Brennan Agranoff, 18, is a senior at Sherwood High School in Sherwood, Oregon finishing up senior year and graduating in June 2018. Brennan has been quoted and published in several national and international media outlets including CNN, The New York Times, and US News for his entrepreneurial advocacy. Brennan was named the 2017 Baylor Teen Entrepreneur of the year for his work on his first company HoopSwagg. Agranoff has been founding companies since the age of seven but officially launched his first business, HoopSwagg, in 2013. He has since grown the business into seven figure sales in only four years. Agranoff is pursuing different career opportunities in the future.
Like the way I kind of do all of this is like through the rest of the year. So if we look at like January through October, I'm not concerned with making money, I'm concerned to generate as many customers at cost as I can without basically losing money. Um, just because the fact I know our products are good and I know the service and the experience is good overall and they will come back and purchase. Um, and that second purchase is where we make all our money. We are totally fine break. Even with that said during Christmas, we run into this issue every year passively because we don't have unlimited capacity, right? Because we go from like maybe 10, 20% capacity in year round, which is like 20 part-time people to, how do we get to a hundred, 200 part-time people and scaling that is not easy, like in-person manufacturing, labor and the training and all of that. And then to run that whole process, it's not like some server Regan it's like up the power of it. Like there's a lot more moving pieces to it. [inaudible]
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Everybody. We are back in action with another episode of the rich dad, poor dad podcast, or dive into what's working, what isn't working as a bad-ass financial tips. So today we have a special guests. I kind of first came across. And when I got a random, you know, package in the mail, which had some socks in there with my face on them and shouts out Dennis, you, you know, it was a super cool little gesture and a gift and a cool surprise, but to get your face on socks, it's very flattering, but this is the guy behind the scenes. You know, he's launched two different companies, the CEO of three, he's killing it in the manufacturing scene and has some really bad-ass things in the kind of scenario, you know, in the pipeline coming to life, especially with black Friday, cyber Monday coming up, I know he mentioned shoot, 80% of sales are coming from this time of year.
So it's going to be a super juicy, you know, episode with some super valuable information on, you know, manufacturing, inventory products, et cetera. So the hype trains up Brennan, I Bernoff, man. How's it going? Thanks for jumping on. Yeah, thanks for having me on. I'm excited the hell. Yeah. So give everybody a little backstory kind of what you're getting into, you know, of course the socks are a big role, but you mentioned you have a ton of other kind of, you know, products kind of more of the gifts at scale side of things. Some really cool things in the pipeline. So why don't you kind of fill everybody in for what you're getting into and some of the projects you're taking part in, for sure. Yeah. So I started like seven years ago doing socks just because I was obsessed with them. Um, and that kind of slowly evolved from like literally, maybe making designs on my computer.
Um, to three or four years later, we started getting into, we saw some of these companies pop up that were like putting dogs on socks. And I was like, I can already manufacture, like, why not hop into this? This seems like a massive industry. Um, and so hopped into that kind of figuring out, like, how do you actually allow someone to upload a picture on your sites and then turn that into a digital print that comes out the next day and ships out and keep that turnaround time really fast. Um, and so over the past two or three years, once we started to get better and better at that, we started looking at, okay, not only are these incredible gifts because they're personalized. And like when you send them to people, like you mentioned like a pair of socks in the mail with your face, or even better, your dog on it, like you're going to take a step back and be like, wow, like where did this come from?
And so being able to do that, I didn't see a lot of people, um, at least doing it very well, um, in the U S because you had a couple of large print on demand companies, but the issues you run into are like quality and timing issues. And then there's some other things there. Um, and you also just can't like, differentiate that much your product from anybody else's, anyone else can go order the same exact thing. And so we were already doing the manufacturing and I kind of made a call at that point. It was like, okay, I want to continue building out this manufacturing front so that I basically have control over my entire inventory essentially, and product line. And so we sort of really jumped into that two or three years ago and like, okay, we're going to nail this manufacturing stuff. Um, and then that kind of coupled along with the backend software side, that we've developed to be able to do the customization stuff in real time, um, whether that's names or numbers for teams, or like images of people and cropping them and whatnot, there's a whole bunch that kind of goes on in the background.
Um, but being able to do that for not only socks, but now we're doing like admits ties, masks, canvas blankets, like the whole show of products, right? Like if they're all kind of printed the similar similar way. Um, and so in a sense, we're like almost our own print on demand provider, um, for our brands. We're, we're the way I think about it is we're like a manufacturing company kind of topped with brands that appear as they're the companies, but really we're the manufacturing company. What brands are URLs or y'alls basically though. Yeah. So we've got, um, the main one that I started seven years ago, the, the main one is called hoop swag. Um, and then we launched a pet one that's called pet party, and then we have another one that's called lit myths that are up mitts. Some of that name
That's sick. Hell yeah. So, I mean, what was probably one of the bigger obstacles you mentioned kind of more on the software side, on the back end and the more probably processes to what was the more difficult parts to kind of scale from socks to other different kinds of products with that print on demand style to them?
One of the biggest issues we ran into is like, I am by no means like technical, but I had like finagled this whole thing to work literally through Google sheets and like a couple of eight beer things. Like, I mean, that's what you do, right? Like I didn't have the money at the time to go hire a full-time engineer to build this whole thing. I don't even know what to build. Um, and so a large, large portion of this required me, myself becoming more technically oriented and understanding how that side works. Um, the fact that there is a backend and that does exist, um, and, and working really hard over the past really year, but more, so two, three years to look at how can we go from my Google sheets to something that just does it in the background and works flawlessly. Um, and then also has the software side, like, as we've been designing all that software, we have to keep in mind our manufacturing process, because what's different about what we're doing is like, everything is a one-off, it's not like we, it's not like screen printing where you have to print like 24 shirts, like everything is a singular one-off.
And so how does what you're developing and printing out of a printer translate all the way through the entire manufacturing and fulfillment process, because traditional fulfillment, the way it's done in a warehouse is not, one-off like you go pick things from a bin and you pull them back and you ship them out. And it's like, there's no way to do that because your product isn't being made until six hours previous. And so looking at how we sort of architect our entire system internally, um, keeping that in mind so that we're able to get things out the door as efficiently as possible, has added a whole new layer of complexity to it. That little Jenny's getting Michael over here, his socks, that's not going to work. Totally, man. That's funny. So, you know, on this podcast, we'd love to kind of dive into the rich hat, AKA, what is working. So, I mean, we've had guys talk about campaigns, funnels offers. So, I mean, what is your rich ad what's working for you?
So one thing, um, that we had minor success with last year, and I really wanted to dive into, as we go into this holiday season, um, and we've been seeing pretty successful results from already is, so we generally will run some pretty generic like Buzzfeed feed, looking prospecting ads at the top level and do like our funnel super simple. It's really that. And then a bunch of retargeting. Um, but what we did for retargeting this year is we added in this layer of over the past couple of months, we've been sending out socks and oven, mitts and masks to these, I call them like a dog army, essentially. Like it's all a dog accounts on Instagram. Um, because they're these accounts like 10, 20, 30 followers who will pretty much post free content for you, if you just send them a product, because they're just amazed someone found their account, deemed them in the first place.
Um, and so we have this like large amount that we've been sending to for a couple of years just here and there, um, as like free influencers, I guess. And so I was like, okay, why don't we approach some of the most successful ones? Um, and we knew there's access based on like discount codes that they're essentially affiliates. Um, so we went to like the most successful ones and we're like, okay, well, let's send you this product or two products. Let's make sure we get like a really high quality image out of this. We approve and whatnot. And then they do it as a branded post. Um, and so we have this whole middle layer of retargeting that is, it's like a dog army of like, if you get, if you look at one of our Socrates, you're going to get spammed with posts from other dog accounts that we're putting the ad spend behind, but they're coming from other dog accounts or they're actually from that. And so we don't have access to their audiences. We're just promoting the posts themselves.
No, I do have an even better story about that. Um, this, this whole idea actually spun off of last year. I did that for humane societies. We got humane societies, give us audience access, um, and then ran ads from them. We're doing fundraisers with them, but it's just funny cause they do a post and you get a text from like a lot of the people who are running the humane society stuff, or like not necessarily as Facebook savvy as we might be. Um, and so you, I remember getting a text from her, like this is so weird. This post has like 2000 comments and I'm like, you haven't cause we just spent 10 grand behind it. Um, but that works really well too. It's like we run, um, the humane society ads to their own audiences, but they normally will just never actually reach their own audience.
Um, but when it comes from them a fundraiser, like, I mean, that's one of the highest converting ads we've ever, ever run. It's not sort of the idea spun off of, and it's been working really well so far. So based on that, you kind of started with some guys with, you know, smaller following counts, 30 to 50 versus, you know, a huge page that could have, you know, 4 million golden retriever lovers basically. Did you ever see quality go up for the smaller guys because they were so much more engaged or did you ever kind of see some kind of ratio towards like if they had 50 people, 40 people are going to see the posts they're going to have a good conversion right there versus somebody with 4 million as an audience size. Yeah. Yeah. So the one time we have seen the 4 million succeed better is when we have audience access.
When we're at the level of, we're just a branded post and we just have access to basically run it against our own audiences. It hasn't mattered as much. Um, if anything has actually helped to be smaller, cause it looks a lot more authentic. So click on the account, they've got 40 followers and like, okay, this person isn't like trying to do anything weird here. Um, but the only other advantage to those larger accounts are genuinely when you're working with them, like their larger accounts, they know what they're doing more in the content you got out of them is better and you can get like unboxing videos and whatnot versus just a simple picture. Um, but we used to run ads on, uh, the accounts like at dog, some of the best performing influencer ads I've ever run over the past, like five, six years. Um, and so that there definitely is an advantage to having those larger audiences.
Um, but what's so interesting is like, so that account, for example, phenomenally for us, but then we'll go run on one of those golden retriever pages and that will just do horribly. Like it's a total kind of crapshoot. What quality of audience is actually following that page, man. That's interesting there. Yeah. I think the first time I ever heard of anybody doing something similar to that, I was like two years ago with Trice snow teeth whitening solutions, where he was getting, you know, Gronk Mayweather's page, running ads from it, getting their audiences. And I'm like, dude, this is fricking sick. No it's same it's same content because it's basically like perceived authority. Right? If other people are talking about you, it's a lot easier to accept that than if you're just going to go blast yourself out there. Oh, a hundred percent. Well, that's a pretty cool
Speaker 4 (11:30):
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Checkout add card, we'll get back to the show. So of course, you know, we all love to talk about what's going super well, but the funnest part about this kind of podcast is our poor ad segment where we kind of dive into those embarrassing, you know, things that I thought this would kill it. Maybe it didn't. So, I mean, what's your poor ad, you know, what's something you thought would kind of kill it that just did not work well. So for the past, like I would say since I got into running ads for all of this, we ran off the same template, prospecting video, pretty much like it was, uh, we had probably eight or nine sections, um, that were like little, you know, the buzz feed style videos. And we would just kind of like piece and piece them together and swap out the images and whatever this worked for like two and a half years.
Um, and I was like, okay, great. I remember back in August, I was like, great. We're just going to like eat pieces of things together to go into Christmas. I don't know, the past month or two weeks spun up. I don't even know how many versions of these things. And they just have been absolutely taking. Um, so we had to basically get creative with what we're doing on the creative side. Now I got out of it probably easier than I should have for the past, however long. Um, but unfortunate, but our, our same little formula just was not like the metrics are horrible on it this year. Like I remember I was literally looking last week and I was like, wow, that just bombed. Um, so we had to just get more creative with what we're doing. Um, I think we got out of it a little easier than we should've past couple of years.
Um, but that definitely has been my latest, like with those kind of three brands, what do y'all spend on advertising across all platforms? Is it well over six figures? Yeah. So hoops, we actually spend nothing on that's pretty much existing customer base. Every year we grow that a lot. Great fundraising and whatnot, but on head party, we are probably spending normally a hundred K a month. Um, it was a little bit weird cause we're doing masks this year. So we spent a lot more than that. Um, but then during Christmas, I mean we probably spent three, four, 500 during November and December and then on limits, we'll probably spend 200 in November and then again in December. So that's, that's there. So you really see most of the sales come in this time of year. Yeah. So with that poor at video, I mean, did you, with the kind of more Buzzfeed style of video, did
That just kind of translate to let's go ahead and try some more user-generated content, maybe some more professionally done videos. How did you get out of that? Because that's a very specific kind of templates.
Yeah. Yeah. So a few years ago I started doing the PR I filmed these professional videos and they tanked and then the bus seed one did with well, so I was like, okay, we're going to keep running down this path of like, I would literally shoot on my iPhone. Like I found out like the, like the, the worst equality, the better their performance. I was like, whatever. Right. We're sort of roll with this. Great. So we started doing that. Um, and then, like I said, I think we just got kind of stuck in that loop, I guess. Um, but when we've moved more towards this, like yeah, user generated content, unboxings openings, like reaction videos, um, and then even videos as simple as like it's just a 15 second video of us just flashing different user generated content images. Um, cause one thing we do throughout the whole year, like I mentioned, like we hit up these dog army people and send them a product all year long consistently just to always be generating content. Um, because come Christmas and holiday season, that's your most valuable ad content we found like pretty much every single time. It just always outperforms anything we can shoot professionally. So, um, definitely moving more towards the user generated content side versus like a professionally done ad.
How many creatives do you think you all are going to be turning in the next like three months?
I mean, we've been, I set a goal just for like it's really me and one other woman that do a lot of the creatives. Um, we've been kicking out like five to 10 a day and just testing and testing and dev team, um, a lot of effort in the past week or two, cause like the turnout 5% decent quality creatives. It's just like a lot of effort. Um, they don't have to be crazy quality. Cause again, we're on the lower spectrum here, like in terms of pretty crappy quality ads, but they look crappy, but they were um, yeah, I mean, I I've always just assumed right. It looks like your friend shot it. So that's the only thing I can assume is if it shows up in a social feed and it looks like your friend shot and it looks more organic you're spot on.
Interesting. So of course you're ready for this one. You know, we take a page out of the rich dad, poor dad book on a crossroads with marketing, marketing and financial side of things. So I mean, what kind of financial tips can you share? I mean, it's pretty different than most of the audiences we have being in super manufacturing side of things. So I think it's going to be a super juicy one.
Yeah, no. So one massive thing for us is cashflow like more so than general. E-comm like e-comm itself is already very like you have to focus on cash flow because you've got to get your inventory and whatnot. We are now trying to stock inventory, um, for things that we don't know, like what we're going to sell, um, in the sense that we, we do have an advantage that we only stock basically like three or four skews, right. They're just white because we can print whatever on them. Um, so that, that is an advantage to us, but we are ordering back in June hundreds of thousands of products for now, um, along with, because we're manufacturing, we have to do all the capital investment in equipment and, and printers. And like, these are not cheap things like we have 10 printers or something and they're like five, six grand each, which like it just starts to stack up pretty quickly.
Um, and so that, and then also the fact that we are manufacturing, there's just stuff like, how do you fill an 8,000 square foot warehouse? It just costs money to fill power racking and all this other stuff and paper and ink and all these other things. And then that, how does that tie into like an e-commerce perspective? Right? Like this time of year is generally pretty tight, um, cash wise for us because we're out all of this money and waiting for it to start coming back in Christmas wise. Um, now this does tie in actually a lot to what we do with our ad spend though. Um, because of the way we've gone through this two or three years, as I'm sure you're familiar with like the whole delayed attribution thing going into Christmas, um, really looking at historical data on that and being like, okay, which days do we need to spend the most money?
Um, which for us ends up coming out to around October 26th, like November 14th, we will spend majority of our money, um, versus black Friday and cyber Monday because you have your CPMs go up and just cost in general is up because everyone else is on there. Um, and so what we're doing is we're basically purchasing all of our traffic now are during that time period over the next two, three weeks, um, when your CPMs necessarily haven't gone up, um, and yeah, your ROAS is nowhere near as high, but just the way the delayed attribution works, it will be in a month because all those people that you're seeing in the market for are going to come back, whether that's through an email list, a retargeting, whatever it is, you pick those purchases up. And if you're able to like track previous years, um, attribution, like for example, are like that date range I talked about, I believe our average lift over a 28 day period is around like 40, 42% versus the rest of the year. It's around like six to 8%. And so like being aware of that is a huge, because you know, you can go lose money day of right. But you're actually making money in a 30, 40, 50 day game.
Speaker 5 (19:34):
That's bananas there. So with y'all's model, I mean, or do you look at it from an LTV perspective or are you trying to, you know, make money on the front end with the first sale? How do you all kind of look at that when it comes to positioning y'all's projections?
Yeah, it really depends on timing. So like this, this time period, we're okay. Breaking even on, because generally they're going to get the product and purchase more for Christmas. Like we know we'll hit them with email. Um, like the way I kind of do all of this is like through the rest of the year. So if we look at like January through October, I'm not concerned with making money. I'm concerned with generate as many customers at cost as I can without basically losing money. Um, just because the fact I know our products are good and I know the service and the experience is good overall and they will come back and purchase. Um, and that second purchase is where we make all of our money. We are totally fine breaking. Even with that said during Christmas, we run into this issue of a year of capacity because we don't have unlimited capacity, right.
Because we go from like maybe 10, 20% capacity year round, which is like 20 part-time people to, how do we get to a hundred, 200 part-time people and scaling that is not easy, like in-person manufacturing, labor and the training and all of that. And to run that whole process, it's not like some server where you can just like up the power of it. Like there's a lot more moving pieces to that. Um, and so we look at how can we kind of flatten that curve out. And during Christmas we have to start optimizing for profitability essentially. Um, because we don't want to sell things. We can't ship. And so we start looking at, okay, how can we basically, like, I would rather make money off my email list and I would off spending ads on Facebook because it's just way more profitable. Um, and so it's just constantly analyzing what percent
Of revenue do y'all do from email out of curiosity.
So this I'm actually super excited for this last year. We were on MailChimp. I had no idea how bad MailChimp was. Um, no idea. We were literally getting like two to 3% open rates. Um, and now that we're on Clavio, we're like 20, 30% open rates, like consistently. We've been like sending three, four emails a week, like, and we did okay. Revenue. I think we probably did maybe five, 10% revenue off of our MailChimp thing with like a 2% open rate. And so I'm so excited to go into Christmas this year. I'm like our list is like four times the size, the open rate is like five, six times what it was. I'm like, this has got to be like a solid, um, going into Christmas. But right now I believe we're doing 20, 25% email right now. That's sick, man. Hell yeah. Yeah. I'm doing a ton of video views and engagement campaigns. I don't do normally around just to feed
The beast because retargeting is going to be the main brand attribution. That's a key thing there everybody has to think about because it's going to be a weird Q4 man.
No. Yeah. And that's the hard part is like we were talking about this before we started recording. Right. But like no one knows what's good. There's so many, like, I mean, we've seen what 2020 has given us so far. It's like, who knows, we're still in gotten two and a half months left, like who knows what's going to happen. And so trying to react to that from an advertising perspective. And then also we look at this year, like for e-comm right. You have all these fulfillment deadlines that are they going to be met or not by postal providers. We don't really know. So, um, that'll be very interesting. I was just looking at it,
Breakdown a FedEx and they're like, Hey, if you get this FedEx here, your, your ex you know, the last day you could, should be, you know, put in orders as December 18th or something. And I'm like, that's kind of cool at least, but who knows how that's going to become three weeks from now or something?
Exactly. It's like, okay. That's like, I w we ship mainly like USBs first class. And like, I know the date I saw it was like the 20th, but I'm like, there's nothing that stops them from like, on the 12th being like, Oh, sorry, it's actually a third date. Um, like, otherwise your practice are get there. So we'll see, man, welcome to the wild, wild West.
Yeah. Kind of what do you have next? How can we support you? How can people kind of get in touch with you, everybody kind of a rundown of what's cooking in the kitchen next.
Yeah. Yeah. So the thing I'm really excited about next is, like I mentioned briefly, like we've been building software for a year or so now that's allowed us to really like optimize internally. Now. We're like, okay, how do we take that next step? Um, and one thing that's huge for like that I've seen success with personally is like this concept of gifting at scale. Right? So you meet someone at a conference or you want to get in touch with someone. How w how do you go about doing that? Um, and like, we kind of ran across an idea by accident, honestly, by sending people socks with their faces in the, in the mail. Like, but as I'm sure you can attest to, like, you notice, you're like, Oh my God, like I got a pair of socks in the mail. Um, and so we kind of took that.
We're like, okay, wow. Like people, like, I can guarantee you, if I send someone a pair of socks, nine out of 10 times, they will post on Facebook about you, let's say, thank you. And like, how much is that worth is the question. Um, and generally it's a lot, especially in a B2B world where you have deals that are closing for upwards of a thousand, $2,000 for that's an agency, or like even a local business, right. Like a chiropractor or dentist, whatever it is. So how can we sort of automatically, um, kind of send out these gifts? And so we've looked at like, how can we implement triggers based on, into different CRMs, right? Based on different events like this person spent X amount over two months, or whatever those triggers are, how can we build triggers that allow you to automatically send products out, um, that are fully customized come with like a note, because we know that like retention in whatever way that works in your business will go up.
Um, and those people will become a lot more like personally connected to you. Um, and I know you mentioned that you got a handwritten note from a company and it caused you to purchase $500 worth of stuff from them. And it's like, what is the ROI on that? Right. It's just a different kind of advertising. That's kind of how I view it. Um, but being able to do that, not only from like a business perspective, but also just like a personal relationship perspective and being able to build better relationships, um, via these gifts and like actual, meaningful things, um, is it's super cool. And like I said, we do all the manufacturing. So for us, that's like, what we're looking at is how can we take that off the plate for other people, because for someone else to go create, even if you do print on demand, right, you have to provide the base artwork and whatnot, like all we take as a face, it's like, you send us a face and what product you want and the note, and it's just done.
Um, so hopefully we're launching that in January, February. Like, I'm really excited about that. Cause I, I, I just personally believe in it so much. Um, but yeah, so that's kind of what we're working towards, but if you ever do need to get ahold of me, like shoot me a message, I'll respond to pretty much anything I am. Uh, my email is literally for Brennan Evernote, 74, gmail.com. I'm on Instagram run in dot IRAD off a Twitter, Brendan Agron off, like I got a unique name, so I'm not hard to find, but, um, yeah. Tell you, and we'll pop those in the show notes. Everybody can kind of find ya, man. This has been an absolute blast. Thanks for kind of sharing all those goodies. No. Yeah. We went through a lot of good stuff, man.
Speaker 4 (26:04):
Well, Hey, shout out. Thanks for coming on with me. Thanks so much for listening to another \episode of the rich ed or ed podcasts. If you're like me and listen to podcasts on the go, go ahead and subscribe on Apple podcasts, Spotify, YouTube, and rich dad, poor dad.com/podcast. And if you absolutely love the show, go ahead and leave a review and a comment share with a friend. If you do take a copy screenshot of it, email me firstname.lastname@example.org. Show me you left a review and I'll give you a free copy of the rich add or add book to learn more about the book. Go to rich ed.com to leave a review that a rich ed or at.com/review. Thanks again.
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Jason Hornung is the founder and Creative Director at JH Media LLC, the world’s #1 direct response advertising agency focusing exclusively on the Facebook ads platform. Jason’s proprietary methods for ad creation, audience selection and scaling are responsible for producing $20 million + of profitable sales for his clients EVERY YEAR