Ridge CEO Sean Frank: AI has 'totally solved' inventory planning, static ad factories run 24/7, and consumer spending is ripping despite the vibes

Speaker 1: Use your favorite agent to deploy web app servers, databases, more while Railway automatically takes care of scaling, monitoring, and security. And while we bring in Sean Frank, I'm also gonna tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real time experiences, a new value with Cisco. Sean, how are doing? Welcome to show.

Speaker 6: Great to see you guys.

Speaker 1: First time in the actual studio.

Speaker 6: Right? Second. I did the Shopify episode.

Speaker 2: That's right. That's right. He took the time out of his Black Friday.

Speaker 1: That was great.

Speaker 4: Yeah. Dude.

Speaker 1: But we yeah. We bounced around a lot. It was a it was a big it was a big day.

Speaker 3: That was a good one though.

Speaker 6: Hopefully, do it again.

Speaker 1: Yeah. Another And Black Friday was a record for you, right? Of course. Yeah.

Speaker 2: Yeah. Have you had a Black Friday that wasn't a record?

Speaker 6: No. Every year it's gone up.

Speaker 3: Every year.

Speaker 6: And it's not gonna stop this year.

Speaker 1: Up only over here at the Ridge Wallet. A Ridge broadly, right? The portfolio is growing still?

Speaker 6: Yeah. The wallet business is a great business. Yeah. It's like a 100,000,000 plus a year. Yeah. But the growth is now like all the other stuff we're doing.

Speaker 1: Okay.

Speaker 6: So we have like a travel line. We

Speaker 1: have Luggage.

Speaker 6: We do like 10% of all men's wedding rings in So we have like a huge

Speaker 2: double digits of the TAM.

Speaker 6: Yeah. It's like a very boring monopoly. We sell a ton of like men's wedding rings.

Speaker 2: And they're coming for it all.

Speaker 6: Oh, yeah. Soon.

Speaker 2: You won't be able to get married. They're actually going for regulatory capture. You won't be able to get married if you're not planning to use a Ridge ring.

Speaker 6: Yeah. Because I'm I'm like a big pronatist now because I'm like, get married, have kids, So buy a Ridge

Speaker 1: you're behind all of that. Every time I see some podcaster What's a sign? About the the fertility crisis, it's you. Yeah. You're behind it funding it all.

Speaker 6: And the big thing now is like the tech business for us. Yeah. So like we do like phone cases, that type of stuff. Yeah. It's like twelve months old and it's like already like a $100,000,000 a year. So Wow. Just adding a bunch of new random little little widgets to sell.

Speaker 1: That's So take me through the demand generation side of the business. Like, what is actually changing? Obviously, there's AI generated advertising, AI enhanced targeting. There's all sorts of different stuff. But, like, from your day to day, from the platforms you're advertising on, like, what has been the most material change over the last twelve months?

Speaker 6: Well, it's a big day to be here, right, because the big meta announcements. Yeah. People were like dancing on Meta's grave like three days ago, and now everyone's soaked on them.

Speaker 2: And now you have a 1% God candle. Totally.

Speaker 1: Is that specifically about the LLM or the image generation model? Because the image generation model seems much more impactful to the advertising business than the agentic coding capabilities.

Speaker 6: Well, yeah. Yeah. Well, I would say the Manus actually, like, really helped unlock like a lot of, like, stuff inside the ad account.

Speaker 1: Using the ad manager more than

Speaker 6: that. Got it. I think like it just democratized a lot of tools that Yeah. Like the best ad managers are already using.

Speaker 1: Yep.

Speaker 6: But really, we just want Meta to continue to get better.

Speaker 7: Yeah.

Speaker 6: Right? Over the past three months, they've rolled out a lot of changes of like the actual ad algorithm.

Speaker 3: Yeah.

Speaker 6: And it was really bad for a lot of people. And we just had like the best Q

Speaker 1: two It was good

Speaker 6: for you. It was awesome.

Speaker 1: Yeah. Interesting.

Speaker 6: I think they're getting so

Speaker 2: so Yeah. Do you think that it was actually bad for some people or they were just going through a slump in their business overall? They had like business problems that they wanted to blame on

Speaker 7: the ad changes.

Speaker 6: Well dude, yeah. I mean, what's new, right? It's like, everyone So if your business is going bad, it's everyone else's fault. Yeah. But really, like, they do like the Meta Performance Summit every May

Speaker 1: Mhmm.

Speaker 6: And they've just rolled out so many great changes to the ad algorithm that like, I think you're getting better impressions with better people.

Speaker 3: Yeah.

Speaker 6: And I the more compute and AI they throw out, I think it's just gonna get better and better. And like we're getting to it like a future where like the perfect impression at the perfect time with the perfect ad that's like customized to that person with AI, that's coming.

Speaker 3: Yeah.

Speaker 6: And click through rates will go up, conversion rates will go up, and CPMs will go up with it. But I think there'll be like a moment of arbitrage there.

Speaker 1: Do do you think do you think Zuck is doing enough to actually message that to customers like you? Because Ben Thompson put out this piece on Monday, sort of an earnings call transcript that he wrote in the voice of Mark Zuckerberg. And his pitch was to investors, telling the investors, hey. Look. We are investing a lot in AI, but it's all in service of the ads business, which is great, which we do take seriously. We have taken some side quests, done some metaverse, some VR stuff. But this investment that we're making right now, you shouldn't beat us up in the public markets because it's going to come back huge. We're growing really fast on the ad side. 33% is massive at that scale, and it's going to continue to double down. But I'm wondering if advertisers are receiving that signal from Meta that it is going to get better, it is someplace that they should be spending more time and more dollars.

Speaker 6: Yeah. We're a captive audience, so I don't think he has to message to us.

Speaker 3: He doesn't. He he can do it anymore. Yeah.

Speaker 6: Yeah. Like, the best thing he could do is get people to spend more time on their app

Speaker 1: Yeah.

Speaker 6: Right? And then better understand who those people are and what they're in market for. Mhmm. And if he delivers those things, the ad dollars will come. Mhmm. Because besides that, like, where else we're gonna spend money?

Speaker 5: Yeah.

Speaker 6: Like, TikTok shop's actually doing great, but it's still a really small business. Right? Like, the GMV this year in America might be 20,000,000,000.

Speaker 1: Really?

Speaker 6: And Amazon does that, like, every four days or something. So it's like, it's still a very, very small business.

Speaker 1: Why is TikTok shop so small? Is it is it a separate panel or something? I feel like TikTok still has so many so many impressions, so many videos that are being served. Do you do you have an idea of why

Speaker 2: that business is falling out? I think it's it's not necessarily I think it's primarily that content platforms have been a place you discover products but not where you transact. Like Meta has done a lot of had a lot of efforts in shopping in app. They never you would have thought that they would have clicked harder. Yeah. Right? It's like you have this captive audience that uses your product for an hour a day to discover things to buy, and they're not buying that many products in the app.

Speaker 1: Yeah.

Speaker 6: Yeah. And TikTok shop is delivering way more value than 20,000,000,000 in GMV. Like, a brand is like Comfort Hoodies. I'm sure you guys have seen They're doing 1,000,000,000 a year right now.

Speaker 3: They're 4

Speaker 2: years Last time last time you told me about them, I think it was like 400 or something

Speaker 6: like that. They've they've more than doubled. Yeah. It's crazy. And all it is is like TikTok shop affiliates, so people posting thousands of videos a day. Mhmm. They take those the best videos of it.

Speaker 1: Yep. They put

Speaker 6: it into TikTok shop GMV max. Yeah. They run that. And their TikTok shop business might do might do a 100,000,000 a year, but the spillover is crazy. Everyone goes to Amazon.

Speaker 3: Everyone goes to your website.

Speaker 1: Oh, got it.

Speaker 6: So like Yeah. They've just done a horrible job actually capturing the value they're generating.

Speaker 3: Interesting. But they're getting a lot of impressions. They're driving a lot

Speaker 1: of purchases. What's the sweet spot for price point on TikTok shop? That hoodie company, is that a $70 hoodie?

Speaker 6: It's cheaper. Right? Like, it's a successful product in TikTok shop is female focused Mhmm. Impulse buy, so like, know, $20, $30, $40, something like that. And then you have people to make outrageous claims. Right? And so Yeah. Yeah. Comfort hoodies is like, it's a hoodie that cures anxiety. Yeah. So like, that's pretty good.

Speaker 1: Like, it's

Speaker 6: a pretty good value prop.

Speaker 1: Claim the FDA might wake up to that one at

Speaker 6: some point. All the affiliates are making it, so who cares? Yeah.

Speaker 1: Somebody should care, but we'll see. Yeah. A little bit of a gray area. Interesting. Are there any I I I wanna know about when you're using AI personally in house or someone on your team is using AI, like the models or the products, like ChatGPT, Clawd, etcetera, versus you feel like you're getting AI for free because you're using Mailchimp and Mailchimp integrated AI, or you're on Shopify and Shopify gave you an AI feature for free.

Speaker 3: Yeah. You know, I I don't want talk too

Speaker 6: bad about any sponsors. I don't know if Notion sponsors you guys.

Speaker 1: They Okay.

Speaker 6: Great. You would actually hope that more of these companies would be rolling out AI faster and better and more useful. Because like, you know, we're using it internally a ton directly with the models

Speaker 1: and Sure.

Speaker 6: Like inventory planning and buying is a solved problem.

Speaker 7: Okay.

Speaker 6: That was like the biggest problem that has plagued Yeah.

Speaker 1: Like Like demand forecasting.

Speaker 6: Yeah. Like all of that is like

Speaker 1: And then sending up proposal to a supplier or or in your case, like the actual factory to to understand how many you're going to sell by month, when they need to be delivered, what would the shipping timelines, all of that's just a bunch of Excel work normally.

Speaker 6: Yeah. And it was huge teams.

Speaker 1: Yeah. And if

Speaker 6: you got it wrong, it bankrupted your company. Yep. Right? Like you had bad inventory or you get like shorts in December. Right? Yep. Like Yeah. It ruined a bunch of businesses. Mhmm. AI has totally solved

Speaker 1: that. Really?

Speaker 6: Working directly with coexes of the world. Right? And just putting in all your your business information.

Speaker 1: That's such a huge unlock for the global economy. Yeah. It's crazy to think about.

Speaker 2: We gotta tell we gotta tell consumers that don't like AI. Your favorite brands are doing perfect forecasting. I'm you are gonna get the perfect article of clothing right before your trip to Hawaii even though you waited until three days before to order it.

Speaker 6: Always have the right sizes in stock. That is coming because of Kodak.

Speaker 1: That's crazy.

Speaker 2: This is this is this is like part of what the Seufert was talking about. Right? Like the the one of the Eric Seufert, most of that memo. He he was just talking about like, actually, if you have like better advertising because of AI, it will create a like like, it will drive economic growth purely because you have more and more of these, like, niche businesses that might have an audience of 50,000 people in the whole world. And historically, you couldn't build that business because it would have been impossible to find that 50,000 people out of billions. Now you can.

Speaker 6: Mhmm.

Speaker 2: And then this is again an accelerant of, so much revenue is lost every day, so much purchasing activity doesn't happen because people just can't buy the stuff that they want because the brand didn't properly forecast Mhmm. And and it's still kind of doing like fly by wire.

Speaker 6: Totally. The wrong sizes, wrong things at the wrong time. Like, with how expensive it is to get stuff on shipping containers and how long it takes. Mhmm. And there was a lot of companies who spent a lot of money trying to solve this. There was demand software that did billions a year in revenue. As long as you have like a system of records like a clean data warehouse Yep. And you have your all of your sales from Shopify, Amazon, whatever else, you port all of that into a codex and it will it totally has it figured out.

Speaker 1: Interesting.

Speaker 6: And if you have to make those small tweaks like, oh actually last year we were on a promo, this year we're not going to.

Speaker 1: Oh, so the multi platform thing is big here because I would have I was just about to ask you like, should Shopify roll out a demand planning tool for Shopify merchants? But they probably Amazon has sharp elbows and won't give them all the data just via a simple integration. Integration.

Speaker 6: Yeah. It all has to roll up into the harness. It all has to go into codec.

Speaker 1: And so and so you have to get into a data warehouse and then you have to point an LLM at that.

Speaker 6: Yeah. So like, you know, we're not like we're not like a large buyer of software.

Speaker 1: Yeah.

Speaker 6: Like, you know, we we have Shopify Sure. Data warehouse, whatever But as long as you have those like basic things

Speaker 1: Yeah.

Speaker 6: And you put it into a harness Yeah. It's like

Speaker 1: But your IT spends like, yeah, probably like less than 1% of revenue.

Speaker 6: Totally.

Speaker 1: Yeah. Yeah. Exactly. Which is which is the the good benchmark. You don't want to be like building every system custom from scratch.

Speaker 6: Yeah. And people are so excited because they can vibe vibe code everything. Right? But like, you know, judge me reviews is like $5 a month. So I'm

Speaker 3: not going to vibe code my own reviews thing.

Speaker 6: Yeah. Right? I'm just going to do this.

Speaker 1: Yeah. Just pay that.

Speaker 6: Yeah. But but yeah, so

Speaker 1: There's some review plugins that are very expensive.

Speaker 6: So Yeah. Bizarre voice horrible. Yeah. Like, yeah. Yappo has a bad reputation.

Speaker 1: Yeah. I've gotten I've gotten fleeced a couple times.

Speaker 2: What's new in manufacturing land? Oh. You know You had You guys were trying to develop US manufacturing like way before like American dynamism was like a category. Like, this is something that you guys have been like exploring and dabbling with for a long time. But what's what's the latest?

Speaker 6: Yeah. So like we actually worked with the government in like 2022 to get something called like a general exclusion order. So like we have a we can we can very easily now get people to get banned from importing. Like if we if they validate our RP. But Oh, to do that, you have to prove that you're like a important part of the American economy. So to do that we actually bought the largest independent watchmaker in America. It's called like a it's called FTS five to IMP Solutions. They're in Arizona. So we own them.

Speaker 1: Yeah.

Speaker 6: So if you ever buy American made watch, I probably made it.

Speaker 1: No way.

Speaker 6: But it's a really hard business. That's crazy. Watches suck. We do wallet production there.

Speaker 1: Okay.

Speaker 6: You know, we probably spent 2 or 3 or $4,000,000 like getting that whole thing set

Speaker 4: up to actually produce wallets there. Yeah.

Speaker 6: But then like the Trump tariffs made it really hard to get steel because there's a huge global tariff on all non American steel. That means everybody wants American steel, so now it's really hard to get it. Sure. We have to wait for those things to work themselves out. But look, most manufacturing is already very automated. Like you guys have spent time in China. I'm going back to the next month. Yeah. It's like they don't have that many people in factories. It is robots and assembly and that can be done basically anywhere.

Speaker 1: Yeah.

Speaker 6: And then it's just getting the raw goods to wherever you actually want to manufacture stuff. And with steel and batteries, you we can't do that in America Mhmm. Yet. Mhmm. So we we have to build a supply chain. It'll be like a ten year thing but the future is going be hyper local manufacturing for sure.

Speaker 1: I like the idea of you getting steel manufacturing. That would be electric. You just make your own steel, fully vertically integrated.

Speaker 2: Is now the best time in history to start a consumer brand?

Speaker 6: Well, would say probably like January 2012 when Facebook ads just sold out. That was probably the best time.

Speaker 2: But now is the second best?

Speaker 6: For sure. I mean, one, it's moded from AI. Like, I would hate to be trying to sell software right now. Sure. Right? And a lot of services, I'd hate to be in that business. Yeah. People are gonna buy stuff forever. Yeah. Right? You have birthdays, you have Christmas. The American consumer is still incredibly strong. Yeah. We really just had the best q two of all time and that's with a war in Iran. Like in Oh, yeah.

Speaker 1: And inflation and all sorts of stuff.

Speaker 6: Yeah. I and like it all actually like looking

Speaker 1: at Consumer confidence is so low even though consumer spending is is holding. You you you you there's always nervousness about will there be a pullback.

Speaker 6: Yeah. There's been nervousness for six years. Yeah. But I'm telling you the Ukraine war in 2022 Yeah. There was a noticeable decrease in e commerce activity. Really? And right now it's not happening. Things are actually ripping. So I think it's a great time.

Speaker 1: Think Total vibe session. Yeah. Total disconnect between what people say in the Pew research and then what people actually do.

Speaker 6: Dude, if I had my Shopify notifications on, it would just be chiming all day right now. I think people yeah. Are It's it's definitely a vibe session. Mhmm. So it's a great time to be selling stuff.

Speaker 1: That's great. What are you thinking on the creative side? Are you Higgs field maxing with like all these workflows to generate endless AI videos? Are you seeing progress in AI images? What what's working? We just talked to the Seufertator about the this study that showed that when AI is clockable, it underperforms. When it's not identifiable as AI, if it's just a product image and it just looks indistinguishable from CGI or a photo, it over performs sometimes.

Speaker 6: Oh, dude. Pull up my Facebook ads library and it is tons and tons of AI generated static ads.

Speaker 1: Okay.

Speaker 6: Right?

Speaker 1: Static.

Speaker 6: Yeah. Because the statics are actually like you can build like ad factories like totally automated. Yeah. So you know, you take a Hicks field, you use an MCP, you bring it into like your harness of choice Yep. Like a codex.

Speaker 7: Yep.

Speaker 3: And you can generate 10,000 static ads

Speaker 6: Yeah. If you wanted to. Right? And we just have that running twenty four seven.

Speaker 1: Yeah.

Speaker 6: They get pumped into ads library to test it. Yeah. And then the winners go to a different ads library to like a Wow. Different ad account to actually scale those

Speaker 1: up. Yep.

Speaker 6: So the static stuff is totally solved Yeah.

Speaker 3: And I would hate

Speaker 6: to be trying to do ads without it right now. Yeah. Yeah. Right? I actually built a spreadsheet yesterday or like a presentation slide by hand and I felt like I was a caveman. It's like that's like we're working with like the ads of like the password

Speaker 1: were like.

Speaker 6: Sure. Video, we still do a lot of it. It's mostly just it's like cut scenes and like a hyper cut.

Speaker 1: Sure.

Speaker 6: So like we want to add motion or somebody talking or whatever. We'll do a lot of that.

Speaker 3: Yep.

Speaker 6: But it went viral yesterday the the Seinfeld fully AI episodes. Yes. That is really really good. It's getting very close to actually being indistinguishable.

Speaker 1: I thought it looked really good. I thought the editing pacing was wildly off.

Speaker 6: Yeah. I agree

Speaker 1: with I thought there was like the gaps in the humor, like the pacing is so key to that. It was like but from a fidelity perspective, it looked indistinguishable from the

Speaker 6: show. Yeah. So it's like it's very inhuman in like the the way they talk or whatever. But like that's gonna be fixed. Yeah. Like that's coming in two more model updates Yeah. I'm sure. Yeah. Then and then it's like, yeah, all video will be.

Speaker 1: What about using AI either to write deterministic scripts that can assemble hypercuts in different because if you have a picture of the wallet, a picture of a person putting in their pocket, a person stepping out of a car, a person on a beach, you might want to sequence those 1234, two one three four, two three two one four, and get every possible variation on the the those different video clips. Are you using AI? Do you already have a system for that? Is that already automated? Is there what's the future of that?

Speaker 6: Yeah. That's still very human in the loop. Interesting. So we have like, you know, two amazing editors Yeah. Who would do all the hyper cutting themselves. Okay. And now, they are using Hicks Field and just getting Sure. You know, hundreds of more variations Yeah. Going through those in the upcoming room to the end.

Speaker 3: Got Got it.

Speaker 1: And they can probably even do some like style transfer and filtering on top of the raw footage that they have to like

Speaker 6: Yeah. And sometimes like, you know, it's a robot. It'll it'll make stupid decisions. Yeah. It's like it'll it'll go like, you know, wallet to something, you know, falling in the ocean. It's like, what the hell are doing here?

Speaker 1: Yeah. Right? It's just complete hallucination.

Speaker 2: Yeah. 5.6 people are reporting that it's it's working on video editing work flows now in a way that a lot of other models haven't. So

Speaker 1: Yeah. I wonder how that will actually play out because there's one world where you're just literally opening Premiere Pro and saying like, move the mouse cursor and make the cut in the footage. And then there's another one where you're, like, editing the underlying file and then you're watching it in Premiere Pro because most of these video apps, they sort of represent the file as, like, a structure of folders or, you know, a bunch of JSON or something. So you you you can manipulate things multiple ways. But will be interesting to see where that where that goes even if it's just for, like, those the the the reconfiguring sequences and whatnot. Are there any vibe coded ecommerce plugins or add ons or tools or software that have stuck out to you as, wow, like, this thing, it was in the $1,000 a month category. Now it's in the $5 a month category or or this is a new capability that's unlocked that's still something you wouldn't roll your own but you would buy outside?

Speaker 6: You know, not really.

Speaker 1: Okay.

Speaker 6: But like a lot of the playbooks that people share it's like, you know, how to build landing pages in one prompt or whatever.

Speaker 1: Sure.

Speaker 6: And like that is going that's like in a one shot companies like Shogun or like there's all these like landing

Speaker 1: pages Sure. Yeah.

Speaker 6: And it's like they're just you know, drag and drop tools. Yeah. But you're getting way faster, way more responsive, way better stuff just out of Codex. Yeah. And it's like Yeah. It's completely on brand with your assets. Yep. And it's like, look, that is vibe coded. Right? Yeah. Yeah. It's and we are we're gonna launch 50 landing pages next week and it's all vibe Yeah. Stuff like that.

Speaker 1: What's the value of landing pages these days? Is that is that critical to the funnel? Is that critical to the Oh, for sure.

Speaker 6: Yeah. Dude, you guys had Hermosian here Yeah.

Speaker 3: Like two days ago.

Speaker 6: I was in the thing. Yeah. It is

Speaker 2: He's got 1,000,000,000 now he's gonna get a landing page for every human on earth. That's actually where we're going.

Speaker 6: Yeah. Basically, right?

Speaker 1: Census records.

Speaker 6: But it's like you you need the offer to get the click, right? And then you need the landing page to inform them and then the like as fast as you can get them to making the purchase as possible. Yeah. Right?

Speaker 2: In sales, they tell you to use the person's name a lot. But I'm really happy that you're here, Sean, because I wanna talk to you about this. Do you think we get to the point where, like, digital platforms end up, you know, in ads and landing pages for, using the individual's name to an extreme degree? Like, cause you get down to targeting one person long time ago. Yeah. But would would eventually there's like a Heck yeah. There's a there's a flipping point where maybe it just is so effective that it makes sense for Facebook to enable.

Speaker 6: Well, all AI cold email right now already puts your name in there. Mhmm. And there's been beta tests rolled out where they're using people's faces in the ads. It's like like

Speaker 2: Oh, We saw that on on Remember? Yeah. Like, they I think they were trying to sell a pair of the meta glasses where it's like showing like you calling your Interesting. And they can tell like who your significant other is just based on your activity

Speaker 1: Yeah.

Speaker 2: On Instagram.

Speaker 6: Yeah. So Facebook has a

Speaker 3: lot of information. It has your face. It has who you're talking to. It has who your wife is. So it's

Speaker 6: like they they look hyper personalization is coming Mhmm. For the entire web. Mhmm. And you know, if you're going to be shopping it's gonna show you what you're gonna look like in the clothes or what your dad's gonna like when he gets to wallet. I definitely think that's happening.

Speaker 1: Yeah. I mean if the price of a cold call goes to a penny, do you think you'll be cold calling people? Something just came across my desk. I got a wedding ring here for you.

Speaker 6: We've talked about

Speaker 7: it. We've talked about it.

Speaker 6: Yeah. There's a thing called like ringless voicemails Yeah. Where like you know

Speaker 3: they'll just mass drop

Speaker 1: Please those off leave them.

Speaker 6: And they put people's names in there. It's like, hey, John, we got this thing for you. Right? And it's like, you know, it's no it's one way. But yeah, the two way is definitely coming.

Speaker 2: Interesting. What's happening in luxury? LVMH and Kering are down like twenty five and twenty ish percent.

Speaker 6: Well, talked about the last time I was here. I was like I'm like, oh yeah, Gucci's getting crushed. And Yeah. And it's like, yeah. It's gonna continue to happen.

Speaker 2: Is You

Speaker 6: know, it's I think it's just a generational change is really what it comes down to. Like each one of those brands have good assets but like Richmont is is still tearing. Right? Hermes is doing great. Coach is on like a generational run. Like the best performing stock of the past like two years. Right? I think last year it beat Nvidia in performance. No way.

Speaker 4: Coach?

Speaker 6: Yeah. So it's publicly traded under Tapestry, you should pull them up.

Speaker 1: Okay.

Speaker 6: They own Kate Spade too but Kate Spade's like a nothing business.

Speaker 1: Yeah.

Speaker 6: So it's just it's just a generational rotation. Right? Ralph Lauren also on a tear. So you have like American Dyingism, there's American luxury. Like America wasn't old enough to have luxury brands, but like LVMH bought Tiffany's and now it's like, look Ralph Lauren's crushing, Coach is totally crushing. And I think the old stodgy LVMHs of the world, the Gucci of the world, one they got overexposed. Like they really rely on the middle class. And if you ever look at like their sales demographics, it is like 80% of the revenue come from people making under a $102,000 a year. And it's like that's just a big disconnect when you're trying to sell whatever. Right? Mhmm. So there's gonna be a shift towards like you know, true luxury. There's also a con some concern that like Elle Catterton is just personally investing in all the great assets and not bringing them into the portfolio. Like they own Crumb Hearts and they they haven't brought that into LVMH.

Speaker 1: Oh, interesting. Yeah. Okay. Well, but when you say personally investing, it's El Catterton is investing. Got it. Okay.

Speaker 6: And El Catterton is the vehicle

Speaker 1: Of LVMH. Yeah. That makes sense. And I know

Speaker 3: that they do a lot of deals in the private equity world, but

Speaker 1: And then

Speaker 2: Oh, yeah. Why why doesn't LVMH like

Speaker 6: They're actually

Speaker 2: You would imagine the R and O's are like, yeah, we want to own the hottest Like, you would think they would do everything they possibly could to own ChromHart.

Speaker 6: There's a divestment in brands right now. They're actually trying to push stuff out of their portfolio. I think they just liquidated Off White. Right? And Off White ended up being like a Target, like Costco brand. Like there's Oh. Yeah. There's like photos of like Costco Off White like big Palatin delivered. So they're actually doing a divestment right now from And you know, Tapestry just divested from Stuart Weissman. So like they're actually trying to go like big bigger down on winners. But yeah, then there's just like a whole like, you know, Mad Happy is a great brand.

Speaker 3: Yeah.

Speaker 6: It's invested via Elle Catterton, not inside of the portfolio. Interesting. And the whole idea was there was supposed to be a scout fund to then bring it into the main portfolio.

Speaker 1: Yeah. That makes

Speaker 6: sense. But if you're the R and O family and you own 90% Elle Catterton and only 45% of LVMH, it's like, what's what's the

Speaker 1: incentive? Interesting. Wow.

Speaker 6: But you look, mean you could like Richmont owns Cartier. Cartier is having a great time. You know, they own Van Cleef. Van Cleef is still having a great time. But those are both of those are way more true luxury brands than an LVMH.

Speaker 1: Yeah. So Have we hit peak, TEMU and Sheehan?

Speaker 6: Oh, yeah, dude. I mean, Trump got rid of section three twenty one de minimis, that totally crushed those brands. Mhmm. It's like I I mean, you know, TEMU

Speaker 3: Where do

Speaker 2: you go if you wanna shop like a billionaire?

Speaker 5: There's nowhere else to go.

Speaker 6: Yeah. Fuck, you're right, man. I don't know. Bridge.com. No. Look, I mean they're still huge. They run a lot of ads and like a team moves publicly traded under like a PEDD or whatever. So like they have a huge business in Latin America. They have a huge business in Southeast Asia. Mhmm. But like their whole arbitrage was just flooding into America with with low

Speaker 1: cost Direct from the factory. Right?

Speaker 6: Yeah. And it just got kinda that kinda blew up. It's gone.

Speaker 1: Interesting. Have you been surprised that live shopping has been slow in America? No. No one was predicting this from China. Oh, if it's big there, it's gonna be big here in a year. And it feels like it's been very slow. But what what what have you seen in the live shopping?

Speaker 6: Yeah. Look, people are very excited about whatnot.

Speaker 1: Yeah.

Speaker 6: And they are putting up impressive GMV growth Mhmm. But it is very much dependent on like the trading card bubble. It's like that's that's what it

Speaker 1: is. Yeah.

Speaker 6: So it's live shopping in

Speaker 3: America. Yeah.

Speaker 2: This is what I was saying yesterday. It's like it's effectively I'm not gonna call it gambling, but there there's some speculation happening on there's a there's a massive, I would say spec. You would want to figure out what percentage of GMV is driven by speculation. And I would expect that it's significant.

Speaker 6: Yeah. Like people aren't going on there to buy their everyday essentials. Right? Right? They're going on there for the excitement like Yeah. It is an option.

Speaker 1: Whereas in China, there's live shopping where you can buy a tomato. And that's just not happening.

Speaker 6: And women are buying dresses and it's the whole thing.

Speaker 1: Yeah. Course, the whole person put picking up one piece of clothing, put it down, put it on the next one. Like we've seen that video and we have yet to see that in America.

Speaker 6: Yeah. Why is that? I think I mean dude, Americans can't watch anything at the same time. Right? Like we are also like consumption based and like like on demand everything.

Speaker 3: Okay.

Speaker 6: Right? Yeah. Everything is catered to us all the time. Yeah. I just don't think there's any value that actually being live. We're we're doing TikTok shop lives Yeah. And we drive like 3 to $400 in in revenue per hour Mhmm. That we're live. Mhmm. So it's like some people are buying stuff when it's live, the real value is like getting all that content and just running it whenever you have four hours at night to to go log on to

Speaker 1: something. Yeah.

Speaker 6: Right? And I really just think it comes down to there's a lot more people in China and they are spending a lot like the the screen time per person is still way higher over there.

Speaker 1: Yeah.

Speaker 3: And just, you know, it developed over there. It's more of like a native sport.

Speaker 1: Yeah. Have you looked into advertising on Netflix?

Speaker 6: Have looked at it. The CPMs are not very good. Okay. And the the here's the thing is we buy a lot of TV ads. Yeah. And we buy them like like directly through the network. So like, know, Fox will have something like we just got an email for the World Cup and it's like you could run a thirty second spot during the World Cup, The USA game and it was like a $25 CPM. Wow. Right? Yeah. And Netflix, they you'll get a lower tier of consumer because it's price gated. Right? It's the lowest tier of consumer the ads. Yeah. And they want a $45 CPM. Yeah. Right? Just it doesn't make a lot of sense.

Speaker 1: Yeah. That makes a lot of sense. What about infomercials? Have you ever thought of running one? It's like a full hour, middle of the night type of thing. I've That's the new meta. Wanted to get I wanted to it feels like a bucket list item on an entrepreneur.

Speaker 6: Well, you have the studio, bro. Let's shoot one.

Speaker 1: We should shoot one.

Speaker 2: I'm I'm I'm down to be

Speaker 1: One hour pitching you a three hour livestream. I interest you in hitting the subscribe button, potentially leaving us five stars.

Speaker 2: I I wanted a hyper personalized infomercial though. Oh, just like falling asleep on their couch. It's 1AM and you're like, hello, Sean.

Speaker 1: I I I feel like I've seen some of those YouTube experiments ads where they they they didn't gate it. And so if you didn't click skip, you'd wind up watching like twelve minutes of an advertisement.

Speaker 6: Oh, dude. You know, I IKEA did that but it was like twelve hours.

Speaker 1: Twelve hours. Dude was like,

Speaker 6: we're gonna read every product we have, but please click skip. Right?

Speaker 1: Fantastic. But you've never done an infomercial?

Speaker 6: No. But I I met a guy one time who made like, you know, his whole business, $80,000,000 a year was selling hoses on infomercials. Yeah. And he's like, yeah, have a great hose and I just sell it on infomercials. Yeah. Then he gets into Home Depot or whatever. Yeah. So, look, you can make a lot of money in a lot of different ways. Yeah. Yeah. Yeah.

Speaker 1: But you gotta you gotta focus a little bit. You got a good thing going.

Speaker 6: Yeah. Right now I'm trying to sell a bunch of random accessories to men Sure. And my goal is get to 1,000,000,000 a year in annual revenue

Speaker 3: Yep.

Speaker 6: I'm like three or four years away. And if I do that, my life's good.

Speaker 1: Fantastic. Well, thank you so much

Speaker 2: for coming on the show. You wanna close it out with

Speaker 1: Yes.

Speaker 6: Alright.

Speaker 1: We got one last advertisement. It's for MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. Thank you so much for coming on the show. Leave us five stars on Apple Podcast and Spotify. Sign up for newsletter tbpn.com, and we will see you tomorrow at 11AM. Sharp. Goodbye.