Venture Everywhere Podcast: Katie Hunt and Scott Hartley
Katie Hunt, co-founder and CEO of Oh Norman! chats with Scott Hartley, Managing Partner of Everywhere Ventures on episode 81: Pet Wellness with a Pawsitive Impact.
In episode 81 of Venture Everywhere, Scott Hartley, co-founder and Managing Partner of Everywhere Ventures, chats with Katie Hunt, co-founder of Oh Norman! — a modern pet wellness brand offering science-backed products for anxiety, allergies, and dental care in dogs. Katie shares the founding story of Oh Norman!, which was inspired by actress Kaley Cuoco’s strong commitment to animal rescue and her vision for a brand that authentically represents the everyday realities of pet ownership. Katie also discusses how Oh Norman! uses community-led development and a lean, omni-channel approach to deliver effective pet care while staying focused on growth and profitability.
In this episode, you will hear:
Oh Norman!’s approach to pet health issues like allergies and dental care
Incorporating customer feedback into product innovation
Using DTC and marketplace channels testing to validate SKUs before scaling
Prioritizing unit economics over speculative LTV projections
Deferring physical retail to maintain flexibility and acquisition potential
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TRANSCRIPT
00:00:04 VO: Everywhere Podcast Network.
00:00:14 Jenny Fielding: Hi, and welcome to the Everywhere podcast. We're a global community of founders and operators who've come together to support the next generation of builders. So the premise of the podcast is just that, founders interviewing other founders about the trials and tribulations of building a company. Hope you enjoy the episode.
00:00:33 Scott: Hello, hello, everybody. This is Scott Hartley, co-founder of Everywhere Ventures, and I'm incredibly excited to be here with my friend today, Katie Hunt.
00:00:42 S: Katie is a multi-time founder. Katie is not only the most recent founder of Oh Norman!, which is an eco-friendly pet wellness brand she launched with the actress, Kaley Cuoco but she's also the co-founder of what used to be called The Fund, The Fund New York, which is the genesis of what became Everywhere Ventures. So we're co-founders and longtime friends.
00:01:04 Scott: And in addition to that was the founding force behind Showfields, which was an incredible online to offline shopping experience, which took place in New York. Many of you may have visited that beautiful store on Bond Street.
00:01:19 Scott: And in addition, has had a storied past working as the Chief Brand Officer at companies like Hinge and as the third employee of Warby Parker, which I've got plenty of those glasses all over my car.
00:01:32 Katie: You're the reason why we got to IPO, in other words. It's all of us losing them and buying too many. It's a whole thing.
00:01:38 Scott: All the cute names. Exactly. So excited to be here with you, Katie. And I don't even know where to begin. We've got so many layers and so many fun things to go into, but welcome to the podcast.
00:01:48 Katie: Thank you. I like that this is just our excuse to actually get to catch up. Scott is the busiest human in the world. And so if I want to catch up with him, I have to book a podcast. That's the only way to get face time. [laugh]
00:02:01 Scott: That's not totally true. I'm usually spending time with my dog. Mia, as you know, with Rome, is a huge fan of Oh Norman!. She's got all the treats. She's probably most preferential to the beef sticks. I think that's her number one. Although the pumpkin strips are also a close second, and the drops of extra vitamins that go on top of her food every day.
00:02:22 Katie: You're thinking about me always. You're with Oh Norman!. You and Mia are having these great Oh Norman! moments. Those are WTF beef treats, which stands for Wholesome, Tasty, Fresh, Get Your Mind Out of the Gutter, one of our best sellers. They are really the Rx bar for treats ingredient.
00:02:38 Scott: I've got a pantry that's pretty much full of boxes that say WTF on them.
00:02:43 Katie: I know. Literally, every time we launch a product, I send it immediately to you guys. It's always my first send.
00:02:49 Scott: So tell us about the product road map. I know you got a few SKUs in the mix, and you guys are on Amazon and a number of other places.
00:02:57 Katie: I can't believe it. A year and a half in, we're on five different locations for shopping we’re on direct to consumer, Amazon, Chewy, PetMeds, and TikTok shops, which has been really exciting. I've never expanded a direct to consumer that quickly.
00:03:12 Katie: But the pet category is super unique in that unlike traditional direct to consumer where you really have to focus on your own website and Amazon, those are your two big moneymakers, pet has a lot of really rich environments that already exist that you can tap into.
00:03:29 Katie: So a lot of the strategy now around creating a pet company is not necessarily how do I spend $100 million to drive traffic to my direct to consumer website? It is how do I create products that are still ethical, healthy, really great for animals, and things that I can be proud of that I want to exist in the market that have healthy margins so that I can put them on other channels.
00:03:56 Katie: And you would be shocked at the margins in pet. Going under the hood, I think one of the things that's been most fascinating as we think about the product road map is I don't understand with the margins in pet why people aren't building better, why they aren't manufacturing in the best way possible, using incredible ingredients, working with veterinary nutritionists to build products.
00:04:21 Katie: There is so much margin to be had there that it is a space that you can actually create products that you are extremely, extremely proud of that are still affordable.
00:04:31 Katie: So that's a lot about what we think about. But the product I'm most excited about that we have coming out is a dog mint. And you might think, “Okay, dogs are not going to start chewing mints.” But we've actually created a proprietary blend that has a probiotic in it.
00:04:48 Katie: It actually kills the bad bacteria in your dog's mouth. So it doesn't just freshen their breath with all natural ingredients, it actually leans into their long term dental health, which we are finding is one of the main things that is actually lessening the lifespan of the pets we love. So we're trying to get in front of that.
00:05:07 Scott: It's amazing as I didn't grow up having a dog, but have had one for the last ten years, believe it or not. But I have to say that across all of the spectrum of pet wellness and health, teeth and dental is one of the most challenging aspects. Brushing is tricky if you don't start when they're a tiny puppy and really get them used to the toothpaste and the little brush in the mouth.
00:05:29 Scott: And then when I've ever gone to the vet to explore dental hygiene paths, usually they need a blood test. They need sedation. They need a thousand dollars. So you look into these alternatives, even the doggy bones that have some rough texture that helps grind away some of the plaques. But it seems there's so much room for category innovation that you guys are doing a great job.
00:05:53 Scott: Obviously, starting with the low hanging fruit, the delicious beef sticks that every dog loves, and moving on to mince, moving on to other adjacencies. But curious about that space. Dental seemed a huge white space to go into that every pet owner that I know really struggles to deal with.
00:06:09 Katie: It's funny. So we have what we call the pack. We have an Instagram following that is a quarter of a million people. And before we develop products, we talk to them. It's one of the best hacks in the direct to consumer business. Why would you create a product and then try and find an audience for it when you have an audience that will tell you exactly what they're looking for?
00:06:32 Katie: Bad dog breath, it literally comes up everywhere. But then when you really look under the hood of the science of it, it is really disturbing that the majority of pets in the United States by the age of three have irreversible dental issues.
00:06:48 Katie: I, like you, my dog is my baby. I hate the idea of putting them under to have their teeth cleaned. One of my dogs is almost 14. He's too old for sedation. I wouldn't want to put him through that.
00:07:01 Katie: As we look at products that we're developing, it is about extending the happy, healthy years of a pet. And the first product we dropped in the dental space is our dental wipe called Your Breath Effing Stinks.
00:07:13 Katie: It's a finger wipe. It goes on your finger. We find it much easier to maneuver versus a toothbrush. Dogs seem pretty okay with it, and it became very quickly our number one selling SKU thanks to our pack.
00:07:27 Katie: They were telling us, “This is a problem. My dog's breast stinks. I'm not really going to pull out a toothbrush. Do you have something that's super convenient?” And so creating something that's convenient that actually addresses plaque buildup and the actual smell of the breath was where we first started. It took off.
00:07:45 Katie: We literally sold out five times in the first couple months. We couldn't keep it in stock no matter how many I ordered. And so that was the impetus to begin developing in that space even further.
00:07:57 Scott: So coming next is the water flosser for dogs?
00:007:09 Katie: Yeah. Exactly. Just get in there with a dog water pick. It will be bone broth flavored.
00:08:05 Scott: I love it. We'll talk to Sam from Flouse. Maybe there's a collaboration here to come.
00:08:10 Katie: Or at least an April fools collaboration where it looks like we drop a co-branded product.
00:08:17 Scott: That's too good. Thinking about SKU development, listening to customers, developing a brand, obviously doing that with a celebrity co-founder, how do you navigate both the distribution and the buzziness that can come with that with the authenticity and really getting in the weeds and talking to customers that have very pedestrian needs? How do you navigate that duality?
00:08:38 Katie: I'm very lucky in that Kaley is not just the face of this business. She is my actual co-founder. She has a rescue farm with over 200 animals. This is a passion project for her. She is the one who wanted to start this company, and I was brought in to help her. It has been an incredible pairing.
00:09:00 Katie: She is not about this clean, perfect lifestyle. In fact, the idea of Oh Norman! is that it can be said in two different ways. It can be said to your pet of, like, Oh Norman! You're so sweet. But it can also be said, like, Oh Norman! You’re driving me nuts.
00:09:16 Katie: And so I think Kaley really embraces the messiness of pet ownership, and you can see it all over the brand. You can see it from the images even that we're utilizing, which are all shot on iPhones.
00:09:29 Katie: It's not meant to be this glossy celebrity brand. It is one pet parent who's like, “Owning a pet is messy. It doesn't look like the pedigree dog on the front of the bag. It looks like something very different. It looks like rescue dogs.”
00:09:42 Katie: Her dogs are not the prettiest animals. They are chihuahuas, a lot of them elderly. They have a lot of character. They're all adopted. They're all rescued. It is about that pet parent.
00:09:53 Katie: It is about the reality of owning a pet. I love the mess. I love that it's Calm the Eff Down, Stop Effing Licking. It is about the things that we're trying to help our pets with, but also the crazy messiness of pet ownership in a good way.
00:10:11 Scott: It is. I read some article recently about staring into the eyes of your pet can release the same endorphins as human touch or other things that the legitimate companionship and a legitimate familial part of pet ownership, which there's a reason why millennials, Gen Z, all the others are…
00:10:29 Katie: Are having more dogs than babies.
00:10:31 Scott: Are having more dogs than babies.
00:10:32 Katie: In a world where that's happening, the humanization of pets, even think about our parents' generation and dogs sleeping outside versus inside, the dog in the last seventy five years has gone from the backyard to the bedroom. What a glow up. What a glow up this animal has had. My chihuahua sleeps literally in between my husband and I in a giant donut sized heated bed.
00:10:57 Katie: If we think about the glow up that they've had, why are we not having the same glow up in the wellness and care that we have for these pets? If they really are an extension of our family, why are we feeding them things that have 100 ingredients that we can't name? Why are we doing these things that we wouldn't do for ourselves?
00:11:18 Katie: And I think the consumer, millennial and Gen Z and all consumers in the pet space are more educated about what they want for their pet. And to me, that's so exciting. Let’s keep them longer. Let's keep them healthier. We have them for such a short period of time.
00:11:33 Katie: You and I were literally just commiserating before this call started about having a love of a pet is a very short part of our lives, but why not make it the best life possible? That's really what Kaley and I want. We just want dogs to be happy and healthy. We love them.
00:11:50 Scott: I think about that every time I'm throwing the ball at the beach or something with my little Muppet, trying to give her the best experience possible in the short, brief life that little doggies have.
00:12:00 Scott: I think it's interesting with consumer transparency. I was even recently using the app Yuka, where you can scan barcodes and see green, yellow, red around the underlying ingredients. I'm sure you're more aware of this as a mother and the types of products you put around your baby. But I think as a person without children, it's not an awareness that is top of mind for me until I consciously delve into it.
00:12:23 Scott: So in some sense, I would imagine there are some headwinds to consumer education around if people aren't doing this for their own bodies, their own personal health. Is this a small portion of the dog market? Because people care so deeply about their pets that this is actually a very large category.
00:12:41 Katie: We do more for our children and our pets than we do for ourselves. My daughter in the morning, I cook her breakfast, organic fruit and eggs and fresh baked bread. I'm lucky if I have a coffee before noon.
00:12:55 Katie: So I think it's about the love of something. When we love something, we really put the time and attention into making sure that we are making good decisions for that child or for that pet or for that partner. And some of the fun data is really around how much we're willing to do for others that we're not willing to do for ourselves.
00:13:15 Katie: So as we have a generation that is more into self-care than any generations before, if you keep that data in line as we begin to maximize what we do for ourselves, that maximization happens for the pet and for the child as well.
00:13:31 Katie: Organic baby food and Farmer's Dog, they come out of that root of doing more and knowing more because we are doing more and knowing more for ourselves. That's exciting.
00:13:41 Katie: I think the market is only going to continue to grow and blossom. Already, the dog market increased by 28% in the United States during COVID, and it didn't decrease. It just continued.
00:13:55 Katie: Because once you've had your first dog, you just keep going. It's an addiction. My husband can't let me anywhere near a rescue organization. Otherwise, we'd have to build another home for our pet. It is what it is.
00:14:06 Katie: I'm sure you guys are seeing it at Everywhere Ventures as well. This trend on consumer transparency, I think, is really fascinating. For us, even in our beef treats, it's five ingredients. There are no additives.
00:14:19 Katie: But we had to work to create a soft and pliable treat using coconut glycerin versus additives. That takes a while. It takes development. But if you can put the time and attention there at the end, you end up with something that is across the board healthy and something I would literally eat myself.
00:14:37 Scott: Interestingly, we live in this world of chasing fancy, shiny, glossy AI with newfangled technology. I tend to think of the world as almost bifurcated into a blog post that I wrote a number of years back with a friend of mine.
00:14:50 Scott: Silicon being deep tech, advantageous, better tech, or Gucci, better brand. So the dichotomy in the world is you're either Silicon or you're Gucci. So we gotta move to one end of the spectrum or the other. You gotta either have insanely better tech or you better have a good brand.
00:15:08 Scott: And as somebody who has built consumer products over and over again, and I'd say every product that you've been affiliated with, in my mind, is an excellent brand, what have you learned, and how have you gone about building these yourself repeatedly across a number of different categories?
00:15:23 Scott: But from Warby Parker to Hinge to Showfields to Oh Norman! and a number of other things that you've been involved with over the years as an investor as well, not that you couldn't go to the Silicon side, but I put you firmly in the camp of Gucci.
00:15:37 Katie: Oh, I like being in Gucci. Gucci is where I want to stay. Don't get me wrong. I'm glad to invest in heavy tech. It does well for our portfolio. Thanks to you, Scott and Jenny. My brain is definitely on the branding and Gucci side.
00:15:52 Katie: Look. I got to sit in the room at Warby Parker. I'm not responsible for that epic brand. I wish I was. Wouldn't it be fun to be able to take credit for that?
00:16:01 Katie: But I got to watch something be created, and that thing was created directly speaking to the consumer and walking around campus when they were in business school and literally having people try on prototypes and look at names.
00:16:18 Katie: There's something to be said about getting to create a brand while in business school. I'm sure you're just surrounded by like minded people who really want to poke holes in everything you're doing. But they created the most epic brands. To me, it's been the inspiration for everything I've built since.
00:16:35 Katie: With Hinge, we got to work with Red Antler to rebrand. I was the Chief Brand Officer there, and it was really important to me to create a property where the technology and the brand were both leaning towards the same thing, which was meaningful connection and love.
00:16:50 Katie: I was single in New York at the time and utilizing all the dating properties, and I felt most of them were rooms with a lot of mixed intentionality. By the time I would end up actually on a date with somebody that wanted to be in a committed relationship, I had to meet so many awful people between A and Z. By the time I got to Z, I was too exhausted, too many horrible things have happened. I'm not interested.
00:17:18 Katie: The idea behind Hinge is could you create a room where the entry point was really saying, “I want a relationship” and making that cool and acceptable because everybody else walking into the room was saying the same thing. And so then you get to build a brand around love and the journey of finding love. How fun and exciting is that?
00:17:39 Katie: Showfields, I got to build my own department store. That was awesome. We got to create this idea of bringing back the original department store and Harrods and that feeling of retail again and doing it with Tal and Amir, who are two of the biggest dreamers, innovators, and doers that I've had the opportunity to work with in Showfields branding. Tal is Willy Wonka. How do you create a department store for Willy Wonka? Talk about fun.
00:18:11 Katie: And then, Oh Norman!. Kaley is such an iconic actor, but also just humanitarian. She's well known for her rescue efforts, but also just well known for being this person who takes no BS and speaks her mind and is absolutely hilarious. So you get to suddenly have this brand that is not just, “Oh, dogs are perfect. Isn't our life so lovely?”
00:18:38 Katie: But you get to have a brand where it's talking about the actual journey of owning a dog with her humor and her actually speaking the word. All of our content is shot on her cellphone. It's her at home. It's her with her pets. It's her with her family. To me, it's magic, and you get to see it. I love it.
00:18:57 Scott: It's amazing all of those moments that you talked about. It reminds me of just when I've had the interactions with real brand visionaries over the years. One conversation goes back ten years to the first meeting that I had with Steph and Jen from Away Luggage.
00:19:13 Scott: I'm talking about building a holistic travel brand. And it reminded me of back in San Francisco, there was… my sister calls it Internet Street, which is Hayes Valley. And Internet Street has a Warby Parker. It has all the internet brands. It's an outdoor mall of Showfields, if you will.
00:19:28 Scott: There used to be a store called Flight 001 that was about the ethos of travel. It was bag tags, and it was all the things, all the fun things about travel, not just luggage. When I met with Jen, I remember thinking, “Gosh. This is an Internet version of Flight 001, not just a bag company. This has a big vision around it.”
00:19:46 Scott: And I think what you guys are creating at Oh Norman! in a similar ilk is not just a pet treats brand. It's a holistic philosophy about pet ownership and bringing wellness to pets. And I think that's what people miss sometimes when they say, “Oh, the TAM is too small.”
00:20:02 Scott: For great entrepreneurs, the TAM expands. The TAM is always a wedge, a domination, and then land and expand. I think you guys are doing a great job of that.
00:20:11 Scott: Talking a little bit about go to market strategy, one of the tricky things I think with consumer businesses and D2C, consumer businesses in general is getting the escape velocity. So you raise the initial pre-seed round. You don't always have the tech enablement off the bat that enables you to get the scaling that, say, a SaaS business or some other technology business can get off the bat.
00:20:32 Scott: If you don't get to sufficient revenue fast enough, you can get in this rock in a hard place where you've raised too much. You can't take more dilution at the valuation that you're at, but investors can't justify a higher valuation because of the multiples around consumer businesses. And they say, we're already betting at 5X revenue or 10X revenue. We can't go above that. So how do you navigate this?
00:20:55 Scott: When I've seen consumer brands that have really taken off, they do a great job of nailing brand, not raising too much money, executing well on D2C, and then moving very quickly into distribution channels and retail partnerships to be able to get that escape velocity before they hit the wall on valuation.
00:21:13 Scott: You guys have done a great job navigating this. Maybe you could talk a little bit about your fundraising strategy and how you guys Gantt chart out or sequence out this layering effect of you got website, you got D2C, direct to consumer.
00:21:26 Scott: And then how do you quickly move into some of these retail partnerships to get that velocity and get the revenue scaling fast enough that you can start to justify the valuation, raise more money, put more fuel on the fire, develop more SKUs? That's really what it takes to run a successful consumer business.
00:21:45 Katie: Things have changed so much since Warby Parker days, which is raise as much money, feed the hockey stick. The first question we're getting as we're fundraising is always, when do you see yourself hitting profitability?
00:21:57 Katie: For me, from day one, it was how do I keep the smallest team humanly possible while fairly compensating them and not taking advantage because I do think there was a trend in direct to consumer of “Work for your equity. Don't take a salary.” And I actually think we priced ourselves out of a lot of great talent.
00:22:15 Katie: So what are the basics that you need? Outline that. That's that first four hires outside of our two founders, Kayley and myself. We outlined who exactly we would need to get to year three. Get that team in place, launch direct to consumer, utilizing Kayley and Kayley’s audience to drive as much traffic as humanly possible with a bunch of different SKUs to start.
00:22:39 Katie: That was really the challenging thing about fundraising in the beginning because we're going to launch with supplements. We're going to launch with treats. We're going to launch with sweatshirts. We're going to launch with placemats, but everything's going to be ethically neat and all fall into wellness in some way.
00:22:55 Katie: But launch very limited quantities, a lot of different moonshots, and then utilize that for six months to see what's working, double down on what's working. Once a product is clearly a winner on our website and we're seeing very low cost for acquisition, we're seeing a lot of repeat purchase, that's when we begin to pull it out to other channels and not before that.
00:23:20 Katie: So I never bet on high quantities of items. I never bet that an item is going to be a winner until I have the data to back it up. Once you're six months into a celebrity-led business, there's enough consumers in the room that everything you're creating from then on, you have data against so you're not taking moonshots anymore.
00:23:40 Katie: Very quickly, we found, and thank goodness, right off the bat, our two supplements Calm the Eff Down and Stop Effing Itching, we couldn't keep them in stock. I think we had hit on two things that are very common for pet parents. One is that we have a lot of separation anxiety, especially post COVID as people are returning to the office.
00:24:01 Katie: The other is we have more allergy in pet than ever before. It has a lot to do with pollution and things we've used in the environment that impact our pets. They walk through chemicals all day on grass and dog parks, and then they're irritated, and then they spend all this time licking their paws.
00:24:20 Katie: It's a really disgusting noise. I have a dog that is a paw licker, and it's awful. And so Stop Effing Itching was my solution to that. But we saw very quickly that supplements were working. We saw very quickly that limited ingredient product was working, and then doubled down.
00:24:35 Katie: We launched on Amazon on Prime Day, which I think is something that I would utilize in any playbook for any brand I ever built in the consumer space post this company.
00:24:48 Katie: We're on Amazon. So exciting, big announcement, but everything's discounted. So right away, we took a huge market share there on Amazon, got consumers into the exciting of buying on Amazon. Those are really good repeat purchase customers. And then from there, we began the other conversations with PetMeds, with Chewy, with lots of other retailers we're talking to now.
00:25:12 Katie: Our second raise, which we just completed, we raised an additional $2 million and that was on the back of showing that Amazon and wholesale are just on fire for us. Wholesale is doing 5X month over month in terms of growth for us.
00:25:29 Katie: We don't have to pay to market that product. I don't have to raise $100 million and drive 100,000,000 people to my website. It's not about a hockey stick. It is literally about creating products that we know have great repeat purchase, that really work, that have really strong reviews, and then putting them into machines that already drive traffic.
00:25:48 Scott: As you think about pricing, there's so many different knobs and dials on a consumer business. Obviously, you have formulation. You have the product development, road map and SKUs. You have this marketing engine that you've got to finetune around customer acquisition costs and making sure that doesn't spike too much on the D2C side. On the distribution side, it sounds like you've got all this partnership development.
00:26:11 Scott: But how do you think about pricing, and how do you think about margin? In the old days, I think of the hockey stick, acquire traffic at all costs. I ran into so many businesses over the years that have high COGS, low margin on the product itself, and then don't include marketing spend as part of contribution margin.
00:26:29 Scott: You start doing the math and you say, based on the actual contribution just on the COGS and the item itself, and then you take into account CAC, you're basically running a deficit on every product that you sell. How do you think about building the stack? And how do you think about those KPIs, those metrics, and how you really drive and build a healthy business that scales?
00:26:50 Scott: You've done this so many different times in so many different categories. It drives me crazy. Sometimes I'm the one poking holes with pencil through the paper saying, but what about this cost? That's not included here. So you're actually losing a dollar on everything that you sell.
00:27:02 Katie: Everything you sell, you're losing money. It's the Casper case study. And look, I am the biggest Casper fan. That was one of the most epic brands that ever dropped. You looked under the hood of the mattress games that were happening, and it was just pouring money off the side.
00:27:20 Katie: The minute I start diving into the LTV of client, when I start looking at lifetime value, that's when I know I've lost the thread. You should be looking at first purchase profitability.
00:27:35 Katie: We have products that are $18 and $35. If this person's going to come back 30 times and purchase for this to be worth it, I've done something wrong. First purchase profitability. That is really the metric you need to be looking at.
00:27:51 Scott: Yeah. I agree with that.
00:27:52 Katie: The only place you can break that a little bit is wholesale. I would say that's because you just see scale of wholesale go so much faster without needing long term investment in it from you as a business.
00:28:06 Katie: If you are entering into a wholesale conversation and let's say they want slightly more favorable margins in the beginning, but you can say that within six months, if you hit X, Y, and Z, you'll go into a different margin split, that's worth it, especially if you have really the gut behind your products that you're putting forward.
00:28:28 Katie: We haven't had to do that. We've had very favorable terms, but I think that's the one place where I'd be okay if we had a really big retailer come to us and want to make a big investment in terms of marketing out of their pocket but we would have to maybe take a little bit of a hit on the margin upfront. I would do that.
00:28:44 Scott: One of my old venture partners ten, fifteen years ago at Mohr Davidow Ventures, Geoffrey Moore wrote the book Crossing the Chasm. It's interesting because thinking about if you stay in the D2C game too long and you cross the chasm from early adopters, which are low CAC, to early majority, which are maybe a little higher CAC, to laggards who are maybe super high CAC, and you don't amortize that cost with distribution in a number of other ways, like wholesale retail channel partnerships, you can't really cross the chasm when the CAC goes spiky with later adopters or heavy competition.
00:29:18 Scott: So the playbook that you've done over and over again is layering these different distribution channels makes a ton of sense.
00:29:26 Katie: I always think about the power of more, the power of partnership, the power of somebody else's audience. If you're doing the math as a direct to consumer founder, it's great to own 100% of your margin and to just crush on direct to consumer. To some ways, it's a lot less risky in the beginning because you're so in control of every knob.
00:29:51 Katie: But you're never maximizing the fact that somebody else has 10x the audience that you do. They have 10x the distribution that you do. If you're too precious about your brand and you're too precious about maintaining direct to consumer too long, you lose those opportunities.
00:30:08 Katie: Because you're cool and exciting in the beginning, and people want to be the first to stalk you. And then that person who's the first to stalk you has a great experience with you, does a half a million dollars in sales in the first six months. You turn around that case study, and you can get really great deals with other groups. So I think sometimes you have to take the risk.
00:30:29 Katie: The only place where I go against my own argument there is physical retail. And this is from literally a woman who ran physical retail in a store. Physical retail is so complicated. It is so hard. Your direct to consumer packaging doesn't work there. Your marketing messaging does not work there.
00:30:46 Katie: Do not touch physical retail until there's enough money in the bank that if your bet was wrong, you're okay. So we will not go into physical retail until we raise another round. We get inundated every day. Come be in our store. We would love to put you in 10 stores. We'd love to do all these things.
00:31:04 Katie: It is too great of a risk for us to take that type of inventory and that type of jump before I have enough money in the bank and before we are profitable as a business where if it doesn't go exactly on plan, that it's not going to take us down.
00:31:20 Scott: Katie, I think what you just said there is the most contrarian and profound thing that I've heard on this podcast or in the last bit of time, because I think that everybody really chases after retail and the buzziness of being in store, getting in store, getting the end cap, all those things. To your point, the inventory risk, unless you've got huge bankroll and huge safety net behind you, is really risky.
00:31:45 Scott: So getting to distribution, getting to scale, but doing so in a digital native way, not first party, not your own website, D2C, but third party where you have distribution channels, but you don't have the cost or the inventory risk that you do in physical retail. I think that's a truly profound insight. So thanks for sharing that.
00:32:04 Katie: Anytime. Look, if you are gunning for an acquisition and not an IPO, and I would look at a lot of the direct to consumer darlings that did IPO and look at where they are now. I would tell you that in this landscape, there are a lot of incredible acquirers out there that are not developing their own products and are going to acquire in the market.
00:32:28 Katie: If you are chasing an acquisition, you need to do that in the most cost effective way possible, and you have to leave enough meat on the table of what the acquirer in your space is great at.
00:32:42 Katie: So the acquirers in the pet space are really great at physical retail distribution and physical retail sales. I could try to challenge them, and I could take the risk, and I could try to be in a ton of physical stores so that they would go, “Oh, look. She's in physical stores, and they're doing well in physical stores. Let me look under the hood and potentially acquire.”
00:33:04 Katie: The better case study is for me to get to $100 million in sales without being in a lot of physical retail because then an acquirer can come and say, “Great. She's done all the work that we hate doing. We know these products work. We know there's a great repeat purchase rate. We know they potentially work in one physical retailer. But overnight, if we distribute them across the country, we can triple the business.”
00:33:29 Katie: I think it's also from the time you build a direct to consumer company, you should be looking at where you think the potential exit is, and you should create your strategy based on that.
00:33:39 Scott: Amazing. Hey. I know we're almost out of time, so I want to shift gears really quick to the lightning round. So not that you have any time to read books, but are you reading anything fun these days or listening to a podcast?
00:33:50 Katie: I'm reading Wool, which is the first book of Silo, which is the show on Apple TV. It's awesome. Highly recommend Wool. I had someone who came to visit this summer, and they left the book by accident. So I am reading it, and it's very good.
00:34:05 Scott: That's the best way to acquire books.
00:34:07 Katie: I agree. Free book.
00:34:09 Scott: If you could live anywhere except for where you live in New York, where would you choose to live?
00:34:14 Katie: I could see my husband and I living on a horse farm in Nashville. I could see us living on a ranch, and I would love to do that at some point in my life.
00:34:24 Scott: Ranch in Nashville. I think we have to make that happen at some point.
00:34:27 Katie: I think, Scott, you would love it. You can come visit anytime.
00:34:30 Scott: As a busy person with a 15-month-old baby, how do you manage your time? What's your biggest productivity hack?
00:34:37 Katie: I don't have one. I really think that I try and be present in whatever I am doing in that moment, whether that's being fully present in work or fully present in motherhood and not having my phone constantly going off next to me while I'm trying to be with my daughter. I think that the worst thing you can do is try and excel at everything at once.
00:34:57 Scott: And finally, where can people find you online?
00:35:00 Katie: You can find us at ohnorman.com. You can find us on Amazon and Chewy and PetMeds and TikTok shops.
00:35:09 Scott: Amazing. Thanks so much for being with us. It was obviously a joy to catch up to talk Oh Norman!, to hear all things doggie and otherwise. So thank you so much for being with us, Katie, and great to see you.
00:35:22 Katie: Great to see you. And huge shout out to you and Jenny for taking Everywhere Ventures everywhere. You guys have done an incredible job. It is a true joy to watch you continue to build and grow this fund. I'm so in awe of the two of you.
00:35:38 Scott: Likewise. Thanks, Katie.
00:35:41 Scott Hartley: Thanks for joining us and hope you enjoyed today's episode. For those of you listening, you might also be interested to learn more about Everywhere. We're a first check pre seed fund that does exactly that, invests everywhere. We're a community of 500 founders and operators, and we've invested in over two fifty companies around the globe. Find us at our website everywhere.vc, on LinkedIn, and through our regular founder spotlights on Substack. Be sure to subscribe, and we'll catch you on the next episode.
Read more from Katie Hunt in Founders Everywhere.