Learnings From The Grandfather of eCom

Hey there, and welcome back for another bite to chew on.

This week, we're diving into the world of Pans

Ok, maybe not entirely

What we mean is we're diving into the company Hexclad, which you might associate with the man himself - Gordon Ramsey.

We had the pleasure of speaking to the President of HexClad, Jason Panzer, on our latest podcast episode.

And WOW.

He dropped some golden nuggets in there - and we want to share SOME of them with you today.

… but because we can't cover ALL the golden nuggets in this one newsletter, we'd still recommend you take a little hour out of your weekend schedule and listen to this episode. It's packed!

Anyway, enough chit-chat.

Let's get cooking on that HexClad Pan, so we can get something to Chew On (Sorry, we told you we couldn't do a newsletter without a bad joke)

Don't forget your housekeeping once you start growing.

It's easy to be organized and detail-oriented when things are going slow.

…but it's hard AF to do it when things are moving fast.

However, growth is not an excuse to NOT being organized, streamlined, and detail-oriented in everything that you do.

Jason mentioned a good phrase from the Investment Banking world that is: "Time kills all deals."

Which is basically saying:

- If you're trying to raise money

- If you're trying to get into retail

- If you're trying to work out a partnership with a big influencer

And you can't respond to them with the info they need in a fast manner because you don't have your house in order - then you're screwed.

Not only that, but you need things to be organized in order to take good decisions internally too.

We've talked about this a lot of times - but if you don't have something as simple as your P&L in order, how will you make the right decisions on the wrong data??!

Build to build. Don't build to sell

"Build a business that you want to own forever, and then an exit will take care of itself."

This really resonated with us because, in the eCommerce landscape, you generally see a lot of founders who are building with the sole purpose of exiting one day and making a few bucks off the sale.

And don't get us wrong. We want to exit one day too.

But there's a big difference between the decisions you make when building to hold forever vs building to sell.

Because when you're building to hold forever, you need to:

• Be ruthless in your operations and find savings/efficiencies in everything you do

• Be very creative in your performance marketing to acquire customers at a rate that can keep your business going TODAY. Not a rate that you can first recoup over the next 3 years

The DTC G-Spot

Given Jason's background in M&A (Mergers and acquisitions) - we had to ask him what a good DTC business looks like from a potential buyer's perspective.

He told us that he looks at G-MER as his top metric when evaluating the health of a business.

If you're confused about what G-MER means - it just means gross margin divided by 1 over your MER (marketing efficiency ratio)

Meaning: (Gross margin / (1/MER))

If this metric is above 2 - you're good.

Another metric he looks at is "The Rule of 40" - originally from the SaaS world, but you can apply it to eCom as well

The rule of 40 says that your YoY growth rate in revenue and EBITDA margin should equal 40 or more.

Then you're good.

So if revenue growth is 40% and EBITDA is 0%, you're good.

If the growth rate is 20% and EBITDA is 20%, you're good too

How Jason has achieved massive success in his career and life

We don't want this to get all fluffy, puffy and aspirational.

But Jason left us with a really solid nugget to chew on, so we had to share it with you.

He says: "All the success in my life and my business has come from my relationships."

Okay, network = networth

You all know that by now.

But how do you build a strong network?

Here's Jason's advice:

• Do 10 favours before you ask for 1

• Make time for people and invest in helping others

• Investing time in helping people and building relationships is like paying for an insurance policy.

• Be giving with your time. It'll come right back around. Just give, without the expectation of receiving anything.

Pssst… Need a killer CRO agency?

We see a lot of people on Twitter complaining about the agency they work with.

And tbh - we’ve worked with our fair share of really bad agencies too.

Therefore, we keep a tight list of agencies that either we’ve personally worked with or close friends/partners of ours has worked with.

The field where we’ve burned through the most agencies is CRO.

And it seems like a lot of people on Twitter are also having a hard time finding a good CRO agency.

If you’re in this position, then we’d love to make an intro to our CRO agency.

They’re rather expensive, but they’re also very good.

It’s a boutique agency that has predominately grown through WOM (which speaks to the quality of service they offer)

Reply to this email if you want us to connect you to them.

Thanks you for reading along

As always, thank you for reading along.

We appreciate you, and look forward to serving you again on Wednesday

All the best
Ron & Ash