Chris:
Hello and welcome! I am delighted to be joined by Margo Diewald. So Margo, help me understand what's Adeptation about, you know, help me understand your experience and how you're applying it to help consumer brands today.

Margo:
Great question, Chris. I'm so excited to be here today and to talk with you and your listeners about how to elevate and accelerate their growth for their CPG and other consumer goods brands. My business, Adeptation, is an advisory firm bringing enterprise-grade expertise to CPG and other consumer goods brands. We've done things like help our clients launch their brands profitably in new distribution and sales channels. Bring new products to market from prototype to winning and direct to consumer marketplaces, retail, and grocery, and debuting at their major conferences, trade shows, and other partner events.

Chris:
Awesome. Awesome. So you've got a lot of experience across CPG and from toys to electronics. You've been involved in over 25 M&A transactions. Is my research right?

Margo:
That's right.

Chris:
Oh my gosh. So what do most CPG founders get wrong about building a business that's actually acquirable?

Margo:
That is a fantastic question, Chris. And the thing a lot of folks, founders are thinking in the beginning about their brand. They're very excited about a product or a particular branding, but they're not thinking about how do I make this business, what makes the business, what someone else wants to buy is not a product. It's not the equipment or the buildings that you own. It's the revenue generating engine that you've put together.

So as you're thinking about growing your business and getting it to the point where you can sell, you need to systematize your leadership, systematize your operations, and systematize your entire go-to-market approach. That's what makes a business viable.

Chris:
You led $150 million pricing transformation. That is amazing. With the way that the market's headed, tariffs are up, supply chain disruption is the standard these days. How should emerging brands think about pricing strategy right now?

Margo:
Very carefully, Chris. One of the key points that I would like founders to understand is retail math is critical. Your mastery of it and understanding every layer of your margin, every source of costs in your business, both in your cost of goods sold for individual product skews, as well as your cost of doing business in Amazon, with Target, with a major grocery, and making sure that you've captured all of those because understanding your check-in economics is critical. But the big picture thing is knowing that for every dollar you add to cost of goods sold, a lot of your products, unless you're in a very high margin category like beauty, you need to be able to charge $5 more at retail. Let me repeat that. Every dollar you add to cost of goods sold requires you to command $5 more at the cash register.

And the look of concern on your face, Chris, is significant as we're in this tariff environment, we're in an inflationary environment. Small brands don't have the scale and the headcount to be able to manage keeping up with all of their costs, you know, to use things like futures and forwards contracts to protect them from inflation on the spot price of a particular ingredient. But the math is, you know, when you work through What the margin requirements are from each retailer, from each distributor, they're going to have different requirements, but it still adds up to you need $5 more at retail for every $1 more of cost.

Chris:
That's really cool. That's great back of the envelope kind of calculations. I'm curious what other ones you have. How do you start to break that down into who gets what out of that and the trade-offs?

Margo:
Great question. I've actually got a worksheet that I can share with your audience that simplifies some of the math and can give a few realistic assumptions to say, okay, like if this is your MSRP, this is what your retailer is taking as their margin. So the cost to the retailer has to be X. what's your distributor's margin? So then they're actually buying from you. Because what a lot of people forget is that your selling price is the next channel partner's cost.

What's your price to the distributor, then your distributor is going to add their markup, which is the inverse of margin, to get to their price that they're charging the retailer. And it's important not to get lost in that math to make sure that you know, if you have, a product with your unit cost is $2.50. You need to be able to charge $1250 MSRP, or the value isn't there for consumers. And what happens too, if you only were say hitting a 3X or a 4X, then you're not able to meet the margin requirements you can't get on the shelf, or the distributor doesn't want to promote you because you're not profitable enough for them, or you're not making enough margin on your products to cover your costs of doing business.

Chris:
That's so critical. Thank you. You know, one of the things that you're also an expert at, you know, is voice of customer, right? And you've done human centered design research at, know, Fortune 50s and concept testing, you know, for small toy manufacturers, right? So I'm kind of curious for a CPG founder who's about to invest a lot of money in scaling production, what does good enough customer research look like, you know, at that level?

Margo:
Chris, this is a great question because I want to talk first about the value of perfect information.

Chris:
Okay.

Margo:
One of the challenges I see for a lot of first-time founders is that they're so concerned about making money, or they're so concerned about their business that they're viewing all decisions equally. Instead of saying, which is the critical decision, where do I focus my time? Going back to our example about cost of goods sold in unit margin.

Looking at your ingredient costs, your packaging costs, et cetera, you want to say, where are the most cents in my unit cost? And therefore, where's the most opportunity to reduce my cost of goods sold? So that helps you prioritize. Well, maybe it's in the packaging instead of the ingredients, or perhaps it's in the shipping, right? Because freight is significant. It's actually kind of mind-blowing when you work, say when I work with Spicewell, to see how much freight and the insurance on that freight.

Chris:
That's wild. Is there any back of envelope math on cost of freight calculations? Is that a best effort based on volume? Or how do you approach those type of problems?

Margo:
So that's a great question. And the right answer is going to depend a little bit on the size and scale of the organization we're talking about. So if you're very early stage, you're spot buying your freight, and you're working through these tough calculations, like, OK, if the price today is this, do I need to ship it today? Can I wait two days hoping the cost will come down? Can I wait a week? Where can I commit?

Can I make larger commitments, say, doing a less than truckload versus small parcel? It's really tough. So that question, that's one I would love to talk with founders one-on-one, because we're talking about ocean freight, rail, trucking. But the main takeaway for founders should be, where can you drive cost reduction with predictability? And in some cases, you can't, because you're too small. so what you're trying to do is make sure that you make enough money in those early days and you get to scale fast enough, right? Because when do you, you know, like when you look at, your cost per unit, when you're making 5,000 units per production run versus when you're making 20,000, when you're unpredictable versus when you're predictable, that changes your cost with your 3PL, that changes your cost with your co-man because everybody wants steady, predictable business.

Chris:
There's 87% of supply chain leaders are now increasing buffer inventory. They're shifting sourcing away from China, doing local source, and advising these growth stage companies and CPGs. It's fundamentally different for both, but what are the commonalities that you see between the smaller kind of startups that you work with and some of the much larger brands?

Margo:
So one of the key challenges that smaller brands have is the amount of capital that they would have to tie up and buffer inventory. And related to that, we'll be thinking, you know, to put that in context for a small brand. I got a phone call from one of my client founders because she had an opportunity on an end cap in one of the healthy and natural food grocers. It's a medium sized chain, very excited about that, but the buyer wanted to ensure that we could allocate more inventory to their end cap. And we were at fiscal year end, or nearing it. And so the founder reached me and I was actually, to be candid, I was in the car, coming home from an appointment in downtown Chicago. So I'm in a parking garage talking to my client and helping her think through the decision. Cause I said, yes, when I get back to my office, I'd be happy to run an analysis for you. Because the client was tiny at that stage, I said, this is a little bit less of a financial decision because we have so many unknowns. We don't have the historical data to answer this conclusively. We are fundamentally placing a bet. Do we want to allocate the next, say, 3,000 units of inventory to this end cap opportunity, which is on consignment?

So we've not been paid for the inventory and we're taking the risk that we don't collect cash from those sales until the new fiscal year. Or do our investors need to see us generate more cash in the current fiscal quarter? And thus, we should keep that inventory, more of that inventory for our Amazon indirect to consumer channels.

Chris:
That's awesome insight. And is that, those are inch for intra-quarter type of strategies that you could implement or is that something, you you've got to take a further, you know, kind of look.

Margo:
Let me reframe that. So it's really about understanding management decision analysis. And in some cases, when you work for a very large company, you have reams of data. And the question is, can you wrangle it? Can you organize it? And can you conclusively answer that question? Yes, likely, but the question is whether you can do do it at speed. But when you're talking about a small brand that doesn't have the historical data, as I go back to it, it's something of a bet.

That's when for small brands, it's very important to work with someone who has that enterprise-grade experience because it's visceral in me to know, this decision is about, do we need cash? Do we need to be returning cash? Or showing that on our balance sheet, and showing that on our financial statement, on our income statement, to our investors who are evaluating whether they continue working, whether they're pulling out or... Do we, you know, so it's like, it's a combination of sales and, you know, the financial performance rate and large companies you see the same thing. You know, I one time had a client not pay me for two months. They did pay me by the way, the following January, but they were trying to make sure that they showed a certain level of financial performance at the end of their first fiscal quarter following a spinoff IPO. The trust was there so I knew I would get paid, but they needed to show more cash on the books.

Chris:
Wow, okay, well, that's something that a lot of people will hope to have that kind of problem, right? And that's interesting that it goes to the point of having the experience will allow you to come up to those conclusions and assumptions and know what the secondary questions ought to be in order to arrive at something meaningful, right? You can't just... You know, very rarely is it a simple recipe for saying, yes, we ought to do this. And, you know, because then you could train AI to do it all, right? So it's not as simple as that.

Margo:
Absolutely. A lot of things are not as simple. And deductions are another example. Even going back to my experience at a SoftBank-owned distributor where we were selling wireless devices, accessories, and related solutions to all the major retailers. Anywhere you can buy a smartphone or accessories, I know how to do business with them. Even when you're at that size and scale of working for the major device makers as well as the carriers, deductions are a challenge.

There's a million reasons that you can get deductions. Shipping late, we all understand why that's a problem, but shipping too early is equally a problem. So retailers will take these off invoice adjustments and they can be called deductions or chargebacks. It really depends on the account you're working with. And then myriad other reasons. But part of the wisdom of being senior having that enterprise grade experiences to know when, yes, deductions are stressful when you're small, but the total size of the prize for addressing them because it's, what's the total dollar value of all the deductions? What percent of them are realistically addressable, and is that worth the cost of hiring the person that you need to manage them and fight them?

And you've got to think about, how much of this is addressable and what's my likelihood of winning? And is that worth the cost of analysis?

Chris:
It's got me thinking about at what stage, obviously, the value of the reductions and the estimated value of the recovery of those is the key component to see whether or not you should invest in headcount or, frankly, there's a lot of tools out there that are claiming that it can do everything that they do. But I'm curious, are there any... you know, industry averages or benchmarks, assumptions around, you know, what you know, you could run as an average deduction for this? You know, I know it probably varies a great deal on a great many factors... but...

Margo:
Yeah, that's going to vary from category to category, and retailer to retailer.

Chris:
Because of the finance background and your strength there across enterprise systems, for a consumer packaged goods founder or an executive running their inventory on spreadsheets or their accounting in QuickBooks, what's the right order of operations for kind of reevaluating the utility of those tools, and whether or not they're hitting any inflection points for kind of working on the business instead of in the business?

Margo:
So Chris, you asked when is the right time to implement an ERP? And a good answer would be roughly around a hundred million dollars in revenue. There may be some ERPs that work for your business at a smaller scale, but you have to balance that with the time cost involved in setting it up, learning how to use it, and ensuring that you've got all the right inputs mapped accordingly.

Chris:
Looking ahead to 2026 and beyond, right, you've got nearshoring is accelerating, AI is reshaping some demand planning. You've got the de minimis exception disappearing, right?

If you were starting a CPG brand from scratch tomorrow, what would you build differently? How would you approach things and how would you advise your clients? I realize there's some specificity there, but what are some of the broad themes in how you approach it?

Margo:
Okay, great question. So with starting from scratch, the way that I would think of it is to do a lot of the back of the envelope math to say, what are my cost of goods sold gonna be if I'm producing in the United States? And that's for all elements in terms of the product in the packaging. Because of tariffs, because of delays, because of climate change, all of these things that are coming together to make the lower cost alternatives of buying offshore and assembling onshore more expensive or more unpredictable. And remember unpredictability is expensive. Then you want to do the back of the envelope math to say, can I make this work in the States? What price would I need to charge?

You wanna think about your channel specific break even numbers to say, okay, should I go into direct to consumer? Should I be selling through Amazon? Should I be selling through grocery? If yes, which grocery? And you want to calculate then for the cost of doing business for each of those channels, how many units do you need to sell per year?

And you can go further to, you know, quarter per month to make this break even. And then what would it take to hit that number?

Chris:
Makes total sense, right? So one question that we get a lot right, is, and founders are thinking of, is they're usually in different phases of maturity, right? The entrepreneur's journey, right, if you will, right, from going from the farmer's market to direct to consumer to channels like marketplace channels like Amazon, Walmart.com, right? And when to go multi-channel retail? right? Any thoughts on where those inflection points are? right? It can't all be driven just by the availability of capital, right?

Margo:
Well, to some extent, it can because either your business needs to be producing enough cash for you to cover the cost of entering new channels or you need to seek outside funding and that could be invoice factoring, could be angel or VC investment. That's going to, depending on your source of capital, you may get additional access to advisory. But the things that I would think about too, in that inflection from farmers markets to direct to consumer marketplaces and multi-retail.

And when we're talking brick and mortar, is thinking about what talent do I need to bring in, and in what capacity to enable this? Because as a founder, you constantly have to think about, what should I no longer be doing, even if I'm good at it, so that I can focus? And a great and a fun example of this is when I was working with Spicewell founder, Raina Kumra, she's an amazing person.

Fortunately, a media-ready CEO and you'll understand why this is important. So you got a call, I want to say it was on a Thursday, to say, can you be on QVC on air on Tuesday?

Chris:
Wow. Eh?

Margo:
For a one-woman company, that is a very quick turnaround time. I think we pushed it out a week or so, but there was still six hours of compliance videos we had to watch.

We had to work with our third party logistics partner to ensure they were prepared to support that huge burst for the day of show. We did determine how much inventory to allocate at what price to work within QVC's terms. We had to submit all of our claims and run those through QVC's approval processes. And importantly, get Raina ready and focused to be on air so that we could sell out our allotted inventory in seven minutes on air.

Chris:
Wow. So how'd you do?

Margo:
Well, so we sold out in seven minutes on air.

Chris:
That's great.

Margo:
And then it's a fun story and it's a great example of true partnership. So when you're a founder, you need somebody who's thinking about, yes, there's my lane, there's my defined job. What I called her the morning of, to give her a very focused pep talk before she went on air, to ensure that despite everything else going on, she could deliver and dazzle her audience while I was then on the back end making sure all of our orders were flowing through QVC systems. Our 3PL partner was picking them up, getting the items shipped. And, of course, you learned some lessons, like there's some button that we should have been clicking to indicate orders were shipped. So it looked like our on-time delivery was off simply because we didn't know that we needed to clear the orders in a certain way through Rithum CommerceHub.

Chris:
That's crazy. Where was that in her journey, right? Was that...

Margo:
Very early stage.

Chris:
Can you help me understand a little bit about how that event shaped the national brand?

Margo:
The way I would advise founders to think about an opportunity to go on air with QVC or any other type of time limited sales burst is to think of the first opportunity as advertising, right? You're not gonna make a ton of money on the deal. Your goal is to drive awareness and maybe make a few bucks.

And you want to then also think about making sure that your operational processes are ready when you're testing out, this the right channel for my product? And it might be, and it might not be.

Chris:
Obviously, there's a huge national lift, right, that comes with that visibility. So do you find founders that go back and keep doing that?

Margo:
So, I mean, the whole QVC experience is incredible. It's a very well-run operation. My aunt actually was a QVC fan. Probably 30 years ago, I remember being a kid and seeing boxes show up at the house because she was, you know... She was home a lot.

Chris:
Yeah, I think we all have a relative like that.

Margo:
And the on-air talent is incredible at making their audience feel like you're having coffee with your best friend. Like that's QVC's magic. It's like I'm having coffee with my bestie and she's telling me about a cool product that I want either for myself or for a loved one to give us a gift. You have an opportunity as a brand to say, do I put my founder on air? Or do we want to hire some of QVC's on-air talent to demo the product effectively and to talk about it? There are different implications for you as a brand thinking through, how do I get my founder ready and then what's my founder not doing for those 48 hours surrounding the on-air presence? Or do I want to hire their talent and then how do I manage that so they deliver and represent our brand effectively?

Chris:
That's awesome. I guess that ties back to your earlier comment about being media ready.

I know you've worked with a ton of brands and, naturally, that always makes us observers of all brands in the market. I'm curious if you see any common threads of brands that stall out and don't hit that mark. As an expert, are you seeing certain things, or, over and over, you start to see patterns emerge. Where are those types of things?

Margo:
I love this question. Okay, so one of the patterns I see in the early stage before you go to retail is thinking about your product and your packaging in isolation instead of thinking about how does this show up in the planogram? How does this pop on the shelf? Right, because you make entirely different decisions when you're thinking about how your product looks in the store. Actually, going back to your question earlier about farmers market brands. I was talking with a woman who owns a Chicago-based confectionery business. And I met her at a farmer's market and my poor husband is looking at me in awe as I just said to her... The conversation just sort of naturally went to how she's working to get her product and grocery, I said, oh yeah, I've seen you on the shelf at this regional grocer. But I noticed that the packaging doesn't stand out. Like she's very pretty packaging, but it's too delicate looking. So it works in her cafe, in her confectionery cafe, but it doesn't work in a grocer. And so she needs to rethink the packaging, the typography, the readability, to understand the human experience of what's going to make someone reach to the, you know, look to the shelf, see her confectionery brand and pick it up and take it home.

Chris:
Yeah.

Margo:
Right? There's an interesting thing where the more prestigious a brand is and the more assisted the sale, the less work your packaging has to do. So if you're talking about a brand that sells $500 to $1,000 cookware sets, you've got basic corrugate with some black text. Why? Because if I'm buying something at Williams Sonoma or Sur La Table or another store, I'm engaging with a sales rep who's talking to me about the products, the packaging doesn't have to. But on the flip side, if you're buying something in Target, or Walmart, or any other retailer with an unassisted sale, the packaging does a lot of heavy lifting for you.

Chris:
That's great. That's very insightful.

Margo:
Thank you.

Chris:
You know, I can speak to a little bit of that because I just bought some Japanese knives that came wrapped in newspaper. So, you know...

Margo:
I'm going to guess those were expensive enough that there was an assisted sale or a very informative website that helped you make your purchase decision.

Chris:
It was. Yeah, there's some cachet around the maker and the steel and all those things, but you hit it on the head, right? The fanciest packaging often belies the underlying lift with who's recommending it.

Margo:
Absolutely, and I talked about this in one of my articles a couple years back about how the packaging decision to changes depending on whether this is a gift item or something for yourself because, I know I, because of my sustainability work, I constantly think about, do I want to even buy this product that has what I deem as excess packaging? Because if it's for myself, the answer is no. Please brands alleviate me from that packaging guilt.

Right? Less plastic, you know, I don't need the forever tins or things like that because I have more than enough of them at this point in my life. So I'm looking for something that I don't feel guilty about buying. But if I'm buying a gift, my thought process changes because that's when you're thinking about, should there be a gift box on the set of knives? Yes, if you're giving it as a wedding gift to a family member or to someone that you know professionally. But maybe you don't want that gift packaging when you're buying for yourself.

Chris:
You get stuck in your lane sometimes, right? And my lane is very specific around supply chain execution, back office operations, and retail compliance, right? And to step into packaging, pricing, funding, right? All those other areas that I don't have expertise in. How do you help clients see those blind spots and try and identify what they don't see oftentimes?

Margo:
That is a great question. When I'm talking with a founder, I typically prep for the meeting by looking at their background to get a sense of what do I think that they're likely strong at? So if I'm working with a particular founder, let's say their background is marketing or technology, I trust that they know how to do the front end demand generation. They're going to be very close to the decisions on everything about the look and feel of their brand, their website design. So I'm not going to... come in and talk to them about any of my marketing or brand experience because that's what they're going to own. But I might then come prepared with things like, let's talk about what's boring but important, like your margins, your profitability, your technology setup. You spoke to things like the EDI feeds. I know because I've been there that... Something like that that sounds unsexy is boring but important. You need to get your EDI right or you get extra deductions. You need to get your product mentions or your DIMs crystal clear. That is the one thing that I generally cannot outsource or hand off to somebody more junior than me because I don't trust them. Really, I don't trust anyone other than myself to be careful enough. It's not glamorous work. It's certainly not C-level work, but you have to be precise about it because every retailer, every distributor system puts length with height in different orders or calls them different things. They have different units of measure that they're looking for. And you need to make sure that something is boring but important as your product dimensions are accurate in every single retailer and distributor system.

And when you're tiny and you're not getting to do things like that through EDI or other technology, you have to do it yourself. And yes, it's painful, but it becomes critical because if there are issues in how the data is flowing to your business partner, you're not going to get the sales, or you're going to get the chargebacks.

Chris:
Right, absolutely. You'd be surprised how many times we get involved where someone has tens of thousands of dollars in these compliance-related chargebacks because they weren't laser-focused on the details. Their strength is elsewhere. And we always talk about it in EDI because it's like oxygen. You take it for granted. You don't notice it until you're not getting it.

Right? And then it becomes super critical.

Margo:
And to be fair to you, sometimes it might be your strength, but I know if I were a founder and I've got to be working with investors and I've got to be selling into new channels, then that's something that I need to find high trust talent to take on for me, even though I could do it. And this is like, right, why most executives in Fortune 500 companies have assistance. There comes a point where, yes, you could do it yourself. Yes, you could do it yourself faster. But you need to be focused on generating revenue, working with investors, right? And otherwise, setting up the operations and systematizing so that you've got the right team with the right processes in place. So you can 3X or 5X or 10X your business, depending on the stage of your maturity.

Chris:
Excellent. And help me understand sort of those, how you weigh those factors or help entrepreneurs and founders weigh those options when it comes to insource versus outsource, right? Using fractional folks like yourself, right? At the high level to EDI outsourcing from our level, right? What are some of those things that they ought to be thinking of as they evaluate in versus out?

Margo:
Great question, Chris. So I was working with the founder of a, well, sorry, the owner of a consumer hardware brand. It's in a particular niche within the woodworking industry. And he's saying, okay, if I, it's, you know, it's a side business to his core business. There's a certain amount of revenue and thus margin in the entire business. He can afford to hire one marketer, customer support person, community manager.

So his question to me was, look at everything I'm doing, tell me what's making me money, tell me what's not. And then if I can afford to hire one person, what am I looking for them to do? Because a lot of folks think, I need marketing, but it's broad. Are we talking about brand marketing? Are we talking about shopper marketing? Are we talking about growth marketing? Or growth hacking? All of those point to different skills and different price points.

When we talked about his SEO strategy or his keyword strategy. He said, you know, look at what I've spent on Google Ads, Meta Ads, any of the on platform ads, you know, and tell me what is it going to take to manage this? And I came back to him and said, look, given your size and your spend, I don't know that you're getting value out of it because most of the sales have come from branded keywords. But because you're a niche brand, you're only sold in a couple of stores.

I don't think this is generating incremental revenue for you because people are already looking for you and can only buy in one of the three places. So with a lot of digital ads, when you're very small, you have to be so, you know, so I came back to him and said, here's how I would think about the decision. If you're not paying at least one third of somebody's salary, you're going to be struggling to get mind share. In other words, a $500 a month retainer and that that covers someone's groceries. That's not covering their rent, or any other significant cost, especially because that's gross not net. So thus he's now, he's always going to be fighting for mind share. There is, and then said, okay, what does, you know, the talent require? You know, what's the typical compensation level? What would then one third of their paycheck be? And if you can't afford to spend, know, so it works out to like, if you can't afford to pay that couple thousand dollars a month retainer, plus your cost of ads, because you have to be spending enough on ads to give someone something meaningful to manage, it may not be worth playing in that space yet.

Chris:
That makes a lot of sense, too, in terms of mind share of the consultant, right? And who are you to that consultant? One of the things that we often talk to our customers about is, what share do you think you have of customer voice, right? If you have someone with a market cap of you know, $8 billion, right? You know, And you're paying them $500 a month. Exactly, how many hours a month do you think that they're willing to spend on you, right? That's a very, very, you know, key question, you know, and I find that a lot of folks are just really well-served, dealing with you know, like-sized and like-minded consultants and service providers, you know, instead of just picking... the biggest, largest, most common name out there in order to create something because there's no differentiation, there's no leveraging of talent. And to your point, it's super important to have somebody that is responsible that it provides that you're a meaningful share of whatever they're building and part of that.

Margo:
Right. And he had hired me for a project, to say, I want you to evaluate everything I'm doing for this brand. He had made a switch from big commerce over to Shopify, so he was combining the two data sets together to look at customer lifetime value, to say, here's some concrete answers. This is not returning performance you think it should. Here's the minimum level you need to be spending for this to be a good strategy for you. Here's why some of your performance marketing isn't working, and it's because the brand marketing had dropped off. So with any product category, in that case, there's an age cohort where people are prime customers for the product or not.

Obviously, then people age out of using a certain hobby, right? Think of every hobby that you did in your 20s that you no longer do in your 30s or 40s.

Chris:
Yep.

Margo:
Right? And then there's hobbies that you'll probably get started in when you reach your 50s and 60s. And so if you're in a category like that, you may think about, well, how are people aging out? And then how am I reaching the younger future consumers? That was the part where we had a holy crap moment because what I put together for him was, how do we cost effectively increase this niche brand by placing bets on who do we see in other hobbies that share the same attributes and share the same appeal as his product, or as the category where his product played? And how do we figure out who those people are?

And then how do we change things like the photography that we're already doing? How do we change, the products that you're making and showcasing on your woodworking site to attract people in their 30s and 40s that might do one project every couple of years before they reach prime woodworking age in their 60s?

Chris:
Yeah, well, it's wild because it's so applicable, right? And you talk a lot about placing bets, and I wonder if there's some back of the envelope math for what size bets to place, and how do you make that decision on whether or not something's worth taking a chance on?

Margo:
Great question. So in this case, because it was with the imagery rather than incremental expense, but it was the imagery that we put in an ad, the imagery that we put in a newsletter. So we're going to be doing photos anyways, but what are the kinds of photos that we want to use? Who are the people? What are they making? Right. So in that case, then it was saying, okay, what's the estimated population of people who undertake hobbies A through J, right, know, whatever those 10 hobbies were that we explored. And then what percent of them are doing them at the level of performance that made sense for somebody selling a niche product to a hobby, right? Take, you know, something like Magic: The Gathering, you've got a ton of casual players. And then there are the people like my friend, Alan, who are gonna fly across the country to come to a convention and play.

Chris:
Right, that's a different level of expense altogether.

Margo:
And somebody who's playing at his level, playing a game like Magic: The Gathering at his level is akin to somebody who's engaging in a particular hobby at a very precision level, which made sense for my client's brand. And bringing this around to CPG brands, right, so let's say you're talking about performance foods, you know, like certain granola bars. Well, is this a granola bar for everyone? Is it a granola bar for kids? Is it a granola bar for extreme outdoor enthusiasts like rock climbers? That's gonna change which retailers you play in. That's gonna change your packaging. That's gonna change your keyword marketing strategy.

Chris:
Yeah, so a big part of it's deciding what not to do, right? Or who not to market to and really defines who you are, right?

Margo:
Right. And by not marketing to people, and this is a common misconception people have. They're like, well, I want to sell to everybody. Yes. But take like a Garmin watch versus a, yeah, like a Garmin smartwatch or a Garmin wearable versus something that's at a much lower price point. You can go to different stores. Nobody's buying the Garmin watch at your low cost mass-merch retailers. Right? Or, I mean, they might be, but not realistically.

Chris:
Yeah, yeah, you can sell to everyone, just not all at once. One idea, thematically, that we have is, you know, shout outs right, to either you know, previous mentors, bosses, you know, people that took a chance on you know, you when you were younger, and what you may have learned, and what they may have taught. I'm curious, is there anybody like that in your life?

Margo:
Yes, and it's not who you might think it would be. It's not one of my bosses or one of my professors. I mean I have many of them to thank. But probably the most surprisingly influential person in my life is the entrepreneur who gave me my first opportunity as an independent consultant. And the story behind this one is pretty fun, Chris. I was flying home from Mexico.

I'm stopping through one of my layover in Texas and I meet a gentleman taking a photograph of the Benefits Cosmetics machine in, I believe it was the Houston airport or it might've been Dallas. And I just stopped and have a conversation because somebody like yourself, you don't look like the typical cosmetics consumer. So we asked him some good questions. And I'm curious, I see you taking a photograph of this cosmetics vending machine. Do you work in marketing? Are you... And the conversation just unfolded over the course of half an hour. Mind you, this is a 45-minute layover.

I asked a question, I asked another good question, and he said, it sounds like you know things that I don't and need to. I'm an entrepreneur bringing a new product to market. I'd like to work with you. Here's my card. Send me a proposal. And I said, wait, for what? And he said, send me a menu of options. And I'm not gonna act like that was the biggest project I've ever sold, but it was this moment where he didn't know my educational pedigree. He didn't know my professional background. He didn't ask for my LinkedIn or a resume. He just knew value when it was standing in front of him and asking good questions. And he wanted to work with me. And that's what catalyzed me into launching Adeptation.

Chris:
That's wonderful. And so cool. It really is amazing when you think about how much of this is luck. And bumping into somebody in the airport changes and becomes the inflection point, right? instead of another logo to add along the way, for sure.

Margo:
You know, look at the impact of the pandemic in 2020 and worldwide shutdowns on some brands. You had certain food brands. If you're a clean food brand already in stores in 2020, your sales exploded because consumers were having to cook at home every meal, you know, three times a day, seven days a week for the first time. And they were starting to look at ingredient labels and saying, I don't want to put all these artificial ingredients in my body and they were trading up to clean label food products. So for some brands that absolutely made their business. And then others, if you were launching a travel product, like someone in my network did, it was, you know, the death knell for an, otherwise, excellent product because no one was traveling in 2020. So luck is incredible.

Chris:
That's rough.

Margo:
And I'm a big believer in the power of serendipity because if you're a founder, an owner, an executive, and you're merely paying attention to the values standing in front of you, you know who to work with. It doesn't take hundreds of resumes and eight rounds of interviews to decide this is the person I need to work with. This is the person who's going to be catalytic for my business.

Chris:
That's so powerful and so true. There are people that you meet and you just know right away that this is somebody I can call when things get tough and somebody that has skills that I don't, right? And how do I put those to use. And it sounds like you're doing a phenomenal job with that with your clients at Adeptation.

Margo:
Well, and when I talk with you, was like, okay, I know from your experience, you know, having founded and exited, and starting Surpass. I know that if I've got a client looking for EDI support, like great, I can trust Chris. I don't want to own those details, but I do know that the boring but important details matter. So that's why I'm going to choose sending my clients over to Surpass.

Chris:
Well, thank you very much. Yeah, I'll give you your five bucks later. So thanks for that. I appreciate it.

Margo:
Appreciate it.

Chris:
Knowing what you know now at Adeptation, and having worked with all these brands, and the three IPOs and the tremendous amount of experience that you have, right? would you tell your younger self anything to do anything differently? I'm curious because you've had quite a career.

Margo:
Yes, bet on myself earlier, and make more small bets more often.

Chris:
Gotcha. So the small bets more often. What does that do for you?

Margo:
Like a lot of people think about betting on themselves, but placing small bets on other people, right? You're thinking about before you give too much to someone, whether it's a potential partner, an employer, et cetera. You want to see, will they give me, do they give back? Right? One of my great litmus test is, can this other person put literally anything in writing?

When I'm thinking about placing small bets on others, I'm looking for the people who can deliver for me at the level that I need. A great example of this, you know, as an entrepreneur, is you need someone who can produce today, not two weeks from now. Because if they're coming back around, know, or they want to have a bunch of comments, but they won't put their thoughts in writing, they won't help the piece of sales collateral take shape. They've got lots of opinions and nothing in writing that doesn't help you as an entrepreneur. Because you need the sales collateral, you need the outbound marketing, you need somebody who can pick up the phones and call potential customers, or call potential partners, or help you find influencers. So everybody has an opinion on things, but the people who will put things in writing are the ones you want to work with.

Chris:
Right. Yeah, I find that, too. That's a great point. It really demonstrates a level of commitment and ownership right, that they're willing to put themselves out there and willing to be wrong, but also willing to put a stake in the ground and invite others to challenge it, or change their opinion with new information, right? That's such a great thing about this crazy world of working with all kinds of people. And I love that.

Margo:
Exactly. You know, ideas are cheap, but the experience and the level of ownership that it takes to put it in writing to make things take shape, and by writing it could mean you know, actually build the website. You know, like create the wireframe, build the site. You know, so I don't want anybody thinking this is strictly, you know, typing. I don't just mean documents. It's you know, can they produce the outputs that you need, or the interim materials that you need to drive sales, to grow your business? And that, you know, when I talk to other entrepreneurs is the biggest source of frustration. It's like, can you put the meeting on the calendar? Right? When I'm working with somebody very senior, if I'm leading the meeting, they should be taking notes, even if they're more senior than me. Right? If we're one on one. That is the biggest green flag that I have in deciding to work with someone is do they put thought to pen? I love it, Chris. I love your notebook. Will this other person I'm working with put thoughts to pen or pixel, and then know, volley the ball back and forth with me until we get to a final deliverable or final output that we need to build mutual business.

Chris:
Yeah, that's great. It's one of my favorite sayings from Slootman, who was a CEO of Snowflake. And he said, you know, the biggest tell is whether or not you have passengers versus drivers. Right. And, you know, it sort of frames that right really well as, you know, someone there that's along for the ride, you know, or they actually taking you know, active you know, steps to move things up that ladder right, to push things forward, and to do things, even if they're wrong, right? Even if they're misshapen, right? Or in the wrong direction. So I really love that.

Margo:
Exactly. But my mindset is, you don't let perfect be the enemy of organized and on paper. There's a lot of times, you know, even say in my enterprise consulting work, I'll be the first one to put to make things take shape. I'll sit there when I'm working, say with technology leaders, know, the data folks, the data, you know, the data scientists, the business intelligence people.

I like, hey, let's make a mock-up of what I want this dashboard report to look like, or we need to document this project. You talk, Chris, you're the expert. I will type. Why? Because my technology experts, communications is not their strength. So I just tell them, OK, great. You talk, I'm periodically going to pause, restate, and clarify to make sure I captured it correctly. And I will tell you, being the first person to put things on paper makes you wildly popular.

Right? People react to the idea of a consultant differently depending on their life experience. But like, you can take a look at my testimonials page and look for, what have you done, et cetera, but focus, the bigger takeaway for a lot of people should be the emotion, like the strength of emotion, literally like 30 or 40% of my testimonials contain a word either exceptional or transformational, or something along those lines indicating that it's not just the what, but it's the how. You saw brilliant. Okay.

Chris:
I saw brilliant a couple of times too. Yeah, they all count. That's great.

Margo:
Right. Because for people that are paying attention, they're like, you know what, it's as valuable if you can save me a bunch of money and time by not going down, you know, unprofitable paths or unviable paths as it is that you help me make more money and grow the business.

Chris:
And if anyone listening wants to know just how analytical Margo can be and how she approaches things, remember 30 to 40% of those had comments about the emotion. And just knowing that illustrates how quick you are to be able to slice things up in your analytical mind. So it's wild. I dig it. When we think about, you know, experiences in our early life that shaped the rest of our lives, right? Anything that you learn from somebody close to you that helped kind of shape your trajectory and your career?

Margo:
Okay. Chris, if I understand, you're asking who or what early in my career, early in my life shaped my outlook and created this, you know, powerhouse who is super confident... How do we get there? And you laugh, but I've had discussions with a few of my friends because a lot of people suffer from an imposter syndrome and sometimes I think I'm the only person, especially, a woman who says, I've never actually experienced imposter syndrome. And I think I understand why. And the root of that is my dad. May he rest in peace, but my dad is like the most milquetoast host. I say this with love, he's the most milquetoast host, Clark Kent of a man. But he didn't have confidence in himself, but the way he spoke to me when I was young, built this growth mindset that's absolutely unstoppable.

Because there would be times where I'd say, know, dad, can I try this? What if I do that? You here's why I'm thinking I should do X and I'd be maybe making something timid, know, some timid decision to try something out. And his response to me was... Yes, Margo, but what if you succeed? Then I've wasted 30 bucks, you know, on, say like a practice test that doesn't actually count for anything. Why not just go take the real thing? I believe in you.

If you met him and looked at him, he doesn't sound like this. You wouldn't think that he's this amazing coach, but he just foundationally had that, you can do it and you'll probably, like, yeah, you can try that and you'll probably be good at it. And when you speak that way to people, it unlocks incredible performance. So how my dad talked to me shapes how I talk to my son.

And it also shapes how I talk to all of my clients and their team members because it's not, you know, it's not enough for me to know this and to be good at it. It's how do I build this capability in someone else? Right? Like if I'm working with someone whose background is sales and they're not good at the boring but important stuff, like setting up Excel sheets. Well, you know, I have a simple method to give them the one thing that they need to unlock the, otherwise, inscrutable process of, equals b3, times c4, plus whatever. And I'm like, okay, you're approaching this all wrong. Let me give you the one thing that simplifies what you're thinking about so that you can build those early successes and build upon them. And my dad was absolutely tremendous for encouraging that growth mindset. He never told me you can't do this, or you shouldn't be good at that. He's like, yeah, you'll probably do it.

And it's funny, you know, too, if you look up he, you know, one of the best ways I was able to honor him before he passed last year was... There's this funny story. He was editing my book. You know, I was showing him the second manuscript. Well, the manuscript for my second book. And he started reading it. And every time I said something about "data is", he goes back to his Latin studies that he's very proud of. And he says, you know, data is plural. You need to say "data are" because the singular of data is datum, know, so datum is data. And yes, I understand, but I use the vernacular to be approachable with others because his point, while not wrong, is off-putting to a lot of people. But it's, you know, and here I was, you know, in my early 30s, and I'm just, you know, a kid who wants her dad to be proud of her. And he's looking for a work. But I realized, too, you know, he had retired. He was starting to succumb to Parkinson's at this point. And what I said to him was, "Dad, it seems like you have a really great eye for grammar. How would you like to save me a few hundred bucks, and be my editor?"

Chris:
That's awesome.

Margo:
Okay. So his retirement job was printing out 7 to 10 pages of my manuscript at a time, going through and marking them up with a pen. And to further paint the picture, he's doing this in, you know, when he's going out for like the equivalent of, whatever the modern equivalent of the blue plate special is at the burger shop, or the diner. And he's going through and marking up everything in my book, and then scanning it and emailing it back to me.

And so I was able to honor him, but he wanted to be the first person to buy the second book. Sorry, that's making me a little misty-eyed.

Chris:
Sure, me too.

Margo:
And he was so focused on trying to press the purchase button when I posted that second book for sale on Amazon that he completely missed seeing his name in print on the screen as editor.

Chris:
That's cool. And he did see it eventually, I'm sure. Yeah.

Margo:
Right. Because what a lot of people miss is thinking, you know, and I said this is more of a leadership perspective than anything specific to CPG, but a lot of people forget about how do you engage others with dignity? Right? You know, his body was failing him at that point, but his mind was still sharp. Everyone around him was like, you know, Mike, you can't do this, you can't do that because, you know, the Parkinson's. And I was like, well, you're still sharp. You're annoying the crap out of me, which means you've got a great eye for grammar. So I'm going to put you to work, dad, but I'm going to honor you for it. And that's something that, and I guess my reason for sharing that, and I don't tell most people this story, but my reason for sharing that with you, Chris, and for your listeners is to really highlight the warmth. Like, yeah, OK, I might be a powerhouse executive, who can help you with the financials, who can help you with operational decisions. But I'm also a very warm and caring human being who knows how to build, respect, and dignify talent at all levels and at all stages of their lives.

Chris:
And that's what it's all about right there. And that's a great end to our time together today because it really underscores the type of talent and heart that you show up with at Adeptation, and how you like to work with your clients. I really appreciate you sharing everything that you shared today. And I think that's there's some wonderful insights in here and great back of envelope stuff. Surely, anyone would be really well served by reaching out at sparkadeptation.com. If you were a founder out there looking to kind of round out your virtual executive team, Margo provides an incredible wealth of knowledge, background, experience, and compassion to help you grow your dreams. And thank you very much for coming on today. It was really nice to have you.

Margo:
Thank you for the opportunity, Chris. Look forward to working with you.

Chris:
Made me cry. Yeah.