Our decision was early

on to make our product

as open source or open as you want.

Now you could use my

competitor's pouches on my belt.

You could use my pouches on a competitor's

belt because we just wanted to get

people into the system.

Hey, thanks again for tuning in. This

episode's brought to you by OMG Commerce.

That's my agency. Hey,

we're specialists at creating

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We love to schedule a strategy session

with you. With that back to the show.

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 I'm so excited

about this topic and

about our guest.

You're going to get to hear directly

from a successful eight figure

D two C store owner and

CEO and so many valuable

lessons here as we look at a

couple of really cool topics,

open source product development,

building product platforms

for continued growth.

We're going to look at some accounting

and finance lessons and much,

much more. And so my

guest is Connor Crook.

He's the CEO of Diamondback Tools.

If you are handy or you

like to build on the side,

you've probably heard of Diamondback

Tools, you've probably seen them online.

They're fantastic. It's

a fantastic product.

Members of my family use this

product and rave about it,

and so can't wait to dive in

and unpack lots of lessons from

Diamondback tools and their growth. So

with that, Connor, welcome to the show,

man, and appreciate you

coming on. And how's it going?

Thanks. Things are going well.

It's a little cloudy today, which

I always prefer the sunshine,

but things are going well.

Things are going really

well with the company.

We're ramping up for the fourth quarter

and getting excited for the holiday

season.

Yeah, man, it's just been so fun. And

full disclosure, Connor and Dieback tools,

they are in OMG clients will get

an inside look at their business,

helping them grow on Google and

YouTube and Amazon and other areas.

But man, just watching you guys

grow and watching what you're doing,

it's been very, very impressive. A

lot of lessons I want to unpack here.

You guys lowered your CACs by

70% not too long ago and improved

quality. We'll dig into that a little bit.

You've taken this mindset of

almost like Apple, where like, Hey,

if we can get someone into our ecosystem

and we can sell them all kinds of

products, and once

they're in our ecosystem,

it's kind of hard for them to leave

and start buying competitive products.

We're going to dive into that and talk

about accounting and finance lessons and

lots of fun stuff. But I want to start

with first this little nugget, Connor,

you were a trial attorney,

and so you were litigating,

I think you said you were in the

courtroom multiple days a week.

How did you go from that to

starting and leading and growing

one of the top tool belt companies

online? How did that happen?

Well, it's a twisty turning

story. It starts with,

I've always been a little bit

connected to construction.

My dad had a construction company.

I worked there growing up.

The room that I'm sitting in right now,

I actually built this room as an addition

on the house by myself. Impressive,

impressive. Well, not completely.

I had a big polish guy who helped me lift

some windows and my dad actually came

along to help me put on some roof rafters.

So tied into the construction

business all my life.

And when I was building this

room that I'm sitting in,

I was contacted by an old friend

about buying a tool belt company,

which is actually our largest

competitor now that I'm at Diamondback.

And that kind of got me down

the rabbit hole of like, Hey,

this is kind of interesting. I'd always,

I'd never been comfortable as an attorney.

It wasn't something I really enjoyed

at all. So I was looking for a way out.

And so the opportunity to be involved

with buying an interesting business in a

field that I knew a little

bit about was appealing.

That original deal never came

to fruition, but along the way,

learned a lot about premium tool belts

and found out about this little company

called Diamondback, which oddly enough

went up for sale about six months later

and we jumped on it. And

all of a sudden, exactly nine

years ago, I mean nine years ago,

in four weeks,

I think we closed on buying this

little tool belt company based in

Alaska. I'd never run a company before.

I didn't know anything about marketing,

product development, nothing.

My original partner had been with a big

tool company for 20 years or a couple of

them. So that gave me a little

bit of comfort. Got into it.

We got some other projects going on so

that my original partner was working on

those. He also had another

business he was working in,

and eventually I found

Instagram became sort of

Insta-famous and ended up with the reins

of a toolbox company and bought out my

partner a year or so later.

And here I am, as I said, the apple

doesn't fall too far for the tree.

I grew up working construction

and now on a toolbox company with

a detour of being a lawyer along the way.

And hey, man, valuable lessons.

We all come from some background

that gives us unique insights into a

business. My background is

marketing, which really helped me.

I wish I had had more legal

experience. That'd be super valuable,

especially as we're looking at

m and a and things like that.

So I'm sure that helped in your journey

of buying the business. But yeah,

super cool to see where you guys are now.

And so let's talk a little bit

about, you mentioned Insta Famous,

so I want to talk about building

a platform with your products and

open source product developments. We'll

talk about that in a minute. But first,

how'd you become Insta famous,

and what was that all about and how

did that help kind of the launch or the

growth of Diamondback?

Sure. I was doing some

writing the other day,

and I think one thing I will say

time and time again is again,

the key to success is not hard

work. It's not brilliance,

it's absolute luck. There are

a lot of people who are smart.

There are a lot of people who work

hard, but unless you're lucky,

you're never going to be successful.

I had the lucky serendipity,

coincidence,

whatever that about the time I got

into Diamondback and started running.

It was really a time,

Instagram was still about building

community rather than its modern

iteration. Again, this was nine years ago,

and the community around

the trades was really

nascent.

You had guys spread around the country

and the world who were starting to share

pictures of their work, share

techniques, talk about different tools,

and these are guys who

generally, it's funny,

a lot of people think that construction

workers or carpenters are this silent

type.

They're not.

They're just on job sites all the

time where there's a lot of noise.

If you get 'em off the job

sites, you can't shut 'em off.

And so I started commenting

on people's work.

I knew enough to be dangerous from my

background in construction and say, Hey,

that's really cool how you're

doing that set of stairs.

I never thought about doing

that. I'd never seen that,

and started making friends. Just

started commenting on people's stuff,

started to send dms,

found out who some of the more

important influencers were,

and at this time they

were still really small,

so they were happy to work

with a little small brand.

Having a couple beers with these guys at

trade shows never hurts and really just

became a part of the community and

friends with a lot of these guys.

And that allowed us to,

people watch my stories. After about a

year, I started letting on that. Yeah,

I'm actually a lawyer and I know some

things about running a business that I've

learned the hard way.

And so we actually had our own podcast

for a while that people were listening

to. They were following us on Instagram.

We were trying to make as much

engaging content as we could.

And it became strange when I would go to

a trade show and people wanted to take

selfies with me. That was weird.

Wait a minute. Yeah, it's awesome,

man. But that happens, right?

You become internet famous

or famous in your category.

I remember hearing this guy,

he used to say they're the famous

people that nobody knows, right?

You're famous at a convention, not

airport famous. Right, exactly.

And that's kind of probably

where most of us want to be.

We'd love to be well known in our

industry, but let me walk through.

I did Avega come up to me at the

airport after a trade show once.

So that was kind a blending.

Of the two.

Yeah, that's awesome. But I love

that strategy where you're like, Hey,

let me just be a part of this community.

Let me comment and form

relationships with top builders. One,

because I kind of want to and

because this is cool, but two,

it's going to allow me to have

relationships in the industry,

get feedback on my

product, find influencers,

maybe kind of opens all kinds

of doors and things like that.

And so I think it's a good

reminder that one, every business,

whether it's online, offline, or a mix,

it's still relationships

are at a core of that,

especially as you're launching content

and storytelling is at a core of that

as well.

And so how then did you

translate those connections

into promotional aspects?

So how did that help you in the early

days of selling that back tool products?

And then I want to talk about the product

development piece in a second as well.

Yeah, so on the promotional side,

we developed an ambassador, a formal

ambassador program about a year ago.

For the first six or seven years, we

didn't pay for anybody to do anything.

I'd send free product to guys.

Once I saw that they were creating good

content around my product, I'd send 'em,

Hey, we got new stuff. You want

to check out the new stuff?

And we just built this very

friendly relationships,

and I always knew that the big boys,

the big tool companies

could pay for spots.

And so as the influencers got larger,

I wouldn't be as prominent for them.

But the dirty little secret is don't

look at what the influencers is talking

about. Look at what they're using.

And I think that's across a

lot of different industries.

They might talk about,

Hey, I got this great new baseball mi,

but if they only use it for a week

and then they don't use it anymore,

that should tell you something.

It also started

to help with, as you were saying,

with the product development,

starting to understand better

the needs of the customer.

My experience in construction was

a very small construction company,

a small town, and we kind of used what

we had and got by and were creative.

The community that I found

on Instagram was really

dedicated to the trades. It was a

whole different mindset from, yeah,

I'm working construction right now until

I can move somewhere else or move on to

something else.

These were guys were passionate about

what they did and were really proud of it.

I came to it with the

attitude of somewhat,

the lawyer thing kind

of worked in this way.

I'm used to in practicing law in a

fairly small town where I live now,

when I walk into a men's shop,

oh, Ms. Crook, what you want?

I got some new ties for you. I got some

new ties you might like to check out.

I remember that last suit you bought.

Would you like to see this one?

You're used to that level of service.

A carpenter is a guy.

The ones that I really

keyed in with were guys who,

you're in high school, you're a smart kid,

but maybe you don't do well in the

classroom and your teacher says,

you're never going to go anywhere. You

should be a carpenter. And the guy says,

okay. And then he becomes a carpenter.

He starts building these amazing

things and somebody says, wow,

you're so brilliant. You should

have gone to college. And it's like,

you can't win for losing.

And I just thought if we show

the kind of respect that white

collar workers get to

guys who were literally

build the world around us, build our

houses, our schools, our libraries,

what'll happen,

and we found it created

amazing brand loyalty.

Just meet people where they are,

find out what their needs are,

find out what their pain points are,

and then figure out ways to

solve those problems. Because

most of the big companies you know of,

they're making toys,

Whether it's a cooler,

whether it's something for camping,

whether it's something for athletics,

whatever. These are for the most

of us, these are toys. Yep, yep.

I'm making the product that literally

can add years to your career

by helping you work faster and better.

And if you really love your career,

that's going to be meaningful to you.

Yeah, yeah, for sure. Yeah,

it's really great, man.

And I think actually in some ways the

tides are turning a little bit on that you

should become, you're not smart enough

to do white collar, do blue collar.

I've got teens, and so I hang

out with teens a decent amount,

and I encourage kids like,

man, consider the trades.

Consider becoming a blue collar

millionaire because that's possible.

And AI is coming for

basically everything else,

but it's going to be a

while I think on the trades.

And so interesting how that's shifting.

But would love to then talk about,

okay, this idea of open source

product development is and

how has that shaped your product

development and what specific,

give us some examples of what products

have you developed because of the open

source nature of your development cycle?

Yeah, so my favorite story around

that is always our Nico pouch.

So when I bought Diamondback, most of

the products were geared around cs.

They had one product that was for

electricians that wasn't very good.

And so being on social

media, being on Instagram,

I started getting messages from guys

who are electricians. It was like, Hey,

I've heard about these new tool

belts. People are talking about 'em.

What do you have for electricians? We'd

show 'em. They'd say, eh, no. So I just,

what do you want? And I started

getting ideas. People would say, well,

I want a tool belt that I want to pouch

that'll hold these tools and not sag and

this and that and the

other, and various things

around about this time I got this massive

industrial sewing machine that ran

on three phase power,

which thankfully I didn't kill

myself trying to wire my shop,

run this sewing machine, and I

learned how to sew, not well,

but enough.

And so for a couple of weeks

I would have my daily store. I

did Instagram stores every day,

multiple posts and stories

every day. And I said, Hey,

I just sewed this thing up. What do

you guys think? And they said, well,

where does this tool fit?

And the next day I do a set of stories

with the screwdrivers and the pliers.

I bought all these

tools. They said, oh no,

I don't think that's going

to work because whatever.

And we just kept going back and forth.

And finally I noticed these two guys,

Adam and Andrew, I'll use their real

names rather than their handles.

And I said,

these guys are commenting every day

I should reach out to these guys.

I had not talked to Adam in a while.

I was texting Andrew about

cooking within the last week,

and this whole development

was six years ago.

And I was just like, okay, these

guys know what they're doing.

And so we would keep doing sort of the

lab stuff, but then there was also,

Hey, I'm just going to say let's set up

a video call on Instagram and let's go

through some stuff. Let's talk through

it in depth. And we started doing that.

And so when we finally

got down to a design,

I had my manufacturer makeup,

three or four of them send 'em to these

two guys and I don't know if we send 'em

to anybody else.

And they then started using their

influence of talking about the product on

their page. And what they were

able to say was not just, Hey,

I got this new tool bag,

I got this new pouch.

And the guy over at Diamond that actually

called me and talked to me and it's

really, we went deep to make this thing.

It's awesome.

That gave the product a real cache,

but it also gave us a Diamondback,

a real cache and some real props for

being the kind of company that would do

that. And so even both of them used it

for a while. They made a couple tweaks.

When we first released

it, we were still small,

we bought a couple hundred of the things.

They were gone in a week and BA gone

because people are like, I want the

ones that Adam and Andrew Design.

And then it sort of snowballed

from there. A month or two later,

Adam calls me up and he is like,

Hey dude, this thing's great,

but I tell you what, sometimes

I don't need all that stuff.

I actually drew this out for

you. Can you just make this?

Wow.

And so that became another version

and it went through the same cycle.

And so we were able to do that with

a number of things. Just a quick one.

Our vest was a real sort of a game

changing product in the market.

I sewed up one and I just started going

to trade shows and every trade show,

I'd walk around with this vest and

just like, Hey man, try this on.

You're a short guy. You're a tall guy,

you're a big guy. You're a small guy.

Try this thing on. Try this

thing on. What do you think?

Hey, is that guy with the vest again?

But people believed in the product

because of that and it was better.

It's so good, man.

I think sometimes we get the idea whether

we're a service-based company like

mine,

like OMG or we're a product company that

we want to design and build and tinker

in isolation.

We get in our office and we're banging

out ideas all independent of the

customer and certainly some

ideas can come that way, but man,

you really strike gold and really

create magic when you are building

and iterating and getting feedback and

working that feedback into the product

and really making it tailor

made for your audience.

And what a cool thing where you were

able to design for some influencers too,

then led to not only better product

designs, but immediate sales as well.

And so that totally makes

sense. As you were building,

how do you make that a part of what

you're doing because now you're an eight

figure brand.

How do you make this an ongoing part

of product development at your size and

scale now?

Yeah,

that was always scaling leads

to a lot of difficulties of how

there's a lot of cool things

you can do when you're small.

Then as you get bigger, become harder.

We had a competitor beat us to the punch

on a product that we were working on

Instagram, and it was just like, okay,

they were bigger, they were faster,

they had more money, and they did

what we were already working on.

So since then it's been

a little bit more closed.

It's still working with customers

because we are on social

all the time.

Our stable of friends and family

has gotten bigger and bigger and

bigger. And you really start to

categorize the guys who

are out in the world.

There are guys who can give you the

best product feedback in the world,

but world, they're kind of dorky, they're

not good on camera, they're whatever.

And it's like, okay, that guy's not

going to be my influencer, but man,

he knows his stuff. Then there's an.

Advisory board member of sorts,

but not going to be an influencer.

Then you have this massive influencer

who you never going to be able to

pay for a spotlight product,

but he's going to use

it because he loves it.

And then there are all

these iterations in between.

They're this nano influencers who make

great content and they get really excited

when you promote them by reposting

their content on your site,

so they're going to keep

making great content for you.

And then there are the guys who are

hustlers who want to make money off this

whole thing and they're like, Hey man,

you give me a coupon code and

I'm going to drive this thing.

So as you have to constantly

be out there in that

space, finding the right people who

are going to meet these different,

and obviously there's overlap

and different people can

do different things for

you, but right now we know, Hey man,

we got to make a new product

for electricians. I think

we need something kind of

in this space. Alright, call this dude,

this dude and this dude get their

ideas and we'll start working from

there. It was a continuum from early days.

I had some ideas and I'd set up some

really, it was actually really fun.

We'd set up an live Instagram

chat, a closed chat,

and get five or six guys in there who

might be all over the United States and

Canada. They maybe met a couple times

and it sort of becomes in like, Hey man,

what have you been up to? Kind

of thing. But it was also, Hey,

Connor's got some cool ideas. Let's

talk about it. Let's hash it out.

So as a continuum,

as you sort of have to get more closed

and not really talk about things,

and then there's this whole,

when do you show a snake peek?

When do you start showing the product,

how you've got to build hype around

a product before you release it,

but you don't want to be too

early so that you get jumped.

Any insights on that because that's a

great point, and as you were talking,

I see some similarities to Google.

Google's always been open source and

let's test and iterate and get feedback

from customers and improve,

improve, improve, start with an MVP,

improve from there. But they also

know that as they get bigger,

there's lawsuits and there's

competitors, and so some things are very,

very secretive on other things they're

open source on. So totally get that.

Any insights then on how you do,

how and when you do a sneak peek on a

product where it's not too early where you

get ripped off or a competitor comes

out first? Yeah, any guidance there?

Yeah, it really has

developed as we have learned.

We're going to talk a little bit about

how we saved a bunch of money on CACs

down the road,

but basically now we have a much better

idea of about calendar and our product

development lead time.

I used to get really excited about

products and start talking about 'em,

and then it was like, wait a minute,

what do you mean we can't

have this for six months?

You have to know your calendar so that

you can start dropping things in there

and not jump the gun and say, Hey,

we're going to have this in two months

when it really is going to be a lot

longer than that. But

we will talk a little bit about

it at one point conceptually, Hey,

we've got this cool new designs

coming out, we're improving this,

we're improving that.

It really comes down to,

with our manufacturing right now,

it's about a three to four month

lead time on manufacturing a product.

We know that that's after it's fully

designed. So after we get the design,

we can start talking about, Hey, we're

working on this, that, or the other,

and then we can maybe start

dropping in a few quick

glances at it.

It's almost like that old story

about the blind men and the elephant.

It's like I can show you a little

piece of what I'm working on,

but maybe not the whole thing. Oh, here's

a cool new material that we're using.

Here's a cool new

whatever that we're using.

We're adding this cool new technology,

and then eventually we have to get 'em

out to influencers so that we can get

some B roll and some copy to

prepare for our marketing.

So we get that out and

we're depending on the

product, Hey, you can show this.

You can't show this.

Maybe you can wear this, but

don't talk about it. And then

we have two big product releases during

the year. One is before Black Friday,

and then one is before a big trade show

that we do in March. The end of March,

we have another trade show that's in

February though, so if that February show,

we'll usually have the product, even if

it's not being released for a month yet,

then we're going to start

building more hype around it,

and then people are going

to get their hands on it.

That's another opportunity

for our influencer friends

to come around and start

taking videos of it and building the hike

so that by the time we're in a show in

March with thousands of our end user

customers, people are coming up, dude,

I've already seen that new belt. You've

got that new pouch you've got. So

you have to understand the timing for

how long it takes to build a product and

know I can release this much

and nobody can beat me to it.

Yep, yep. Totally makes

sense. Know your calendar,

know your product lifecycle or lead time,

all of that. It totally makes sense.

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A quick comment on,

I love your approach here on the open

source product development side. You're

just creating products that people

love and the feedback is amazing.

The reviews are amazing, and as the agency

helping you grow on Google, YouTube,

Amazon, and organic,

unpaid and stuff like that,

it makes our life so much easier

when this is an amazing product.

And then when you have this influencer

content that you can work into the

marketing,

it feeds the machine and it's

really what's at the core

of your growth. And so love

that you guys are doing that.

Let's talk before we get into the CAC

savings. I think that's super fun as well.

I think this open product source or

open product development leads itself

into how are you building platforms,

what are you thinking about platforms?

And we kind of compare it as we're

prepping compared this to Apple, right?

Apple maybe hasn't had,

just as a quick side note,

they may have maybe the

biggest innovations lately,

but iPhone's still solid.

I love my MacBook. Once I'm in the system,

it's pretty hard to do something else.

You're kind of trying to do that with

tool belts and your systems as well.

So can you explain that a little bit?

Sure. Well,

the first thing you remember is that Apple

did that for its first 20 or so years

of existence and almost went bankrupt.

Then it recalibrated started over

again with the iPhone and exploded.

And of a person of my age.

I remember the early days of

Apple's closed source versus what

Microsoft was doing. I

remember Sony Beta versus VHS,

and those were some real conversations

and ideas that we struggled with early

on. Do we want to be compatible with

other brands or do we want to be like,

if you're Diamondback,

you've got to be Diamondback.

And so our decision was

early on to make our

product as open source

or open as you want,

however you want to describe it,

so that you could use my

competitor's pouches on my belt.

You could use my pouches

on a competitor's belt.

The suspenders would work cross platforms

and everything because we just wanted

to get people into the system.

Totally.

Makes sense.

We had a major competitor who was,

they're still I think probably

at least twice our size,

but we had this major

entrenched competitor.

We just had to get people to get a taste,

and you're talking about a

blue collar guy, a carpenter,

and I'm asking him to buy at that

time, probably a three 50 tool belt,

which now more like four

50, right? Let's get,

and people would say, well, if

I want to get into down that,

what should I buy first? And so

it was like, okay, try the belt.

That's the real heart and

soul of this ergonomic design.

And so we started getting

more and more people into the

system. And so then two years

ago, we revamped everything.

We revamped the belt, we revamped

our vest. Talk about platforms too.

We really think in that apple mindset of

you can buy a belt and put our pouches

on it, maybe as suspenders,

or you can buy a vest and you can put

all the pouches and different things on

it. And we also offer some bags and they

also have compatibility so that you can

sort of modularize them.

And so that was all this idea of

here's the software that I use on my

MacBook, and I put the same

thing on my phone or whatever.

So trying to create that brand

language across all the things.

And so about two years ago we

started this process of redoing the

belt, redoing the suspenders,

redoing the pouches,

and we're doing a vest for next year.

And we've been able to

now at a certain distance,

what is the brand language that

we want rather than me doing a

lot of it working with different outside

manufacturers and outside different

designers. Now that we have our own

design team that's focused on this,

we can create a unified brand that's

everything from the appearance of our

website to the functionality of our

product, which sounds a little weird,

but trust me, for instance,

there's the diagonal on our,

we have a diagonal on our logo.

If you look at my belt, the way that

there's certain components of it,

the same angle is where the

different materials come together

and it's actually functional.

So now we're to a point where we

think we're large enough, Hey,

you know what? Let's kind

of start closing the system.

So if you use my newest belt, most of

my competitors pouches don't fit on it,

and we're moving more in that direction

so that we are really creating a full

ecosystem around down

and back and the brand.

Love that. Have you gotten any

feedback positive or negative on that,

or is that not really an issue? I

don't think it's really been much of.

An issue now because people,

the brand has become strong enough that

if you're going to go buy Diamondback

tool Belt, which means four

or five different components,

belt touches everything,

you kind of want it all to

be the same really focus.

There is a look to it that is

beside the functionality that

it all really looks good together.

Totally. Totally. And it

makes sense, man. We're

as creatures, we like to collect.

We like some things to be uniform.

And I'm sure in the contractor world

that's especially true. And so yeah,

it's super, super smart.

And any insights on how this has impacted

repeat purchases, LTV, things like that?

And feel free to speak in generalities,

but as you've done this,

what has that done to your repeat

business and to the business overall?

Yeah.

We've talked about Apple a bit,

and I think I told you this

story earlier off camera that

we were at that trade show I

mentioned in the February one,

about two years ago when we were

first rolling out this new belt,

and it was a real mindblower

when some people came

up and some dude I'd never got

before. He's like, Hey man,

I got two Diamondback tool

belts. They're all tricked out.

What you got this's new? He's like, yeah,

basically I want more. And I was

like, well, we got this new belt.

And I showed it to him and he is like,

holy crap, I got to get that now.

And this was a huge paradigm

shift for us because for

years it was trying to get people

to go from a cheap product to a

real premium product and say,

Hey dude, just spend the money.

This thing will last you forever.

Thank me for it later

to somebody saying, wow,

I've already spent a ton

of money on this product,

but now I actually like it so much that

if you have something new and better,

I want to.

Upgrade.

And once we had hit that upgrade

point, that was when we said, wow,

this is huge. We've now

unlocked this thing such that

we make a great product. And then

we hear the, I won't say complaints,

but I'll say people saying, wow, I

wish it did this, I wish it did that.

And what people also don't realize,

a tool belt does need to change over time

Because

the tool companies are constantly making

new tools. Tools. And so we have to,

it's like you can throw everything

in a bucket and carry it around,

or you can throw it into an organized

system and the organized system has to be

made.

Everybody's bought one of those drawer

organizers that doesn't do you any good

because your stuff doesn't fit in it.

So to make those upgrades that people

had asked for and see the changes in the

tools that the best people are using,

we were able to hit this upgrade level.

And that then takes the guy who said, oh,

I've already bought two year tool belts.

I've spent a thousand dollars

with you to now like, oh wow,

I'm going to replace

both of those tool belts,

so I'm going to spend another

thousand dollars with you.

And so you can grow your

revenue in a number of ways.

You can grow your geographic base,

you can grow your product base,

your sort of product lines, but man,

if you can just continue to

improve the same product you got,

that's probably the easiest way to build

your lifetime value with your customer.

Totally makes sense. And I experienced,

I think you mentioned

cameras a minute ago.

I'm kind into photography and I've

got several friends that are too.

And then of course we work

with videographers and

stuff for YouTube ads and

whatnot.

And there's a guy locally who I've

worked with forever and his name's Nick.

And every time I see him, he's

like, oh, I got a new camera.

I got this new thing, I got

this new piece. I'm like,

there's no way you actually needed

that, but you like it, right?

And I'm sure it is

creating some improvement.

And actually what's funny is Nick is

editing this video, so I love you Nick,

but that's just the way it works. This

is our craft, and if we care about this,

we want to upgrade and we

want to get the new stuff,

I want to see if we can push the envelope.

I want to see if we can improve and

whatnot. And I think I

see this a lot too, again,

with kind of videographers

or photographers,

they also kind of gravitate

towards a platform.

Are you a cannon type of photographer?

Are you into the Sony platform?

Are you a Nikon person? I think

that's more rare, but yeah,

it just all plays together. And man,

if you can continually

innovate and extend the line,

you can grow with your existing base.

And that is a beautiful thing. Well,

we've kept the people

waiting long enough. Connor,

let's talk about how did you

drop your CACs by 70% and improve

quality? Walk us through

that. Alright, Brett,

we're going tread very carefully into.

Some very hot political waters here.

Yeah,

anything we say related to this is maybe

going to change 15 times in the next

couple of months. Who knows?

Yeah, so the company we were scaling,

and I knew all along that the problem

I had with Diamondback was that I

had a luxury product that had a luxury

cost. And what I mean by that is, look,

a Louis Vuitton bag doesn't cost any more

than the bag to make than the bag you

buy at Walmart. It's the same thing.

It's just that one of them

has a different logo on it.

Unfortunately with my product versus

the product you can buy at the big box

store is it really does cost.

The price is four times as much and the

cost is four times as much because we

were making it in the United States,

which was a huge brand color for us,

made in the usa,

the term made in USA is actually a legal

term and there's certain requirements

around it. And the FTC

came after us and said,

Hey, you're not made in USA because

you're using too much foreign content.

And they asked us to prove where every

material that we used in the product

came from and whether or not we had the

right percentage and blah, blah, blah,

blah, blah. And I mean we're

talking 10, 15% was of the cost,

labor materials, everything was

coming from outside the United States.

And they said that wasn't good enough.

Then when we asked what would be good

enough, they wouldn't give us an

accurate, got to be this percent.

And we said this is ridiculous.

And so we made a flying leap, which was

we can go to Asia and we can make this

product a lot less expensively and

I'm sure we can make it just as good.

And the reason we're getting in trouble

here is because we're bringing materials

in from Asia that aren't sourced from

the United States because we don't make

them here.

The cut and sew industry in the United

States is basically the military and some

small brands and just the

whole base is just not

there. And besides the people who

are willing to do that kind of work,

oddly enough,

the people who are doing all work from

us were either Vietnamese or Mexican,

depending upon which American

factory we had in the United States.

So we started this long process

of moving to Vietnam and it

quickly became apparent

that we could drop CACs

60, 70% by moving to Vietnam.

And then

the book of materials that

we could use of just like

fabrics went from like, oh, you

can pick one of these three,

so you can pick one of this 3000 when

it comes to zippers, buttons, buckles,

all this stuff.

Here's a little book that's the size

of your kid's high school notebook,

or here's a binder set like the

encyclopedia you had as a kid.

I mean it was radically different. Oh,

you don't like any of the

fabrics that we have now? Well,

tell us what you want and we'll make

it for you. You got a custom color,

no problem. How much do you want?

So we were actually able to go out and

find all this great stuff and we found

there's some stuff that it's proprietary

about some of these large companies.

We can say, Hey, we want something

like this, but we want it better.

We want it thicker, stronger,

whatever. And they say, okay, fine.

We can figure out how to do that.

So it took us about two years to

make the shift just from a cashflow

perspective, because when you're

making stuff in the United States,

it's like every week

you've got stuff coming in,

you're paying for it every week versus

in Asia, and we were in Vietnam,

we did make a very strong, I was

like, I'm not working with China,

which I guess was a

good thing politically.

That worked in your favor for sure.

And we also found that China,

it's like a red flag for

people. They're like,

I don't care where he goes as long.

This is not China. Like, dude,

we're going to Vietnam.

They're like great people and they are

the nicest people in the world ever have

opportunity to go over there to visit.

And so it took a long time and

it took a change of our story.

But the thing that kept

rattling around in my brain,

there's a book called Blue Ocean Strategy,

I think I had it home and I took it back

to the office and it's all about when

you make a product that's got

too many bells and whistles,

when you make a product that

has too many bells and whistles,

the value proposition doesn't

align with your customer.

We kept adding features to the product

like, oh, you can put this product in,

you can put this drill

bit here, you do this.

But we never could get all the features

that people wanted because it was too

expensive.

But what we realized was the blocking

feature was that made in the USA

label. So when we took that away,

we were able to add all these other

features that people wanted and

able to keep the price the same,

turn the company from basically

just cash pouring out the door.

And literally we were selling

all the inventory down to

try to keep the company going while we

made this transition because we just

could not scale with a product that costs

that much while also paying OMG to run

our ads. And that does

not mean we're more.

Expensive than other

agencies. You want to.

Call that? No, it doesn't.

No. What it does mean, Brett,

is that you can grow a certain level

by just organic Instagram power,

just dedication of being on

Instagram all day every day.

And you can get to a certain level,

but once you have to start running ad

campaigns and reaching people who aren't

on Instagram.

Man, it.

Takes money.

It takes money, it does. And that

requires cashflow. Not just profits,

not just sales, but cashflow.

And so we got to a point where we

were able to make a product that

is definitively better. It

has a much better feature set,

the quality of construction.

This is no slight to the folks who are

making products in the United States and

the manufacturers we had,

we had some wonderful manufacturing

partners in the United States,

but the first time we

got stuff from Vietnam,

we got a letter from this third

party inspector saying it all failed.

And we were like, oh my

God, what have we done?

And they started sending us pictures of

the failures and we just started rolling

on the floor laughing. We

were like, are you kidding?

This looks better than

anything we've ever had.

It's just the level of perfectionism

from those manufacturers and

they had better machines, bigger, stronger

machines, more experienced workers.

That's what they do day

in and day out. And man,

I went over there and visited those

factories and man, they are amazing,

the efficiency, just attention to detail.

And so we were just like, failure,

that thing looks better than anything.

Just put that thing on a boat

and get it over here, man.

So it's a better product

as far as the feature set,

better product in terms

of the construction,

better product because of the

materials that we're able to source.

And our goal was to do that for our

customer and keep the price the same.

And that's what we did. At the same time,

we were able to take the products we

had been making and start to create this

bifurcation system that we

have a better and best line.

And our best line is light years ahead

of anything else out there in the

market. And our better is very

comparable to our closest competitor

in terms of the look, feel, everything.

It was started by a guy who left the

employment of Diamondback before I owned

Diamondback. There's a long

weird story about that,

but I'm able to make a product just

the same as theirs. But you know what?

It's less expensive. So

we've been talking a lot about Apple.

They're not in main in Wisconsin

totally at some point in

time. And also for Diamondback,

half of our business is global.

In the US is important. Manufacturing

jobs in America, American jobs,

I'm from South Carolina, man,

nobody wants those jobs

working in those cotton mills.

Jobs. Not the same kind.

Those are not the jobs.

Those jobs left South

Carolina when I was a kid.

And those same families

are now making BMWs.

Lemme tell you which one pays better.

Yeah, yeah, for sure, for sure.

No, it totally makes sense, man.

I love this because this is one of

those things where as we look at how

as a D two C brand or

an omnichannel brand,

how do you improve profits?

How do you improve cashflow?

How do you convert and cash to sales,

sales to cash, cash, inver cycle,

all that. It really does start with CACs.

You've got to get CACs at a certain point.

You got to continually be

optimizing and maximizing that.

And when your CACs are at, I'm

just going to make up a number,

this is not reflective of yours,

but if your CACs are at 20% of your

retail price versus 50% of your retail

price, that's a completely

different business.

And so being able to reduce that is huge,

especially while improving quality and

consistency and innovation and all those

things. And so goes to you guys on that.

It opens up so many more opportunities.

And a lot of people think, well, Connie,

you're just making money off of this

hands and fist because half of a bunch of

your sales are online. Well, I tell

people all the time, there's Amazon,

there's online, there's dealers,

there's wholesalers that

trickle down to dealers.

You're giving up certain

things with each one of those.

There are a lot of costs to go into

each one of those hundred percent.

You're doing FBA, Amazon, you're

paying Amazon a ton of money,

managing a lot of your stuff.

If I sell to a wholesaler,

I'm going to give them a lot of margin,

but they're also going to have to go out

and find dealers for me and do all it's

partnership. If I'm selling online,

I've got to get customers there because

people don't just walk down the street

and stumble across a website. I

have to get eyes to that website,

which costs a lot of money.

You're paying Google, you're paying

YouTube, you're paying me, you're paying.

It's all expensive. So

you got to factor that in.

And if you don't have the right

margins, you are immediately behind.

And so love that kind of, and we're

getting a little bit tight on time.

It's probably just a

couple more topics here.

I know you're passionate about

financial success and even I think

spoke at was University of Virginia

maybe recently talking about this?

And it's been one of the trends in DC

eCom that I've loved where there was a

period of time early pandemic and mid

pandemic where people were just like,

grow, grow, grow. Who cares?

We'll figure out money later.

So now everybody's obsessing over,

let's create profitable growth and

let's treat this a real business and

understand that.

And so that's where we want to see get

insights and all of our clients is this

profitable growth is, it's not

profitable growth, things like that.

But what financial

lessons have you learned?

What insights can you share with us?

Yeah, I mean I was

definitely in that same era.

We were hitting our biggest

growth during COVID.

COVID was a fantastic

time for us financially.

We just grew and grew and

grew and grew. And yeah,

our idea was we'll figure

out the cost play. Well,

we figured it out a little bit

too late, but not too late.

We were able to correct

things. But yeah, for me,

I don't have a finance background.

I took one accounting class in

community college 30, 25 years ago,

something like that. I know

enough to be dangerous.

But the main lesson that I learned was

don't give too much authority to

any one person in your organization.

I had a COO for a while, and

that was a total disaster.

I tried to kind of say, okay,

well he's got this under control.

I'm going to go do some other stuff.

You've really got to get down and

understand the financial

aspects of your business.

And what I told those folks in this class

was that comes down to understanding

cash. Cash is king. You've

heard it before. Guess what?

No matter what you try

to do to get around that,

no matter how smart you think you're

cash is still king. So for me,

I have a daily process.

My daily process is I've got this

wonderful tool, my cell phone,

and I can see how much

I sold online yesterday.

I know how much I sold

on Amazon yesterday.

I know how many deal

orders I got yesterday.

I know the cash cycle

for each one of those.

I that if I sell stuff

on Friday on Shopify,

I don't see that money till Tuesday.

I know when I pull money from PayPal,

how long it takes to get there.

So I know all that.

I know how much money I

have in my bank account.

I know where all my

credit cards limits are.

I know where all my lots of credit are.

I know all of those things on a

daily basis. I know those things.

One of the first things I do in the

mornings check, all of those things.

When I get to my office in the morning,

I sit down with my staff accountant

who tells me all of those things and I

happily say, you know what, Sheila?

I was off by about 5% of the number

that you just told me was what was our

available cash. There's always some

things that she knows that I don't know.

Sometimes I know some things she

doesn't know. But then knowing that,

and then we can go through

the AR report together,

we can go through the AP report together,

and then she has old school paper

calendar and we look at, okay,

we got to pay this bill this week,

this week, this week, this week.

We know monthly run rates and all of that.

Now I know all of those things because

I had to learn those things when the

company was about to go under.

Yeah, yeah.

We are now in a very

healthy financial position,

but I still look at

those things every day.

Got.

You. And from there,

when the month closes, it's the 10th of

the month right now. 10th of September.

We're recording this.

I don't have my financials for

my outside accounting firm yet,

but I can tell you what they're

going to look like. Yeah.

Because I can look at the trends.

I know how much percentage of

revenue I spend on marketing.

I know what my product margins are, CACs,

I can just go through and I can look

on my different revenue cycles, say,

this is how much money I made,

and then I can just trickle down

from there and I can figure it out.

It comes in, there's some variances,

there's some things that

pop up month to month,

but I know that and because

I know it that well,

that means I can build a forecast.

Yeah.

Monthly accounting. It's

nice, but it's looking back,

if you're the owner of

the company ceo, his.

It's what happened.

Yeah. You got to be looking forward.

And your accountant cannot do that.

Your accountant doesn't have

the skillset to do that,

and they don't know what new

products you got coming out.

They don't know your product

release schedule. So you

need to know those things,

but you got to build your own forecast.

It takes a few months of revenue so

that you can start to see those trends,

what's related to what.

But if you can do that and then build

your forecast every month when the books

do close, you look back and say, where

does that match up in my forecast?

Where was I off?

Hopefully you were off because you made

more money than you thought you were

going to.

But that doesn't affect the percentages

and the relationships between all those

categories. And once you're to the

point where you can start doing that,

then you understand your business.

Yeah. It's so good, man. So good.

Understanding the history, understanding

all of those things you talked about.

And there are profitable businesses

that go out of business all the time.

They're turning a profit on paper, but

the cash conversion cycle is not healthy.

They do not have the

appropriate amounts of cash,

and so they go out of business.

And it's one of those things where

in order to forecast properly,

you've got to obsess over what's

happening and what happened.

And the best operators, I know their

numbers like you were just talking about,

we're teaching and training our team as

best as it fits for particular clients.

Let's know their numbers like they do.

So that can help us

influence those as well.

And I compare it to people

that I know that are really,

really healthy and I try to be consistent

with hitting the gym and running and

watch what I eat and things

like that I cheat to,

but those things are pretty healthy.

And the healthiest people I know they're

using an Apple Watch or whoop or an AA

ring and they're tracking their

data, they're tracking their inputs,

they've got a schedule, they hit

their workouts on an ongoing basis.

People that are unhealthy

that dunno any of that, right?

They're not looking at it.

And so I think the same is

true with your business.

You've got to know the

numbers and then opt Well.

A great place where you can come in to

help on these things with a business is

sometimes you overbuy inventory.

Sometimes you've got a big inventory

purchase coming up and it's like, okay,

we need cash.

And one of the things we've learned

over the last few years is where those

levers are. It's like, is there

a holiday coming up? Sure.

What is it? President's Day. Okay,

we're having a President day sale baby.

I don't care what the holiday is,

but it's a reason to put on a sale and

so we can generate some quick cash.

And that's where you

come in and you say, Hey,

I got this great idea

for a campaign. We can

throw some cash at some ads,

we can create some cash for you and a

multiple of that cash spin. And it's like,

okay, we smooth that

out. Everything's good.

And unfortunately people now so much

expect Black Friday sales that October for

an online company is a terrible month

because nobody wants to buy in October.

It's like, Hey, it's going

on sale next month. Wait.

Let's just wait. Totally. Yeah.

So you have to start to learn that cycle

of through the year of when people are

buying, when they don't, and

then you got to figure out, hey,

let's make a new product to throw

out there that time of year. Let's

a sale going to be. How do we get eyes

on our website in those slow times?

Right? Right.

It's the Amazon developing prime day and

what's historically the slowest month

of the year, July.

And then now they have a fall prime day

in October like you're talking about.

Yeah.

What can you do for product release or

some kind of special thing in those slow

months to try to level that

out? This has been brilliant.

We are out of time I do want

to leave just a minute though.

For those that are watching or listing

and they are handy and they're like,

dang, these products sound amazing.

Where can they check them? But then also,

how can people follow you? I know

you're starting to put out some content,

you're doing this, you're a seasoned

operator, you're crushing it.

So how can they find your tool

belts? How can they connect with you?

Best way to find a tool

belt is@toolbelts.com.

One of the founders of Diamond url.

Moments of Brilliant early in the

nineties to buy that URL. For me,

probably the best way to reach out

to me is on LinkedIn, Connor Crook.

I think I'm one of the only

Connor Crooks on LinkedIn.

If you see Connor Crook and Diamondback,

that's the best way to get ahold of me.

And I check it all the

time. I love LinkedIn,

so I'm always happy to meet

new people there and connect.

That's amazing, man.

And then any sneak peeks of things

that are coming in the future

for Diamondback or for you

as an e-comm influencer?

Any teasers there? And

totally okay if not.

No. The big things we have

coming up, I mentioned the vast,

we've got a big re-release

on that next year,

which we've been working on for years.

Some really great new technology

that we're putting into that.

And then we've got some ideas

to move into the B2B space,

moving towards sales to large contracting

firms instead of just the smaller

firms and the individual,

which will be open in another

big sales channel for us. So.

That's where we're headed. Check it all

out. Diamondback tools tool bells.com,

and Connor Crook on LinkedIn.

Connor has been amazing, man.

Thank you so much for the time

and really, really enjoyed it.

Thanks, Brett, appreciate it.

Absolutely. And as always,

thank you for tuning in.

Let us know what you'd like to hear more

of on the pod. You found this helpful,

share it with somebody who would

benefit from it as well. And with that,

until next time, thank you for listening.

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