Advice Line with Miguel McKelvey of WeWork

0:10 Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show. who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one minute message that tells your business and the issues or questions that you'd like help with. All right, let's get to it. Joining me this week is WeWork co-founder Miguel McKelvey. Miguel, welcome back to the show. Thank you.

0:47 Happy to be here. It's great to have you back on. You've been on the show twice, first in twenty seventeen, and then again in twenty twenty-two. Uh, for anyone who hasn't listened to either of those shows, uh I we're really encouraged you go back and listen and we'll put a link to it. in the show notes, um b basically the stories about how Miguel came to entrepreneurship. uh with a background in architecture In two thousand seven, uh, he met a guy named Adam Newman. They'd shared an office space in Brooklyn, and then from there

1:15 So much more detailed story. We Work was born uh by twenty nineteen The valuation reached forty seven billion dollars. Now a lot of people listening know what Adam Newman faced some accusations of mismanagement. Uh he was forced to resign. The company withdrew a long anticipated IPO filing and then Miguel left in twenty twenty.

1:38 We work, by the way, still exists today. There are about three hundred and thirty locations around the world. Um But you know, obviously down from its peak. Miguel, you know, it's been over six years since you moved on from We Work and we've talked since then. Um but now that you've had even more distance How does it feel? And I should point out, you were never accused of mismanagement, you come out great in a lot of these documentaries and in the um dramatization that was that was uh

2:03 Um How do you how does it feel when when you look back? on your experience there. You know, I still look back a lot. It obviously played such a huge role in my life, and I get the opportunity to talk about it, um, not publicly that much, but like last night I spoke to a

2:21 group of entrepreneurs at an accelerator, and of course they're very curious about the experience, and I love to share the stories of both The good times and the hard times and um You know, entrepreneurship is a roller coaster no matter what. scale you're at. You know, there's so many emotional layers to everything that happens and I think my perspective is that every one of those experiences is an opportunity to grow from and learn something about myself, um, about how to treat other people, about how to

2:54 Yeah, do business in the way that I think is the right way to do it. And I still get lessons from it. Cause people, you know, I'll run I literally will run into someone on the street. A former we work and play who will Share something with me about how we work change their life, something I may have known and forgotten or something I you know never even knew about.

3:13 And You know. I get this incredible feeling of like, wow, we did something really powerful and it touched a lot of people. And um That is just endlessly fulfilling. And so uh I I don't shy away from it at all. I I'm happy to go. back into it, um, even though there's a lot of pain there.

3:33 I think going into that pain is productive. Yeah. Um It's interesting'cause right now, right, we're looking at this this moment where and I wonder I'm just curious to get your take on it, where There seems to be, uh at least people are talking about, a a kind of a bubble with AI. businesses, right, companies. I mean there's just the valuations are

3:51 Unbelievable, right? You You you experienced this with a company that you were at and and companies around you where you just saw you know, valuations go through the roof. Um and I wonder whether you think there are any parallels between, you know, some of the crazy valuations you saw even at We Work and and what could possibly happen with some of these emerging AI companies. One of the biggest differences I see is that we work with a very

4:15 Real world problem. It was very tangible, right? And similar to Uber or Lyft, um, you know, Airbnb, some of these companies that of my era that achieved great valuations you could really see like the value in them in in a tangible way. Like does do people need to ride in a car? For sure they do. Do they need a work space? For sure they do. The AI applications are so incredibly powerful and amazing.

4:41 But because they can do so much and it's not yet clear exactly how how to monetize them, it is a bit confusing to understand how will they be evaluated. You know, I kinda go back to like even the earlier days Like the dot com boom where it was like Everyone's super excited about what this technology is gonna do. But no one's exactly sure if the business models are sound, you know?

5:05 And um Uh who knows? I mean, I know I'm diving into every AI tool I can find and loving it. I'm barely paying anything for it. I don't even know if I pay at all. Like I I you know, it might be a part of my Google bill, but I'm I'm getting the benefit of incredible technology and not paying. So That always

5:24 feels a little bit scary of like what's gonna happen. Um and of course when you have big players who are competing. You know, it can be a race to the bottom. And that's scary too, because if Google wants to give their AI tools for free, what happens to chat GPT? You know, these kind of things They get dicey, you know? Yeah, for sure. For sure. Well, a lot of um a lot of interesting things that you're you're part of. And you are, I mean, you've done some mentoring and I know you you you still, you know, go to incubators and talk to founders about

5:56 their experiences. So it I mean sounds like a big part of what you've been doing and what you will continue to do is is just Yeah. Kind of be an advisor and mentor. For me, that's super fulfilling. Um I like engaging with people, I'm super curious.

6:12 And ask a ton of questions, uh, regardless of I know anything, I think I can be helpful in just getting people to you know, think about things from different directions, different perspectives. So I really enjoy it. It's what kinda lights me up. The most. Yeah, all right. Well let's let's let's put it to the test, Miguel, and and bring in our first call. Are you ready? Yep, I'm ready. All right, all right, let's bring our first caller. Hello

6:32 Collar. Um welcome to the Advice Line Your Own with Miguel McKelvey. Tell us your name, uh where you're calling from and just uh briefly about your business. Hi, hi Guy, hi Miguel, thank you so much for having me. I'm a huge fan, so this is such a treat. My name is Jane Barthel. I live in Minneapolis, Minnesota, and I am the founder and owner of Copa Threads. A women's pants brand that features small batch Fun.

7:00 comfy, beautifully constructed pants. Awesome. Well thanks for calling Jay. So what kind of pants are they like? At leisure or leisure or dress or what? Tell me a little bit about what they look like. Um I consider them a colorful and fun trouser.

7:17 They are intended to have the comfort. of athletic pants, but definitely l have more sophistication. um like a pant that you could wear out to dinner, you could wear traveling. Um they're made of primarily a hundred percent cotton canvas. So they actually have some structure, so they have like a nice silhouette.

7:37 They're not like flowy pants. And the main fabric is all printed. So they have Colorful designs, floral, geometric. Birds.

7:48 They're just fun. Cool. And and this is this your uh main business right now. А мійця. I have a full time job in another industry. What tell me what what's your full time job?

8:00 Um my full time job is I am a neonatologist. So I take care of newborns in the newborn intensive care unit. Cool. Well I'm looking at at your website and I wonder whether There's a I mean they're they're obviously more elegant than scrubs, but is there they are a they seem like kind of Easy to wear, is there a connection there?

8:20 Yes, um I found coming home from work when people put on their more comfortable clothing that I it was a conundrum because I wear scrub every day. And they're just the most comfortable pants you can wear. So um

8:35 One day I deconstructed a pair of scrubs. And started making pants. Just for fun, not to wear to work. But out of really fun, colorful, funky fabrics. And that's how this whole thing was kinda born because

8:49 I would wear them around town, I wore them to a concert. And I would have friends, family, even strangers saying, Oh my God, I love your pants. Mm. So that's kind of how it all started. Are you selling the pants in stores or is it mainly through through website? Almost all my website I have um

9:07 Just a few pair at a local boutique. In the suburb of Minneapolis where I live. Yeah. And and where are they being manufactured, the pants? In northeast Minneapolis, at a woman owned factory. Wow. And the material comes the main canvas comes from a manufacturer in Florida. And that's um I get that v via a fabric sourcer I met who's out of Chicago. Got it. And and before we get to your question, one one last question for you.

9:35 Give me a sense of how how you you're doing. I mean overall sales, let's say for the last year or so. So I just started last summer. At the end of last June of twenty five. And um I've done about

9:47 Fifteen thousand dollars. And sales. Great. That's a good start. Yeah. All right. All right. Uh before I bring in Miguel, uh, what is your question? So my question um Is about scale.

9:59 I've built my business around local manufacturing with very high quality standards, leading to high costs and price point. So how do I build demand and scale? When my values limit how fast and how cheaply I can grow. Got it. Okay, Miguel McKelvey, I wanna bring you in um thoughts for Jane or questions that you might have for her. Yeah. First thing, the pants are great.

10:24 I'm sad you don't have them in Men's size for a six foot six foot eight man because I I love the patterns. Um very cool. Um I am curious, just one question. I know you're getting attention for these beautiful patterns, but

10:41 Do people want them in black or gray or you know, more neutral colors? Yes. Yes, I've definitely heard that request. Which is Which Could be another whole conversation, you know, because

10:55 Um, I hear both that I should be following my customers' demands, but then also kind of staying true to my brand, which is meant to be colorful. Exciting pants. And what is your exact bottleneck? Is it that the factory can't produce as many Pances you need to sell, or is it also that you need enough customers who can spend three hundred dollars on a pair of pants. Yeah, it's really more the latter. It's finding the customer base.

11:22 um of people who value high quality local manufacturing. And really I think of the pants as like wearable art. I mean I when people say to me, When are you gonna make black pants? I say, Well, go to Banana Republic. I'm not making black pants. Like the whole idea is that these are like an art form you're wearing.

11:41 Got it. And one more question on that. Where have you gotten the customers who have spent fifteen thousand dollars so far. Um, I mean, of course a huge part of my customer base is my friends and family and people who Right. graciously want to support me. Um but then also the boutique uh where I sell things locally

12:02 is all local designers, it's all high end, it's all kind of in that price range. So Right now. Uh the price point is high. About two two hundred ninety five dollars for a pair of of pants. And you know this, and it part is because part of is'cause it's made in a small factory in in Minneapolis and you're sourcing the

12:23 mm the material the fabric from the US. Um so That makes sense. But before I address it, what do you want this to be? Do you want this to be a bigger brand? Do you are do you want it to be a bigger side hustle? What what is your ambition here? I

12:40 I would love for it to be a successful side hustle. That could kind of slowly grow. And eventually become potentially something bigger when I'm kind of more toward the end of my career in medicine. Right now, I'm fifty four. I'll probably work in medicine for another I don't know

13:00 Six, eight, ten years. And it would be nice for this to be something kinda on the side that would evolve. I I've actually thought Um, I I'm working with my manufacturer on a new design for spring. And I was thinking

13:14 maybe it could evolve into a business that has like drops. Quarterly. Mm-hmm. So I I maintain the small batch. High quality standards. Yeah, I I I'm cu Miguel, I'm curious to get your take on on what I'm about to say because

13:31 I mean there I there are two obvious paths, right? There's there's manufacture this more cheaply, right, which is m maybe outsource it, go overseas. Or the other the other uh option is keep keep it where your price point is at, but you gotta do a better job at explaining why. Like so so Miguel is an owner, uh part owner of a brand called American Giant. We featured on the show. It's a great brand Made in the US fabrics are sourced in the US, a cotton is even picked in the US.

14:00 And you s from the moment you go to the website you understand that it's a little bit it's a little bit more expensive than what you might pay for, you know, a Haynes T shirt. But you understand why. Go to your website. Nothing that you've told us is here. You don't know it's w it's made in a factory in Minneapolis by a group of women, it's handmade, these are hand source, it's all I mean because now I need to know why

14:25 I'm paying two ninety five and then it but that story starts to make sense. Miguel, do you do you think that moves the needle that that you know, when people know those things, it moves the needle. Hundred percent. It moves the needle, but I think you have to tell that story over and over and over. It's not just a one time thing. Like you need to be on Instagram Telling your personal story. And why you care about

14:48 the product and the way it's made and then also have the story of the people making it. And the story of where the fabric comes from. All those things are really meaningful. And giving your why will be what really translates to people. So I I would say doing that would be really powerful. And then the other thing is um The products look great. The UGC, like the reviews I'm looking at like the women wearing the pants when they've taken their own photo. Yeah those are amazing. If you could get some of those ambassadors who would do the same thing, who would go on to social media and share their story of why they love the pants. um to their networks, that would be great. Because it really translates, you know, it it the fact that these

15:29 Right. Um funky patterns um are so beautiful in a photo. And there's one where actually a woman is standing with three other women and her pants compared to theirs, it's like you're like, those are some great pants. She's at like a music festival. Yeah. I mean the that sells the product itself, but you gotta get that out there as much as you can. And and and and then put the why behind it. Right. Another thing.

15:53 I would suggest would be going to a local restaurant. and gifting the pants to some of the servers and asking them to wear them or a coffee shop where people can see them behind the counter because they they really jump off the page. I'm sure The more they're in public. People will say, Hey, where are those pants from? Yeah. Just brainstorm Everywhere someone could see these pants.

16:18 Y they don't need to work that hard. They th just showing up uh does a lot for these pants. Um, but you need to get'em out there. I've said like a big marker of success for me would be if I saw a stranger, someone I don't know wearing my pants at our local grocery store. That's like that's one of my goals. Yeah. Yeah. No, I mean it's awesome. I think you need to really double down on On the story here. Yeah. And and not just on the website, but a anywhere you can.

16:48 So people understand what they're buying. I mean they're buying something that's That's W artisanal, right? That's a real craft made product that isn't just uh made in a giant factory and put on a huge container ship. Yeah. So I that that to me is is critical. I think I th and and as Miguel said, you wanna

17:05 use any channel you can to to tell that story and to and and for people to understand where it's coming from. Yeah and how it's made. Right, for sure. Yeah, that makes a lot of sense. The brand is called Copa Threads. Uh, Jane Artell, thank you so much for calling in. Good luck. Thank you. Alright, we're gonna take a very short break back in just a few minutes. I'm Guy Raj and you're listening to the Advice Line.

17:27 on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Roz, and my guest today is Miguel McKelvey, co-founder of WeWork, and we are taking your calls. And let's bring in our next collar. Hi Guy Miguel, my name's Melissa Jensky. I'm in Santa Fe, New Mexico. I'm the co-founder of Good Grief. We're an online gifting company that specializes in care packages for life's twists and turns. So anything from loss of a loved one, loss of a pet, infertility, miscarriage, cancer and illness, mental health and wellness, breakup, job loss, and more.

18:17 Wow, okay, well welcome the show. So So good grief Um these are care packages that you send to somebody who's going through a rough time.

18:26 Yeah, so we've intentionally chosen products that are practical and support healing and self care. So we have a ton of books and journals focused on specific type of losses, consumables like tease, um Cookies, chocolate for all the emotional eating, uh cozy things like socks and candles, sleep masks, hot cold packs, and then some beauty and wellness, so bath soaks, aromatherapy type products. Lots of eye gels for all the puffy crying eyes. And then um we also have some services that you can add to your care package to book things like one on one grief coaching and things like that. That's cool. How did this idea come about?

19:05 Yeah, so we are a family run business. My sister is my co-founder, Kristen. She's in the UK. And it was really born out of personal experience. I always like to joke that I got the the short straws in the family. Um when I was 29, I was diagnosed with an autoimmune condition called rheumatoid arthritis. And then in my thirties, I experienced um infertility and a miscarriage. And around that same time we had a family member whose spouse died by suicide. And it really just hit me that I think as a society we're not super great, you know, we are super great at celebrating all the good stuff. the weddings, anniversaries, the new babies. But when it comes to the tough stuff, I think we can really fall short. We don't know what to say. We don't know what to say. Exactly. We don't know what to say. We don't know what to do. Sometimes we say the wrong thing. Sometimes we don't say anything at all. Um, so I really wanted to fix that. And during the pandemic, um, we were home working like everyone else, and my sister and I just started talking more.

20:00 And I think we were both pretty frustrated with our jobs. And I was like, hey, I have this business idea. What do you think? And she was like, yeah, let's do it. I don't I think I was crazy because I was working full time. I had a two and a half year old at home. I don't even know how I pulled it off, but we we launched in six months. Um so we launched in April of 2021. And you know, I think You know, we I know that A box of stuff isn't gonna fix anything. It's not gonna take away grieving, but we really just hope it provides an icebreaker or a bridge for people to connect and really show up with genuine care and empathy. And Melissa, these are you're selling on entirely through your website?

20:37 Yes, all direct to consumer online. And tell me a little bit about how the business uh is doing. Yeah, so for the past three years we've been r um right around two hundred thousand dollars in revenue and just can't seem to break past that. Um this past year was Pretty challenging for us. Um, and so we were down like seven percent from the year before. And and how are you marketing mainly?

21:01 Yeah, so previously we were doing all Google ads. That's where we saw the best row ads. I think one of the challenges I think with us is the intent to buy isn't always there when people discover us, right? So when we first launched, we tried some social Um, but we ended up we had such a limited budget that we ended up just Going to Google Ads, we were getting great returns, and for whatever reason it completely collapsed last summer. And so now we're really in a place where we're having to diversify our marketing efforts and Um, I think it's also challenging because we have so many scenarios and we touch upon so many different types of grief and loss. It's

21:38 Great, because we l have lots of opportunities, but it's also like sometimes overwhelming. So it's like where do you go with it and what do you do? So sounds like that's kind of your challenge, or the question that you brought, right? Yeah, like what um growth channels should we prioritize and especially I think AI has really changed how um paid media works and how customers are discovering brands. Um so yeah, we're trying to just find, yeah, where do we put our effort, you know, limited time and resources. And

22:06 What will move the needle? Nice. All right. Uh Miguel Kelvey. I want you to jump in here, meet Melissa, and thoughts about uh The business, the dilemma, questions.

22:18 Yeah. I mean the first thing that came up for me when I w was looking at your website was I I would be so confused in one of these moments of what to do. So even before I was gonna buy a gift, I was thinking Could I have a guide of just how to think about it or how to feel about it? And

22:40 Especially now with AI, I imagine I would go ask, you know Uh Gemini or or someone like, Hey, this just happened in my life. What do I do? And so it seems like tuning your the content side, both for SEO and also for AI, is essential. And I don't know how much you have this, but Um

23:00 having a web page for literally every single web search you can imagine that someone might make in one of these scenarios would be really smart because You know, if someone goes in and they say, X just happened, what do I do? You wanna come up first in that uh in that search. And And then if you optimize that page for AI crawling, you know, it's possible that when the person goes to AI to ask that question, they're gonna find you as well. I would look at the same thing.

23:29 Across everything. Like Can you make TikTok? videos that answer these questions? Can you make YouTube videos that answer these questions? Like everywhere you could have content to answer this question.

23:40 be there um to help. Uh people deal with it. Yeah, that makes sense. Melissa, I wonder um aside from from marketing through influencers or or you know doing social media ads, Have you

23:54 with partners at all, uh, you know, not not sort of paid media, but with like uh hospices organizations or or you know oncology centers or I mean even funeral homes or or um I don't know. Have you tried any of that? Yeah, so we've definitely have done like lots of cold outreach for like funeral homes and things like that. Um we did work with um Erica Sinner to launch um

24:22 A Pets Pets are she wrote a book called Pets Are Family, so we worked with her to launch a custom parent care package this past year. Um, we also have we we launched a um employee gifting program as well. We get a lot of repeat customers. We were seeing lots of orders come in from places like Chewy, Nike, Microsoft Gates Foundation. And but it's just so hard to get a foot in the door. I I basically begged the Gates Foundation customer to put me in touch with HR and she was like, No, I can't do that. And so there's just so much potential, but yeah, it's just hard to get a foot in, I think. And I think maybe part of it's like starting maybe starting more locally. Yeah, I mean for sure. I would start locally in Santa Fe. You know, I mean you've got uh obviously smaller probably smaller businesses there, but but it would seem to me that and it sounds like you're you're trying

25:09 that channel, that second channel, right, that B to B gifting channel working with HR teams could really uh be game changer. Yeah. Definitely. Yeah. Right on. I mean unmanaged grief in the workplace costs employers, you know, seventy five billion dollars a year and up. So like it's a huge, huge opportunity. I was wondering, um, have you tried any direct mail?

25:31 Uh have you ever you know, have you made any printed cards that you sent out to people or anything like that? We haven't, no. Besides just like some flyers like in co local coffee shops, but no direct to direct mailers, no. Yeah. I I mean to me it seems like this is like a back of mind thing that you know it's it's almost like that. thing you want to have on the refrigerator for when that time comes. That's a the way I would imagine it is that If I just saw the brand out of context, I would probably forget about it, but If

25:59 I had it in the back of my mind when that time came up, I would go, Oh, that's where I go. But that recall is difficult. So I don't know. I kind of imagine If you've got this thing and you sort of remembered you put it on the refrigerator, you put it in a drawer somewhere, and then that time comes and you go, Oh Let me go find that card that I saw a couple of months ago. You know, that's the kind of thing you need is for the person to have, you know, recall of of this option when they are searching for something that again is a very difficult problem.

26:27 Problem to solve. So Yeah, that could be really interesting. The more times you know someone touches a brand, the more likely they are to recall it. And you might need to touch them three, four, or five times and that card could potentially win. I w I would say canvas your neighborhood with some cards through the mail slot and just See, you know, does that result in anything? May maybe it would.

26:48 Yeah, I love that idea. I also, you know, Miguel, you mentioned the socials and and the messaging and You know, increasingly th the the AI scrapers are gonna be what matters, right? That's that's the new SEO, right? And and so when people ask Hey, w w where do I go for X, Y, and Z? You know, these AI assistants are gonna be uh making decisions based on what what they're seeing out there in the language they're seeing. I mean are you

27:15 When you do put a little bit of money into socials. Are you direct in the way you are um connecting trying to connect with people like what to send someone after a miscarriage. Like when you don't know what to say or something. Like do you do you have language that's really clear like that? Um, not really. I mean, most of our Google paid ads were Google shopping and stuff like that. We tried some we had to bring on an ad agency last summer to try to fix things and get us back on track and it didn't work. But we did try Meta and did some more kind of

27:48 out there messaging I just didn't really see much happen, um We are focusing a lot on SEO and blog writing to try to get those you know, AI crawlers we have seen A handful of orders come from AI.

28:03 So But I think this idea of just a clear message that Miguel was alluding to, like People want to help, right? When something happens to somebody, our instinct is to help, and often we don't know how to help. And so maybe it's like Um ha l literally a message is like

28:18 How do you help somebody who just got a horrible diagnosis? Here's how you comfort somebody who had a miscarriage and they they click, you know, or Um Or here's how you show support to somebody uh you know, who's struggling with infertility.

28:32 Yeah. Telegraph is Your problem is you don't know how to help and we're your solution. Yeah.

28:40 You can solve the problem. Yeah, I would just as a point on that, um, I was talk speaking to someone who worked on SEO for a payments company, I won't say which one. They said they have literally thousands of SEO pages for Every single thing that someone might need a payment for.

28:59 And that's okay. And that's I was overwhelmed by that, but I was also like, It's so smart. You wanna be the answer in that moment when someone uh needs you. And a lot of that is just you've got to be at kind of the top of the list. Um, yeah, all of that. And also are you doing any email follow up? Like do you send out a a weekly or a monthly newsletter to the people who have purchased? Yes, we do have an email that goes out a couple twice a month. Got it. So you are staying in front of mind with the people who have

29:31 Repeat business like Are people typically coming back um after they By the first time. Yeah, return customer rates around twenty percent and I do, you know, once in a while have to

29:41 field some customer service calls. I just had one the other day and I asked her how she found out about us about us and it was she had been gifted something. So I think that happens a lot. Someone's gifted, been gifted a care package and then they come back to buy it for someone else. Got it. Yeah, I mean again, it seems like because this is so situational, you need people to think of you in that exact right moment. So the more often you touch them, and this is I think a big debate amongst email, and I'm not an email expert. But Um Email

30:10 When it's there, you find it. When it's Push down 200 emails in your inbox, the chance that you find it is low. So maybe experimenting with, you know, one of these AI products that can help you with some. email automation to just test some different things. Um would be helpful because you know, you wanna stay front of mind uh for your customers, so whenever that moment comes, you know, they think of you first. Yeah, definitely. Yeah, absolutely. Uh the brand is called Good Grief, Melissa Jensky. Thanks for calling in. Good luck. Thank you so much.

30:40 Alright, we're gonna take another quick break here. I'm Guy Raz and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and today I'm taking calls with a We Work co-founder, Miguel McKelvey. Miguel, ready for next caller? Let's do it. All right, cool. Welcome to the advice line, you're on with Miguel McKelvey. Please tell us your name, where you're calling from, and just a little bit about your business. I'm Lee Wright. I'm near uh Boston and Marlboro, and I'm the founder of the History List Store. We provide things for people who are passionate about history. Uh nearly everything we offer is designed by us. Nearly everything we offer is made in America.

31:36 Awesome, welcome to the show, Lee. So the history list is a It's a w Help me understand a little bit more. I'm I'm looking at the website, but help me understand what you sell. So I started out as a as a content site, uh the history list uh for um information about events and so on and so forth. And this is really an outgrowth of that. I was looking for a way to cover some of those costs and so designed a history nerd. T shirt. And uh that was back in twenty sixteen. We now have hundreds of SKUs. covering a wide range of historical topics, a wide range of product types and so forth.

32:08 Like T shirts, hats. Pins. Exactly. Exactly. And uh like our uh you know, we do some fun things, uh the the Thomas Jefferson breakup letter uh T shirt for Valentine's Day. Uh we do also offer. uh very selected antiques and rare finds things that could be uh a ship's passport uh signed by John Tyler. Uh

32:30 A World War One or World War Two. Oh wow. Yeah, yeah. That sort of thing. So all right, so it's a combination of like products like T shirts and and prints and caps, even jewelry, but then you also have some antiques that you sell and and I guess the thing that jumps out at me is the T shirt that says huzzah. Which is cool. Which is the right which is what they would chant during the

32:50 Revolutionary war, like that was sort of a right. Um, then you see in the dot and the exclamation mark it says seventeen seventy six. Right, all right. And tell me how the business is doing. Uh so we did about seven hundred fifty thousand dollars last year. And it's really been driven by my passion for helping connect people to history.

33:11 And we have you know, customers that come in, they're they're gonna buy something for uh a relative, perhaps. And we have other customers who Place fifty different orders, sixty, seventy five, and so forth. Um And we get great feedback, great reviews. People really love the things.

33:28 Um okay. And Uh and m mainly you sell through the website or entirely through the website? Um the vast majority through the website. We sell through some selected uh historic sites. We have some partners that go, for example, to um reenactments and so forth, right? They'll set up a a tent and offer our things. Awesome. Okay, uh before we dive in further, what's your question for us?

33:50 So this is the two hundred and fiftiet anniversary of the founding of the country. Yes, indeed. How do we Increase uh our customer base and uh drive down the cost of customer acquisition. All right, Miguel McKelvey wanna bring you in uh cool really cool stuff on the site and here we are. You're two fifty. of America's founding. Um

34:09 Thoughts, uh ideas. Answers. Well first. You said you wanted to bring down the cost of customer acquisition. What is it costing you now? Uh blended CAC for around twenty. Twenty bucks.

34:21 Twenty bucks. Is that not very low? That sounds I would love to acquire customers for twenty bucks. That sounds great. It's it's not bad. Um a lot of the things we do are uh through you know Facebook and so forth. Um we have tried A number of kind of the obvious things in terms of either reaching out partnerships to publishers.

34:45 Uh trying to do more with historic Site. Uh but the thing that we just keep coming back to is is social. Right. So what's your average order value? Eighty dollars. Okay, so you're spending twenty dollars to get an eighty dollar customer and then How what's your margin, you know, if someone spends eighty dollars

35:05 on that what's your gross margin? Yeah, so overall the margin's around fifty percent. Um uh you know not not bad. Uh we one of the challenges of course is making things in the United States. Uh but Our Customer base, I think, values that. I certainly value that.

35:21 And it reinforces our Or made by America message. Yeah. I mean, I I'm thinking this all sounds pretty good. You got seven hundred and fifty thousand dollars on a fifty percent margin. You're only spending twenty dollars per customer, like Oh, that sounds sounds great. If I was

35:39 Going just on that, I would be saying s just spend more money on more advertising at twenty dollars per customer. It it it sounds like you have great stories to tell, and you just may need to go directly to the public with these stories. You know, you I don't know if you have a TikTok, for example, but people love to learn through TikTok. You might need to go post a TikTok a day with a cool historical narrative and and people will will start gravitat directly to you. So so TikTok is interesting. We've talked a lot about it. We have about 60,000 followers on Facebook, um, about what, 14,000 or whatever on Insta. Uh we've debated whether or not our our our target market is on TikTok, but I I think it's worth giving it a try. Generally our target market skews older. Um

36:27 And it's only a matter of time, you know? We always say like the older people are on these other platforms, but w you know Age is always elevating and you know, the platforms people are on are always chang changing and Again. I think What you find

36:42 In the difference between TikTok and Instagram. Is Yeah, narrative. Like rough storytelling, real people in front of a camera, that's really on TikTok these days. Uh and it's it's less so on on some of these other platforms. So it's worth experimentation at least.

36:59 That's a great idea. I I let me throw something out there. I think that's probably true, and that's still a very valuable audience. I mean You you definitely w uh don't wanna um Ignose those folks. I I wonder a couple of things here. First of all, Facebook is where I would I would really

37:18 focus because that's where there's an older crowd. But forget about social media for psych. I think that there are two o opportunities here. One is Um, if you've got some cash and you don't need a whole lot. I would Seed.

37:32 little advertisements on history podcasts. And or Try and collaborate. See if you can contact some of these history podcasts. They're huge, by the way. And see if you can make bespoke things for them that would drive their audience to your site, like

37:48 Some of them probably don't have merch. Maybe you can be a uh merch you know, person for them. Absolutely. So th that's a that's a a a great idea. We tried that early on, um and uh it didn't It didn't pay off. I um

38:04 some time ago talked directly to the fellow puts together just a great podcast series is one I think you guys are probably familiar with. And and that was the pitch, right? Like hey you don't have merch. Uh I can I can help you there. And and the answer was uh we'll we're gonna do our own merch. Well, but maybe you can buy advertising, right? I mean that's what I'm saying. Well, it exactly. And that was my next question. And and uh they are a podcast that's carried by one of the large uh podcast networks. And You know they're handling the advertising and it's it's going to advertisers with with large budgets, more brand budgets than look for smaller shows. I mean I I'm yes, you can ask the big one, but go go to a smaller show that that doesn't isn't doing that, that has an audience of ten thousand, not a hundred thousand.

38:48 What I'm saying is there's always a way. especially if you're trying to reach a very specific audience. The other thing I I would consider doing is Make your own. I mean if you have your own even if you are a reaching just a fraction of your followers on TikTok and your customers

39:04 Uh Maybe you've got a newsletter, you know, you've got now you've got a podcast. That you can uh once a week where maybe you're highlighting some cool thing in history.

39:14 And you're also talking about how it inspired something that you guys make or sell. Mm-hmm. That's a that's a good idea. Our newsletter is very successful. Uh we have a more than fifty percent open rate. We mail to folks uh every every Saturday with the new merchandise every Thursday night with our rare finds. One other thing would be, you know

39:34 f finding those really niche interesting facts. I don't know how much you're doing this on social media already, but You know sharing things that are surprising, that are oh wow, I didn't know that, you know, in small bits. People A lot of people this is a a niche for, right? You you know your niche, right? Then there's a whole other group of people who

39:56 don't put themselves in that niche, but could be attracted to it with something, you know, a little less obscure or maybe something obscure that's really accessible and fun. So um I would sort of continue to expand the edges of of your appeal, um, and just experiment, you know, try whether it's podcast, whether it's w one of these other platforms, just try to get more experiments out there to see what what catches on. We're very fortunate. We have one of the one of the most successful uh history. uh folks on social, uh history dame doing our social and and she just does a fabulous job doing Exactly what you're talking about. Putting out some of these things, whether or not that's

40:36 uh something obscure or something that is just very timely, like the two hundred fiftieth. Awesome. Well, it sounds like you've got some momentum there and Listen, I mean it it sounds you got some some some ideas in place and I think you should try podcast, Lee. You should try to Well thanks. Thanks. And yeah, and and Guy, I think you had a master's degree in history, isn't that right? I do. Well I I hope we s we see you someday. And I really wanted to thank you both for for the the great podcast. I think this is one of the really indisp uh Spencer resources for people. That's that's our that's our goal here. Lee Wright, the brand is called the History List. Uh good luck. Thanks so much for calling in.

41:14 All right. Uh Miguel, what w one of the questions I ask every founder who comes back on the show is when you if you could go back to when you were starting out, you know, building your business, uh your f you know the d certainly we work in in in others. And you could go back and give yourself advice about something you know now. that you've learned that would have been helpful for you to know back then. What what could you have What could have been helpful?

41:35 Back then for you to know. I think what would be helpful for me to know is Uh to be more critical about the things that I was bad at to think more critically about things that I avoided, you know, because I think

41:53 I knew for example that I really didn't care about money. It wasn't a motivator for me. So as soon as I had an opportunity to hire a CFO and never think about money again. You know, I I did it, but that Sort of

42:07 Um out of sight, out of mind. It's not a great model for entrepreneurship. You know, I think You have to be responsible for everything when you're a founder and So that's what I would say is like really go back and like

42:19 Go through all the things and say, Okay, you love this You don't like this. But if you let that go What's gonna happen. And I would encourage people, uh, you know, myself and others to do that. To kinda go into the things that you don't like as much as you Do the things that you love.

42:35 I love that. That's Miguel McKelvey, co founder of We Work. Miguel Thanks so much for joining the show. Thank you. Uh and by the way, if you haven't heard Miguel's original How I Built This Episode, uh you've gotta go back and check it out, uh, both of them. We will put uh link to them in the podcast description, and here's one of my favorite moments.

42:53 F So they showed it to us. I'm like wow like for me as coming from a design background I'm like this is sick this is as good as it gets And um and they're basically, okay, here's the building, what would you do with it? So basically I go home.

43:07 And I start thinking of A concept. Of a name. I by the domain, I build a website.

43:15 I designed some floor plans really simple. Do like a quick like business model. I stayed up all night. You did this in one night? Yeah, basically because We had been challenged with like what are you gonna do? And we have no credibility, right? So my thought was If I do all this stuff and come back tomorrow, it'll seem like we were planning it for weeks in advance, right?

43:37 Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at guyroz.com or on Substack. And of course, if you are working on a business and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them. You can send us a voice memo at hibt at id.wondery.com. Or call us at 1-800-433-250. One two nine eight. leave a message there and make sure to tell us how to reach you and we'll put all of this information in the podcast description as well.

44:17 This episode was produced by Sam Paulsen with music composed by Ramteen Arabui. It was edited by John Isabella and our audio engineer was Quasey Lee. Our production staff also includes Alex Chung, Elaine Coates, Nor Gill, Niva Grant, Casey Herman, Chris Massini, Catherine Seifer, Carrie Thomson, and Ramel Wood. I'm Guy Roz, and you've been listening to the advice line. on how I built this lab.

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