What's up, Dtcpod? Today we're joined by Adam Xavier, who's the president of the Xavier Group. So, Adam, I'll let you kick us off. Why don't you tell us a little bit about your background in the D to C space, some of the projects you're working on, some of the brands that you're currently building, and we can kind of go from there.

Great. Yeah. Hi, Blaine. Sure. My company right now in DTC, we have a brand called Axel, which is women's hair growth and support products. I've been in direct to consumer space for going on, I think, six years now. So I've been involved in that pre pandemic and throughout the pandemic and now going into the world afterwards. So our product line, like I said, it's a hair growth product developed specifically for women, and we developed that from just my years of experience in not just DTC, but in skincare and hair care.

Before that, why don't we go into a little bit about your background? I know you've worked as well with launching different product lines as well, so why don't you give us a quick little background, and then we'll get into Axel and the problem you guys are solving there as well.

Sure, yeah. So I've been in manufacturing for about just over 18 years now. It's hard to believe. Started out in New York with a motorcycle security device that me and my twin brother invented. Basically, we invented this product, got patents on it, raised some capital from private investors in the state of New York, and ran that for about six and a half years. And we had our challenges of that going in 2008, financial crisis, and then moved out here to California and got involved with tech, as I think most people do, going up to San Jose and Silicon Valley. And then I was dragged back into manufacturing. In a roundabout way.

I got involved in some facial devices like RF skin toners and red laser tools and things like this, in a roundabout way. I was approached by Paris Hilton to develop a skincare line for her. As most celebrities know, influencers with large follower bases were getting into pre pandemic. So I sat with my lab and my chemist and we developed five or six SKUs for a line for Paris. And that's also how I got indirect to consumer, because that know, we had a branded site, but we also had distributors and both domestic and international. So while I was working on that brand with Paris, we also put together some other product lines with some other celebrities, some other influencers that were in early stage. And I was also making some products specifically for my wife for hair loss problems she had. So even though we went from motorcycles to skincare to hair care, it's always been involved in manufacturing.

I've been able to take my experiences from my early days in New York with making hard motorcycle parts out of metal and use a lot of those contacts, a lot of that networking, the network I built here and in China and Korea and get into manufacturing skincare with the packaging coming out of some of the same suppliers I use for my other company. So it's been 18 years and it's been navigating through a lot of financial or economic situations. Like I said, 2008, the pandemic and things like this. But it all comes back to we make Widgets, we have manufacturing inventory.

Yeah, absolutely. And I think those will all be really great topics to go into. Especially. I know it seems like Paris is early to the game in a lot of different things, but I know influencers and celebrities launching their own product lines, that's something that we've been seeing a ton of in the last couple of years. So we'll definitely want to get into what that process is like and unpack that. But before we go there, why don't we go into a little bit? Let's start with Axel. So what was the problem that you were seeing, knowing that you wanted to develop this product alongside your wife and solve a real problem how'd you first go about it? How did you realize there was a problem? And then how did you go about productizing that and taking it to market?

Sure. Great questions. So I've been dealing with hair loss from a very early age, and it's not a new topic for me. What I wasn't aware of was that women experience that. A lot of women that go through pregnancy with the hormonal changes and the diet changes and the stresses on the body, a lot of women experience postpartum hair loss. I had no idea. And watching my wife go through it, when we were having our first son together, I realized that I had the tools at my disposal to develop something to potentially help her. I'm familiar with what's on the market for men because, like I said, I've been using that stuff for 20 years.

So I sat with my chemist and we put together a few different formulations to truly help her. Did some research on products, available ingredients, and we built two or three iterations of a formula, and it actually helped her hair came back. It was thicker than before. Her recovery time was much faster because she had a child before that. So she was used to that stretch of time. So we kicked around the idea a little bit about what to do with that product because my wife has a background, she's an entrepreneur. She had a PR firm here in Beverly Hills. And the gears started turning in her head too.

She said, Maybe we should put some branding together around this and get this out, because it really works. It really helped me. So we did. I sat down and I developed a brand for it, put together the packaging. We did some tests with some small groups of friends and contacts of ours, and people seemed to like it. So we eventually just put together a branded store on Amazon with no marketing, very little marketing, very little anything, really. And it quickly started gaining traction. We got great feedback, and it was really surprising to see how that started to kind of develop in its own way.

And about a year into it, we actually launched it towards the end of 2019. So I don't have to tell you what happened in 2020, but while all of our other projects were experiencing some sort of impact from the Pandemic and our other interests and our other concerns, that product line was still know. So we started to develop it out and build some other products that customers were asking for and just kind of took it from there.

Yeah. And Adam, the next question that I have about that is when it comes so the hair care product or the hair growth sort of product, it falls within a different sort of category than a lot of other different products. Like, obviously, motorcycle products, very different. But it maybe falls in that gray area between something that's like maybe pseudopharmaceutical supplement, like wellness, that sort of space. So as it pertains to regulation or patents or formulation, was there anything that you guys had to consider when coming up with your own solution or when it came to testing and using?

What kind of went on behind the.

Scenes from an operational perspective, once you were being able to see results with your wife, I guess, what were the things that you guys had to do to make sure you could actually take that product to market and sell it on Amazon?

Well, selling here in the US. Is a little decidedly different than most markets. The restrictions are different. It's not necessarily more difficult or less than selling into, say, the EU or just it's different. You can take a product to market relatively quickly here, right? Considerations, you know, around the ingredients, any starting point. So when we put together this hair growth product or any of the other follow on SKUs that went into that brand, or even we were working with Paris's Line and putting together those products with those ingredients, first consideration is always, what are we putting in it and the way our lab works and the way we work with our chemist. Know, we have a portfolio of thousands of different ingredients that are supplied. Know, some pretty major suppliers here domestically in France.

And, you know, we sit down and consider first what ingredients we would like for. A lot of them have clinical trials, right? They have clinical result test results. So we'll put those together, and then it's considerations on the other ingredients you need in the formula to keep it, to create some efficacy. You need binders. You need things to hold the formula together. Then you need to test your shelf life, how long a product can stay in solution, that kind of thing. And while you're doing that, you also have to consider, say, these main ingredients we're using in Axel, can they be sold in China? Because at some point, we would like to sell this product into China, or we'd like to sell it to Japan or Korea. So we have to consider every ingredient and where they can and cannot be sold.

And then ultimately, for selling in America, we decide how we want to approach the marketing. Because here, these are all over the counter. That's not even a good term. These are just ingredients that are not regulated by the FDA. You don't need a prescription for any of this stuff. It's like Minoxidil originally was a prescription, right? And then it became over the counter. None of this falls into that category. A lot of this comes from plant sources, right? So we're mostly looking at how do you want to market it, what kind of claims do you want to make? You have to be careful with that stuff, right? You have to be careful what you can say.

So a lot of that comes down to how you're going to market it. And then there are ultimately some other things you can do. If you want to be an ethical business, you have to say, okay, so we've done our homework on the ingredients that we're going to compile these formulations with, where they can be sold, considerations on shelf life. Then you can take that extra step and say, okay, now, of the fillers and ingredients we're using, is it vegan? Is it cruelty free? Are these ingredients that are on a watch list that consumers have put together, or non governmental groups? So are they clean ingredients and things like this? That all goes into marketing, but it's also an ethical question. We want these products to work, but there is a balance between what you use and then how you can talk about it. So as far as going into the market here and selling on Amazon, amazon has their own list of requirements as well. You have to give them safety data sheets on everything, which that's all stuff. When we develop our formulas, we run anyway.

But when it really comes down to it, it's kind of like you just have to be careful with what you use and how you market it. Right here in America, but going into countries, one of our countries we're very interested in working in, with my experience with my other companies, is China. They have a very different set of rules, not necessarily more difficult, but they have different ingredients that they require going through their version of an FDA, right? I believe it's a CFDA or SFDA. I don't remember which one it is. But again, we don't want to make it more difficult for ourselves three years from now, when we're ready to take our product that's gaining traction and brand loyalty here and go into China and say, oh, well, we have to change the formula and all that. So again, it's just from the starting point we consider this is what we want to come out in the market with. But how does this product need to be five years from now when we go into China or know the UK? Right?

Yeah, I think it's super important and insightful because I think maybe if it's your first time around, you're just thinking about like, let me get to market really quickly. But clearly you guys have been in the formulation and space for a while and you know that it's not just about one market. There's multiple markets that you can eventually reach. So the easier you can make it for you guys down the stream, the better it's going to be. The next question I have just to piggyback off that I don't know. I mean, the answer here could be no. But just out of curiosity, are there any patents that you can come across? Like, for example, I know in the example of minoxidil and hair loss, I think before that there was a patent around what was it, the other main ingredient that was like in propecia and everything. And then when that patent expired, then that's when a bunch of these other companies kind of popped up.

I don't know. In formulation, is patents something that you've come across and what you're able to market the product as while using a specific ingredient, or do you have any color you can provide there?

Sure, yeah. And like I was saying, from my experience with my first venture back in the early two thousand s, I went through the process of getting utility patents and all the office actions of the USPTO. And understanding the different criteria that you need to hit to be able to be granted government protection with a patent. So it's a good question. There are ingredients that are specific ingredients that have patents, and we use some of them. For example, our main ingredient that we use is Redensol, and they have patented technology in their formulation, their molecules or the different ingredients they use. I think we have several products that have patents around the ingredients. You're talking about goodwill by the sounds of not just patents, but you have copyrights and trademarks and things like this.

So in developing a product like this, the way we decide to go to market is we've put into formulation a handful of ingredients that have their own trials and their own efficacy that are developed, manufactured by very well known reputable ingredient chemical suppliers globally. Right. They've done the homework. For example, we had a supplier out of Barcelona that was providing the main ingredient on Paris's skincare line. I mean, these guys had years of research on ingredients, and one of them, even the four scientists that discovered this one enzyme years ago, won a Nobel Prize on. I mean, we're using ingredients that have this patent protection from other ingredient manufacturers. Our lab, we don't invent ingredients, but what we can do is we build these formulas and we can create formulas of multiple ingredients and work to get some kind of protection on that. And that varies.

There's certain ways you can do that. One of the things we focus on is trademark. We have, say, a formulation of an ingredient profile, or what I would call a matrix, and we can put a trademark on that. But at the end of the day, the reality is if you walk down a line in a drugstore and you see Minoxidil right below it, you'll see the drugstore's brand of it that essentially just has Minoxidil in it. Because the supplier of that sells their ingredient to Rogaine and they also sell it to or. Whoever manufactures for that drugstore buys that same ingredient. So for us, you can get wrapped up in a lot of expense if you first can invent or develop an ingredient that has efficacy and whatever, and you manufacture it. But the process of getting a utility patent is incredibly time consuming, and it can run you up quite a bit of investment.

So if you're an unfunded startup, you're bootstrapping it, or you have friends and family that have put their trust in you that can quickly wipe out a lot of your early funding and again, experiences from my first company, we went down that path. It was a very time consuming, costly process, but in the end, we were granted two patents and we were able to utilize those patents in selling to OEMs in this space. I guess the very long answer is we do leverage the patented ingredients that are in our products. We work with the manufacturers and the suppliers to say, hey, we want to highlight that this product has redensil or it has Capixel. We want to talk about your clinical trials, and we want to use the term patented Capixel or patented redensil. Right? So we're just leveraging the investment and the work from that, and that's exactly what they're in business to do.

So, last question on patents, because I think it's really cool to think of it from your perspective of coming up with a brand, knowing that there's a couple of amazing ingredients out there and trying to put them together with your own formulation. So when it comes to that and you're coming up with the ingredients you want to do, you see that one of them is patented and you're coming up with your own formulation. Is your conversation with the people who have the patent, is it, hey, we want to license your patent, or is it a more collaborative thing where you're able to use it so long as you're able to provide marketing around their patent? How does that kind of shake out when it comes to actually using those ingredients in your formulation?

My answer to that question could be different from there could be ten companies answering that and we all have different answers. I don't know the relationships between all the suppliers and the different manufacturing facilities. I just know that, say a large I don't know if I can say names, but well, no, these are global brands. Lucas Meyer. Right. Ingredient supplier, well known. I believe they're global, but they have some pretty amazing products. They're in business to develop, to continuously search for innovative ingredients, innovative compounds that can be extracted from plant sources or wherever they derive most of it, and develop these formulas, these compounds with efficacy, and then turn around and sell those products to a lab or facility.

And they absolutely want to work with that lab to have their ingredient included in whatever their clients are trying to put together. And for me, the conversation isn't around. It's not directly with the manufacturer and saying, hey, I want to use your patent, and say that that's a collaboration between our companies. It's more like you just have to sign the necessary legal documents to even utilize their clinical trials in your marketing. So you'd have to make those arrangements. Firsthand to say, we're using your through our lab, we've decided to put your ingredient into one of our formulations. And now what paperwork do we need to have in order so that we can say that the main ingredient, this has been proven to do this and just be above board with those suppliers, and probably not all startups do that. It's just from my experience with my past businesses, get it done in the beginning, just do it.

Get it done. And then as you grow and develop, you aren't blindsided that you didn't do all your homework before you do it. But again, for me, my experience with patents and trademarks and coming out of that, having that experience with my first company, and actually raising money on the patent, I'm very sensitive to IP intellectual property. That's a very important thing for me, is to have those protections in place. It's good business. You should have that protection, especially. That's your creative collateral. If you sit down and you spend all this time coming up with a logo and then a trademark and a design around it, and you have certain service marks or word marks you like to use, you have to protect that, because there are countless people out there that they'll just knock.

You mean you go on Amazon, you can see it?

Yeah, of course. And I guess the reason I was curious about it is just from the perspective of if you're going to launch a company, right, and then you start looking up, oh, I want to use this ingredient, this ingredient, this ingredient, and then the next thing you know, you start seeing all these patents. And it's just maybe for a first time entrepreneur who's, like, looking to build a product in the wellness space supplement space, skincare space, whatever it may be, it could be really daunting if they're trying to create their own proprietary formulation and serve up a specific marketing message along with that, and then be like, oh, wait a minute. Maybe there are protections around these. But I do think your point about trying to figure out what get it done sooner rather than later is really important, because as a founder, you don't want your business to be growing with a massive liability, right?

And again, with that idea, the way that you just said that if you were sitting there and you were looking up ingredients you wanted, you see that there's patents. The process of getting that into your formula or even developing your prototype formula, you would have to acquire that from. And something like an ingredient that's patented is most assuredly brokered through a supplier, and there's a handful of them coming into America here, and you would have to go somewhere to get that. I don't know about sitting in your bathtub and making it that's direct knockoff. Like, if you said, I know how to make minoxidil at my house, and then you went and did that. Yeah, that's direct patent infringement. I don't know if there's still patent on that, but you have to go somewhere to get those ingredients compounded for you. That group or that place you went would most likely get that from an ingredient supplier that is buying from the patent owner or the trademark or the patent holder rather.

Totally. Okay, so enough with patents. Let's move on into the next steps for when you're building. So now that you understand the ingredients you're using, you've done some of the tests. What are the next steps in terms of taking to market? Making sure you can get it spun up on Amazon? What were all the things that you were doing in taking this product to market?

Right, so again, like I said earlier, I had a lot of this pre existing. It was, it was the Paris line, it was some other product lines in the space that were they weren't even direct to consumers. Like this flash sale stuff. You knew the things that had to be done. You had to have barcodes, you had to be registered to have your barcodes. You had to get the packaging so that it was whether or not you're selling in retail, it's pretty good practice to get the packaging so that it's up to Snuff. Your ingredients are listed out the correct from Getting it from hey, my wife really likes this Product, and her friends do too. To let's send a bunch of this to Amazon in FBA so that someone can order it.

There's a bunch of work know, at least we did and I think most successful brands would do or want to do or have to do is you have to build the message, you have to build the messaging. You have to decide your brand position in the market. Are you the cost leader? Are you prestige? How are you going to price it? What is your brand position? So after we sat down and decided the best place to put this product, you go through the arduous task of building all the marketing around it. You want consistency. It has to look like a legitimate product. So we're deciding what the look and feel of the actual marketing materials are, what's on the box, what colors are we going to use for not just the logo, but everything to develop the brand feel. Is this going to look clinical or should we take it the other way and make it look super high end? Like you'd buy in a blue Mercury or a like, where are we going to put this? Is it ultimately going to be in a drugstore or are we going to sell it in Nordstrom? So once you decide all that, you have to build all the collateral, develop the packaging. You get the primary packaging or the bottles or the tubes.

And then you have to develop the secondary packaging. Is it even going to have secondary packaging? Is it going to go in a box? Right? And then it's really working to understand your scale as you're working through something like a new product, whether it's a skincare product or a motorcycle part, how do you build initial inventory and what's it look like as you start to grow scale? Where are the milestones where you say, okay, instead of putting in 5000 piece orders, now that our next order is going to be 30,000 pieces or 50,000 pieces. And as that happens, you obviously have to understand how it affects your margins. Are you ever going to reduce the price? Is there going to be a point in time where you phase out? So going from that, like you said, initial concept, and I would say it was a test on Amazon too. Okay, this is no joke. Now we're going to build out some SKUs and some bigger channels. Like when we went to Rite Aid, it was getting all that in a row and understanding that as we start to go to someone like a Rite Aid and say, hey, we want to work with you, and they come back and say, what's your marketing plan for 2022? And what are some of your marketing materials? Can you send us your strategy? You should have that in place, otherwise it looks like you are doing it out of a garage. And again, I was fortunate enough, I am fortunate enough that I've done this with other products and retail, and I have a lot of that already in place.

But there are manufacturers and there are contract companies here that have a specialty in helping someone with an idea get to market, that have those contacts, that can help with those contacts.

Yeah, absolutely. And I guess the last question in regards to that is when you were like, let's talk about that first PO, right? Because I think everything you said about making sure you have everything in place before you take it to scale is really important in deciding who's the customer, what should the packaging be like, what are the marketing materials going to be like? But when you guys were doing this for Axel and you had come up with the formulation and you took your first PO and went to Amazon, how many units were we talking? Did you scale immediately? Or was it a small sort of production run, like how'd you approach that first batch?

Our very first PO was very large. And if Axel was my first product line, I think I would have had a moment. Right? But our first PO was very large because the customer we worked with the customer before with some other product lines. As you're working with customers that put in these larger POS, it's a different kind of a negotiation because there's a lot of back and forth on. Yeah, we understand what your retail is, we understand what margins you're offering. But with an order like. This. If it's a large order, say it was I think our first one was 40,000 or 50,000 units, there's always going to be a negotiation, right.

And that's where we have to do our work in understanding our manufacturing. The manufacturing side of this thing, in and out is, okay, if it's going to be a 40,000 unit PO, they want brakes, they might want marketing allowances. What can we tolerate? And as a startup brand, you want the deal, you want the order, but you kind of walk this fine line of, I don't want to turn them off so that they don't work with us, but what am I willing is this going to be straight marketing? Are we going to make almost no money just to get product in the hands of consumers, or are we going to run this like we're making 50,000 unit orders every month? So I think if it was my first time doing it, I probably would have just given the stuff away, right. But we have those relationships and we have that manufacturing experience of making 100,000 unit orders where I say, okay, now I can get on the phone and negotiate with my bottle supplier. And let's say we're going to do this one off run. Do we have enough time to ship the bottles here from our supplier by sea, or do we have to rush ship it by air and pass that along? I think that it really depends on not just the stage, but the network that's in place, the experience with producing an order like that. Because ultimately a big order for a fast moving consumer good is it could be quarter of a million units. What is your manufacturing capacity? How many weeks does that take to do? Is that like a five week turnaround for a quarter of a million units? But we know we're fortunate because a lot of these customers that put in their initial POS with us, we have rapport with.

So I think in my other line, not Axel in the line with Paris Hilton, when our first order came in, that was a little bit different because that did involve, hey, we've got this big order and they paid net 60 or net 30 terms. We need to put up some cash. Right? And now we need to figure out not just all that other stuff I said about, are there breaks for this customer because it's such a big order now. It's fine, great. We've got the PO. There's a commitment here. There's a delivery date. We need to get this thing paid for.

We need to get it in production. There's going to be hiccups. It's never smooth. There's going to be a lot of, hey, we need to get this ingredient or this supplier. Of the 50 ingredients in this one, there's one supplier that's out of these two ingredients. We didn't know it there's all that stuff, right?

Yeah. And I'd love to maybe now we can take some time and go back to revisiting that story. So why don't we talk a little bit about launching Paris's skincare line? How did that go? What were the experiences, and what was it like working with a celebrity talent at that scale to come up with their own line?

Well, first working with Paris was know, I'm not too big into social the. You know, some of the people that are influencers and celebrities, everybody knows. I don't I never had an opinion of her. I just knew who she was. That was my generation, right. Growing up. But to work with, I would say it was fantastic. She's nothing like I would have expected.

Right. She had a very strong business mind. And the idea of launching a product line with a celebrity was exciting because the general thought was, you get this celebrity or you get this influencer, and all they have to do is make one or two posts and you're off to the races. Right. The reality that and we're talking 2016 or 2017, it doesn't quite work like that. I think a lot of people can get excited about that concept, and maybe there are unicorns where that does go that way, which is great. I think that's phenomenal. But that can create its own challenges, too, right.

Launching a product line with a celebrity, it's just exciting because you can immediately get an interested consumer. There's instant recognition of your brand because you're tying it to and someone like Paris, I think you said it earlier, she did a lot of things first. And being a celebrity that wanted her own skincare line yeah, she was one of the first. And the way she wanted to do it was different, I think, than most celebrities. She wanted to own it. Getting a phone call with a distributor was worlds easier than I think, most startups with a no name brand. You pick up the phone and want to talk to Macy's and say, that your Paris Hilton skincare line, they'll take your call. It's great.

You can get the attention of someone like a buyer. So there's all sorts of benefits to aligning a product line with a celebrity. The challenges, again, are I think, for the most part, you still have to put in the work. It isn't post about it and sell millions of units. It's like using turbo or actually nitrous oxide. I don't think people use it anymore. It's like nitrous on a car. You're still running down the road with your foot to the floor, trying to get as much traction as possible.

I think a celebrity tied to a line is like nitrous. It just supercharges it. You can reach further to people you can gain interest from someone hearing the name Axel right now doesn't mean anything to them. It's just this brand. They may or may not have a hair problem when they see it, may not even resonate. But if you see a product and they see a celebrity's name, all of a sudden, most people would say, okay, this is interesting. It supercharges in a way like that. It also provides a huge platform.

So I think at the time, I think she had paris had six or 7 million followers, I think, on Instagram alone, something like this. So theoretically, I don't know how the algorithm worked on Instagram at the time, but theoretically, she can post, hey, I'm launching my line, and a large portion of her followers, and a ton of people can see that without having to know half a million dollars on ads. So that's great. And then, like I said, talking to distributors, retailers. Yeah, you can sit and take meetings with Rena Cente. We did a launch in Italy with one of the premier luxury retailers, la Rena Cente, and they listen. But it's like I was saying, I think there are unicorns out there. You hear stories about it.

An influencer comes up with a lip gloss line, and she posts about it five times, and all of a sudden, she's got a 200 million dollar brand. That's great. But I do think that those things are there's more to the recipe to make something like that happen. I think there's more that has to be there.

Well, yeah, and I think even in our age, as more and more of the brands pop up, that means more and more competition. And back when you guys were doing it and you could pick up the phone, the celebrity is doing a skincare line, okay, yeah, we want to talk. Whereas now you've got all sorts of competition, and they might be saying, well, yeah, we already stock 20 different celeb skincare line. Like, do we really need another one? So I think that's why market timing when you're doing this kind of stuff is so important. But I think there are definitely universal lessons when partnering with anyone. Right. In this case, you guys were bringing the manufacturing and the formulation and operational know how, and she was bringing the digital distribution and brand and marketing. So when you guys were putting this deal together, what did it look like from a deal perspective for you guys? And who were the other players involved? Were there managers involved? Were there other parties involved? How did it all shake out?

Yeah. And that is another part of the challenge. Like I said, working with Paris, it was great. You said she's got a very strong business sense and she knows what she wants, and she's very shrewd about how she likes to get things done, and it's good. But there are other parties that come along with that, especially when you get into bigger influencers or bigger celebrities. And that's the challenge. Developing a working relationship and a business structure that satisfies everybody. You have to take into consideration maybe not a lot of celebrities understand the difference between royalties and owning a business.

Maybe a business manager has never done a deal where there's equity in a company. Maybe they're only used to royalty checks. I think, like in any business, the most important thing is to work all that stuff out ahead of time. There's countless amazing examples of people that get together with their great ideas, and then an entity blows up, and then they have to circle back because they're at each other's throat trying to figure out why they didn't structure it right. I think there's even movies about that. But there are challenges, and the more people you get involved, it can become quite a task to get together a structure that does work for us. Like I said, we were fortunate, but there were challenges, like anything with working with business managers and legal team. I think ultimately, like I said, paris's understanding of what she wanted out of it was different than most celebrities or influencers.

Not just want, but even understand. She got understood. Yes, I want to be an owner. This is something that is going to require capital, a lot of capital. It's going to require time. And this is a different deal than getting a check every quarter or every year saying, okay, pay me. But the manager gets their cut. Because if you think about it, how do you bring a manager in if it's not royalties, if it's equity? That's another challenge.

Right? And I think that overall, it was just a good experience for me because living here in California and La. Specifically, if you start to get a little bit of recognition because you can make products like skincare and hair care and color cosmetics, you do get approached by influencers and celebrities. So understanding the challenges right out the gate can save a lot of time. I think ultimately, for us, to be fully honest, I don't know how the deal would have gone further past the Pandemic, but it is, unfortunately, one of those brands that we were affected heavily by the Pandemic. We were heavily invested in Korea, and that was one of the first moments for us, was in February or March when they shut down. Okay, now we've got a problem because we're very heavily invested in a launch we were working on. Actually, I think we just came back from a launch out there in South Korea. Now, we were working through the product, the supply side.

We worked through the KFDA and all that. But again, you learn a lot from it. And it's just one of those things that said for me, I much rather keep things simple. I think keeping it simple is better, at least for me, because everybody does have a different take or a different view. It's just you want to make sure that the people you're talking to or the managers or the attorneys or whatever they all have, if not the same, a similar understanding or grasp on the different ways you can structure an entity or a deal rather, right?

Yeah. I think it's super important and I know when we're chatting offline about this, I've had experience working to think about building products with different influencers. But there's so many considerations that need to be met that maybe an influencer who's really good at the branding and the marketing and captivating their community audience don't even understand. Right. Like, if we're building a technical, imagine we're building an app for them or taking a product to market. We don't want to end up in a situation where we invest a whole bunch of time and money to build an entire product. And then either the manager, the influencer, they get cold feet. So it's like, how do you really, truly align incentives? So, like you said, we can approach it.

So we're all on the same team here and we're partnering because this is a team and she knows what the deal is going to be up front. As opposed to putting yourself as an operator in a really compromising and difficult position, right?

Yeah, absolutely. And then you have to take your risks too. And I think in my early days, my first company, I wasn't very risk averse. When I say myself and my brother, we weren't really risk averse. You have an investor waiving an investment check, talking about equity, it's like, yeah, off to the races. As you get older, and I think there's more critical mass in your personal life, you have to really start considering that, because, like you said, you could put up a ton of investment into a brand line for a celebrity, and something could happen. I mean, it's another human being. Anything can happen.

They can get in trouble, they can say something. I think everybody knows you can say something wrong and then all of a sudden you're sitting on two years worth of a project that you've dumped a ton of money into or time and you could be dead in the water.

Yeah. It's so important to think about because also, especially in the world of influencer and celebrity, these people have tons of opportunity. It's like add on steroids, right? They have shows they're working on or this project or this collaboration. And you don't want to ever put yourself in a position where your outcome is tied to them or a manager's whim and you have something you've been cooking up for months and months and they're like, oh, actually, we're just going to go with this or that. So I just think for any entrepreneur thinks like, oh, it's really easy, I'm just going to partner with a celebrity for distribution and then we're going to be all good. I do think even from a risk point of view, it's just something that you want to be wary of and understand where their priorities lie.

As you know, it's like one of those things. Be prepared. My very first investor back in New York, my very first investor said to me, gave me a lot of good advice. One of the first things he said to me was, you have to have an iron stomach. The idea of sitting down with a new relationship or someone maybe you've known for a while that's a celebrity or an influencer. But sitting at a table with someone before you engage into a business like a business together or some kind of adventure. Having those tough discussions right away, even though it's awkward for most people or it just seems really uncomfortable. It is so critical to get that stuff out before.

Like you said, you spend months and months, ton of time, money and all sorts of putting your other interests on hold. I mean, that's stuff you can't get back, have those really difficult conversations right from the get go, and then have a good attorney, good contract, right? Absolutely.

Okay, so moving forward beyond that, I just kind of wanted to talk about now that you've done Axel, you got it going. You're able to prove demand on Amazon and selling the Rite Aid and some other big locations. What's the growth phase of the business look like for you guys? What's on your roadmap, and what are some of the next big challenges that you want to tackle with Axel?

The 2023 is going to be a pretty big year for us. Like you said, Amazon has been a good channel for us. Not my favorite, but it's necessary for a lot of reasons. We're very heavily involved with PR, so you need that, right? Rite Aid. We're looking to further our relationship with Rite Aid and do some testing in store some flagships, and possibly working with some other drug stores domestically. Our big focus this year is working to take it into the next market that I have more experience with, and that's China. And everybody says that. Anybody that knows anything about numbers will say, yeah, everybody wants to get into China.

That's how you supercharge. But the reality is this product is actually pretty well positioned and suited for the Chinese market. It just is. Half of my marketing team last year, two years ago from China, told me right away, this is a very big problem in China, and a lot of people talk about it. It's a little different here than in America. It's not such a taboo discussion where women here don't typically like to talk about their hair loss, even with their women friends. But my understanding through them is in China, that's actually something that it's pretty common discussion. Right.

So in 2023, we'll be spending a lot of time really building our national distribution through our direct to consumer channel is still very important, but we'll be working and leaning a lot on Rite Aid. We have a new relationship with full beauty brands. It's a parent company over several publications. We'll be working with them. We have some other great relationships that we're putting together potentially with other drugstore, you know, for domestic. It's really developing the drug retail channel. We have a relationship. We have a distributor in the UK.

They have some pretty aggressive marketing plans for the year going into their drugstores. I think they have two they're working with right now. So we're developing our 2023 marketing plan in conjunction with them. So they manage our UK DTC Site axel Co UK but it's all the same. Like, whenever we make web modifications or changes, we work with them and they make their changes. So we'll be developing that market over in the UK. But ultimately, it's gaining the traction domestically and gaining the brand recognition to ultimately start developing how we go into China and possibly Korea, because, again, these products were developed with that in mind. Like I said, I didn't really know that it could be a pretty popular product there, but after hearing from our marketing team that it is, in fact, a pretty big problem and a pretty big space for it.

Luckily for us, we developed it so it could be sold into China from the get go. We also have some other products that we'll be exploring in 2023 and getting more traction. We work with Ipsy and Boxycharm, so we'll be working with them to get some more traction on some of our other SKUs. We have an eyebrow serum for, like, overplucked eyebrows and repair, and we have an eyelash serum. So we're working with Ipsy because that's a little bit of a different target demographic, right? It's a product that you can use from the get go. 18 and older, we say. So if you use fake eyelashes or whatever, it's like a repair for that. So 2023 is really developing the brand, our core consumer, our target consumer, to gain some market share so that it's like when someone says, hey, what do you use for your hair loss? I can think of two brands off the top of my head, no pun intended.

I can think of two brands that I would go to. We want to start to become one of those other brands. When a woman asks, what do you use for your thinning hair postpartum hair loss? And then ultimately, the long goal is, like I said, you really need that domestic visibility in brand recognition to really then have success in going into China or Korea and into those markets.

That's super exciting. I think you guys have carved out a really strong niche, and I think it's something that everyone deals with hair loss, especially on I mean, it's something that I can relate to, having gone through that and started using some products. And then I think on the female side, you're right when you say it, female products don't really come to mind. So being able to go after that niche and build a product around it, I think it's awesome. And the traction that you guys have so far is really exciting. So we're pumped to keep up with you guys as you keep growing. And then for our listeners, where can they connect with you guys and the brand as well? Are you on Twitter? If you could just shout out your.

Oh, I hope I remember them. Yes. So we're very active on Facebook and Instagram. Our Instagram is Axel Hair and our Facebook is just Axel. And we do have our direct to consumer site, which is axel.com A-C-T-S-Y-L.

Awesome. And what about where where do you connect with people? Are you on LinkedIn, Twitter, anything like that? Email?

I am on LinkedIn. Yep, I am on LinkedIn. And yeah, I do get in the know. I've gotten some questions, know how you get into import export, but I always like having the conversations because, like I said, I feel like I've jammed a lot of experience in manufacturing, not just domestic into a very short amount of time, but primarily LinkedIn. I'm on LinkedIn.

Awesome. Well, thanks so much for joining us on the Pod, and we can't wait to see you guys keep growing and expanding into more locations in the US. And more markets abroad.

Very good. I appreciate you having me on today. Blaine, thank you so much.

Thanks, Adam. Thanks for tuning in, and we hope.