Sergio Radovcic of Dyper on Building a $100M CPG Brand, Going into Retail, and Aligning Interests

This week I am talking to A++ operator Sergio Radovic, founder and CEO of Dyper - a $100M run-rate DTC CPG brand located in Scottsdale, Arizona. - Sergio shares his background as a technologist and his previous roles in various startups and technology companies. - Exploring Sergio's journey into the diaper business driven by his desire to address the environmental impact of traditional diapers. - Sergio discusses the hidden environmental consequences of traditional diapers, such as the use of plastic and their contribution to landfills. - The mission of Dyper is to create a responsible and sustainable diaper alternative using bamboo as a primary material. The bamboo plant's fast growth and minimal need for fertilizers make it an environmentally friendly choice. - Dyper's unique approach involves a cradle-to-compost solution, including a pickup service for used diapers in select cities. - Quantifying the impact of Dyper's products on carbon emissions and landfill waste. The challenges of being a challenger brand in the direct-to-consumer space, particularly in the highly regulated and competitive diaper market. - Dyper's strategy to capture emerging trends in sustainability and cater to customers willing to pay a premium for eco-friendly products. Balancing price considerations and margin protection while expanding into retail partnerships with giants like Walmart and Amazon. - The importance of brand messaging and adapting brand blades to different distribution channels. - Sergio shares the story of Dyper's beloved giraffe mascot, Frankie, and the unintentional brand recognition it has gained. - Exploring the transition from direct-to-consumer sales to retail and the challenges faced along the way. - The impact of COVID-19 on fundraising and adapting to virtual fundraising processes. - Navigating the changes in advertising channels and the effects of privacy issues with Apple and Facebook. - Leveraging first-party signals and targeted marketing to reach the right audience for Dyper's niche product. - The future possibilities and expansion of Dyper beyond the baby diaper market. - The speaker discusses the importance of data and data enhancement in their business. They mention that every record that comes to them goes through a data enhancement process to model customer behavior clusters. - Data enhancement helps them provide detailed information to retail partners about their customers, such as shopping preferences, media consumption, household income, and presence of children. - They give an example of targeting customers who buy fancier kids' clothes based on income propensity rather than broad market segmentation. The speaker compares selling to retailers to selling to investment partners, emphasizing the need to bring data and spin a compelling story. - They talk about the challenges of pitching to first-time venture capital funds and the importance of tailoring the story to align with their interests. - The speaker mentions finding an investor specialized in direct-to-consumer challenger brands, highlighting the investor's focus on being a permanent source of capital. - They explain that their company has only common shares, which was not an easy negotiation but aligns management and investor interests. The speaker discusses the focus on brand building and creating an enduring American brand. - They emphasize the need for a longer-term horizon and substantial capital investment in building a brand. The speaker mentions measuring brand perception and recognition as important metrics alongside sales. - They discuss the direct-to-consumer (D2C) model and its limitations, stating that it is not a sustainable standalone channel for most brands. - The speaker suggests treating D2C as a fast channel for customer feedback and market proof, but not as the sole strategy for reaching households. - They mention the importance of having an Amazon strategy and a retail strategy to reach larger scale and align with consumer preferences. - The speaker highlights the execution of Walmart and other retailers in adapting to the shift in consumer behavior, including same-day delivery and eco-friendly packaging. - They mention the significant number of brands launched by retailers like Target compared to CPG companies, highlighting the importance of strategy and understanding customers. - The speaker discusses the potential benefits of Walmart acquiring TikTok and leveraging its user-generated media platform.