YouSaid · the spoken record

Michael Duda

lines on the record

63

first

2019-01-15

most recent

2019-01-15

sittings or episodes

1

sources

podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

1. “It's deeply kind. And then more functionally on the business side, so I don't get too teary eyed. It's first round capital who for no motive other than their generosity as a firm. Spend a lot of time with me to get this right on that side. And then very recently Todd Benson is one of our investors. This guy's a baller. He was the former co-head of private equity at City, Chairman of L2 is Scott Galloway, which sold, and he saw something in us and to some degree me that said, like, I'm investing. And you guys will be much bigger in the next fund and the next thing. And I'm going to help you. Does that pay some returns? Yeah, I think so, but just. When other people have bet on you and they don't have to or spend time. So that's my triad of an answer.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

2. “I've heard this. I knew that question was coming. I've heard other podcasts, and it's just I go to different places because it'd be my wife for letting me do this. I was a pre-senior person at a firm. We were making great money. And I just, I had to do this because I didn't want to be that guy. And I was in my mid-30s and like prime earning years and doing pretty well. But I was like, what happens if I don't take that shot, if you will? And she allowed me to do it as crazy as that was and to quit the profession that I had or others thought I had success in. by the way, with a baby that's six and a half months into the equation and to like not pay myself for you. You're going to do this to build it up. It's like she had the bravery maybe more than kindness to allow me to do this. Whether she believed it in or not, she believed in me.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

3. “Some of the stuff that people look at the front of the bus we use as the pressure test as what not to do it because if something is a great consumer experience but it's never going to make money, we're not going to invest.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

4. “You probably figured this out, listeners too. It's like I'm not ridiculously smart. We love EQ more than AI for that stuff. We dial that in even on the consumer level. So it's not just 2,200 people in a survey. It's just like, what are people really doing? And we study that quite a bit. And don't be fooled. We look at TAM. We look at total addressable market. We look at gross margins and we look at those things. But I don't see greatness in Excel sheet. I don't see it in like, wow, or that. We look at it in terms of so many other outlier things that are not going on here because I don't think the best businesses are going to have to come from a Boston or New York anymore. We invest in a company in Pittsburgh, Pennsylvania that is launched in February their October was bigger than the first six months combined and everything. We're going to see great businesses come out of different areas. There's too many smart people in Cincinnati, Ohio. They've worked for P&G. Maybe they're going to do something new. So it's just like we're seeing this regeneration on that side. But still, the fundamentals come into play. Total addressal market. We want to make money in businesses, but we care about.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

5. “So, you could say, well, that's ops, and that's that. We look at that as marketing. When Harry's went into Target, Harry's can do all this stuff on digital, but there's something to the people in Overland Park, Kansas that go into a target, that's validation. If Target gives us the seal of approval, it's like, that's good. So when Harry's went into Target, it was a sign of marketing. And we did end caps in a different way and a different proposition. And it brought some heat to an aisle. In the first four months, they only had 25% of the shelf space versus the Gillettes. They were getting 50% of the buys in the first four months. And so target's happy. It's like, great. We have some new noise now. But we chalked up to marketing. So marketing in the form, it's not ads. It's not that is being where your customer wants you to be or getting discovered and having the EQ and speed of whatever size company you are to say, wait a minute, we should do more of this stuff.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

6. “Wow, that's a lot better than doing advertising or marketing. And actually, they started getting the talk value like, wow, these are great glasses, $95. And they stand for something different. They felt like more of a Ralph Loren than like a traditional retailer. And then to expand, I'm going to put this under marketing. They did their first pop-up store. Now, pop-up store, you hear that all the time. Did the first pop-up store by the standard hotel in New York City? And it was great. It was up for three or four months. It also exposed the brands to a lot of people that were coming from Germany and from London to stay there. Like, what's this Warbier Parker? So they actually wound up doing, let's keep this open because if we look at his marketing, we're getting a strong RY in marketing and people can actually pay us on the spot. So people have wondered, especially out of the valley, like, why would you do physical retail stores? It's like, because it's marketing. And the average consumer for them and for a bunch of others we have, their average customer is more profitable and stronger that goes in a store and does stuff online than just stuff online. Just online is a stronger margin.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

7. “I'll go macro again. When we see activist hedge fund, people approach us or we see it in the news. We think we're going to take a position because they're spending too much money in marketing, somewhere between 62 and 200 million. They don't know on that side of it. That kills us. The funny thing is the best companies early on realize if you do that proposition right again, you can spend less money in marketing advertising. Warby Parker, I think, taught me that lesson. So when they were early on, they did an ad campaign. It was like a radio. It might have been a Howard Stern. I can't remember what. And they got inundated and flooded with calls to the point that they were like three months behind. So they shut down all marketing and they were saying, sorry, sorry, sorry to their consumers catching up. And so what they did is they put that into customer service. And they realized it's actually a better acquisition and a better experience because people are talking about it by a strong customer service. So what again was a negative thing in the beginning? Like we don't have enough glasses. We're not doing it. Are we going to tick people off? They invest in customer service and realize.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Painful process of pain in the assklue, yellow, purple blue, yellow blue, like there's all these, like this is where the paradox of choice comes into play a bit, but there's like no empathy to it. So we've backed a company called Claire that is a direct consumer paint proposition that you get these big samples sent to your door to see if you like it, and we've limited to 55 colors. And we give you tips to do it. And the magic is, are we going to do it cheaper or whatever, we think we can help you get that 135 days down earlier? So we're about 90 days into launch, so we're getting data now. But Claire was all PR. And for architectural digest to say this is the Warby Parker paint and for cosmopolitan to write up about it, that it's just, that's the power of earned media at launch. And that validation is better than any marketing thing we could do.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

9. “If you go in and you'll never hear this like fat Joe selling Retro 90s inspired Nike shoes. And I'm just proud of that because it's a sign for a company that's dealing with early stage companies like bigger companies like we need a more modern approach so they're coming to us. Same way with bigger investment firms. But otherwise like the Harry's launch stands out quite a bit and most recently Claire, which is a direct-to-consumer paint company from Nicole Gibbons, probably the best PR launch I've ever seen. In July, she launched a new paint company. There's been little innovation in paint. Benjamin Moore, Sherwin Williams. We were approached three years ago from a company that one of those companies bought saying we're trying to do a new direct-to-consumer proposition. We can't do it ourselves. Can you help us? And we were putting together and then they got acquired by one of the companies I just mentioned earlier. So we think there's an opportunity in the paint business. It takes 135 days from the time you decide to paint your living room to actually doing it.”

   2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

10. “Having created individually, I would say there's some things coming up I'll be super proud of, but I can't mention, I will say our most recent one is we did something for Nike where Nike hired us ironically to sell sneakers in physical retail stores. And part of it is like they've had such a huge dedication to DTC as everyone has, but there's still the power of like, if everyone stops doing retail, like a lot of businesses go down and Nike's one of them. We did this campaign and the target was a 19 to 20 year old who does not like media. And so all they do is Instagram, YouTube, maybe Twitter, some other channels. YouTube is a huge, I was anti-Google earlier, credit YouTube is pretty effective. So we created this massive campaign that became like the number one organic ad on Twitter, pulled in three and a half times stronger for product advertising on YouTube and sold 22% more product than it was supposed to.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

11. “Yeah, it's like that's what makes this more premium. But people want to go to where the ears are, the eyes, and get in front of their target consumers. That's harder to do. The great thing from my old marketing and brand life, which is still my current life, is you're going to have to earn that consumer's attention in dollar and to sustain that over time. So you just can't like how we found you, four pieces of marketing in the world or awareness. It's got to be preference and trial. So we're going to see more targeted. In many ways, marketing programs are very targeted, but also there might be like the big home run where you do a Super Bowl commercial of that stuff. We've had three early stage companies approach this about, what do you think about doing the Super Bowl in 2019? And we said over three on that stuff just because they didn't have the back end ready or any of those things, but it's an arms race.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

12. “So, it's versus that, and there's a lot of overrated things like the influencer. Oh, I need a celebrity to make this famous, that can help, but that's steroids or sugar high stuff thinking than anything tangible. But I think one of the things that we've unlearned over the past year is digital might be cheaper, but digital because of all the bots and we're not sure what Google and Facebook are doing, we're not getting true measures of what's going on there. So some of the thinking digital isn't as effective and it's still very effective. That's why TV is gone. Maybe one of the most surprising things is satellite radio performs extremely well, extremely well for early stage companies and in other areas that are still untapped, like podcasts, the phenomenon podcasts is huge. The amount of airtime dedicated to ad dollars is small. So guess what's going to happen? We're going to have a brought to by in the middle of this thing, probably in a year from now because not this one.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

13. “Wow, that's a great question. If it's direct to consumer, it's like the power of activations and events. And it sounds weird because that may not be activation. It could be something at Union Square in New York City that gets a lot of attention to it. It sounds so analog, so I apologize for that, but it's like real-life things that cause it or Twitter. If you see what brands like what Wendy's, the Burger Company is doing on Twitter, is absolutely amazing. What bravery from a company that is a big company out of Columbus, Ohio that has this sassy tone? And it's like winning over people. And it's correlated to sales. The most overrated stuff to almost answer your question is influencer. Stop. Influencers are the thing, but it's become such a predominant thing that people are getting like, oh, you got paid to do that or whatever. So now there's micro.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

14. “Or constellation wines. But funny, on a recent earnings call, like Coca Cola got lauded because of their doing something in CBD and cannabis. And then Pepsi didn't. And there was a couple of headlines. Price goes down because Pepsi doesn't have a plan for that. And it's just like, wow. And these are the same people or whatever. They're feeding like the quant-based stuff in the metric. It's like, no, every decision's emotional, irrational, why certain companies have a higher P ratio than others. But my linear thinking, my nonlinear thinking side, like cannabis and CBD is a thing. And our friends north of the border in Canada are doing it. And there's some stuff. And there's a lot of money going into it. We're seeing the power of the states too. So it almost be like a March Madness bracket. Okay, if we could become the one dispensary in Connecticut, then we can take all New England with capital. There's a lot of private capital. There's also some reticence. The reason you're seeing some higher valuations to your earlier question is some people are like, let me wait another round to see how this goes and I'll just pay up because I don't want to be wrong.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

15. “Cannabis worries me just because of the legal issues and that, but it is a thing. CBD is a thing, it is probably the most prevalent thing we see right now from so many different sides.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

16. “We're looking. There's one that we really like, but there's a lot of noise out there, and I think some of the players now, their number one, won't be, you know, first mover doesn't always make the best mover on that side. Very long on esports. And related to that in a separate is with all 50 states now go nuts on gambling, what that's going to mean. So it's given new life to a draft kings of the world, but how does esports play into that? That's something we're looking in. And then even something less like bras. The brawl market is still massively underserved in terms of Victoria's secret. The millennial, the younger, doesn't resonate with Victoria's secret in that style. And Victoria's Secret is a market leader at 30% market share. But we saw a bunch of business plans 2014 or 15, but we had a lot of entrepreneurs that didn't understand the supply chain. Now we're seeing actually a few more that are getting it and doing better designs to it. And we just invest one recently that's taken on Spanks and they're profitable in the first three weeks, which was amazing.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

17. “Gross cat, like esports, esports is not the future, it's the now. There's an 18,000 person stadium being built in Dallas, Texas dedicated to eSports.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

18. “It's not Torthis is our core. We want paying consumers, and that's advertising base. Although we're seeing journalism, we used to get newspapers for cheap because it was subsidized by advertising. Now these things called paywalls exist. We hate them. Guess why? That's how they're going to make money. I've banged this one to death, but the amount of cell ratings we see on CPG companies for a reason, all these companies have the wrong food and they don't have direct access to the consumer and it's paidful. And when you're at the mercy as the publicly traded companies are, I was just at a Citibank Citigroup disruptors event, and they had five publicly traded companies out there talking about the shareholders king. And then there was the founders of Daily Harvest, Casper, all those. And they were saying the consumer is queen. And it's like, you've better sue the consumer. Now are they under the same, are private companies under the same constraints? No, not publicly traded. Yet we might have a lot of that VC money, but it's like they're building powerful businesses that are taking share away from the big companies. So CPG related things. There's obviously...”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

19. “We're seeing it in media to some degree. It's like the destruction of whatever the cable business is called these days because of Netflix. Netflix is now the operating system for our televisions. And yet television is enjoying a bit of a renaissance. There's still nothing as impactful to all five senses than a great television commercial because you feel it, you hear it, it sounds weird, and that's a power video, but that's become ubiquitous. So the media business is going through a reset on that side of it.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

20. “Brand does something like we are sorry and do something, they'll evangelize for it. It's amazing by the power of the apology. As humans, we make mistakes. But when brands make them, it's just like, oh, you're the big faces corporation. When those upstarts actually humanize like, we're wrong. We give your money back. That's amazing. There's a famous brand case, J&J at Tylenol, and there was a cyanide poisoning back in the early 80s. It was awful like killed people. And they weren't necessarily at fault. They went above and beyond what the government requested to do doing the child poof cap and things that added one cent per bottle that they didn't charge to their customers and they abided by the credo. And after that incident, well, they certainly had a dip in sales in that. They actually skyrocketed to marketplace performance after that. It seems stupid in the short run, but gaining trust takes forever, losing it's very quick.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

21. “At the end of the assessment process, I said, What's the win for you? Is an IPO? Is this? He's like, I want to see Unilever and PNG burn. And I was like, yeah, I want to see that. And that's a different thing versus I want to sell for a 10x multiple. If someone says I want to sell for a 10x multiple, it's like you can do it for a financial thing. It's like, we're shooting for a higher ceiling. And like if you run a great business, the finances will come on that side of it. But it's just that edge. It's not an SAT score. It's not GPA. Certainly going to a very good school is a mark, but the best businesses we fund at point two, Warby Parker, I point to Peloton. I point to Harry's. I point to Casper. I point to Carrov. They are relentlessly insatiably focused on customer service and serving the consumer to the point where a founder will email or take calls like, I'm sorry for that happening. And they tend to have higher NPS scores. Because when something goes bad, people will tell 11 friends and now the internet about it.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Everything they come from liberal arts schools to interviews where they talk more about the team than the product, we don't fund great products. We fund great businesses. That's the goal. And everything can have a one-off product. Like Angry Birds was a great thing. I don't know what we've heard from that company since. And now you have Fortnite. And now Fortnite's company is worth $15 billion post Kleiner Perkins and that side of it. So we look for is this person capable of repeatable success? I played point guard poorly in college and I tried to. It's just like I was a non-scoring point guard, but my job was to make the other four players in the court better. We want to see that from founders, like the leadership of it, a chip on the shoulder. Like someone who's like, this is wrong the way so-and-so's doing it. I'm going to write it. We invest in a company called Function of Beauty. And it's a shampoo company and conditioner company that they literally have 29 trillion different combinations of shampoo and conditioner. It was founded here in Stanford, Connecticut.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

23. “A 12 digit fund, you have a $100 billion fund coming out of nowhere, which is raising all the stakes. But listen, when you have a lot of capital out there, all the investors are complaining about the valuations.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

24. “And if you try in any rational metrics like a PE firm or like a public equity would, it's like things aren't going for two to three times earnings. It's going much more on the potential. And the things that factor in at the very early stage are how much do you bet on the proposition of the founder? What's the path to profitability? We focus on that. I don't think that's focused as much on companies in the first 6 to 12 months as we focus it on. Because at the end of the day, if you don't make money, the music stops and the musical chair, there won't be a chair standing. If 2000 didn't teach everyone that, it's like we're going to learn again soon. But we're also seeing big, like I said before, 18 billion plus investors, assets under management coming to meet us now because we want to see companies earlier. So private equity funds that maybe have invested in stuff that were at a 50 to 100 million EBITDA, they're trying to take that expertise and go to 25 to 50 because of that. So a lot bigger players are coming in earlier. And then you have the softbank phenomenon where all of a sudden you have”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

25. “In general, what everyone's saying across any asset class is everything is expensive. Everyone is saying we're saying our asset class will be the first money into a new company, to like the $18 billion buyout funds. We're hearing that across the board. The way we look at it is what's a likely outcome? Is it going to be an IPO? More and more we're thinking it's probably not. Most of our entrepreneurs do not want to go through the compliance issues that go around, but they just don't want to go through it because you just get crushed. You get celebrated until you get crushed. And VCs, we do a pretty good job about celebrating entrepreneurs. And then Wall Street says, okay, when are you making money on that? So that probably is when you get ninth place trophies, it breeds that to maybe an entrepreneur or something like that. But valuations at our asset class are like high, but they're like reasonable. And what we're seeing is people taking less money early on. It's something reasonable. It might be even a convertible note and then showing some proof of concept and then raising big arounds.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

26. “Coles is now shooting up the charts in plus size because they're given due Amazon is the number one retailer for like women's clothes right now, believe it or not. So there's a lot of different things that are almost past categories that people don't want to talk about, that their online world, they can go in and do and then get those brown boxes shipped to them very discreetly. But it's not all of them make great investment propositions, but part of those do have check the boxes, an efficient journey, or there's a shame to them, the dress bar example, and then some cases price instead of getting an expensive thing for a Piccia, now people can do that for like $20 or $30. So one of the things we do look, what's going off patent soon, but those tend to be big marketing plays. So we're intrigued by those categories, but it is an arms race of marketing capital.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

27. “Hearing aids. Think about hearing aids. There's not like an apple for a hearing aid. There's a dominant area where the average hearing aid costs like $4,500 to $5,000. And we saw a company attacking it. Like, we think we could do this for less and it's using those same plants. And all they're doing, the same manufacturing around the world, because there's only six places around the world that manufacture hearing aids. That's interesting. Plus size closed for women has become in vogue. And I don't mean to take a shot at companies, but when the number one category leader is called dress barn, If you're a woman, it doesn't matter if your size 14 or 16, you're a woman. You want to look good. And yet the solutions we've given are things like dress porn. And then we saw things like D&Co come out. And great cultural thing. Ashley Graham covers Sports Illustrators a size 16. For years, women who are size 14 plus have been shamed in the shopping experience. Well, direct to consumer is a great place to do it because you can do online. You can do that. And also, who's also wise enough to it? Kohl's.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

28. “Right now is actually there's companies like HIMS and Keeps and Roman erectile dysfunction. Like a key propecia patent went off label in December of last year. So a few companies came in, saw that, and basically marketing is their more expense have gone after showing like ED is something that could rabbit your door. So taking something, we were seeing a lot of consumer advertising for this. Some of the most unspeakable things that you don't want to talk about. Well, that's a great thing for the internet to do. And so we're seeing companies on that. We're investing. What could be good, but also what could be the financial outcome of that?”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

29. “That time we found by accident, we interviewed hundreds of women in TNC, New Jersey, Atlanta, and Los Angeles about the women's shopping habits and then even what some of their beliefs were. And a few times we're getting like, I don't want other women to tell me what to do and other things or people that were very close about saying who they might vote for at a very polarizing election. And so people don't speak the truth. So it's like we're trying to dig deeper into the wine to that, the motivations, the values, and like, what does that mean? And we're still in the process of, we don't have it all figured out, and we're correlating that against the actions of our different portfolio companies than things like the cost to acquire customers on a month-to-month basis. But it's really interesting stuff because if you look at this on paper, like the pornography business and the sex toy business are great businesses. But do you want to invest in them? Because what's your exit going to be and what would your LPs think? And that's a very real thing. That said, one of the most explosive categories”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

30. “Along the same things that Meyer Briggs has done on that side of it, and the name of the study escapes me, but it's a personality types and it's defined different personality types. So we started with like demographic and geographical mix and that stuff, and then we try to pour those out. And what we're getting from that is interesting data points. 60% of Americans in the past year have gone to church. 59% have looked at porn and things like that. So what are you going to do with that stuff? Researching things. Like it's interesting when we looked at Facebook and Google, if you look at the top Google Facebook things about the husband, it's like, my husband is great. My husband is loyal. My husband is wonderful. And then on Google, those same people are Googling, my husband is a jerk. My husband is a liar is my husband gay on that. So it's one of those things we just don't do polls and things like that. It's the why. And consumers are wonderful liars. I don't have to remind people that the 2016 presidential election happened. We were doing consumer surveys then for the women shopping and it was amazing.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

31. “And we take 1500 people across the US of various age. It represents what the U.S. population looks like. And we do a series of questions that just get into what their behaviors are. So it's not the Galpo or the Michigan Confidence Poll, but we do that. And we're correlating. And we just started doing this is why people do. And from that, we've realized early adopters are great, but it's also the petulant, slow movers are actually the best consumers to have because once you got them, you got them and they don't go to something else. Whereas early adopters will move on real quick on that stuff. So we look at different cohorts. So as we're looking at different businesses across that, it's like we'll look at like, what cohort is this best for? We have 16 different cohorts of different minds. And again, we look for stuff that's going to sell in the US. Is this something that could be in Middle America?”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

32. “There's so many, and I'll try and bucket him in a little bit. But dimensionalize journey inefficiencies, why does it take me 12 weeks to get furniture? So Ikea went after it one way. Bob's discount another way. Furniture, why can't we do it? Tough now because it's like drop shipping. But one of the things we'll study is what's the cost of goods and all the financial metrics and what makes sense in this category because it might be inefficient, but that's the way it is. From deal flow to assessment, it's funny if you have a good friend.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

33. “20 year old urban kid that devours one way versus a 47 year old suburban woman. There's different things, different motivations. Advertising still works, but you have to get smarter, more calculated, and market to the differences at the same time.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

34. “Reads pretty quickly, very cost effectively on that side. But a big part of this comes we have to do data because guess what? People don't trust advertising. Advertising people, I think, are right there with used car salesmen and politicians on the trust and respect meter. And so maybe that's why I came into finance, which has had its own issues. But that's the truth. People don't trust advertising, but they trust what they find out about brands, what brands that you can't hide from that stuff, as I said earlier. So advertising still works from an awareness standpoint. How that gets manifested now, there's so many different ways. But right now, Instagram, they have to do more, especially as Facebook goes down a little bit. Instagram is a great proposition to sell stuff. If our CPG company, I'd take almost all my money out of Google for the most part, put into Amazon. 63% of searches in the US are now taking place on Amazon for consumer goods. That's amazing. That's the equivalent of marketing the six feet around the store that your product might be. Depending on the consumer is, if we're talking about a”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

35. “That's been an ongoing battle. There's so many presentations started in 1980. There were four major networks. Now there's channels on our cable or TV or YouTube TV streaming that we have the clown channel had no idea on that. So measuring advertising has been through the years a very inefficient science. Nielsenoy polls a certain amount of homes, whatever. The great thing is now no more excuses on that side of it between data in terms of attribution. We now with a bunch of our companies, wherever we can. Another reason why I like DTC is you can control based on what marketing message we put out and what was the activity on our site and when did we sell. Something like a hue chocolate bar might be very quick because that's a relatively not costly purchase. Something like a mattress that might be $1,000 is a little bit more and you're not always looking for a mattress. So you're looking at certain funnels of like what messages of what time produce what results A-B testing is a big deal. You can put things on Facebook relatively and test different messages to different cohorts and get lots of”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

36. “Like a doctor, you might diagnose a flu, and then the next patient is like a broken leg or whatever, but it's the diagnosing process of the brand, not just, oh, this only works on consumers on that. And sometimes that's tough for B2B side, like Xerox, who's like, we just have the best sales force. If you have the best Salesforce, then that's part of a brand. You have the best sales force. So use that to recruit the best people, for instance.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

37. “This podcast for you is helpful. The fact that you've had a history of it and everything and that you've taken this over and created some more modern elements of it too, it's getting the word out. It's brands that kind of convey how they think, how they feel. And funny enough, their generosity. The more generous the brand, the more potent it could be. Look at REI and Patagonia for that matter in terms of when a retailer says we're going to be closed on Black Fridays so you can spend more time out there, guess what happened? Their online sales went up much greater than they had year over year, year before. Was their PR move? Yep. But it was also a cattle call and like a stake in the ground in terms of here's what we stand for. We're for the great outdoors. Don't spend Black Friday in shopping. Go with your family and that side. And that's a great stuff. So we could riff on your bread. I want to hear more about your brand. What do you think this company stands for if you want to stay outside of it? But it's, you know, from a Goldman Sachs where I've done work for or whatever, brand management has, it's like a general practitioner.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

38. “Oh, yeah. And so listen, we do stuff beyond CPG, or KKR brought us in to help GoDaddy, and we did a Super Bowl campaign on the marketing side of our business in 2017. And to this day, it was the number one revenue day they had after any Super Bowl campaign. They did 19. And they did an investor alert afterwards. So it's brand, but it's also marketing. We believe marketing should drive an ROI. And the fun we have with early stage companies, funny enough, is that if you get the brand right early on, you can spend less money in advertising and marketing because you can create a flywheel effect and build advocates and zealots to build remarkability in the things you do and say in the partners. So I'll interlace brand and marketing a little bit. So if I'm going to look at O'Shaughnessy and everything, what is the brand stand for? And part of it is, listen, it doesn't matter what we look like. We just have to post great returns and everything. Well, is it? What happens when you have a down market and everyone's indexes look the same or what have you? Or what really differentiates the world where there's so much private capital and so many options?”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

39. “Silicon Valley Company for investment. And the partner said to her at the end, it's like, well, we tested it and just, you know, my wife would get bored of this after three or four months. And I've worked on Revlon in the advertising side of my career, which is weird for a guy maybe, but it's in the investment world. But we shop back. The consumer doesn't have a seven car garage in Palo Alto. She's a 27-year-old mom of two in Cleveland that subscribes to New Yorker. And that's the thing. It's just like, we don't look at like male, female, millennial, adult 1834. We actually try and get some of the human elements of it. And I'm not anti-New Yorker San Francisco, but just sometimes as investors, we can't unsee what we know.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

40. “Almost be on a case by case basis, but look at what some other firms do, and I'm not saying we're the smartest firm, but it's just like we don't look at things as intently as like CAC or we don't put as much word cost for acquisition and that some of the rational things. We go out and we do surveys. We talk to consumers. So it's like where we differ is we actually look at the consumers LP in our fund. 38% of our entrepreneurs are female founders, which is above the status quo. I'm not just saying that champion ourselves, but guess what? Women make 83% of the consumer purchases in this country. So they're much better consumer than you or I. So why wouldn't I want to know what they're feeling or whatever? So when we see something that's interesting, whether it's a broad category or chocolate and if it's a consumer audience, a female, we go find them and eat, Oklahoma, Syracuse, New York, and Boise. It's a $12 juice going to sell in Boise? I don't think so on that side. So where we differ is like we had one birch box was our first investment, and they were talking to a very significant.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

41. “Consumer better, whether it's like physical or online? Is there a branding opportunity? What is like, oh my God, this is a billion dollar category that has just always been that way. Why is that? And so, again, we don't have computers going X, Y, Z. Oh, it's these four or five categories. The X factor, literally, the exponential factor on top of that is the entrepreneur. Who is the jockey as much of that stuff? Because we could find businesses with that and find someone with a great pedigree with all this great education. But is this entrepreneur have the leadership capability, the drive, the hustle to deal with crap when it goes bad because it always does? And do they have the ability to build a great team? And part of that is, have you done in the past? Although we don't like doing serial entrepreneurs as much. We want someone like uniquely dedicated to solving a problem in X-market and factor all those things together.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

42. “You're a consumer, is like how easy or not as easy for me to purchase a product or do a certain service. So bringing back the Gillette example, wow, that's really expensive. There's got to be a different way. We don't know any better than here comes Dollar Shave Club or Harry's Warby Parker, Lenscrafters, and basically Luxotica had a monopoly over the market. Luxotica out of Italy owns lens crafters, but they also bought Ray Band in Oakley. And if you're wearing Tom Ford glasses, guess who made it? So here comes Warby Parker along. And it's just like high margin category. And they said, you know what? We'll take a little less margin and just offer much better service. Try five pairs on at your house and we'll ship them to them for free. That was something that could be ripped off. It took, I think, Len Scraptures five years to do it, but that's inside like the mindset that the fact that they led with that means there's more innovative thinking going on. So where there's companies not doing innovation, it just those shows up in the NPS scores and the journey inefficiencies. Where's an opportunity to service the?”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

43. “Exactly. And Kine Barr had a 51 NPS. Everyone else in the category, it was like 14 or at negative. So utility companies like ConEd, is it a negative? And Apple is at like a 95. So what we look for is where are there low NPS categories where there's opportunities? Some are best performers of early stage brands over the past seven years have NPS score north of 80. So that's one of the things that we look at depending what we're investing. Where's there a journey in inefficiency? How hard is it to get X or Y or Z?”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

44. “It's amazingly human and as smart as I'm going to say all these things we do in diligence just because our LPs feel good, which I hope they do. It's like we don't have these computers running these quant things left and right and everything. We probably should at some point. But quite frankly, things we look for are NPS deficiencies. So where is there just not allowed love in the category? You look back at KindBar. Kind bar, I'm dating myself a little bit like three years ago had an NPS, which is a net promoter score, which is basically, what is the likelihood that you would recommend or be an advocate for a brand to someone else? Like a service.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

45. “Now there's companies like Not Standard, wherever you can get a custom made suit for $600 or $700 and it fits real well or suit supply. So it's part of the reason brands have gone town is like pricing pressure. People are able to make stuff cheaper and faster along those things. So there's still great brands like Alexis and Mercedes, if you will, but there's a reason why Alexis has a $30,000 car and not just the $90,000. That said, you can't launch with a $30,000, go to $90. It's the other way around. To stay relevant in the consumer's mind is more and more challenging for everybody. And that's an opportunity. It's also why a lot of actors hedge funds are involved with consumer right now.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

46. “Back in the day it was like FedEx was like the fax machine and FedEx and these things. Now if you don't respond to a text message in like five minutes, it's like, where are you? It's crazy. It's not cool to put an out of the office message thing on. So as consumers, that's going on and our relationship with brands, what serves trends are going bonkers. We see stuff go up and down. Fashion especially. We're in an era of fast fashion and companies like Zara and TJ Maxx are killing it. Why? Well, Zara, it's like women in 2010. We did this massive study of how women shop for a brand. In 2010, women were still buying $2,000 dresses. Now they're buying $200 dresses. And a big reason why? No one wants to be caught on Instagram twice wearing the same thing. And it's a crazy thing. And even men's suits, men's clothes. It's like there's something about going if you live in Granch, it's Richards or just getting that $5,000 suit and you feel good for the custom tailor that might have come to a hotel because you saw his ad in the Wall Wall.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

47. “You go through the Selsa Aisle or different elements there, it's just really interesting. So, people's tastes have changed and they've widened out. Even private label has become cool instead of just something that's black and white and whatever. It's like private labels become a brand. If you live in upstate New York, WP the Wegman's brand is something. 365 buy Whole Foods. 365 is a separate brand and something that they use. So it's really interesting. The points of distribution, the internet. On top of that with internet Instagram, it just we get sick and tired of things quicker. And this goes into the consumer side too, which is weird. What we're noticing on the consumer side, we're seeing with iPhones and smartphones, we're seeing people have midlife crises at 28 or 29. And it sounds silly. And I'm old school now, that, but it's like Lily, the amount of talent that we've seen that graduated school, worked for six or seven years. And the reason why it's like we are in an always on culture.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

48. “The rapid ascent of what can be successful and equally the decline. We did something in our last investor letter where we found the data point that from 1923 to 1983, in the top 25 CPG categories, 20 maintained number one share the entire time. From that point on, only like four have market share leadership, and most have lost that since 2003. The one area, golden metal flower has just owned that market. It's amazing. And part of that is modes of distributions have changed the internet. Choice. Whole foods wasn't really a big deal. Costco is, so where we get our food isn't just like the one place in the store corner. There's so many different places. We think on some level and food specifically, just immigration, the amount of like between the Hispanic populations, Asian populations, if you go down to grocery stores now versus 10 years ago, there's a lot more spicy and flavor and almost like, I dare say, like exotic stuff.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

49. “Strategy in terms of who we're targeting. Look and feel. What is the brand identity look like? Color schemes, there's deep meanings behind every color, like yellow is a color for creativity. Red, do you see that on a lot of global brands? Because red is a powerful, especially in China. Red's a very powerful, pretty neutral color in that side. And so we go from every from strategy to picking colors in this stuff. But to do everything in a 360 level from the values of the company to the mission to what the ads look like to what partners you should have or you shouldn't. I can give examples and we can go back and forth on that about different ones, what brands mean, and then pick across colors, but it's more deep rooted than people think. It's certainly deeper than ads.”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source

50. “Drives everything they do in terms of the products they make and that stuff. And that doesn't mean if we're in Granch, Connecticut, you don't go to Darien to buy this stuff, but it's just that's the mentality of in terms of value and being empathetic to what that customer goes through. And that's a very strong point. And then you go through and explore like how can we differentiate ourselves to the consumer audiences we're going after? And certainly there's a graphic explorer. What does the logo look like? What is the name of the company? Or what's the name of the brand? What does it stand for? In today's world, transparency is a big deal. You can't fake it. So if you're Xerox, I'm not pointing Xerox out and you make paper, but you're burning down the Brazilian tree forest, you're going to be toast to a lot of people that find out. We live in a voyeuristic world. You can't hide or can't hide for that long. People want to have more of a belief system in terms of the procs that buy and the brands they support, which is more of a millennial thing, but it's spread much, much deeper than that. It's a long iterative process that involves”

    2019-01-15 · Invest Like the Best · Michael Duda – Investing In Brands - [Invest Like the Best, EP.117] · IDENTIFIED FROM THE TRANSCRIPT · source