Few DTC brands have been as polarizing or as successful as Chubbies.

The Chubbies story is a wild one. It started with humble beginnings, selling shorts one by one in parks around the Stanford campus, leading to an IPO.

Four Stanford college students had 3 things in common: 

1. They were tired of working for the man. 

2. They didn't fit the "Abercrombie" fashion mold of the late 2000s and 

3. They loved shorter shorts - BEFORE the short shorts trend. 

And so, Chubbies was born.  

This is a deep dive with Co-founder Preston Rutherford on what Chubbies got right, what they got wrong, and how to think about building a brand.

Here's a look at what we cover:

• Feedback loops. This started when the co-founders were selling their shorts in person. They could immediately read customers' reactions and hear what they liked, what they didn't like and what needed to be tweaked. As the company grew, this shifted to digital and online feedback loops tied to ad creatives, social posts, and user experience.
• Downplaying vanity metrics. We all want to brag about ROAS and revenue. But, these metrics can be misleading. If you maximize ROAS, you sacrifice long-term growth for a sale today. And you get into a trap that squeezes profits and becomes hard to break. 
• Obsessing over core metrics. We should focus on metrics like contribution margin, total profits and branded search growth (as a sign of a growing, healthy brand).
• Building a brand. Want to have a big exit? Want to charge a premium? Want to drive consistent demand? It's all about brand. 

Transcript

Preston:

Why do you build a brand in the first place? Well, it's so that people seek you out without having to prompt them with a conversion ad basically. Or when people are in market, they think of Che's and they come and they go to Nordstrom, where they go to Dick's Sporting Goods or they go to Amazon or they go to chubby.com, but ideally unprompted, and that becomes a conscious or subconscious learned behavior. Those are the dynamics that we're trying to create, not this Pavlovian. And I see a product offer urgency ad in my feed, and I click and I buy because it's 15% off. And I had to get that because the discount expires in two hours. That's not what we're trying to build.

Brett:

Well, hello and welcome to another edition of the e-commerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today we are talking about really just an iconic DTC story, an amazing success story, an amazing brand. Talk to one of the co-founders of Chubbies, and we're going to talk about brand building and how to think about growth and how to think about brand. And I just can't wait to dive in. And so my guest today is Preston Rutherford. He is the co-founder of both Chubbies and Loop Returns. And so Preston, welcome to the show. Thanks for taking the time and how's it going?

Preston:

Awesome. Yeah, Brett, thank you. Great to meet you. Great to chat with you and really look forward to this conversation today.

Brett:

It's going to be good, man. And so I was telling you before we hit record, well two things. One, you and I met on LinkedIn, so I've been following your posts. I don't know, some friends of mine commented or shared or whatever, and I'm like, dude, this guy's smart. He's got some fresh takes on brand building and how to think about stuff like ROAS and who you are as a brand and growth and things like that. And then I also met Kyle, one of the other co-founders of Chubbies, about a year ago. We spoke at the same event in Los Angeles. And what a cool guy. And so when I saw you posting, I'm like, dude, got to get you on the show and we got to talk about this. So let's do this first. I think a lot of people are interested. First of all, what is chubby for those that don't know? And then what's the origin story? How did you and your co-founders start this brand?

Preston:

Totally. Chubby's is a lifestyle apparel brand. Basically if you think about what you want to wear on the weekend, it's our job to provide that apparel net lifestyle. And in terms of how we got it started, it was, gosh, it was over a decade ago now. We were friends from college. We had been working for the man for a while, four or five years and just thought we would love

Brett:

Working for the man. Nobody wants to do

Preston:

That long term. Exactly. And we just weren't a fit for it. And at that time, Shopify was just becoming a thing, a platform that existed. And we realized, oh my gosh, it used to be so much harder, more expensive and slower to just be able to sell something online. And some of these tailwinds were making it ridiculously easy. And we also thought there was a product gap in the market for some reason or another. All of us really liked shorter shorts. Two of us played soccer, one of us played rugby. Another one of us just spent a lot of time growing up in the southeast where shorter shorts were more than normal.

Brett:

And you were the rugby guy, right?

Preston:

I was the rugby guy, yeah.

Brett:

Nice man. Rugby from the time you were a kid, this is a sport that fascinates me. I think you can make the case that there may not be a tougher athlete out there than the rugby player, but how did you pick up rugby?

Preston:

A good friend of mine freshman year in college, he played it in high school. He just asked me to go out for tryouts, and I really loved it. I grew up playing soccer myself. Wasn't good enough to play at Stanford, like some of my co-founders, but I liked running around. I liked the team environment and the culture just seemed awesome, really fun thing to be a part of. And again, with rugby as with chubby, fun and community were at the core. So it drew me to it.

Brett:

Yeah. Now wait a minute. So now you started playing rugby with a guy who was on the college rugby team, or you just decided, I'm going to go out for the college rugby team, and you made it

Preston:

A guy who was already on the team. He knew what he was doing. I had no idea, but he knew that I liked playing sports. I like running around. Maybe I'm fast, who knows. And he asked me to come out and try out, and I was blessed enough that got on the team.

Brett:

That's insane. And was this at Stanford?

Preston:

Yep. Yep, it was at Stanford. So it's a club team. It's not D one, it's not varsity, it's club team, but lot of amazing athletes on the team.

Brett:

Yeah, I've been around club lacrosse teams at the collegiate level. I mean, it's still collegiate sports, man. Most people don't just decide, yeah, I'll learn the sport as I go. I'll learn at the college level and then I'll go. So anyway, that's super impressive. Hats off to you. Your first experience was at the college level of rugby. Holy cow. I appreciate,

Preston:

I appreciate that, I appreciate that. So yeah, that was a little bit about who we were. And at the time, if you remember back late 2011, the Abercrombie and Fitch vibe different from today, but back then it was very guys with six packs standing at the door spraining with cologne, like the NCE music playing. And if you weren't that vibe, you didn't even feel like you could walk in the place.

Brett:

Dude, I was so not that vibe ever in my life, and I resonated with that. I'm like, I can't even buy this stuff.

Preston:

Yeah, exactly. And then just at the time, it was very much serious and exclusionary and there wasn't a lot of humor and we just thought, well, let's just flip it on its head. Let's have some fun here. Let's create a vibe that is the vibe that we wish existed. That hearkens back to the retro days of shorter shorts, barbecues, fun, welcoming humor, creativity, and let's just have a go. And so nights and weekends while we were doing our normal jobs, we just started trying to make some product first made it for ourselves and then just started making it for our friends. And then this was also at the time when the square card reader came out where you could actually transact with the credit card in person. So we just put product in our backpacks and went out and would do the weekend thing at the park or at brunch or whatever, and there'd be just a group of us wearing these bright tiny shorts and people would either love it or hate it. And we loved that polarity existed. There wasn't apathy. It was either you love it and you want to be a part of it, or you're just like, this is clearly not for me. And I think these guys are idiots. But that's kind of what you need with a brand that is what you need. Because

Brett:

The worst thing is apathy. The worst thing is that I don't really care that polarity means that there's a group out there that they fall in love with it and they want to be associated with it. And so that's perfect.

Preston:

Exactly. It was clear what we were and clear what we weren't, and that was just authentic to us. That was our story. That was who we were. And people would come up to us, people who liked it, they said, where can I get this? And we said, well, oddly enough, we've got some in our backpacks you want to try 'em on. And then people would just be buying. And so in-person sales was huge for us. There was such a tight feedback loop. Now it's tougher. You've got this meta and Google middleman in there, but it was awesome to just have that hands-on direct connection with folks at the beginning.

Brett:

Now I know the trend, and we're actually just talking about this with some of the guys that work here at OMG. We're talking about how shorter shorts are the thing. And a couple of guys that work for me are runners and they love the short shorts. And I am more of a child in the nineties. I played basketball in high school in the late nineties, and that was the era of the giant shorts. I have no idea why this was a thing. But the Fab five in Michigan, I mean you look at now and you're like, how did we move? How did we do a crossover between, I was a post player, so I didn't do any crossover between the leagues, but how do you do that with the long shorts? I don't know. But were you guys very early on in the short trend? Do you feel like you helped helped that trend, or were you kind of riding the wave?

Preston:

Oh my gosh, we were early, super early. We looked like idiots for the first number of years in terms of what we were doing because the vibe was the longer the cargo shorts with 20 pockets

Brett:

Cargo shorts,

Preston:

The tight ed hardy shirts, that was the vibe. So yeah, we were not riding tailwinds at that time. Now, I would hope that we were a part of creating these tailwinds and this change, but that's something out of our control. We were just focused on the inputs and what we felt was a missing piece of the market. But at the beginning it was just very polarizing and very different. But we knew we were a customer and we knew there got to be people like us out there. And it wasn't a top down sort of men's fashion tam and then men's bottoms, if you did that analysis, you wouldn't have started chubs because the tam totally addressable market gets really small real fast. That's why a post I did was basically no MBA in the right mind would've started chubby because it's a tiny tam and people generally want to attack massive tams. But we didn't care. It was just let's make a product for ourselves and let's just see

Brett:

What happens, make a product for us and then see where it goes. Yeah, it's so great. And so I want to skip ahead to kind of the ending because I think a lot of people don't know this. And then we're going to get into lessons learned that I've got some great topics, again kind of inspired by your writings, but you guys were acquired by this what became the solo stove kind of platform, which iPod, and there's a lot to that. But what was that exit and was that process, were you involved in that process? Did you leave the company prior to that or what was that like?

Preston:

It was a whirlwind. I mean, first of all, a huge blessing that anything like that even happened. And

Brett:

You had to go from selling in parks in around your college campus or whatever to company that had an IPO. That's just wild. It's just crazy.

Preston:

It's totally wild. It's mind boggling, and it is crazy to think about it in that way. But yeah, I mean, it was wild and a crazy, crazy process. And yeah, you're exactly right. It was a bit of a rollup. So it was the solo stove brand and then two other brands. And then very quickly after the acquisition went public, which was its own crazy whirlwind, so many learnings and things like that. But yes, so that was gosh, about a decade after starting the business. So my takeaway is these things take time. Consumer brand building takes time. And our hope is that this is just the beginning, right? That this is a multi-generational thing, like a brand that transcends and that's the hope. So we view it as sort of the Jeff Bezos quote of day one, and it's amazing to see that the brand continues to grow, the resonance continues to strengthen. And I was just in Dick's Sporting Goods last week looking for a golf club, and I saw this massive chubby set up there. I almost started crying because it was just amazing to see that something like that could happen after, again, just walking around San Francisco selling one short at a time to people who would just walk up to us. So

Brett:

Were you tempted people walking through the aisles of Dick's Sporting Goods? Hey, hey, I'm one of the founders of that.

Preston:

My wife does that. I'm so embarrassed to do that kind of stuff, but my wife does that sometimes. Then I get really red and blushing and kind of look down. But no, it's such an amazing thing to just see all the UGC, for instance, thousands and thousands of things that have been created by just people living their life, having fun, kind of reflecting back at us, what we hoped to put out into the world. And it's things like that that gosh, just kind of floor you and fill you with humility. It really just kind of shows you, gosh, left a little bit of a positive mark on this and what a joy to be a part of that.

Brett:

Yep. It's so cool. And yeah, I think most overnight success stories, unquote, this was about 10 years in the making and lots of blood, sweat and tears along the way that eventually led to roll up in that IPO, which is amazing. Let's dive into a few things. I want to unpack several lessons you guys learned along the way, and one of those is I think we learned a lot from failures or missteps. So what are some of your favorite lessons learned at Chubby's from what you guys got wrong?

Preston:

Geez, so maybe to start, we made all of the mistakes in the book, I would say. So anything that I say or anything that I write about, if you read any of my stuff, is all coming from a perspective of starting with humility and having made all the mistakes, not I know this is right sort of thing. So just a couple of things that pop into my mind. One is around changing the view, having more learning, humility around channel expansion. So for the longest time it was the trend of I got to sell everything through my site. I'm going to own this customer, own this transaction, get this email address, and I'm just going to, it's mine. You get all the data, blah, blah, blah. What we realized is a e-comm is a very small sliver of overall retail or commerce, what, 20%, maybe a little bit more growing fast, but still very small.

Amazon owns half of that. So we're fighting for 10% of this broad sort of pie, yet spending a hundred percent of our dollars on that pie. So that to us started to make less sense over time. So I think one thing we got wrong was holding onto that digital D two C for way too long, have a little bit of humility that even if someone really loves your brand, they're busy and you want to be where they're buying and you don't want them to necessarily have to just type in ch.com, be where they are. So big thing there, maybe start going multi-channel, exploring multi-channel earlier. Now it's hard to do that before you actually build an association in people's minds. So you've got to do those things, those basics, but be where the customer is.

Brett:

And a couple things to piggyback on that, because I 100% agree with you, people are strapped for time. It's not easy to just buy in one place. And I think a lot of people mistakenly believe that, Hey, if I don't have someone's email address and phone number so that I can follow up with them, or I don't have their address where I can mail to them or whatever, then they're not my customer. And while in an ideal world, yes, we would want all of those data points, that's not necessarily true. We can all think about our favorite brands, whether that's Nike or particular kind of jeans, or my favorite hot sauce. I'm a hot sauce guy, I am a customer of certain brands, and I may buy those brands in a variety of places. Maybe it's on Amazon, maybe it's D two C, maybe it's through their app, but yeah, maybe it's just at a retail outlet. And so I think we over romanticize having full control of the customer experience when it'd be a lot better if we just put our products where people are, because another reason, a lot of people may find you in a retail store and then become your customer online. So it can work both ways, and I think we forget that or are just a little bit too shortsighted about that.

Preston:

Totally. And there's fear. I mean, on Amazon, is Amazon going to duplicate my product and put me out of business or will the same thing happen

Brett:

When it comes to brand? They can't do that, right? Amazon's not, I mean, okay, maybe they could at some point, but you guys had this brand going for which I think that's the key. And Amazon's not just going to recreate that brand overnight

Preston:

A hundred percent, but we have these, now I can call them irrational fears, but at the time, very real. You're trying to do the right thing and I get it, but that was a big lesson for us and big growth drivers now that we're able to be in more of the places where a consumer already is. Another one is how to spend our marketing dollars to better drive the outcomes that we actually want. And so what do I mean by that? For the longest time, it was very much, and this starts to get into the roas, short-term ROAS conversation, but it was very much, I feel like I'm doing a good job if my ROAS is a high number and not really thinking about what that means in terms of business fundamentals. And so starting to think a little bit longer term, my primary goal is not to buy short-term revenue pops. My primary goal in building a brand and building a business is to generate a machine that generates sustainable sequential increases in profit dollars over time,

Brett:

Which

Preston:

Allows me to create jobs, which allows me to make more great product, invest in great product and build great content, create great content that brightens people today. So let's create a machine that actually does that rather than give me whatever, 8.3 x roas that I can then screenshot and tweak. And so that was a big shift because we thought we were amazing media buyers. We thought we had cracked the code. We would constantly look for these little pockets of arbitrage, short-term arbitrage, but we thought we were killing it, but we weren't really generating any profits at the end of the day. And so shifting a little bit to, okay, what are we trying to do and then how do we think about getting there? And so a little bit about what does it mean to be strengthening a brand? Why do you build a brand in the first place?

Well, so that people seek you out without having to prompt them with a conversion ad basically. Or when people are in market, they think of Chubbies and they come and they go to Nordstrom or they go to Dick's Sporting Goods, or they go to Amazon or they go to chubbies.com, but ideally unprompted, and that becomes a conscious or subconscious learned behavior. Those are the dynamics that we're trying to create, not this Pavlovian. And I see a product offer urgency ad in my feed, and I click and I buy because it's 15% off, and I had to get that because the discount expires in two hours. That's not what we're trying to build. Not that we shouldn't do any of that. Of course there's a balance. But shifting the way that we thought about, okay, what am I buying when I spend a dollar? And getting a little bit more of an understanding of that was huge, was huge for us. Let's build these.

Brett:

Yeah, I love this so much.

Preston:

Yeah, let's build these resilient bases of revenue and then let's build a layer cake rather than just a pop. And then you have to do it again. And then because you're reaching an ever increasing pool of people, the LTV to CAC ratios just get funkier and funkier over time, and CPMs go up, CACs go up, and you kind of get in this upside down position where they're just insurmountable headwinds or you're starting to sell multi-channel and the old playbook didn't work for us. So you just have to make these shifts and I think start to think a little bit more long-term, like how is my percentage of new customer revenue coming through owned and organic channels? How is that changing? What am I doing there? Fundamentals.

Brett:

Yeah. And I think what's really interesting here is that of course, we want all of our marketing dollars to be productive. Of course, we want everything to work in our favor, but on what time horizon and what does that really mean? Because we can all become ROAS obsessed. And if you think about it, the only way that you truly maximize ROAS is by making mistakes or doing things the wrong way. If I want to maximize roas, I'm just going to go for search and branded search. But where does branded search come from? You got to generate that in the first place. Or going to, if I only want to maximize ROAS today, then I'm going to stop organic content and I'm going to stop prospecting on Facebook and I'm going to stop prospecting on YouTube and I'm going to stop doing some of those things.

But that kills your brand in very short order. And so I love that being able to spread out the time horizon and think, yes, I want this to be a maximum return, but over the long haul, right? Because I want to be able to charge a premium forever, and I want people to associate with my brand and share my brand and talk about it and to seek me out and all those things. And you don't get that. You don't build that by just running discount ads and by just creating that discount death loop. And so I'm so glad, so glad you brought that up, but sometimes you have to learn that, right? We all get addicted and even as an agency, and we run a lot of Google ads and YouTube ads and stuff, and I get it, we want to be able to show those impressive ROAS numbers and put 'em on case studies on your website or brag about it on social media. But it's pretty much a vanity metric, and it really only tells a sliver of the story, not the whole story

Preston:

Vanity metric. Yeah, I mean, I think for us realized vanity metric revenue we found for us was a vanity metric. I mean, optimizing around revenue, you're missing a whole bunch of stuff. Start thinking about contribution, contribution margin, things like that. Letting that drive everything we do, at least on the demand driving side of the business was also huge. So yeah, just learning about these vanity metrics took time. You get there, but then can we start to spread that message a little bit more broadly so that people get there a little bit faster without having to struggle through it for 5, 7, 9 years?

Brett:

And one thing, sometimes we kind of push aside lessons from bigger brands because we think I'm not that big. I can't do that, right? I'm not Apple, I'm not Nike, I'm not Procter and Gamble, but one of my favorite lessons I actually heard from Procter Gamble, and we'd already thought about it this way, but hearing it from them was validation. Then one of the key success drivers they look for in ad campaigns, what they're doing is, does this lead to branded search? Does this lead to branded search? If it does, then it's probably working. So if we're running a TV campaign, it's maybe hard to measure exactly, but is it driving branded search? Are these other campaigns driving branded search? That is a huge component of brand building, and that's kind of a shift in mindset that gets you to think, and that's where the big profits are is I do want to double click on something since you brought it up, and we'll kind of talk about this for a minute, and then I want to hear some lessons from some of the wins and some of the stuff you guys got. But you mentioned contribution margins when we talked about vanity metrics. So what metrics did you start leaning into? And let's start with contribution margin and the way you guys viewed contribution margin.

Preston:

Yeah, yeah. I mean, an example, maybe it's helpful to think about an example. So you could, as you know, get a really nice roas, but what's happening is you're selling shorts that are 15% off, and so you're still spending the same amount as you were when your shorts were full price. It looks like ROAS is going up, or you're just driving a bunch of conversions. And ultimately the dollars that are flowing through your p and l are dramatically reduced. And so then at the end of the month or at the end of the quarter, you look back and you're like, I thought I was killing it. And then you realize, wow, I generated no cash from this. So then we started to think, okay, gosh, what really matters here? And then how do we look at things on an apple to apple basis? Then it allows you to compare to things like wholesale and things like that, and it starts to incorporate things like the amount of dollars you're spending and the discounts that you're running.

And so for us, just that change and then ideally trying to, and I know Bennett True classic talks a lot about this of daily contribution. It's one thing to get a number from finance at the end of the month once you've chewed everything up, but that's far less actionable on a day-to-day, we're making these decisions on a daily basis like budget allocation, channel tactic, creative decisions. We need this daily feedback loop. So yeah, very much getting away from revenue because revenue can be tricky and can, I mean you can gain short-term contribution, but looking at long-term sustainable sequential increases in contribution dollars that your business machine is generating for us was huge. I mean, it just totally shifted how we thought about things and how we gold our team and things like that.

Brett:

And just for those, I think a lot of people listening are very familiar with contribution margin, but for those that aren't, can you define it really quickly?

Preston:

Sure. And I think people have differing definitions, but fundamentally it's just taking into account sales less all of the things like your cost of sales, which incorporates your marketing costs, which incorporates your product, gross margins, but then also all of these other costs like diminishing returns maybe in terms of where you are in your business. But once you become relatively sophisticated, you start to incorporate things like per skew, returns per skew, CX tickets, and all of these other sort of associated costs. Getting down to incorporating shipping one little aside here, we started doing, one of the things you want to do is drive basket size, drive your ALV, and we didn't have $200 shorts, but we could do bundles, and I think a lot of us have tried bundles. The thing about bundles is that you hit a shipping size threshold where you might go from an average of five bucks to ship a package to 10, and you didn't take that into account.

You didn't know you hit that threshold. Maybe you scaled shipping costs linearly and you're like, wow, this is way off. So having that sort of sophistication where you're incorporating both shipping costs as well, especially as you run these different promos becomes very important. So then you get this sort of nut of cost associated with selling your goods. And I mean, you're not incorporating fixed costs. This is all your variable costs, so you get to effectively your variable profit. So it's not incorporating things like your rent or your headcount, things like that, but nearly everything else. So then it helps from the perspective of, okay, I'm the marketing team. I'm the demand driving side of the business. What can I truly control? I can't control the whole p and l, I can control revenue, but that's not really driving the fundamentals of my business. I can control effectively down to, and obviously there are other teams that are taking into account product gross margin and CX ticket costs and things like that. But from the demand side, driving demand side of the business, what are we able to really affect here and help drive the business and get just closer to the bottom line effectively? It's just more of a tie to what the business is actually producing at the end of the day.

Brett:

It's so good. It's so good. And yeah, when you realize that rose is a vanity metric and revenues a vanity metric, and even percentages, margin percentages can be a vanity metric, it's more about what is the contribution margin? How am I getting closer to the bottom line with each sale and getting those daily feedback loops so I can adjust marketing efforts and adjust merchandising to really get there. And so it's so smart. It's great. I love it. Let's talk then about what did you get, and I think sometimes people confess we're definitely this way in the building and scaling of our agency. Sometimes you get stuff right on accident, you did this and you're like, oh, holy cow, we were spot on here and that was an accident. And then sometimes you're very intentional about it and you end up being right. But what are some of the things you just got right early on?

Preston:

Man, I think a lot of this was wasn't an accident or things we stumbled into, but we did try to be very thoughtful around the things that we did. So I think first and foremost, no ad spend can compensate for substandard product. So I mean, you got to start there. Your product has to deliver, has to be unique, it has to meet a need that's currently unmet, and that's relatively obvious, but with how easy it is to create a product and then just start running met ads against it and being able to sell some stuff, there's somewhat of an issue there in my opinion. And obviously you'll get feedback and you can iterate over time, but fundamentally, that's why I'm such an advocate of in-person sales at the beginning because you see that look on people's face, you see if they'll just walk up to your thing and be like, eh. You get so much feedback that

Brett:

You can read the emotion and you hear the language and they're like, there's so much rich feedback there. Yeah, I love that too.

Preston:

It doesn't show up in clicks or sessions. I mean some of it does, but that's one of the things I think that we really focused on. And I think it started because we made the product for us. We were the first customers. The second I think is the fundamental approach that we had to the relationship with our customers. So because we were making product for ourselves and our friends, this was sort of easy, but generally what we were seeing out there that we thought was fundamentally problematic was companies, this corporate entity communicating with faceless customers. And that drove the communication, the communication style, the content that was put out, and we just kind of fundamentally decided to take the opposite approach. We are not a company first, we're just group of people first, and we're developing friendships with other people, and that's it. So then how does that govern what we do and how we behave and how we communicate?

We're trying to build a relationship. So then when you internalize it and you think about, okay, how do I behave in my friendships? What are the things that I do that drive deepening of friendships? What do my best relationships look like? I'm giving, I'm investing. I'm there, I'm dependable. I'm building trust. I'm honest, I'm transparent, all these sorts of things. Whereas if you're a company talking to customers, you don't care about investing in the relationship, you don't care about giving a hundred x more than you ask for, so you can just feel good just throwing an ad in someone's feed that's like, yeah, buy this right now. I don't care who you are. And not that we never put ads in front of people that we're telling them about our product, but it was just fundamentally different approach and it just guided everything that we did, and it really kind of permeated the culture of the org. So I think that was something that really helped because it really helped in building a community. People felt like they were in it with us, they were building it with us, and they felt like they knew us. They did. They really did. And that I think led to a level of closeness and loyalty and trust that you just can't really manufacture if you're doing it another way.

Brett:

Yeah, it's the stuff you can't hack, you can't shortcut, you can't get there in sneaky ways. It just takes time and you just got to do it the right way. Yeah, absolutely.

I want to talk a little bit now about content creation and we will talk ads and inorganic. We can talk about both, of course. I'm going to quote a post you made on LinkedIn recently because I thought this was great. You said that, Hey, there's three parts. There's a three part playbook for infinite video success, part one roller blades, part two, Nerf footballs and part three my favorite mullets. And so this tied into a specific piece of content you guys created, but it was so great. It was so fun. It was so funny. But my question is how do you create content that is on brand but still impactful, where people want to watch it and want to share it, want to comment on it? You guys did that so well, you do that so well at Chubby. So what's your approach? Talk about your approach there.

Preston:

Yeah, I mean, appreciate it. So yeah, obviously that was me being somewhat facetious, but

Brett:

For

Preston:

Us, what we learned is, and it'll be different for everyone's brand, but it's about an approach. So the only formula we really have is making sure we have a tight feedback loop where the learning can take place, and that's all that matters. And I think that's the thing that's universally applicable. And so that's relatively obvious. So then what does that mean? It's having that deep process in place. So what is the quantifiable goal you're trying to achieve? You mentioned one metric that is branded search, or you could even take it a step further and talk about engaged sessions from branded search, right? Because a lot of totally and bounces. So what is getting to two page views or collection view or whatever it might be, however you want to define that, but there's a quality there that we found matters, but what is that quantifiable?

What are you driving for as it relates to brand video content? And it's not that it necessarily cannot have any kind of ACTA or anything like that, but for us, we found that it wasn't necessarily short-term revenue. That was the way that we would measure the success of this stuff, but have that quantifiable metric and then use your gut to come up with two or three different ideas and then just start the learning process. But you have to know what you're going for. And once you have that, you can start the beautiful process of looking at the data, coupling it with your intuition and doubling down on what's working, doing less of what's not working, and just build that machine. And it doesn't cost a lot of money. I mean, you probably saw some of our videos. Production value was effectively one of the things we found was that production value was inversely related to success of the video.

So it was just very much like let's make something that's authentic and that resonates, and that allowed us to have the fast feedback loop where you didn't have to pay up front 50 K to just get one idea to explore you, to explore a lot of ideas very quickly so that the feedback loop could happen. So I think that was the key for us is just having a feedback loop and you got to have that dependent variable that you're optimizing for, and it has to be very clear. Everyone has to know what it is. And then you got to have a method for to the best you can connecting what you did to that metric. And that's it For us, it was rollerblades and nerve footballs and mullets for you, it's going to be something else

Brett:

That's not going to be universally applicable. I mean, maybe

Preston:

That formula,

Brett:

Who knows mullets could work anywhere probably. So let's talk a little bit about, you were saying that, or maybe we talked about this before we hit record, but your brand statement, what you focused on, what drove and inspired everything you did was chubby equals weakened. Now was that something that was just kind of baked in and part of who you were when you started or did you have that crystalline focus in the beginning or did that kind of evolve over time? Talk about how you got to that chubby's equals weekend, and then how did that impact everything you did?

Preston:

Sure. The way we thought about it was that the core is fixed and then around the edges or the narrative evolves over time. And we didn't necessarily know that at the beginning, but the notion of weekend, the way we kind of summed it up was that Friday at five feeling was there from the beginning. We graduated college in 2008, global recession, very stressful. It was hard to get a job

Brett:

The worst time, the worst time possible to graduate college.

Preston:

Yeah, I mean, it was a time. And so there was all this stress around work and getting a job and holding onto your job and feeling nervous about whatever, that whole thing. And so for us, it was just kind of like, man, that's rough. And what can we do there? How can we contribute on that front? And it's, gosh, it's that moment where you leave the cubicle, you change into your weekend where you relax. It's Friday at five, that's the trigger, that's the switch, that's when things turn on. And we just wanted to capture that feeling and that was the kickoff for the weekend. That was the time when you were making memories with your friends, when you felt in control of your time and where you just kind of felt free. And so it was that feeling of freedom that was associated with Friday at five with the weekend and all of these things that were the story that we wanted to tell. And then that just very nicely tied into a lot of the charitable things or the cause things that we decided to associate with around mental health because this stuff matters. It's all a consistent story because ultimately that's what we were trying to is help us have a different approach to life and stress and our work and what's important. So yeah, that was there from the beginning. And with that comes an irreverence, comes a humor, comes a levity that we can

Brett:

Not taking seriously.

Preston:

Yeah, it's the weight that we add to our lives that in a lot of ways can be changed if we just bring a little bit of levity and take ourselves a little bit less seriously. And that's what we were trying to do, the story we were trying to tell, and we knew it had to be a tight story because people are busy. Again, back to that note, humility around the fact that you are not the only thing people are thinking about. You get a quarter second and then they're moving on. So are you going to tell the same story over and over? Are you just going to continue to build that mental availability, that mental association around one very simple thing? You're going to monopolize that niche in someone's mind. It's got to be tight, but it can't be boring. So it's finding that balance. That's the infinite balance.

Brett:

And I think it's one of the fundamental marketing mistakes that so many people make is assuming people are paying attention to you or assuming that people are more interested in you than they really are, and in the beginning they're not interested in you, right? In the beginning, they're not thinking about you. You really got to work and you got to be both succinct and interesting and funny if that fits your brand and all of those things. Now, I saw some videos, and I think this was you guys, but it may not been the videos of the guy on the Zoom call and he's got the green screen behind him, so it looks like he's in his office, but he's really on the golf course where he is riding his bike down a busy street. Was that you guys?

Preston:

Yeah, yeah. In partnership with one of the most awesome TikTok creators. But yeah,

Brett:

So where did that idea come from, and can you talk a little bit about the success of that? Because one that I was just remembering and I watched the other day, which was so great, was a guy's on a Zoom call and he's got a headset on. He's like, yeah, yeah, yeah, but he's actually lining up a putt. He's on a green, and then he sinks the putt and he's like, yeah, exactly. Everybody else on the zoom call is whatcha excited about, but that really captures that weekend vibe. Where did that come from? Was that you guys? Was that this TikTok creator? Was it a collaboration? I'd love to hear the story.

Preston:

I mean, we've been doing videos, making fun of work from the beginning. We would make videos where we would just get dummy laptops and do flipping the tables or throwing our laptops out the window. But again, it all kind of speaks to what is the video, what is the content that you want to see when you just got out of that performance review and you're just feeling like, what am I doing? I just want to flip the table, throw my laptop out the window and just go fishing. And so that was a lot of the stuff that it is such a blessing to be able to even spend time making content like this. I mean, we were the luckiest people in the world to be able to do this stuff. But yeah, just bringing fun and levity to work. I mean, we talked a ton about just the shackles of the cubicle and all these sorts of things.

And so what's the opposite of that and how do you think about, gosh, this is exactly what I want to be doing when I'm looking at this content. And again, that was one of the consistent themes that ran throughout and it's just fun. It's just fun to think about because so many of us spend so much time sitting looking at a Zoom screen, and so then to be able to just sort of say, okay, what is the most creative approach you could take there? Because it's just something we all resonate with and generally sucks. And so how do you turn it into something that is like, oh, this is awesome. This is super fun. I wish I was doing this.

Brett:

Yeah, we've all been on a Zoom call where we desperately wished we were on the golf course or riding a bike or doing anything other than being on the Zoom call. Totally on brand and totally worked for you guys for sure. So other just, and I know there's a million, I know we could talk for hours and hours. I want to also talk about Loop, which is kind of your newer venture, just a second. But any other lessons or takeaways, some of your favorites from the building of Chubby that you want to share with entrepreneurs that are listening?

Preston:

I think one of the realizations that was really helpful for us was just an understanding that 95% of your audience is not in the market for your product at that given moment. So then what does that mean? What are you going to do with that information? And that kind of blew our minds. We were just sort of thinking, man, as long as my CT A is good and I can tweak this language a little bit and I can run all of these variants, and it was kind of like missing the forest through the tree sort of thing, or playing just fundamentally the wrong game. And once we realized that stuff and we're able to start thinking a little bit longer term like, Hey, this is a marathon, not a sprint. We're trying to drive this machine that is this ever increasing percentage of new customer revenue coming through, owned in organic channels and just create this layer cake of resilient based revenue.

I think that's the mindset shift. And I'm not being prescriptive in terms of what you actually do to do that, but just how can we think about our businesses like that? That might be the one thing I want to leave people with because when we were changing our mindset and changing our approach to these sorts of things, and there were a set of tactics that worked for us as we kind of waded through, stumbled through most of the stuff that didn't work, but that really was one of the big things that drove this unlock in not only growing top line, but bottom line profit generation as well. And having gone from a business that wasn't really doing that to doing that, that's all I want to contribute to the ecosystem is how do you do more of that and what are these fundamental approaches and mindset shifts that we think we learned are more aligned with better way to run our business?

And just because it's not as popular or talked about on Twitter or whatever, doesn't mean it's not right. It's harder. It takes longer period of time. The feedback loop is less well measured in platform, but it's the stuff that lays these foundations that helps us build the business we're all trying to build. So I think that's maybe the main thing is just that mindset shift and I'm exploring it myself because it's something that to be silently articulated so that people can understand it, internalize it, and then operationalize in their business. So that's the fun of writing and having a conversation, Brett with you, is just figuring out how to talk about this stuff in a way that actually makes sense to people.

Brett:

And I think we just, a lot of people are trying to solve the wrong problem. They're trying to solve a short-term revenue problem rather than obsessing over long-term sustainable revenue, or they're trying to optimize towards the wrong metrics, roas in revenue versus contribution margin and some of these more sustainable healthy things and trying to drive sales instead of trying to build a brand and building long-term demand. Then of course we got to meet cashflow needs for today and things like that. But shifting the mindset there, it's so good, and if you can successfully do it, you'll be happier. You'll have more fun in business. If you want that exit one, an additional and eventual IPO like you guys, then that's really about the only way to do it. And so really enjoy that. That's awesome. Love it. Let's talk a little bit about loop returns. That's a newer venture. So what's the idea behind that and what is Loop returns?

Preston:

Yeah, I mean this was something that we built for ourselves while at Chub's, oddly enough, and we had no idea

Brett:

Noticing a theme here, right? Building for ourselves first, which is a brilliant way to start a business.

Preston:

Well, thanks can really, I mean, what it has turned into is absolutely fantastic. Jonathan Palmer and the team amazing in building this thing into a great, great company, growing very quickly and really helping the Shopify ecosystem. And then more broadly, non Shopify ecosystems really provide much better customer experiences around this truly bottom of funnel, these experiences that used to be really bad. So I mean, we had a habit of just building software tools, software experiences that solved their problems internally. I mean, if you remember, I don't remember exactly when it was 20 15, 20 16, the returns and exchanges process was rough. I mean, you just think about the back and forth.

Brett:

It was so rough that that's why a lot of people didn't buy online. And apparel being the most challenging, really good shot, this isn't going to fit. And that would just deter. It was so painful to deter people from purchasing,

Preston:

Totally emailing in, say, I want to do a return email back. They send me a photo so I understand you didn't violate the return policy. They send the photo, then you check the policy, then you send back a manual PDF of a shipping label, just so broken. And then the realization, so many returns could have been exchanges and just that the material difference that that can have on your p and l if you're converting a return into an exchange. It just sort of seemed obvious to us that there had to be a better solution. So we built it for ourselves. And then other brands came to us saying, we want this experience. This is so much better than what we have. And we were just like, I don't even know how to think about this. This was for us. Are we a software business? Are we not?

So we stumbled into it and it seemed like it was solving a need that wasn't unaddressed elsewhere, just kind of like what happened with Chubby's just in a different context. So yeah, I mean, put together, spun up a new entity, put a team in place, and they have gone and built an amazing business. It is awesome to see, so proud of the team, and I think a lot of customers are having much better experiences with a ton of brands, thousands of brands because of this. And that's humbling and awe inspiring to be a part of in some small way.

Brett:

So making returns less painful for both shopper and merchant. Such a needed, needed thing. Where can people learn more about Loop returns?

Preston:

Loop returns.com.

Brett:

Easy enough, man. So we'll link to that in the show notes as well. And I do want to underscore, if you've enjoyed this podcast, which I'm confident you have, you need to follow Preston on the socials. That's how he and I connected. I was reading his stuff on LinkedIn. The post about ROAS just got me teary eyed and I was crying tears of joy as a marketer, but your content is really, really good, man. So where all can people follow you? I know I saw you on LinkedIn, but where else are you posting regularly? If anywhere else?

Preston:

LinkedIn's the place, man, that's where I'm trying to do it and spend time and invest and try to get better at it. So just search Preston Rutherford on LinkedIn. There's a little shorts emoji in between Preston and Rutherford, so you know that this is the one you're going to select and follow. But yeah, LinkedIn would be awesome to interact with you, comment on my stuff, give me feedback. I mean, this is a learning process. I'm not here to just dictate stuff. It's searching for truth and trying to learn together. So would love to follow, would love the comments. I mean, let's learn together.

Brett:

And your teaching style, the style of your posts, the style of your education is very chubby esque, right? It fits the mode and the ethos of Chubby, which is fantastic. I really like to hear that what you said, you're focused on LinkedIn. That's what I'm doing as well. I kind of, for a little while I was like, I'm going to try posting on Twitter and I'm going to on Instagram and all these things, and TikTok, which I'm never on TikTok as a user, but I was like, this is ridiculous. I like LinkedIn. That's where I'm going to connect with other brand owners and stuff. So I'm just going to go kind of all in on that and then I may add stuff later. But I think there's a lot of wisdom in that. Preston, this has been an absolute joy, an absolute blast. I have to do it again sometime. Thank you so much.

Preston:

Would love it, Brett, thank you. So grateful to do this with you. It was really fun, super fun conversation. And yeah, I'd love to do this again sometime.

Brett:

Awesome. Keep up the good work on that content and I will keep reading and sharing, and I know other people will as well.

Preston:

Appreciate it, man. Thank you.

Brett:

And as always, thank you for tuning into the show and we'd love to hear from you. What would you like to hear more of on the show? If you'd like this episode, share it with somebody that will enjoy it. And if anyone is thinking about being an entrepreneur or they run AD two C brand or they're a marketer, they're going to love this show, Preston Rutherford. So please share that. Until next time, thank you.

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