Transcript: How Shabi Dagan Turned a Loss-Making Store into 10x Growth

Eyal David: [00:00] Hey friends, this is Eyal. You've reached Product Builder, where you can listen to the most interesting product conversations. My journey began in 2012 when I learned what product is, at my startup. Since then I've worked in the industry, and since 2017 my company has been consulting for a variety of companies. My drive is to help all of us improve as product people. And before we begin, if you're enjoying listening to Product Builder, please rate us five stars on Spotify. It gives me great feedback that the podcast is providing you value, and it would make me really happy. So let's go, we're starting. Hey Shabi, how's it going? Hey, great, how are you? Fun — so great that you came. So let's tell a bit about why you're actually here. Shabi and I have been working together since day one; Shabi is the owner of a software house — go ahead and tell us a bit about yourself. Actually, on top of that help, Shabi has an e-commerce business that's been taking shape over the past year, and we started talking about the story, and I said, hey, this could be great inspiration for a great episode, so Shabi is going to reveal his entrepreneurial story here, tell a bit about where he is, what things he's done — there's a ton to learn from it. A slightly different episode, as I said, so Shabi,

Shevi Dagan: [01:08] here you'll tell us about yourself in a few words. Yeah, sure, so I'm Shabi, 35, a dad to two wonderful kids, one is a year and a half, and the other is three and a half. Still learning what it means to be a dad, alongside everything else I do. I was discharged in 2017 from the Ministry of Defense, from MAFAT, and I realized I'd never be an employee, so to speak, I decided I wanted to set out on an entrepreneurial journey and actually become an entrepreneur, so that when people ask me what I do, I'd say, I'm an entrepreneur. What exactly that means, not sure anyone knows, but I decided to build some kind of journey for myself. So at that time I founded a startup in video analytics, which is one of my specialties, AI video analytics. We operated in the retail world, physical stores, analyzing cameras and store spaces. You raised money, right? Yes, we raised several million dollars from a few funds in Israel and the United States. I was a co-founder. When you come more from the technological, product side, the responsibility for the roadmap and strategy is more technological, and I also managed the relationships with the investors, like customers, with potential partners, along that path. I learned what it means to be a CEO of a startup — at that time I was completely inexperienced, but I gained a ton of experience during that period. 2021 came, COVID, stores... no retail. No retail, stores closed, huge headlines, retail is dead — and by the way, retail is really not dead, it's simply changing its face, and it's one of the biggest markets there is, interesting to focus on. And then the board and I, together with my partner, decided to close the company; we had to lay off nine employees, it was very very hard, the first time in my life I'd laid off employees. But again, I learned a lot from it. I had to bring money home — as I said, an employee I would not be, so I had to find a solution. I decided I'd actually establish a software house, in the field I'm an expert in, which is developing information systems, and applications and complex information systems for organizations. Now, I wanted to take all the experience I'd accumulated before, from the Ministry of Defense and the previous roles I'd done at the startup, and simply turn it into some kind of business and provide services to organizations. And that's how we met. Exactly like that. And it's...

Eyal David: [03:09] In parallel, now, having accumulated successes with the business you built, in parallel you decided about a year ago,

Shevi Dagan: [03:16] tell us about it, to buy an existing store. Yes, so the software house really took off, became profitable, and an entrepreneur needs to start doing something with the money he slowly accumulates, and I decided to invest it in things — the idea was basically to establish some kind of holding umbrella company that holds several companies, one of them being the software house, and then many customers I'd had from the software house world, they're actually in the e-commerce world. For example, Aba Chatuv, which I assume many know, and many other big customers like that, where I built with them the whole technological strategy for the world of e-commerce, huge systems at very large scale. I said, okay, interesting, I want to expose myself a bit to something that isn't only technology and such,

Eyal David: [03:51] and see what I can do with the knowledge I've accumulated. Wow, that's really interesting, so let's talk about that for a moment, because we've discussed this story too. Tell me about the work at Chatuv, what it looked like, how they came to you, what process they went through — in the end they built an e-commerce business, right?

Shevi Dagan: [04:04] Yes, it's an amazing company, really. They started — when we started working together they were about fifteen employees, something like that. And they had this crazy idea, actually the owner's, which was really to build some kind of digital program that helps people, they built some kind of community and to help people go through a process — after all it was ongoing, not just afterward, the day of the process, but also the day after. What did they sell until then? Until then they simply sold a digital program, where the method was a kind of webinar, and then you upgrade with some app that accompanies you, they coach over phone calls, and updates by SMS and WhatsApp and so on, and they were relatively in a mess because they grew very fast, they realized they wanted their own software, to build a real CRM, ERP, their own mobile app system, really everything. It's something — look, they did the opposite path from you during COVID, they grew like crazy, okay. It's a business that really exploded during COVID, they realized they love technology, and that's how we met,

Eyal David: [04:58] I planned their whole technological strategy for them, the entire architecture of the system. And what did it include? It included a store that connects to an app, you mean?

Shevi Dagan: [05:07] Yes, a WordPress store, a mobile app, an app on mobile too, a CRM system customized for them, internal organizational service capabilities, and also communication with customers, and processes — simply very complex things I could talk about, really, just a beautiful business model that I got into, and it's all technology, meaning, as far as I'm concerned they're a technology company today. And you enter a business like that,

Eyal David: [05:29] you really build all the processes for them, and you actually see them growing, and you also see the technology growing with them,

Shevi Dagan: [05:35] right — more precisely, it depends on the relationship, I play along. It's not just that I see them exploding, and the beauty is that I remember the first conversation with the owner, and I ask him, tell me, where would you want this to reach? Now, he told it in two sentences, and I pictured it, I told him, I know exactly what needs to be done for you to get there. What did he say? So he said to me, how? I told him, I drew it on a whiteboard, which I later realized they use, that drawing, internally, to explain to themselves what's going to happen. So you framed his vision for him, basically. Yes, and it means translating it into technology, and there's really no glass ceiling to what we can do. So will he get where he wants? Yes, and it seems to me it'll keep growing.

Eyal David: [06:13] Very nice. Nice. So basically what did you learn — what did you actually learn from this process?

Shevi Dagan: [06:19] And you're also very involved in e-commerce, right? Yes, in many more e-commerce businesses. I learned that I actually know how to understand these needs, and to see a future and work backward from it — one that's a program, based on software and digital, digital because that's the world we live in, and simply lead the whole organization in that direction. Meaning, also harnessing the right people — let's call it being the glue of this thing. The one who knows how to connect development with planning, with marketing, with product, all the multi-disciplinarity that exists within an organization,

Eyal David: [06:50] and bring them to that goal, together with them. And you probably also learned how hard it is to bring in a customer, to get them to pay — maybe at Aba Chatuv it was easier, but going through this whole process, right? And all these costs — so did you have some kind of blueprint you took from them, or how was it?

Shevi Dagan: [07:06] So actually from them, but also from many customers, because during the journey with them or with the other customers I had, I learned the marketing funnel or sales funnel that basically every organization needs to go through, and how to simply turn a business into a brand, and how you bring customers into your funnel at the first stage, and you create some trust and get them to keep staying with you over time — that's it. Challenging for everyone, really everyone suffers from it.

Eyal David: [07:28] But all the more so for e-commerce businesses, the brand is the thing you actually point to? Yes. Because otherwise, what differentiates me from another Shopify store that probably sells similar products? Right, there's probably the quality and this whole aspect you're talking about, the operational side and the service and so on? Yes.

Shevi Dagan: [07:45] But really the branding, which is a derivative of all these things. The branding and the differentiation and the focus and choosing the audience correctly.

Eyal David: [07:51] So okay, so what did you do when you decided you wanted to get into e-commerce, what did it look like? So I basically decided which market I wanted to enter that isn't software

Shevi Dagan: [08:00] and to see how I could apply everything I'd learned. E-commerce was the classic choice because I'd really accumulated a ton of experience there — that I thought I'd accumulated a ton of experience, by the way. I actually decided to examine companies — whether I could buy some existing e-commerce brand and improve it, so to speak, or simply build one. Where there's already an anchor, there's market fit, you'd already... you enter a store with customers, with traffic. Yes, what I was debating at the time was whether to build one from scratch? Okay, or to buy something existing and shorten, so to speak, the time to market, the time to actually meet customers. Where did you find this business? Good question. There are many... first of all there are brokers who offer them and I worked with many, many entities, like for example logistics warehouses, fulfillment centers — there's such a service. I accumulated there, also because of the development experience, I accumulated a lot of people there and eventually one of my contacts there introduced me to the brand I acquired. So I acquired a brand called Sporty Wolf exactly a year ago — we just celebrated a year this very week. It's exciting to share, you know. How old was it when you acquired it? It was two years old. And I actually acquired it from a guy, a lovely special man who worked two hard years on creating the right fabric formulas so the set... it's basically high-quality sportswear for women and also for men but mainly for women, he worked really hard to perfect the fabric quality and make the successful combinations, to be, let's put it this way, the Israeli Lululemon and Alo Yoga at half the price.

Eyal David: [09:19] Because that was the vision. So allow me to ask you something before we dive in. How did you decide which niche to focus on? I mean, it works in niches. Did you actually go by the offers that came to you from those brokers, or alternatively did you know you wanted to market to women in a specific field?

Shevi Dagan: [09:37] Good question, honestly I didn't come with some predetermined agenda. Yes, there were fields I knew interested me more to deal with because I identified some trend improving in a direction, okay? For example, all the wellbeing and fashion that integrates with everyday life, I said, okay, that's interesting. It's not exactly fashion because that's a hard world, but yes, there's some wellness or improvement in quality of life through products — that was the general direction I aimed for. I examined 29 companies, their financial statements, I learned how to properly analyze financial statements, I really went through quite a journey there. It was a brand whose story seemed good to me, the product was simply excellent from what I examined, the numbers weren't great — later I discovered I'd analyzed the statements incorrectly.

Eyal David: [10:16] You don't say. I bought a completely loss-making business, much worse than I thought. But you said you realized in real time that it wasn't good.

Shevi Dagan: [10:23] Yes, in real time, and I mean I really bought the company, I analyzed the statements, I consulted a bit of course, but in the end I acted on intuition, because I felt the foundation was good, and I said, okay, at most, let's see what happens, the business may be loss-making, but let's — I don't know how big the pit is, let's see how deep. It's loss-making — what caused its losses? Simply because it wasn't run like a company. We said, in my view, that a company — when someone establishes a business unit or some company, he must think, first of all, in my eyes, in my head, about profitability. How do I make revenue minus expenses equal something greater than zero? Although it's not obvious, people forget to think about this thing. So he built it in a way where he simply did many things, other things... he didn't factor in his own time in the story. He didn't factor in the time, he didn't choose the suppliers correctly, and then in the end it turns out that revenue minus expenses is smaller than zero, including the time. So it's also optimization, basically, that's the thing you did,

Eyal David: [11:12] and also actually including his time, and you understood you were going to spend that expense on it. Yes. Like, in a plan going forward, when you built a plan that... how much did you set as a target for this thing, like, what did it look like? So I basically allocated about up to 350 thousand shekels to it,

Shevi Dagan: [11:27] this adventure, and I said, let's see what I do with this amount, and how I maximize it and within how long. What was the plan? My plan was, within a year I recover the money. Ambitious. So within a year and a half — within a year I recover the money, at a year and a half I'm really profitable, and then I think, whether to scale up the operation, or sell it. Like what people do, some kind of round, an exit-like move, turn it into built to last, so to speak. So update us, first of all, you chose a business that's evergreen,

Eyal David: [11:51] which I think is lovely, that basically has no seasonality, but update us now, from a bird's-eye view, after a year actually,

Shevi Dagan: [11:59] where do you stand? Yes, so after a year, let's put it this way, relative to the revenue I bought, I'm at 10x on the revenue, which is very nice. The business is profitable, but really on a small scale, meaning, I still can't draw a salary, but I am — it's a profitable business, I leave the money inside and grow the operation, but we really turned the whole thing around, meaning, it's a business that's, profitable today, working very nicely, there are very well-defined KPIs, there's a very orderly operational method there, everything I received I still broke down,

Eyal David: [12:26] I rebuilt it from scratch, so it looks completely different, and it just looks good. So you're saying revenue, basically, because again there are those acquisition costs,

Shevi Dagan: [12:33] revenue, meaning income. Like, the income really grew 10x, and now, now we're bridging his expense, we took it into account. Yes. And how many are you on the team, what does it look like? So it's very funny, you know how many we are on the team, there's only one full-time employee, and we have a few small service providers who complement what she needs. If someone else had built this, he'd probably have done it with three people, and would have lost like crazy. But if you build the right method, you need fewer hands to do it. For now.

Eyal David: [13:00] How nice. And tell me, how did he actually bring in customers, until you came in? Digital marketing. What, just Facebook?

Shevi Dagan: [13:06] Yes, yes, I use a platform called — it puts money into Facebook, Instagram, Google, manages the advertising budget, like hiring an ad agency of sorts.

Eyal David: [13:15] Okay, a regular Shopify business. So basically, if we stop for a second and take a look, so you entered this adventure, now you're actually sharing your story, you're actually letting us in a bit on the thing, when you've already achieved some success.

Shevi Dagan: [13:29] So tell us for a minute, what did this year look like, what did you do? Yes, this year could be characterized in one sentence. I began it saying, okay, I've accumulated a ton of experience in e-commerce, and during the year I say, wow, I have so little idea what I'm doing here. What is this? It's so different from what I was used to. So it's really not simple, it's very very complex, there are a ton of challenges here. It's managing this process in a different way, because I'm suddenly an importer, and I need to manage orders and inventory correctly, and I suddenly need to work with influencers. That's something he didn't do, right? He didn't do it, he only started, it was budding, he didn't really know, he didn't build a method. But in this business,

Eyal David: [14:06] you must have digital marketing, and you must also work with influencers. How did you decide that... how did you see the oil there, actually, in influencers,

Shevi Dagan: [14:12] how did you decide to go in that direction? I simply tried to see what the other competitors do, and I saw that basically the big competitors in my market do this hybrid model, meaning, both influencers and digital marketing. When you say the big competitors, that's Lululemon... Lululemon, Alo Yoga, and a few more nice Israeli brands that are Israeli. And that's exactly what they do. So I said, okay, let's see how you do it, given that the budget I have is quite limited. Extra money, I said, I won't go invest in this thing, it needs to be self-maintaining, it needs to feed itself. I don't know how, that's what needs to happen. What really sets you apart from these competitors? Yes, that's a good question. The brand and really the focus. Because say, the guy I bought from wanted to expand over a wide span of women and men — I told him, the next two years we do only women, we do it excellently, and then the question was how I can segment it even further. So I say, okay, it's only women, but which ages, what characterizes them? How do I choose the niche where I say, I create value for it over the next year or two, reach beautiful sales and then move on to the next thing. We made a lot of mistakes along the way, but now we're already more distilled, we lost a lot of money in this learning. Wait, can you tell a bit about it?

Eyal David: [15:15] Not just about the amounts you lost, but more actually about the learning you did, what did it look like? Yes, so say, we spoke with a lot of women, we basically wanted to understand,

Shevi Dagan: [15:23] and each one was, I don't know. And then say, we said, okay, so there are women who are post-childbirth, say, a mom who has one or two kids, and she wants to get back to training. And I did — if they're beautiful, if they hit the mark exactly for her, then she's also a customer. And there's also the young woman who was discharged from the army, and now she's about 21, and she's about to be a student, so that segment. And there's also the segment of older women, 45-50, who are already, the kids have grown up, and they're now on a renewed journey of their self-image, and they train and bring value into their lives,

Eyal David: [15:54] you meet them too, but you hear — I mean I heard with my own ears an insane lack of focus, like, they need to focus, each of them has such a different value proposition.

Shevi Dagan: [16:03] At first we tried to look in all directions, I admit. Like, saying, okay, women, focused enough — well no, really not. So now, after a whole year, we know it needs to be much more niche, right now we're focusing on two niches, and now it's going to narrow to a single niche,

Eyal David: [16:17] meaning, even more focused, and doing only that. That's part of learning, that you do, because the more knowledge you have, then naturally you can focus more. It's also a value proposition, but it's also the marketing channel you approach through, right? Just for example, I won't approach 50-year-old women on TikTok, probably not, that's my estimate. So basically, you're saying that up to that point he'd focused only on Facebook ads, right? What did his Instagram page look like, did he have a presence on TikTok, on Facebook, what did it look like? Yes, so he had an Instagram page that he maintained pretty much by himself,

Shevi Dagan: [16:47] it looked pretty unremarkable, okay? And we took it and brought in a social team that actually maintains the page. It got an upgrade, but not enough. So now say, we're refining it even further and making it a bit more of a fashion experience. We tried not to be in the fashion worlds, but in the end there's something that conveys — if you're a premium brand like us that's at an affordable price, you need to convey something very fashionable, very innovative and really beautiful. So now the Instagram page will undergo another upgrade. And you too. What does it look like? So no, this time we'll bring in an external company to do it for us properly. And you're not putting in more money, that's the good thing. Not going to put in more money, don't know how it'll happen.

Eyal David: [17:26] So what does it look like? What actually — if you look at the expenses today, what's your biggest expense? Today the biggest expense is marketing and advertising,

Shevi Dagan: [17:32] unequivocally. And does it pay for itself? No. What does it look like? Can you share? I mean, let's put it this way, I'd be happy to reach a point where I measure ROAS, return on ad spend on the money, but I think it's not there yet, because it's too scary to hear the numbers. Like I can bring in, I don't know, 120 thousand shekels a month and spend that same month 60 thousand shekels on advertising and marketing. That doesn't say anything. The company is still young, and because it's young it's very hard to measure this.

Eyal David: [17:56] Yes, there's some directional read that in my view comes more from the paid marketing side. Okay, Facebook, Instagram, where you can somewhat speak in ROAS terms, and it's too young a business to measure it, that way. You haven't gone through enough Q4, that's what you're saying.

Shevi Dagan: [18:08] Yes, exactly. So you're preparing for that now? Really. Now, as far as we're concerned a new year begins, because for us it's exactly a year since we bought.

Eyal David: [18:16] Now there are new targets for the company. It's going to really change its face and make another leap. So share with us a bit about this leap, about these targets?

Shevi Dagan: [18:23] Yes, so if this year we grew 10x in revenue, now we'll basically reach a point where a year forward I want 3x in revenue, okay? And to be profitable. Now in the e-commerce business, it turns out it's super hard to cross 10% pre-tax profitability, okay? In the software worlds we're used to bigger numbers, in e-commerce it's different, it's a harder world. E-commerce, meaning physical e-commerce, where I basically have things on the shelf, I have, like, it's not a-b-c-h-t-u. Right, not a-b-c-h-t-u. Exactly, you're right, these are physical products, right?

Eyal David: [18:51] That you're not selling some... it's really interesting that you went there and not to a SaaS business, right? Totally, totally. Who knows what made me think to do this, but that's how it turned out. Maybe the crypto folks, did you see? Tell me, and... so okay, keep telling us about this year, so... actually tell us here about the branding process you did, because it was... the optimizations you mentioned earlier, in the warehouses themselves, in the bottom line.

Shevi Dagan: [19:13] So there it is, in my view, wait, before I even approached the branding, I had to create a kind of infrastructure, where I say, okay, I have something amazing in my hands, that now I can build something right on top of. I really insisted with her on the beautiful characterization, that the service is simply wonderful, something Israelis aren't familiar with and aren't used to, but we have phone service, and fast response, and all of it, WhatsApp, a very digital experience, very high quality. Also a bot that knows how to talk with you and communicate with you, really as we should receive, in terms of service experience, and insanely high-quality products, flawless. Now, once I set up this floor, I could understand I had something good in my hands, and now to approach the branding, okay? And then I say, cool. What you said until now, that's branding? You're right, but I look at it so operationally that I didn't call it branding, you know? That's something I learned over time, that it's also part of branding. In my view, first of all I built a product, you understand? I have a product, I have a method, and now I'm distributing it, maybe, spreading this gospel to the world. So now in my view branding began, but you're right. So basically, having now aligned this thing, we said, okay, let's focus on the market we want, only women, this age range, after we're now focused on it, and everything happens around it. Focus — maybe the listeners will note — which age range is relevant? So right now the age range we meet is 25 to 35, say 40, we do only that. There's something... nicely seasoned, yeah. Yes. And most importantly, this is what characterizes us, that all our customers are women who train. Meaning, we're also everyday clothes, but first of all it suits a woman who trains. Common across our whole audience, which is super interesting, we did lots of surveys and everything, they're all women who train. We don't have anyone who buys us simply for everyday wear. It's not like that. Okay? But it's just high-quality. 2,000 washes and it looks the same, feels the same, and a set cost someone only about 240 shekels. There are no prices like that in the Israeli market, but that's how it is.

Eyal David: [21:06] Gorgeous. So okay, so really part of the branding was also price — is that something that was already the case before the acquisition,

Shevi Dagan: [21:12] or did you actually do some optimization there? So basically I did some optimization on the fly, because the prices were very high, and it felt inappropriate to me relative to the competitors in the market. Like, if I wanted to create differentiation, then it had to be in the quality-for-cost, and to see how I manage to lower the price. Today the quality is even better? Better than it was, and the price was higher. And you bring it from abroad, right? And I bring it from abroad.

Eyal David: [21:31] Some of the things I manufacture in Israel, but most from abroad. Okay. Meaning there's a mix like that. And okay, so basically take us now really into the continuation of the year, so what does it look like? You suddenly brought influencers into your story. Right, right. Because I saw the competitors in the market who also do influencers,

Shevi Dagan: [21:47] and they're totally right because in the end it's a matter of creating trust. When they don't know you as a brand, you need to get people to understand there's something here worth checking out.

Eyal David: [21:56] How do you measure it, sorry, how do you measure that your brand improved? What's the metric? So that's a really hard question and very hard to measure the world of influencers.

Shevi Dagan: [22:04] By the way, I could give a whole lecture just on the objections against the world of influencers as it meets e-commerce. There's a clear conflict of interest here that I don't understand how this market still survives. Like it's all... that someone comes and says come buy this. No, there's no shared interest yes. Between the influencer and the e-commerce brand. We want opposite things from each other. And I don't understand how this thing still happens. By the way, everyone I talked to who's an e-commerce entrepreneur said you're right, they wouldn't dare say it. Everyone will tell you the same thing if they dare to open their mouths. It's a world I don't understand how it still survives. Honestly. But it does have benefit. Meaning, for someone who doesn't know the brand, if she knows the influencer who makes her say okay, if she wears this, maybe it'll be good for me, and I'm willing to try — that's where it meets. Okay? Meaning it's hard to measure profitability or return on investment for this thing, okay? Hard to measure, and certainly not on the first transaction. But it's enough that you got someone to buy — if you provide good service, and a good product, and know how to keep in touch with her so she comes back,

Eyal David: [23:05] slowly you start to see the benefit in it. So that's my question, after how long do you start to see that, say, advertising costs go down as a result of this?

Shevi Dagan: [23:12] Because your brand is stronger — how do you measure it? That's a good question, basically this company, it's, as I said, still young, we're only a year together, so I don't have enough data to say this, but I know, from other brands I've spoken with, that I try to learn as much as possible from those around me, you can see it by how long it takes someone to come back and buy again, usually, on the third transaction it's already very worthwhile. Okay? Meaning, the work needs to be that you manage a mix of, how do I bring customers back and manage returning customers, and acquisition of new customers. You need to manage this mix together. The big profitability will come from returning customers, because there's no marketing cost there. What do returning customers really look like in a business like this?

Eyal David: [23:50] Because you say, it's enough for 2000 washes. So how many garments does one really need to go train?

Shevi Dagan: [23:56] Wow, that's an excellent question. A trainer, say a fitness trainer, buys a few sets a month, because she constantly wants to come in a different color, with a different design, she wants a different experience. And her trainees probably want the same thing, just at a lower pace. But anyone who wants to upgrade — and the pace, say, for us, we see an average of repeat purchase once every two months, a month and a half.

Eyal David: [24:17] Nice numbers. Reasonable, yeah. So basically, in Israel you could say that in the end the average,

Shevi Dagan: [24:23] it's each season, like, I'll come and replace it. Something like that. Every half season, depending on how much she trains,

Eyal David: [24:30] the more someone trains, the more she'll want to replace. So maybe you have an interest in increasing the training pace, like, coming from that angle too, right? Or are you... just saying, every regular e-commerce business really focuses only on the buying experience. Here there's an additional experience that further... there's an additional experience that wraps the thing, amplifies it, you have an interest basically, first, in finding those women who train at a more frequent pace, or their friends, right? Yes. But also basically to provide some kind of support, to sort of encourage, push this whole aspect

Shevi Dagan: [25:03] that you can think about. Totally. Wow, a really interesting angle, say, that occupied us a lot, like, the idea was... Obviously it's an insane lack of focus, right? Yes, but you know, it's a lack of focus, but there is something very complementary in it, because if we're targeting women who train, yes, we want not to be only a company that sells clothes, we want to provide some kind of envelope that allows that woman to simply achieve her goals. Now, today it's athletic goals, but going forward it also reflects on the way she achieves goals in her life. Yes, how do I not only make clothes and sell to her, but also how do I give her greater value, like for example, encourage her to train more. We thought, say, about the idea of offering digital content on our site, for example, workouts, that trainers who work with us as partners create. So today we're uploading that. So on our Instagram page, you'll see, every two or three times a month a workout segment goes up that a trainer who's a partner working with us simply uploads. Along the way she wears our set, but she also encourages the audience that listens and watches maybe, and gives them tips or gives them some workout she's able to do.

Eyal David: [26:04] Interesting, and what are you learning from it? What's the adoption of this thing? That we're still learning, we don't know everything. Yeah, I don't know what the adoption rate was for this thing.

Shevi Dagan: [26:12] The feedback — I estimate it'll be a pretty high adoption rate, but there's quite a risk here, because as you said, it really is a lack of focus.

Eyal David: [26:18] No, I think, I think something simpler, but okay, we'll talk later. Oh, okay, interesting. [playful gibberish]. No, I'm kidding. Strong. Sounds good. So basically, take us now actually into the guts of the business. What growth engines do you currently identify? So we just touched on something, so I'll expand it. What other growth engines do you identify that could grow the business?

Shevi Dagan: [26:42] Going out to the US market, where, say, it's a much bigger market than here. Why did you start here, by the way? That's a good question, convenience. Purely convenience, and simply because I didn't know it. Again, like, in the end everything rises and falls on the experience I've accumulated, so I don't know how to sell and guarantee quality in the United States, so I said, wait, let's start here, see if I can learn, and then make the move there, okay? And I think we're now beginning to take our steps toward the American market, examining exactly the options and how it works. It seems to me that this time I'll try not to necessarily do it alone, because my tendency is always to go with doing it myself. Mostly that's good, but sometimes it also simply takes time. Okay, so that's one thing. Second thing, in our case, it's product diversification. Meaning, to bring as many complementary products as possible that will basically build, to say, I love you anyway, you're high-quality, bring me more. Give me the complementary tank top, give me the complementary bottle, give me more things that let me experience you more in everyday life. And that's basically where we're heading. That's what's called product diversification. Excellent. So those are basically the two things.

Eyal David: [27:47] Yes, that we'll focus on in the coming year. Yes. And how are you going to increase the buying pace you talked about?

Shevi Dagan: [27:53] The repeat-purchase pace? The repeat-purchase pace. So the way to do that is our customer club. We basically have a customer club that receives digital content from us, and also receives special discounts, and we simply know how to retain the audience very well, and we have a very interesting method. We don't work with models on photoshoot day. Whoever gets photographed with us on photoshoot day is a customer. Before a photoshoot day we reach out to the existing audience, to the customer club, offering to the women who are actually our customers, if they want to come to a photoshoot day, that's what we do. We already have a circle of about 60 or 70 of our customers, who, when they come to be photographed, they also get quality photography from a professional photographer, they also get the sets they're photographed in that day for free, simply an amazing experience. And then they arrive, there's also a yoga class along the way, or some workout of one kind or another, and an atmosphere and photos, it's just amazing, and then in the end, their photos go up on the site.

Eyal David: [28:42] Wow, all credit to Lilita. Yes, all credit to Lilita. And okay, the customer club — does it cost money to join?

Shevi Dagan: [28:48] How does it work? No, free, you join. Yes, you join and got 15-20% off the next purchase.

Eyal David: [28:54] Worth it. Soon now, during the shopping holidays, will you have something you want to highlight, that maybe you want to tell about? Some campaign that's about to happen, worth checking out — we'll put a link.

Shevi Dagan: [29:06] Yes, so first of all now, ahead of the back-to-school return to routine and so on, we're currently running a 3-plus-1 promotion on the site, to bring down, first of all, to clear out our summer inventory, which was simply amazing, we got more stock, so we lowered prices very significantly. Toward the holidays, several new collections are going up at once, and there's going to be a 20 percent discount promotion,

Eyal David: [29:26] on the store and on the new items. Good, so we'll put a link, then, okay. Beyond that, Shabi, so we said, you also have a software house, so really, as we're approaching the end of the episode, it's been very interesting, so the software house, if someone wants to get in touch with you, or actually wants to get in touch, regarding the e-commerce story, you said one of the reasons you want to come here, is basically to share from the story, the e-commerce, this e-commerce experience, and basically to give inspiration, but also basically, if someone has questions, they can get in touch, so what about LinkedIn, what do you recommend? Gladly, both on LinkedIn, and by email,

Shevi Dagan: [29:56] and even by direct message, I mean I'd say the door is open and I don't mind how, if there's something I can contribute from the experience I'm accumulating, on the fly, failing, erring, learning fast, correcting, and in the end reaching the goals,

Eyal David: [30:10] and sharing, so may there be lots of success with Sporty Wolf overall, and one more question before we finish, where do you see Shabi in another 10 years? What do you wish for him? To keep enjoying every moment,

Shevi Dagan: [30:22] to do what I love, to increase more the free time I have relative to work, in another 10 years I intend to manage the holdings of my business activities a bit more, and to have teams that actually handle it, and to have teams that actually handle it, and I just look at it from above, to go skiing 3 times a year and not just once, to go back to surfing in the sea, mainly just to enjoy what I do.

Eyal David: [30:46] Cool, I'll wish you the same. Alright friends, thank you very much, and see you next time, bye bye. Hey friends, thanks for listening, if you found this podcast valuable, you can subscribe, follow us, of course for more episodes, like on Apple Podcasts or any other app, of course if you didn't find us on some app, I'd be happy for you to write to us. We'd be very happy for five stars on every platform and for you to follow us, so that more listeners can be exposed to us and find the podcast. You can also find the previous episodes on any app or on the YouTube channel, we have links in the description. Until next time, come on, be productive and bye bye.