You make your biggest mistake before you start your business

What I wish Ridge did different

You probably started your business because you were passionate about it.
You have an idea, you see an opportunity, and you start building.

But what you start building is a bigger factor in your success than how you build it.
Thats a bold statement.

”Your category matters more than your effort”
An even bolder statement. One I stand by.
Here’s why:

Trends Matter:

Athleisure is a trend. it is a wave. It will crash.
But Lululemon rode it to 45 billion.

Skateboarding hit the mainstream in the 2000s.
Malls were dominated by skate brands and everyone in middle school was wearing bam t shirts. I know because I was one of them. A total poser.

But general interest in skateboarding is down 90%.
It is objectively a worse time to launch a skate brand than 2002.
Your market is smaller.

Often people launch a brand because it is something they are passionate about.
But more than 50% of your success is environment.

You could have the best sailboat.
You could have the best crew.
You could be the best captain.
You wont go anywhere without a little wind.

Set yourself up for success and try to sail on the windiest days.
Or else you better start rowing.

Category matters:

Ridge is a huge business off of a small category.
I dont recommend trying to build that.

The wallet TAM is massive actually, billions a year, but bifurcated across two extremes:

• Luxury wallets costing several hundred to thousands

• Whatever wallet your mom gives you

So you have one end of the market that was actually a status symbol and one end thats a commodity.

Ridge built a business on the white space in between.
And it was hard as fuck.

We often say we are bigger than the Category.
What does that mean?

More people search for ridge wallet than mens wallet.
That is category dominance.
If you replace the generic term, that means you are growing the category.

Every dollar we spend isnt to capture demand for wallets;
its to generate demand for OUR wallet.

Huge difference most marketers cant grasp. Most business owners cant grasp.
Pick a category that can support dozens of very large businesses lol

You will have a higher MER lol

Product category matters:
Why did we launch two huge new product lines in Q4?
Because the wallet business sucks.

We all know LTV is important.
CAC goes up, but hey you have a customer for life now right?
Casper loses money selling beds, but you gotta think about the SLEEP ECONOMY.

LTV only matters under very specific circumstances:
You need to have a habit forming business.

What is habit forming?

• Routine focused

  • Beauty, bathroom, health

  • A daily, personal, behavior

  • Has to “run out”- the routine is the rebuy

• Necessity focused

  • Milk has the highest LTV

    • Because a lot of people just drink milk

    • And familiarity leads to brand loyalty

  • If someone needs, or thinks they need, your item to survive, you will have a high LTV

• Identify focused

  • Fashion brands can have some of the highest LTV

  • If you decide “I am a gucci person” then you buy more from them because it is part of your identify

  • Apple does this the best

    • Apple is just a fashion technology company

Where did casper, and really all mattress companies, fuck up?

• Single product companies arent brands

• They dont form routines, even if someone uses it every day

  • The repurchase is the real routine, beds dont break every 30 days

    • Same with wallets BTW

• As much as they would like to believe, someones identity isnt tied to their mattress

  • If you cant be seen in it, people dont tend to care

  • And even worse, you cover it up with bed sheets, so you get zero clout from it

what the hell am I getting at?

Choose a good product category at launch.
Shoes are the best non consumable item to sell.
(debated btw lol)

• AOV over $100

• Common for people to own multiple pairs

• Actually do degrade quickly

Shoes are the best consumer business.

Sure, sizes suck. shipping sucks. manufacturing sucks. Blah blah blah.
THATS THE SAME FOR EVERYTHING.

Buying behavior around shoes is unique, powerful, and scalable.

We grew ridge into a huge business DESPITE the category.
I tell people all the time, dont try to sell wallets.
Its not that I dont want the competition, its because I know the challenges.

The same effort, pushed to consumables or shoes, would make a more valuable business.