, if we do this, if we acquire this brand, because of our specialty, and XYZ, we’ll be able to make more efficiencies, deals, 1% incremental improvements, what are those?
Kelcey Lehrich 26:03
So really, we have that spectrum of things? It’s kind of similar spectrum to answer this question about, like, how many ideas we can take from another business that we already own and implement and how much we should just leave alone, kind of like, hey, it’s a good business, we should just buy it and run it the way it’s run. We’ve gone back and forth on that spectrum of change and innovation. And we’re trying to refine that model. The answer to your question is, we’re a vertically integrated, big team. So we’re usually gonna find a business where the founders gonna say, Well, I ever had time to do X, or I wish we would have had more investment into y, or I didn’t understand this, or I looked at their ad account. I’m like, that’s not right. That’s not right. Like nobody’s thought about this in a long time, like clay, do whatever it is, we want to see a lot of those things, that there’s opportunities where we have made mistakes, is presuming too much about a different business that we have that we can just copy, paste, there’s no work great, it’s a really fine line, a really tough balance to strike there from decision making of what to leave alone, and what to improve. We’re trying to get better at that through time. But we’re looking for lots of little compounding things that are throughout the work. So for us, that’s like postage, and pick pack internally, our cost versus their media buying and creative and what their costs are currently versus what our team’s gonna do with it. Supply chain, how, what they’re doing for purchasing and MOQ and financing and how we’re going to do it. So we’re looking at all of those things, because we have a full team.
Josh Hadley 27:31
Interesting. Yeah, I think that’s, that’s very smart. I was speaking with another gentleman that also acquires, you know, Amazon, FBA businesses. And one of the things that he had talked about is that so many people come up with this new idea, or they have a product, but one of the things they don’t pay attention to is like the size of the product, and how that’s going to impact your Amazon fulfillment fees. And he’s like, I can go into, like, if I see an Amazon listing, and through a quick check, I can see that I can add an extra half a million dollars to the bottom line, just by tweaking the packaging, or reducing the product size by one inch or something like that. He’s like, that’s where I dive in. And I was like, that is that’s a fascinating strategy. And it sounds like, you know, for yourself, it’s similar. It’s like, what’s my zone of genius? We’ve got, you know, finance, you know, pos negotiating with suppliers, you have your own internal pick, and pack and warehousing. So I think you have a lot of strength there. It leads me to my next question. I think a lot of people have this kind of preconceived notion that, hey, I’m gonna have this holding company. And I’m going to be able to share all of these services. You know, I have one accounting team, or I have one warehouse, and then look at this, I can have as many brands as I want, and share those services across the board. What has been your experience with that? Is that true? ballz. And why?
Kelcey Lehrich 28:53
Definitely that easy 100% then being facetious. Yes, it sounds really good. I’m usually the one that puts together those stories and tells everybody how great it’s going to be. The reality for us, I would say is mixed. I think for every one of those efficiencies, at least at the get go. We have an offsetting deficiency or problem or challenge through split attention and different systems and processes. Over time we accumulate more and more efficient, it is not instantaneous. That’s definitely not easy. And it’s a whole mountain of work to get there. In the long run. I think we’ll broadly be more efficient. I still think even with six brands and 80 Something people and the scale that we’re at today, we’re still a way to sub scale to realize what that is, is that another one or two points of EBIT? Da like they definitely double, possibly, but right now, it’s likely a wash all really good ideas all fundamentally sound but like there’s a lot of assumptions baked into that conversation. And a lot of things change. You might bet your Amazon example like you might buy the business for predicated on changing the packaging. And then it takes six months to be packaging and your financial model had it baked in from Day Zero and supplier delays it and this happens and Amazon changes their prices anyways. And suddenly, it never materializes, like those types of things happen.
Josh Hadley 30:14
That’s very true. Looks good on paper, right? And then sometimes when it gets to the practical application of things gets a little bit more challenging. Kelcey, I want to also ask you, as you approach some of your brands, and you’ve had experience scaling multiple brands, in the E commerce space, is there a particular strategy that you would recommend or kind of general advice that you would give to a seven figure seller that does want to scale to eight figures and beyond? What would you say is some of the most important things for them to be focusing on? Is it marketing operations, what?
Kelcey Lehrich 30:50
You should think really, really, really deeply and spend an obsessive amount of time understanding your CAC LCD cohorts, and segmenting and pivoting, how you view customer acquisition and the cohorts of customers that you have through time, by product by channel by campaign by avatar type or landing page, you should spend a lot of time really, really, really, really understanding of that dynamic in your business, and then isolating the really high value segments and understanding your best business ideas in the next quarter or a year. But product development, whether it’s marketing campaigns, whether it’s m&a, whatever your strategy is, but I fundamentally believe that every business on the planet is just a giant CAC LTV equation, and thankfully, ecommerce makes that like so easy that we can be a six, figure seven, figure eight figure a little company and have like phenomenally precise data about that. There are way bigger companies that don’t actually have the ability to measure that precisely. Like Chipotle doesn’t really know what my cat was 15 years ago, but they’re glad I go by pretty frequently. Now, I’ve got a good LTV at Chipotle. But as ecommerce guys, like we can get really precise, like, we can get all upset about the Facebook pixel, and we gotta go buy triple well now and I’m like, Fine, like, you can go and measure your spend, count your new customers and see what they spend. Like, if you don’t want to buy fancy software, just get a kid with a spreadsheet. And it’s able to figure it out. Really obsessing over ways to understand it ways to optimize it ways to lean into it ways to develop it is I think, the most high value work you can do as an E commerce founder or executive.
Josh Hadley 32:30
Yeah, I completely agree. And whether you sell, you know, D to C on the Shopify, your own website, or even if you’re selling on Amazon, the rule still applies, right? The difference with Amazon is okay, the Amazon’s getting some traffic to you. But you still got to pay for ads, you know, there’s a portion of external traffic that you’re driving as well. And at the end of the day, it’s that lifetime value of the customer. Amazon’s released a few new tools that allow you to do that as well, because I think that they see, so many brands have been complaining about that. And there’s more competition. I think tick tock just recently announced that they want to open up fulfillment centers, right, and try to be a competitor to Amazon, which I’m all game for more competition for Amazon, I think it makes them they can’t just keep jacking up their fees that makes them have to provide a better service to their sellers. So it’ll be interesting to see the landscape and into that point, Kelcey, what do you see happening over the next five to 10 years? For in the E commerce space? Where do you see the puck going?
Kelcey Lehrich 33:33
CAC is gonna go up, clicks will get more expensive. That’s all I know, for sure. Now. Our whole thesis for 365 is really around this idea of micro brands. So you go back to 5060 7080 years ago, and like American consumers and started like just post World War Two, and you get a small number of really big brands that grow and they use mass media, radio, TV billboard, to penetrate American household spending. And now we have the inverse of that the internet has unlocked the longtail and we use big tech. So Facebook and Google and Amazon and we have many, many small brands. I think the number of durable profitable micro brands, the small but meaningful is going to explode and others make 1000s of organic peanut butter and vegan leather belts and dog brushes and stuff. You clean your car with all these categories where people see ads and they buy something. I know that we’re just the beginning portion of the type of unique product market fit that you can unlock on the internet. About longtail brands. The hard part for that is many of them are not nine figure revenue businesses, very few of them a public none of them should raise venture capital. They’re good, good small businesses. It’s the same that happened on first in Maine 100 years ago at a brick and mortar retail shopkeeper. or store. We’re just doing it on the internet now, because FedEx will take the box there for you. And I just think there’ll be a lot of those. I think that our market of E commerce businesses will grow substantially. If you see the data from the side about the growth of E commerce penetration. I think retail matters like Walmart’s not going away people still going to stores, I get all that. I think that brands are way more and more important, and the bifurcation between lowest cost denominator on Amazon and kind of the nice side of like, the race to the bottom, there isn’t a get exacerbated against more premium, more niche more well defined more avatar driven, like real DTC brands, whether they sell on Amazon or not, I just mean like real brands versus commodity, I think we’re unlock more real brand.
Josh Hadley 35:41
Yeah, I 100% agree. And that’s time and time again, as we’ve had multiple guests on the podcast talking about what is what’s going to evolve over the next five to 10 years on Amazon, it’s long gone are the days of just creating me to products, or just drop shipping products, or some cheap white label product that you just threw a brand name on, you’ve got to have a whole brand story and telling giving people an experience around that. And I agree with your point that I think a lot of these micro brands are going to just continue to grow and thrive. Because the barriers to entry I think continue to get lower, and lower and lower. If you think about it, you know, it was tough to get into retail, you know, a decade ago or two decades ago, for sure, you’d have to go pitch your, you know, products to get them into, you know, retail, a Walmart or something like that. In addition to that, you’ve got to front all of that inventory, you can’t really run a small test, per se, you’ve got to pay slotting fees, right, and this is this is not easy in the retail game. And then along comes Amazon and they lower that barrier to entry. It’s like you have a product, okay, just put up a listing, take some images of it, and bam, like go test it out. And I think what’s going to be interesting with you know, tick tock and Walmart and who knows what else is going to come out, I think that was barriers to entry are going to get even lower than they are now. It’s going to be easier for people to just start something from, you know, their basement and put something online. But ultimately, I think it’s all going to revolve around a brand or you know, somebody that has a community of people, right? If you want to launch a brand, I think like establishing a community and building that now, it’s going to be even more important in the future. So thanks for sharing your thoughts predicting the future, we’ll see what that crystal ball looks like, you know, five years from now we’ll have to jump up on the podcast again, Kelcey. I’ve got a couple questions here that I want to ask you as we wrap up here. But I want to first ask you about Holdco conference, is this something that you know, you would recommend for E commerce sellers? When’s the next one happening? And why should people show up?
Kelcey Lehrich 37:52
When I recommend it for E commerce, so if you are a multi business entrepreneur e commerce or not, this wants to grow in scale. And you’ve got multiple millions of revenue and multiple maybe dozens of employees like yeah, like you should, you should be that you’ll learn a lot about multi business m&a, and entrepreneurship and how to think about all those challenges scaling a team was a big topic this year, whether you’re an E commerce or not, that’s the place for you. I would say if you’re a single business operator, who’s not doing the multi business thing, ecommerce or not? No, it’s not really geared towards like scaling a single business. It’s geared towards having a portfolio of businesses. There’s unique challenges with asset allocation. And how much money am I putting into these businesses, human resource allocation, the team structures, all these interesting things come up in the Holdco sense. The next one is hopefully going to be September of 2023. In Cleveland, Ohio. Again, you can sign up for early notification of those details that hold coke comm.com. Or if you follow me on Twitter, I’m surely talking about it at some point. But these are not yet signed all the recordings we just released this week. Actually, if you want to see some of the content that was there this year, you can catch most but not all of it. Content is great. If you come in just for the content, you can catch the recordings. If you want to meet cool people like Josh, that’s why you come to Holdco conference, they have really great in depth conversations with actual operators, like everybody there has a substantial seven, eight or nine figure business they’re running real payroll, real businesses, come to have those conversations. If you’re interested in coming, shoot me a DM or reach out if you have any questions.
Josh Hadley 39:32
Awesome. I definitely recommend it. It was one of my favorite conferences that I attended this year. So thanks for sharing those, those details. All right. Now, before I ask you our final wrap up questions here, Kelcey, I love to leave the audience with three actionable takeaways from each episode. So here are the three takeaways that I noted Kelcey, let me know if you think I’m missing something here. But number one, I think entrepreneurs need to do a little bit of self introspection, and they need to understand where they’re zone of genius is right, as they look at the vision for the business that they have, as they tried to determine, Hey, is it better for me to try to exit this business and go start a new one from scratch? Or is it better to try to keep growing my existing business and even potentially get into mergers and acquisitions as a way to grow and take it to the next level? You first got to identify like, where’s your skill set up? Are you the guy, that’s just the ideas and you get the thrill going from zero to one? Are you the guy that gets the thrill from adding systems and processes and scale and team building to go from one to N? Right? So I think that’s number one. Number two, once you understand that, then you got to dive in and and actually start taking action, whatever those goals are, you need to identify and create the vision, first of where your brand is going to be or your business. If you’re creating a holding company, create that vision, and then identify your levers, what are the big levers in the business that are going to actually move the needle, because you can’t do everything? You’ve got to identify those big rocks, then from those big rocks, you could take further actions. And I think, finally, is if somebody is interested in getting into mergers and acquisitions, I think there’s no better way to learn it than by experience. Like you mentioned, Kelcey, you’ve got to just get as many at bats as possible. You know, as you begin, you know, maybe there’s a few strikeouts. Kelcey, you talked about that early on with, you know, 365 Holdings, you started acquiring a lot of small guys, and you’re like, Ooh, maybe that wasn’t the best decision. But you only learn that by experience. And the mistake is only a big failure or mistake, if you don’t learn from that mistake. And it sounds like you’ve learned from those mistakes. Those are kind of my three actionable takeaways for our guests. would you add anything to that Kelcey, anything I missed?
Kelcey Lehrich 41:52
I love it. Great summary.
Josh Hadley 41:54
Awesome. All right. So as we wrap up here, a couple of quick quick questions for you. What has been the most influential book that you’ve read? And why? Oh, man,
Kelcey Lehrich 42:03
My bookshelf’s in the video behind me. If anybody’s watching.
Josh Hadley 42:07
You just you just have a few.
Kelcey Lehrich 42:09
Yeah. The one that most recently
struck, stands out to me for a number of reasons. Is Ben Horowitz, Hard Thing About Hard Things. Once you’re out of the startup phase, and you’re running like a real team of like 658 1012 people or more, give that book a read. If you’re worried about the recession next year, give that book a read.
Josh Hadley 42:30
Awesome. That’s a great recommendation. I’ve heard of that book before. I’ll have to dive into that one. Next, what is your favorite productivity tool or resource that you use?
Kelcey Lehrich 42:40
superhuman? Is it for email, and it started by the guy who did the original Gmail extension that brought in like social contacts on the right hand side of the screen? So you got your LinkedIn profile and some of their stuff. They built an email app that was really built around like keyboard power user, very fast interface, a big fan of superhuman.
Josh Hadley 43:02
That’s cool. That is one I have not I think I’ve heard of it before, but one I haven’t really looked into much, but my emails can my email inbox only continues to grow. And I think many people can relate with that. And I think it sounds like there’s some amazing features there. Thanks for sharing that tip. All right. Last question here, who is some someone you admire or respect most in the E commerce space? And why? Oh,
Kelcey Lehrich 43:25
man, everybody gave me his prep questions. And I was like, Oh, who am I gonna call out for this? If so many people that I think influenced my thinking. I said earlier that like, we didn’t come from marketing or E commerce, anything, we didn’t know this. And we’ve learned from like, a lot of people. I don’t know that I’m gonna, I’m gonna wuss out and not give you one. But I’ll say that if you go to our website, I got some articles that are kind of some of our, like, essays on things we believe, but how and why we were in the business that we were on, and different employees and new hires as part of our content marketing. The bottom of each one of those though, I call out people that influence that particular thought that I had, because none of it was original. I’ve copied all of those things. I’ve distilled them in a way that I think it’s probably unique. And so in marketing and ecommerce names like Gary Vee, things like Roland Frasier are certainly frequent. There’s some like really modern thinkers and DTC people like to holiday at CTC is a lot of deals, go look at those articles and scroll down to the bottom and just read the credits because that is many, many, many people have influenced the business we have today.
Josh Hadley 44:41
I love it. I think there’s there’s a wealth of knowledge out there and I think you’ve shared some some great names. So another add to go have people go check out the 365 Holdings website there and the content they’re sharing. Kelcey, where would you like people to come reach out to you if they want to learn more and keep following what you’re doing.
Kelcey Lehrich 44:59
If they’re interested in the conference go to Holdcoconf.com. If you want to chat with me, I DMS are open on Twitter, you can find me on LinkedIn. My email address is not hard to guess. If you know how spell my name, I’m always happy to hear from people and just kind of chat and talk shop. So feel free to reach out if you want to see the 365 stuff. That is 365 Dash holdings.com
Josh Hadley 45:21
Awesome. Kelcey, it’s been a pleasure having you on the podcast today. Thanks for joining us.
Kelcey Lehrich 45:25
Thanks for having me. Appreciate it.
Outro 45:26
Thank you for listening. Visit eCommBreakthrough.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.
