Adam Torres, Peter Nguyen, Barron Zuo, Harvey Fine, and Onur Çelik discuss the future of CPG.
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Listen to the Mission Matters & Science Inc. Future of CPG Summit coverage. In this episode, Adam Torres interviews Peter Nguyen, Co-founder & CEO of Ad Exchange Group, Barron Zuo, Head of E-commerce CPG at AliExpress, Harvey Fine, Managing Director of Pendulum Holdings and Onur Çelik, Co-founder & CEO of EnergyDefensePlus, explore CPG at the Mission Matters & Science Inc. Future of CPG Summit.
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Full Unedited Transcript
All right. Welcome to everybody that could be here in person and for everybody at home and online. Welcome our entire YouTube community, our Mission Matters community, everybody. As always, we’re bringing you great content and a great panel. We got a good one today. So the CPG event, the future CPG event, and we have a very Balance panel that Chirag put together.
So we have the investment side of CPG represented. We have the marketing side of CPG represented. We have the individual product side of CPG represented. CBG represented. So we got, we got a lot of things to go over here today. I’m going to start with some, some intros and some bios, and then let’s have some fun.
And just to give you a feel and a flavor for those that have never been to a Mission Matters event this is not about you sitting there listening to me talk the whole time or even the panel. You get to get involved too, so I’ll, I’ll kick us off, I’ll get some questions in there, make sure we’re flowing and having some fun, and then and then think, you know, on your end, I’ll give like a warning, I’ll say, okay, this is the last question, and then I’ll open it up to the room so that others can ask questions too as well, so we can all get involved and have fun.
All right, let’s go. So we’ll start with Peter. So, Peter Nguyen, he’s a co founder and CEO of Ad Exchange Group. He’s one of the world’s foremost authorities in direct to consumer digital advertising and e commerce. He’s founded several of the leading direct to consumer digital marketing agencies FinTech and e commerce distribution companies.
And Peter founded Ad Exchange Group in less than six years. AdExchange has delivered over 1 billion in revenue for its clients. It’s an insane number, I want to talk about that. And he’s become one of the fastest growing marketing companies to reach 100 million in just 19 months. Let’s welcome Peter.
Alright, Onar Celik is next. Co founder and CEO of Energy Defense Plus. He’s not, he’s been on a nearly 20 year journey, even though he doesn’t look like it in consumer goods, and he’s been working with companies across stages of the business life cycle as a consultant, as an executive. And as an entrepreneur, so he’s got a very balanced career there.
As CEO and co founder of Energy Defense Plus, he is excited about making wellness accessible to all and is on a mission to disrupt a single brand. It’s a one billion dollar energy shop. Maybe he’s going to drop the name now. I’m guessing he will. And he’s trying to do this with a sustainable, healthier alternative.
And quick fun fact, I was like, hold on. Owner, have we done an interview before? And he’s like, no. And I’m like, wait a minute, you have another co founder. Who is it? Who is your other co founder? Justin Choice. Yeah, so Justin, so Justin had been on the show and I’m like, okay, this is small world so we’re gonna have some fun and I’m a big fan of the product and what Justin has already told me about it and now everybody else gets to learn about it too so we’ll have some fun there.
Alright Baron Zo He’s the head of e commerce at CPG at AliExpress he brings over a decade of expertise in affiliate marketing and digital growth with a proven track record of driving brand success in the U. S. market. He specializes in leveraging innovative strategize, innovative strategies to optimize e commerce performance and foster impactful brand partnerships.
And then rounding this group up, all right. Harvey Fines, so Managing Director of Pendulum Holdings. Harvey Fines an investment and advisory firm, excuse me, Harvey Fines, Managing Director of Pendulum Holdings, which is an investment and advisory firm. He’s formerly the Managing Director of BDT and MSD Partners, a merchant bank that provides advice and long term capital through its affiliated investment funds to family and founder led businesses.
Thank you. Previously, Harvey helped build Fosun’s Group’s Global Direct Investment Platform as Managing Director. Alright, let’s get, we got through the bios, alright, so step one, right? Everybody good? We still awake? I didn’t put us to sleep yet? Alright, good. Don’t worry, like I said, it’s not just me talking, it’s okay.
Alright, so, I guess just to get this kicked off, I’ll start, you’re at my left, Peter. So A lot of things happening with selling on social. A lot of things happening with that. Social, social media, social commerce. TikTok, TikTok shop. I’m sure nobody in this room has heard of that, right? Come on, we’re all here.
Should we be doing it? Does it make sense for a brand? Does it not make sense for a brand? What should we be thinking when it comes to TikTok shop? And just in general, selling on social. When it comes to TikTok shop, you know, my background, 22 plus years in the e commerce space, and then You know, I was there during the rise of when Google paid ads for 5 cents, 2 cents, and then, you know, our world in the direct to consumer side, you know, we scaled that side, and then went Facebook, and then IG, and then, and then for the last decade plus, you know, as we all know, in the DTC space and CPG space, it’s like it’s, things are very, very expensive.
It’s the, the ROASs are less than one sometimes. It’s just very, very, very difficult. It’s on who’s. built agency on paid media, right? It’s, it’s harder than ever. And then all of a sudden, you know, last summer, you know, TikTok shop comes and a lot of my clients in the past who I would just turn down, you know, 90 percent of those clients were like, you know what, your price is too little, the margins aren’t there, DTC, you know, all this other stuff.
And then those same clients are TikTok. And then, and it’s for me, someone who’s exited, exited, you know, some of my other past companies and, And I was like, for me, I was like, okay, TikTok, just seeing where all the curves are is exactly where, where a lot of the same brands and, and whatnot that I turned down in the past are, are absolutely doing really, really well.
And so in this social commerce space, I’m just very simple statistics on this. I mean, by 2028 of all global e commerce sales social commerce, you guys know the difference between social commerce and just e commerce? So social commerce means. Within the social media platform, the actual sale of the product stays within the platform.
So what TikTok Shop does is obviously, instead of what you’d buy an ad, you know, what we would do, we’d buy an ad on Facebook and then you’d go to the, you know, the brand’s site. Here you stay within TikTok, make the purchase with like one click, and then you stay within the platform. And so that’s the difference between social commerce and just normal e commerce.
And so with social commerce by 2028 22 percent of all global sales, globally, will be through social commerce. And this is just, and so here, here, which is TikTok, you know, it’s maybe, you know, tens of billions of dollars right now, you know, where, where in, in, in China and in Asia, it’s like a 600 billion industry.
And there’s two components. There’s the TikTok shop side, which is the social commerce side, and the other side is the TikTok live side, which is, you know, Live shopping. Think of QVC, right, all live shopping. And so that has already exploded. And so if you look at what we have today, you know, TikTok live just came, you know, around March of this year, right?
So it’s just brand new and nascent. But over in China, there’s a, there’s one influencer who did a 1. 4 billion a day. You see what I’m saying? And so like, it’s already a thing right here and it’s just barely getting started. And so, so for me. And a lot of people are even saying it’s just kind of too late to get started.
I have one, one of my old dear friends of mine he didn’t know anything about digital. Like he, he sold his company, retired for seven years did yoga, wrote a yoga book. And then I remember him visiting my office because he sold his company, is a retail guy. And then, you know, he spoke, I, I had an event last Wednesday on social commerce, like the first social commerce called Creator 360.
And I had him speak, it was the first time I’m speaking on stage about this whole thing. And his brand is a brand called Guru Ananda. And he’s done tens of millions of dollars in a single month with this one single brand. I think he’s the top TikTok shop. And he was telling me, like, how did he do it? I was like, I asked him, he’s like, it’s more luck than anything because he was just one of the very first TikTok shops, one of the first five TikTok shops in August of last year get started.
And he had all this eyeballs, no shop, you know. And, and so, To that point, to me, like, this whole social commerce is just barely a fraction of where it will be, could be, should be, right? And so, and TikTok’s putting a lot of efforts and marketing dollars into, and, and we’re already seeing the first million dollar days on TikTok Live, you know?
Several people broke the million dollar days on TikTok Live already here in the US, and so and, and, you know, one of my partners, Michelle Phan, she’s breaking records. TikTok says you can’t even. You know, typically in a TikTok shop, you’re selling a 35 or 40 and under type product. Very heavily discounted.
Michelle’s selling a 200 or 239 product. It’s like, expensive. Which is blowing TikTok’s mind because it’s not the case. And so we’re seeing this new evolution happening. It’s here to stay. It’s only going to grow. And so this is absolutely something that you should pay attention to, you know. And I’ve been at every growth event.
You know, stage with the companies that I’ve built and, and, and a large part of that, and so it’s a very exciting time for me. Shrag, you hear that? Where’s he at? There we go. We gotta figure something out over there, right? Yeah. You wanna, you wanna jump in there? I mean, on the TikTok shop or just commerce in general, I don’t know if you’re doing anything at AliExpress or anything else like that.
It’s open, it’s open format, I won’t get into it. Yeah, of course. It’s very inspiring about what Bill just shared. Because social and also e commerce are naturally connected, right? It’s hard to believe that we’re launching a brand without any influencers to test it, to use it, to endorse it. So actually you know, from Aliexpress, because Aliexpress for those people who might not be familiar with that maybe you have heard of a stock called Alibaba or Baba.
Our stock exchange is founded by Jack Ma. So Aliexpress. com is a B2C platform marketplace. We’re here in the U. S. domestic market. We’re selling products from local and also from overseas to the U. S. audience. So when we realize that, it seems there’s a lot of a challenge for those merchants on the platform.
Why? Because You know, for CPG brands, especially in your early stage, you know, bootstrapping, or you’re still looking for 10x growth in the next, maybe, 24 months, you always find it hard to find the right inference groups to back you. It’s always hard to find the right distribution channels, online or offline, you know, to have a smooth transition.
So, that’s why we, even though we are an e commerce platform, we are also an open platform ecosystem. So we bring in TikTok, we also bring in you know, other like A Win, Rakuten, and all the other, you know, affiliate programs and platforms here in the U. S. market to help us to grow. So that’s why it’s more like a integrated, cohesive solution for our merchant.
And that’s why, actually, just according to the report from yesterday, we got a double digit score again for the next Q1. Yeah. Wow. Great. Harvey, would you want to, you know, if not directly related to social or piggybacking on that, like in general, like, you know, CPG brands on the investment side, like what are you, is this kind of going to the equation of when you’re looking in companies and looking at things like that?
Yeah, for sure. So a couple of trends that we’re seeing, you know, if you look at the incumbent CPG brands, they’re pretty content to stay with their large brands and not really grow. I mean, any kind of innovation they have is probably around flavoring. Right. Not so much new products, right? And so it leaves a lot of room for the emerging brands, some of which are in this room, to take some of those white spaces that are available, and focus on kind of distinct niches.
And one of the ways they’re able to do that is because of people like Peter, who can all of a sudden have direct consumer, not just marketing, but actual sales. And so we see a couple trends there. One is, is, is the, The direct consumer capability, and for us we focus a lot on athlete and entertainer owned brands because they have a natural following on social to begin with, and then from there they can expand beyond that.
The other trends we’re seeing is around ethnic foods, so like you know, CJ Foods in Korea, they’ve got Korean dumplings that are frozen, that they started selling in the U. S. Ciate, which is sort of better for you foods, right, it’s gluten free chips. They’re just in the process of selling to Pepsi for 1.
2 billion. So I think there’s a lot of these niches that are there, but a big reason why they can succeed is because of social. They don’t have to have the same kind of marketing that Doritos and some of these other big brands have had to spend money on. Oh no, let’s get you involved, man. Alright, so Energy Defense Plus, maybe talk to us a little bit about it.
And, you know, competitive space, right? The beverage space, the, specifically the shot space that you’re in. Like, tell us a little bit more about why you started the brand. That’s that’s a good question. It’s, I’ve, I’ve worked in CBG for my entire career. And when I moved here to the U. S. I was like a clean slate.
Let me, let me launch a business. Let me do something that’s purpose driven. Let me do something that makes wellness accessible. And, I looked at the non alcoholic space first, and I really kind of zoomed in with my co founder on the energy shop space. It’s, it was and it’s really interesting, like the energy space broadly has grown from like 13 billion to 22 billion in four years.
I don’t know if you guys know Celsius, but they grew from 130 million to 2. 6 billion. In four years and they did it by positioning themselves differently. And when you look at the energy shop space, it’s just been this, it’s a one billion category that’s been stagnant for like the last five, maybe even ten years.
It’s got one player, if you asked me if I was going to name it, I will. It’s 5R Energy, everybody knows it. And it’s it hasn’t really innovated. If you look at the marketing of 5R Energy, it’s It’s men, it’s only men, it’s NASCAR, and it’s, it’s kind of necessity. So our whole thing was like, where can we introduce something that’s healthy?
The energy space already had it but energy shots that was what we wanted to focus on. It was so, you know, our, our whole thesis was we have an opportunity to change the space. So let’s make a product for the, the, the modern consumer. It tastes better. It’s, it’s healthier. It’s, it’s it’s sustainable.
It’s an aluminum packaging. And it’s, you know, for busy people that align to their values. And we’ve seen that in other categories. And we haven’t seen it yet in in the energy shelf space. And we just launched on Tuesday, so And you didn’t jump all over that a million years ago? I was like I was excited to be in the first place and now I’m really excited.
And you didn’t jump on that? You should have been raising your hand, me next. And then telling everybody to go grab some. Follow us. Yeah. There we go. Come on. Look at the camera, man. We got a YouTube audience, too. We gotta get that going. All right. Barron speaking of competitive spaces the beauty space, very competitive space, what is AliExpress like doing that’s a little bit different and how are they addressing like as a platform, like the need of those types of users?
Sure. Just before I answer that How many of you, let’s take a guess, what kind of product or maybe what kind of subcategory do you think is the best selling product on Aliexpress. com? Take a guess. Okay, those who already shared, please don’t tell. What was it? Say it again. Take a guess. Louder, louder.
Louder. Is it real guesses? Beauty, beauty, or fashion. Fashion? In beauty, in beauty category. Yeah. Skincare. Skincare. Yeah. What else? Maybe subcarbohydrate? A little more? A little mask? A little moisturizer? Come on. Nope. What else? Haircare. Haircare. Haircare. Very close. What else? Lipstick. Chapstick. Oh, sorry.
Lipstick. What else? One last chance. One last chance. What’s that? Virgin. No, actually the top, actually the top one subcategory is synthetic hair. Synthetic hair. Nobody wants synthetic hair than that. Synthetic hair.
Because Aliexpress. com, we have a very large African American population. Actually we started to notice that that category is growing like double digits every month. And right now, one of the brand, called Rebecca Hair, is one of the biggest seller and also brand on the market. And their market is so sweet.
Their market is so sweet. I will be happy to introduce you guys to them. So, back to the question. Beauty industry, beauty, personal care, and also food beverage has been our focus for Cognitive 25. We want to, you know, bring more brands to the platform. But at the same time, we want to build an ecosystem around ArtExpress.
Because ArtExpress is not just the marketplace. We are looking for One of my jobs is at ArtExpress. The official one is category management leaders. But actually, I’m looking out for the white horse. And then we want to bet on it. We want to bet on it. How well can we bet on it? We The business model that we created is that the brand or the product don’t have to spend your own dollars on marketing.
But actually the platform, according to our algorithm, is going to spend the money on the right product. And for those winners on the top of the list, or if we’re going to do an ad, Throughout all the channels, no matter if it’s from Meta, no matter if it’s from Google, no matter if it’s from TikTok, once the winner shows themselves, then we’re going to increase the investment.
So basically our model is that all you have to do is wholesale price plus dropshipping cost. Then that’s it. You don’t have to worry about it at all. And for a daily operation, it’s really hassle free because we have the entire team here in Pasadena office. So this is the model that we are creating. We want to minimize your We want to make sure that your brand or your product could get picked by the team and also by the algorithm.
Then we’re going to support it and we’re going to endorse it through a different kind of marketing proposal. So that’s why we always want to make sure three things matters. The brand matters. We want to choose a brand. We want to invest in their own image. You want to invest in your own content. Second.
We want to make sure the growth matters. The growth, we are looking for 5 times 10x growth for 6 to 12 months. And of course, very important, mission matters. We want to make sure the mission matters. We want to make sure that we always reach the goal that we set at the beginning. I think you just made a reel.
Come on. Mark that one. Of course mission matters. Come on. I agree with you. Thank you. Harvey. So keeping it kind of along the same line of of opportunities and different niches and or industries how are you, given the current geopolitical environment, how are you finding opportunities, CPG opportunities or investment opportunities and like, like, what does that look like?
Like, how are you, how are you doing that? So obviously I think the U. S. markets have a complicated relationship with China and with Europe. But we think those opportunities are still there, so the world is still pretty global. If you think about what I mentioned before about Korean brands coming into the U.
S. But I think there’s opportunities for U. S. brands to go into China, too. Despite the geopolitical issues it’s not a conflict between the populations or the markets. So, historically, U. S. brands have done incredibly well in China. They still do. I think CBG has been a little bit, the emerging ones have been slow, right?
Because the larger players have been there and done well. But I think it’s an opportunity for the emerging brands to go there too. For a couple of reasons. One is, you know, U. S. brands historically have resonated very well there. From food all the way to, you know, to apparel. Everything from restaurants to, to CBG products.
And if you look at the broader consumer marketplace in China, one thing that’s happened is that it’s not just the big brands that succeeded. Again, using apparel as an example, even the mid tier brands have too. So I think there is a real opportunity for it, especially the differentiated and very innovative U.
S. brands that have a different point of view to go over there and grow their markets, especially when it comes to premium pricing and to cut better for you products, which the Chinese consumers crave. So I think that’s an opportunity that exists as well. Europe is another one because they don’t have the same kind of innovation that happens in the U.
S. Like, look at the brands that are here, right? There’s only a fraction of that happening in other continents. Amazing. Alright, so this will be my last question. I’m going to do a quick round, and then I’m going to open it up to the group, like I said. So definitely have some, ask some questions ready. If not, I can ask more questions.
Don’t worry about that. But I want to definitely get everyone else involved while we have these amazing leaders up here. Peter! Man, so you’ve done a lot in sales. You’ve helped a lot of brands. I need you to open that playbook for me, man. Like, what should people be thinking about? There’s, are there other brand owners here, co founders, business owners here?
Hands, yeah, a whole lot. Come on, man. Open that playbook at home on YouTube. They’re gonna want to hear it too. Give us some of that playbook on how to maybe stretch our marketing dollars, effective strategies, like, like, go! I think that playbook has definitely evolved and changed over the last 15 years I’ve been doing this.
Today, I’ll be relevant today because that’s the most important thing. Obviously, you know, we’re talking a lot about TikTok. That’s a heavy focus of ours now. And, you know, the playbook that’s working where we’re seeing kind of rates and repeat success with brands starting from scratch is the first first and foremost is Where I feel like in the influencer marketing space, what democratizes this space in TikTok is before an IG and Meta and the other platforms, an influencer with a million, two million followers has a way higher chance of going viral than a someone with 10, 000 followers.
And so, but on TikTok, you’re seeing people with a few thousand followers, you know, with the TikTok algorithm, which is very, very different. Can go viral. And so now it’s a kind of a numbers game. You don’t need necessarily these big mega influencers. And don’t get me wrong, we work with a lot of those and they do help.
But if you can, the playbook is, you work with these micro influencers and make sure, it’s a numbers game. And when one of them go viral, right, then you bet on, then you turn on the pay, on TikTok. And then But normally at an agency you might get, you know, back in the day we’d get 2, 3, 4x ROAS in return on ad spend.
And now in meta it’s hard to get 1 or 2, you know, 1 and a half, right? And then all of a sudden when something goes viral on TikTok and not have to spend these big influencer marketing dollars, now you can get 3, 5, sometimes 10x ROAS, right? And then that’s the playbook, right? So find, find a video that go viral of yours, Spend on that one.
And that’s working day in and day out. But it’s a numbers game. You need to work with the right agency. You know, with ours, we have well over a thousand of these micro influencers where you can pour into and we tell them to post every single day on your brand for a month, right? And it’s a numbers game.
You have thousands of these videos, right? Something’s gonna hit, several of these are gonna hit and then you spend. So that’s, that’s Our little, one of our, our little secret playbooks that, that’s a Ritz repeat without having to spend a huge risk on some big mega influencers that you cross your fingers.
And I, and I think, no, no diss on the influencers. I’ve, I’ve spent the $250,000 on the Danville errands on, you know, this product and that part. And then I’ve done all the, all those things that I’ve seen it for myself. But, you know, you don’t have to take those risks anymore with TikTok, you know, and, and I, I would also say.
The things I was saying earlier about TikTok is, you know, before there was like you, you needed a D two C, you needed a usually 4, 6, 8 x you know of your cogs. You need that type of margins. And now TikTok, you know, the, the, the $15, $20 products, I would just pass on those because, but now these, these are the guys who are dominating TikTok.
Because if you look at the typical TikTok user, the, the Gen Zs, the you know, the, the Alphas, or. Alphas aren’t worth so much right now, but the Gen Zers right there, they don’t have a lot of money, but they have maybe a little bit. And so they’re looking for the heavily discounted things under 20 bucks.
And so like for Guru Nanda, he’s selling hundreds of thousands of these units of different things, but they’re all like 15, 20 dollars, right? And it’s a numbers game, you know, lower margin and making sure. I would say the other big thing is just, you know, Puneet Nanda spoke at our event and one of the things he said, to advise, I’m going to repeat.
So I’m going to his, my favorite advice that he gave to the audience. Number one, he was like, you know, he fired his, his head of marketing because the, his head of marketing, this guy’s an older Indian guy who’s just like, doesn’t look cool, you know, whatever. And the marketing person said you shouldn’t be the face of your brand.
Like you’re not the influencer guy. And he fired her and it’s like, I’m just going to post, I’m just going to go just post every single day. Just be him, be imperfect. And he just continued to post and post and post. And he became the biggest guy out there, right? And, and, and perfectly, that’s the first advice, is just feeding the algorithm.
TikTok’s about feeding this algorithm. Even when you go live shopping, right? Like, Michelle, you know, she’s like dominating but she’s feeding these algorithms. And you’re, you’re teaching the algorithm. And it’s all about the algorithm. When you talk to, when you talk to TikTok corporate, they’re all talking about it.
We can’t change the algorithm. And so you’re teaching the algorithm what you want to be, you know, and who, who you want to be. And so you’re feeding that. And that second thing I would say from that perspective, just make sure you have inventory. Right, and that’s a big thing, is just like, because when something goes viral, right, it’s just like, it can sell out like that.
And, and we’ve seen this time and time and time again. So just be prepared for that. You know, and perhaps like, you know, have the right capital partners in the back end. Obviously you can just sell out and not be able to run away, but those are two, two really good advice. Your playbook and your history with Energy Defense, plus that you care to share with the other co founders out here.
Co founders. It’s when we, when we built our strategy, and we’re still adapting it, it was really focused around capital efficiency, placement, and finding our kind of consumer fits. And it’s, it’s, it’s, you know, that, that journey is changing, but it was, you know, we named it Energy Defense Plus because our competitor is 5 Hour Energy, we wanted the name to explain what it is, you know, which also saves us a little bit on marketing.
We we put our money initially, because it’s a convenience store product. We put it on placements it’s You know, we, we found out that our product sells better when it’s next to 5R Energy. So that, that’s where we spent our money on, and that’s where we saw our returns. We found out, we, we had a convenience store next to a hospital, and we found out that nurses loved our product.
So, we went to their hospital and said, your nurses love our product. Can you, can you sell us in your cafeteria? And they did. It’s amazing. We, we had a connection at SpaceX, right? It’s, it’s engineers love that product. It’s a, it’s like a healthy energy shot. And they love energy. So we’ve been expanding to other kind of tech workplaces.
So it’s really been about focus and doing what we can with limited capital so we can create that story. It really is, we didn’t even expanse to, to all of California. We focused on Southern California so we could go deep instead of going wide. That’s it. And kind of getting that velocity story, I think that’s the key here.
And that’s really helped us reposition, find out who our consumer is, and focus on them. Barron your vantage point, I mean looking over a lot of different brands, anything from the playbook that you’ve noticed that, you know, you’d like to share? Sure. Actually I can share that all night. But to, to save the time I’d probably just share like three things that on the top of my mind my mind that I think it’s really been very helpful. We have been really paying a lot of attention to identify those winners from all those brands. I used to work at India, Google. For those people who do not know, Indiegogo is kind of a rival platform.
Kickstarter. So what we do, the algorithm, beside the algorithm, that we look for certain successful factors. The first and also number one, especially for CPG brands, is that the content. The content is the key. Because the content, especially like video content, there’s a conversation, there’s a language.
Right now you speak, you communicate, you try to win over Gen Z. So content is really the key. So you should really diversify the different kind of format for content other than TVC. Right now, you know, most of the brands that we know on platform that has been doing really well, whether on iExpress or Amazon or TikTok, especially TikTok, they try to push like 300 or even more, 500 of videos from influencers from their own, like video reels every month.
Push that. Because why? Because last month they tested about 30 new ideas, each idea has 10 videos, right? And then they tried to narrow it down to the top 10 ideas, tried to narrow it down to the top 5 audience group, then let’s do the test again. So you always have to iterate that, you always have to optimize that.
That’s the secret sauce between all the ads and all the algorithms. So content seeking, without that, you lost your voice. to the next generation. So second factor, the second factor is that pay more attention to affiliates. So right now, the Meta and the Google stock price is so high. Why? Because they are making a lot of money from who?
From you guys. And also, of course, the investors backing you guys, right? So that money fuels the stock price and that results in a very high CPM right now. Or CPC, if you’re looking at it technically. So, to balance that and also to achieve a long term growth, no matter from your dot com or from your overall business strategies, to focus on a fit, you know, use different kind of coupon cashback sites, try to get into different, you know, ID communities, work with influencers, you know, work with, you know, Carding offers work, you know, whatsoever fits.
That will diversify your marketing costs, and eventually that would result in a very hard YLI. In the history, you know, on the top of my mind, normally, the, a fitted channel would result in the highest ROI, you know, over all channels. Number three, number three, of course, diversify your distributed channels.
You know I express we’re trying to be Your best alternative other than your com and also Amazon. So that’s why for Mission Matters community, we’re also, we’re offering zero commission for setting up on Express for limited period of time. Yeah! So, so feel free to discuss that after this. But overall, you know, three factors very important.
Diversify your distribution channels. Try to focus on affiliate marketing. Okay. And also, content is the key. Alright, and I’m gonna, I’m gonna pitch that question to Harvey, and then that’ll be the last one for me, and then I’m gonna open it up for everyone. And Harvey, I know your compliance will be coming after me, so I’m gonna ask this in a very specific way, without mentioning any names of companies.
Open up a playbook, like, what can you tell us, what have you seen that’s worked? Yeah, so when we look at companies, I think, for me, the number one thing to look at is, what’s What’s your reason for existing? And I say that because, does the world need another Coca Cola or Pepsi? Not really. But maybe there’s a need for a better for you energy drink.
Maybe there’s a need for we have a company that does hair care for African Americans. which is very different than, you know, the traditional haircare products that are out there. So, Barron and I need to talk about, about having Ellen Express be a distributor of that. Or we have a hydration, kids hydration product, right, that’s better for you, so it’s not, doesn’t have the same kind of levels of sodium as, as a Gatorade.
So there’s a reason for it to exist, and that occupies a white space that there’s an opportunity. The second thing is, and I know this is really simple, but a lot of companies don’t actually do that, is, People have to like the product, right? So make sure that you do not just taste testing, but go to certain actual channels and get real traction.
So, one of the companies we made sure that it sold pretty well for e commerce, it over indexed compared to other snack food brands that are in its peer group, and it gave us confidence that, look, now we can launch this in retail. The third thing, and even though this sounds cliche, I’ll give you some specifics around it, is the management team really matters.
So, and it’s not just The quality of the team, but it’s the fit for what the product is and what stage the company is in. Our, we have a plant based snack food company, and the CEO that we brought in, she actually not only worked in an adjacent area, so she worked in better for you dairy products, so she understood the space, she understood the channels, had relationship to Whole Foods and Sprouts and the like.
And she understood the playbook of how to get that from the better for you shelf to the mainstream shelf, which is pretty important. The second thing is that she also had experience building a brand from 50 million to 300 million. So for the stage, the company in, she knows how to do the kind of basic stuff that you need to do to grow it.
Whereas sometimes you get a big resume person, they don’t know how to do the grassroots stuff that’s necessary at that stage. Because I think for a lot of, and why I say that, if the product sells well, then if you have the right kind of management team, then you have the blocking and tackling that’s necessary to get that product to serve mobile sales.
Now that doesn’t guarantee you that it becomes a billion dollar company. But it at least gets you to the point where you can have a real thriving business because you already know that the people like the product. And it’s just a question at that point of getting the right distribution, getting the marketing spend so that it’s actually profitable for the business to reach out to the people they’re looking for.
So those are kind of the three things that we focus on when we look at companies. Alright, thank you. Alright, let’s open it up for some questions. Let’s see those hands. Who’s first? Great panel, and my head’s buzzing with a lot of you. Do you guys know who Peter Drucker is? Yeah, he’s a great writer. So, I’m thinking of distant time, right?
In the exponential growth, you mentioned velocity, the speed at which things are moving. And you’re all aware that businesses are moving very quickly, right? So we have Moore’s Law occurring, we have AI, and we have this movement in shipping. And I’m wondering if the businesses that you’re thinking about Velocity, and speed, and exponential growth, and how you taper.
You brought the five hour energy drink, right? It was the first mover in the market, correct? And then you founded Nietzsche. And then anyone who knows what’s true value, I’ve been thinking about that, because we’ve been working with them in a specific way. They were an old company, turned a century, a smart guy came in and said, I’m going to roll up these small private companies to 4, 000 franchises and involvement.
And unfortunately, private equity got him in the cold. So the question is, how do you guys look at the speed at which things are changing? And grab hold of that. And hope that your businesses hang tight. And are the possibilities for Rolex in the future, where you guys see aggressive possibilities within your own marketplace, that you can show a true value?
Are we going to see 100 year old companies? Or at least moving at a pace that you may not see that we are. I mean, I can give an example from us. Where we are we have to grow fat. I, I come from a corporate environment and I’m looking at a, a start up. That environment, the insight had to come before you did anything decision making.
It was slow. And, and those companies aren’t adaptable and that you’re seeing in the CPG space, the, the portfolios of those larger companies, they can’t renew them. I think the, the last big disruptive thing in in CPG was, was it was Nespresso with Nestle. Right. That, that, that changed things. But in the, in the, even in the beverage space, prime and sports, Celsius is energy liquid death and water white claw and alcohol, right?
These, these, they, they come from something small and grow super fast, super quickly. And I, I think the strategic buyers are going to be buying those businesses because they need that for, for portfolio rejuvenation. I think the life cycles of, of businesses are, are smaller, so they might, I, you don’t have that growth in perpetuity that you’re used to, so valuations might go down.
People are less loyal you can’t stretch brands into adjacent categories as much as you could but it is, like, you have to be, in my experience, We test it, if it works well somewhere in five stores, great, we roll it out to the other 200. So it’s really speeded decision making. And the one thing I’ve learned in this space is, is the insight doesn’t come from thinking.
The insight comes from the action. So you do the work and, and, and you, and you learn from that. There’s no learning behind my computer screen. I want to echo part of that because if you look at, if you’ve been in TikTok, like, the several dozen brands who have, who do seven figures or more a month. Yeah. I think one of them are one of the big companies, right?
And so it’s just in general, and it’s always been the case in every newer market, newer platform, a list of their stuff. And so this is where the true entrepreneur, the nimble ones, the small teams, have the early mover advantage, right? And so like, so for me, it’s just like, from that decision maker, most of my wealth, my empire that I’ve ever built, has all been being there early.
Either, you know, First mover or fast follower. I build a lot more on the fast follower, just kind of seeing the needs and from that, so from, and then with AI, I would say like right now, you know, we talked about content, like that’s a huge thing on TikTok, you have to carry a bunch of, to feed the algorithm, but with AI, it’s a huge thing.
You know, like, whenever Michelle does a, Michelle Phan, she, she did FC, 40 million a month, all this sort of stuff, whenever she’s doing a live, every super live she does, she has to feed in around, like, two, two dozen worth of, like content reels that she just prepared for a super live, and now we’re, we’re using AI to do, to do that, right, to, instead of human capital and different things like that.
So those are the, the, the tools are there. And it’s just moving at such a rapid pace, and so you just gotta have to keep an eye on. To me, like the, the entrepreneur who can, who’s techie enough, who’s fast enough and, and can keep up with the fast moving is, is gonna continue to win. I think there’s more than one way to build a business, right?
So, you can have the, you know, capture a moment in time kind of businesses, especially in the CPG space, because you can scale really quickly. And, and those will sell for, you know, 100 million, a billion, something like that. And then there’s, and this is where I have a little bit more of a bias, because this is where I focus most of my career, is on you know, enduring businesses, right?
And if you have the right elements for the business, great product, lead management, then you adapt to the different things. And Peter talked about how, even in his, you know, six years, right, the, the marketing trends differ. But it’s the same type of companies that are using those channels to, to reach out to, to consumers.
So I think you can have those enduring. Businesses that throw out cash flow consistently because they reach a point where they become the Kleenex for the consumer. Right, so I think those are, those are two different ways to build businesses, but both are still available even with changes that are happening in how they’re distributed, how they’re marketed.
Alright. Did I hear you say that the, the TikTok shops, the Gen Z TikTok shops, Cheaper is better, like if it’s a high end consumer product, 70, 80, it’s harder because it’s outside the normal steam, whereas if it’s 10 or 15 or 20, it’s easier. Did I hear you say that? Yeah, currently right now, that is the case.
In Asia, that is the case. We’re looking to try to build that middle market because That’s where I feel that there’s a white space. And we’re starting to see these on these lines. I would say, no, it’s like, 35, 40 and above. It’s now like that middle market, right? And so, but like, The algorithm right now is because right now, the current existing markets think about TikTok as getting a heavily discounted, something that’s very affordable, something that’s kind of like pop culture trending, you know?
Demonstrable, you know, everyone see all these influencers, you know, that’s kind of cool and hip, right? And it’s just kind of a no brainer purchase. 15 bucks. I see it everywhere. Let me just go purchase a Gwent flip, right? So that’s where it is headed towards right now. That’s where it has been for the most part, right?
And so, but there’s still a long way to go there. There’s still, and I think especially here on North America, I think that’s where TikTok wants that. They want to see that. And so this is where like, TikTok told Michelle, for example, in the lives, like, okay, go sell that 30, 40 product. And she’s like, let me try this 200 product.
And she’s like, no, that doesn’t work. And then she sells out in one day on this live more than this brand’s entire month with all the other influencers, right? But this is again right now in live shopping, right, for example. So we’re starting to already see these exceptions. And we’re trying to make that the norm.
And I think that’s just because in the U. S., social commerce is pretty neat, right? So in China, it’s been around for a long time. So it’s to the point where there are different types of channels for different hierarchies of pricing. So you could sell, you know, Hermes and Chanel sell through live streaming in China, but they just sell on different channels.
It’s not on TikTok, right? So that’ll evolve in the U. S. too, as social commerce becomes a bigger part of the market. Anyone else? Last question? Alright!