Today’s guest has a few things going for him that sets him apart from the typical CEO:

✅ CEO of a publicly traded company 

✅ Has a streak of 7 years without a day off [Jim note: not sure I’d recommend this for most!]

✅ Runs a website with 100+ million visitors

Join Jim and David Meniane, CEO of Carparts.com as they hit on a variety of topics from strategic consolidation to free cashflow.

3 Key Takeaways

• Define Yourself: On the surface Carparts.com looks like an ecommerce company. But when you peel back a few layers, there is an advanced analytics engine and logistics infrastructure that has been purpose-built over the years to give consumers high-end car parts at a fraction of the cost due to their underlying inventory infrastructure. 

• Less is More: Carparts.com used to be one of 17 different digital storefronts owned by the same company. It wasn’t until a strategic decision was made to ‘abandon’ the other stores (that had built up value in their brand following, URL traffic, etc.) and focus on their most valuable asset (Carparts.com). Since turning full attention to Carparts.com, the company has achieved significant growth in revenue and profitability.
• 
  
• Speak Last: As CEO, it’s your responsibility to listen. If you’ve done your job right, you’re surrounded by people smarter than yourself in specific areas and are closer to the problems in their areas of the business. So when you’re in a meeting, shutup and listen (respectfully!). 

Resources

• CarParts.com 
• David’s LinkedIn

About Our Guest 

Named CEO of CarParts.com in April 2022, David Meniane is responsible for providing sound strategic, financial, and operational leadership for the organization. Prior to this, David served as CarParts.com’s Chief Operating Officer and Chief Financial Officer since 2019.

Under his leadership at CarParts.com, the company has undergone a comprehensive operational turnaround with record financial growth. The company has achieved eight consecutive quarters of year over year growth, doubling the size of the business in just three years. David hired more than 800 people in 2020 and 2021, and the firm now has over 2,000 employees globally. 

About The Dirt Podcast 

The Dirt is about getting real with businesses about the true state of their companies and going clear down to the dirt in solving their core needs as a business. Dive deep with your host Jim Barnish as we uncover The Dirt with some of the world's leading brands.

If you love what you are getting out of our show please subscribe.

For more information on how we dig into the dirt check out our other episodes here: https://www.orchid.black/podcast

About Our Company

Orchid Black is a new kind of growth services firm. We partner with tech-forward companies to build smarter, better, game-changing businesses. 

Website: https://www.orchid.black 

Jim Barnish’s LinkedIn: https://www.linkedin.com/in/grow-smart-grow-fast/ 

Orchid Black’s LinkedIn: https://www.linkedin.com/company/orchidblack/ 

YouTube: https://www.youtube.com/@OrchidBlack 

All contents of this show are rights of Orchid Black©️ and are not to be used unless authorized by written consent.

David Mignon.

And yeah, okay, perfect, perfect. All right, and David, David versus Dave, you want David, right? Okay, and Carparts or carparts.com, which one? Carparts.com, you got it, all right, all right, man. So I'm gonna kick things off just by asking you, who are you, what do you do, and why should we all lean in? And then we'll go from there. I'll do the actual intro at the end, okay? Little backwards.

Either is fine. David is cool.

CarParts.com

Sounds good.

Alright, cool, sounds good. So.

here

All right, David, welcome to the dirt. Talk to us a little bit about who you are, what you do, and why we should all lean in.

Hey Jim, thanks for having me. So my name is David Mignan. I'm the CEO for carparts.com. We're one of the fastest growing player in the online aftermarket part sales. We built a destination for auto repair and maintenance. And we just announced our 15th consecutive quarter of year over year growth. We were a $300 million company a couple of years ago. And today we're on track to becoming a $700 million company.

Wow, wow, sounds like a fun journey.

It's been an incredible journey, yes. A huge transformation.

So let's, yeah, let's talk a little bit about that because you guys are a 20 plus year old company, you've reinvented yourself, you know, you've done a lot to invigorate growth in the business. Let's just, let's start at your entry point, right? Like, you know, when you got engaged with carparse.com, what did it look like?

The company was very different. I joined the company in 2019. At the time, I was the chief operating officer and chief financial officer. The company had about $2 million of cash. We were burning about $1 million a month. And we had about $20 million of debt. So the company was going through a difficult time. And our team came in and put together a new vision and a new strategy and tried to reinvigorate the business.

And so we went on a journey to transform the business. Then COVID hit, so we had to adapt. And then over the last 18 months, we went through basically a second round of transformation since I've become, or I was lucky enough to become the CEO. And so we built an exceptional team, a great business, profitable. And now we have a lot of cash, we have no debt, and we're still growing despite the challenges in the environment.

You guys are publicly traded, correct?

We have been publicly traded since 2007. Our stock has been up and down. Right now, it's been a little tough in the stock market, but the underlying business is very solid, and our balance sheet is extremely solid.

Okay.

All right, I won't take that as a stock tip, but maybe I will at the same time. How about that? All right, so you've done a lot combining, I think you've got 17 separate brands or entities that you kind of cobbled together under a single roof. Is that the right number first off? And...

Yeah, in 2019 we started and we had 17 websites. It sounds like a lot, but it was down from 300 websites about 10 years ago. So part of our transformation strategy was really to focus and build the brand for carparts.com. So at the time the company had a different name and we decided to double down on what we thought was a fantastic trademark that doesn't need explanation, that could get a ton of traffic.

Okay.

And today carparts.com is our sole domain. You know, it's the flagship domain of the company and it gets 100 million visitors a year.

Wow, that's incredible. Can you talk us through any specifics around the evolution of the business model?

Sure, yeah. You know, at the time, about five years ago, the business was a combination of private label product, a lot of collision parts, lights, mirrors, bumper covers. And over the last five years, we've been making some significant investments to scale our supply chain. So as much as externally facing, we're an e-commerce company, internally, we look at ourselves as a supply chain, logistics, transportation, and data science company. So.

You know, the last three years we've deployed over $150 million of capital, and that was to scale the supply chain, the open fulfillment centers, to grow our inventory position. And so if you look at our inventory position today, we went from $40 million of inventory to $135 million of inventory. What makes our business so unique is that we source high quality parts straight from manufacturers overseas. We bring them to our distribution centers, and then we ship them directly to consumers.

So they can get the same quality parts that they get at a brick and mortar retailer, but for 30, 40, sometimes 50% of the cost. And it's the same quality, it's realistically the same product, it's just a different brand. So for customers that look for high quality items at a very attractive price, carparts.com is basically the number one destination.

So is it typically consumers that are buying direct from you or how does that typically work out?

Yeah, it's typically consumer. The majority of our business is direct to consumer. You know, believe it or not, there's 300 million cars on the road today in the United States. And the average age of a car is 12.5 years. And we sell a lot of parts that are very easy to install on your own. You can go to YouTube, we have our own channel, but there's plenty of YouTube channels out there that explain how to do basic repairs. So if you wanna change a headlight, a tail light, a mirror, windshield wipers, even brake pads, it's relatively simple.

and the information is out there. So instead of going to the dealer or a mechanic and spending 500 or 600 dollars for a simple job, you can go to YouTube, you can buy a part from us for 100 dollars and you can do the job yourself and it's relatively simple. Now we do sell a lot of more complicated parts like suspension parts and steering parts and a lot of mechanical parts for the people that are a little more sophisticated, but we have a full assortment of parts. We do collision, we do replacement.

We do accessories, we do consumables, we do maintenance items. That's what makes the business so unique, is that we carry a very wide assortment of parts for a lot of cars.

Got it. Got it. And when you, um, as part of your go-to-market, are you also, you know, uh, partnering with the cars.com and the Kelly blue books and those folks of the world that are, you know, have a certain like demographic that's already going to there or, or how, you know, how are you, I guess, attracting customers?

Yeah, you know, a lot of the customers come through carparts.com, so we have a very strong presence on Google, but we also have a blog that gets 8 million visitors. We have a very, very large customer list with up to 10 million customers. So in terms of retention marketing, we have a lot of capabilities through the blog, through the email channel, through SMS, and then carparts.com gets a ton of visitors. And the other thing is...

And that's one of the beauty of having a website and a company that's been around for a while is that people are starting to know about us. They know about carparts.com, they know about JC Whitney, which is a brand and a trademark that we own that's been around for over 100 years. So we're lucky enough in that we get a lot of people that already know about us. And a third of our revenues come from repeat customer. So as we continue to make investments in our customer experience, as we continue to expand our assortment, we're seeing our customers coming back more and more.

And that's the beauty of the business. Obviously, you want repeat customers.

So you mentioned something earlier before about financial stability and kind of general operational and financial health or discipline. Pick your nomenclature. But when you look at where you are now compared to where you were, and obviously we talked to a lot of founders about, a lot of business owners about cashflow flexibility and about

those same things that you probably went through. There's this one thing that you said before that stood out to me, which was focus on the balance sheet as much as the income statement. So I ask you like, first off, what does that mean to you? And why is that so important to you and carparts.com?

Yeah, we're going to go through, and most companies go through different economic cycles. And sometimes times are very good and sometimes times get more difficult. The consumer has more money or they have less money, more spending power, less spending power. We find that having a very strong balance sheet gives you that flexibility. So we've been focusing on generating free cash flow, staying debt free, paying off all the debt that we had five years ago and generating that.

that ammunition. So the balance sheet gives you a lot of flexibilities to invest in the business when needed, to survive when things get tough. And so, you know, we went through a very, very good time during, you know, COVID and stimulus and a lot of companies benefited from that acceleration of online. But now that times are getting more difficult, we're finding a lot of these companies spent all the money, they don't have a strong balance sheet, you know, they're burning cash, and not all of them are going to survive.

Like I'm seeing a lot of players in our space actually struggle financially. Players that have been around for a long time because they don't have the balance sheet. So yes, they focused on the income statement, they grew their sales, they grew their margin, but at the end, what pays the bills is the cash, not the sales. So we've been focusing on that, building our balance sheet. I'm lucky enough to lead an organization that's been around for 27 years, and I wanna make sure that I leave it significantly better than when I found it.

And I also want to make sure that in 25 years, the company is much bigger, much more well funded and still debt free. So I like that piece of mind. I'm a big believer in financial discipline. You track every dollar and you do it on a cash basis. And that's been one of the things that made us so successful is we focus on cashflow generation, whereas companies sometimes focus too much on growth at all costs. So we're balancing growth, profit and free cashflow generation.

Are there any opportunities that you can speak to or ways that you can speak to of how managing this capital and towards cash flow flexibility has really impacted the company's trajectory?

Yeah, I think it's, you know, there's a lot of things that reversed the path of this company. Obviously, it was in financial troubles five years ago and cash flow generation was one of the key components. You know, building a team, building a culture, having a focus, strategic priorities, simplifying the business, communicating to investors. Like, there's a lot of things that you need to do, but none of it matters unless you can manage your balance sheet and your income statement and your cash.

Unfortunately, if you run out of cash, you go out of business and the music stops. So for us, focusing on free cash flow has been what allows us to keep the music going. And as we go into a more difficult environment, next year, we think it's going to be difficult for the consumer, which means it's going to be difficult for more companies. We're seeing a lot of companies pull back because they get nervous. For us, we can be very fiscally conservative, but at the same time, be very aggressive when it comes to investments. So we're making...

a lot of big bets, we're opening a big warehouse in Las Vegas, which is double the size of our current footprint. We're making investments in digital transformation. So next year, we're going to deploy a lot of capital. We're going to be very aggressive. But in terms of ROI, it's actually high ROI, low risk, high reward. I'm actually quite excited about our ability to do that.

In your experience, where do companies typically get that wrong?

I think it's a philosophy, it's a mindset. For us, we micromanage cash the way a small private company do it. You see founders, when they start a company, they track every dollars, every new hire, every new contract, and we do this. I still sign every job offer that goes out. I still sign every contract that goes out. I still approve a lot of things that might seem small.

But for me, it's very important because it adds up. When it comes to financial discipline, a lot of what companies get wrong is it's death by 1,000 cuts. I hire one person, and I can afford it. And I hire another person, and I can afford it. And then three, and then four. But at the end of the year, you've hired 12 people. And if you pay them $50,000 a year, each of them, plus benefits, plus taxes, plus time off, it all adds up. So we try to have that long-term view of like, any time I make a commitment, I'm

What's the impact on the financial statements for the next two to three years?

All right, let's talk a little bit about something we haven't really talked a lot about on the dirt so far, which is working with institutional public investors and the impact of that connected to not only your financials, but the business. What has been the most challenging part of working with these types of stakeholders?

You know, I think the opportunity for me was to learn how to work with different institutional investors. So, you know, the largest investors on our cap table are BlackRock and Vanguard. So obviously these are, you know, mega index funds. And then we have smaller hedge funds that will trade in and out of the stock. Then we have very long-term focused investors. So what's interesting is that we tend to group.

institutional investors in that one big bucket, but every investor has a different size, has a different portfolio strategy, has a different holding period. So obviously what we're looking for is we're looking to maximize value for shareholders. That's our goal. That's why we exist. But at the same time, we're looking for investors that align with our long-term strategy. We're always looking for investors that have a long-term vision and a long-term holding period. But, you know, if you're an investor, even for one day...

You're still an investor and my job is to make sure that I maximize shareholder value for you. The other thing is our employees are investors, our vendors are investors. So I like to think about this kind of multi-stakeholder ecosystem where we have the investors, the employees, the teams, the communities, and all of these. And our job is to create a long-term sustainable business that is good for all of these players. That's how we think we can win.

Is there anything that you know now that you wish you did back in 2019?

There's a lot of things that I've learned, yes. You know, it's things that I've always known. But when you go through it and you make mistakes, you know, I like to think back about some of the mistakes that I made. A lot of times, it's not making a decision fast enough. You know, I'm pretty decisive. Our team is very decisive. A lot of times, I'll find there is a decision that I know I need to make, and I take a little too long. And sometimes, I pay the price. But you know, we live and learn.

I have a seven year old daughter and I tell her every time, sometimes you win, sometimes you learn. So we've been lucky that we've been winning, but we've been learning at the same time. And for me, as a first time CEO, it's been a great journey because I get to evolve. I get to learn new things. I got myself a coach who's training me, mentoring me, helping me in the decision making process. We got a good board of directors that's super supportive. So I'm enjoying the journey. I'm enjoying making the mistakes as long as they're not fatal and we just keep going.

You're a dad. I actually just became a dad a few weeks ago, which is pretty fun, pretty cool. Thank you very much. So I got a dad joke for you. How about that? What's a car's favorite meal?

Congratulations.

Okay.

Breakfast.

Very fast.

I don't know. Nice. Yes. Just to tie it back to our, I was in selling mode, right? Our brand of brakes is called SureStop, so brake fast, SureStop. So yes, I like it. Yes, actually, if you're not to go off topic, but I'll recommend a book that I've been reading that's really good. It's called Daily Dad by Ryan Holiday.

Yeah

There we go. Yeah, it's almost like we planned that. Almost.

It's re- you got it? It's really good. So every day I take two minutes and I read that one page about how to become a better father.

Yeah, I got it. I just got it, yeah.

Awesome dude. Yeah, that's a good note. Good note. So back on the investor side and really on some of the evolution of you and of your business, right? I talked to a lot of CEOs, CFOs, folks that were in your former seat, some that have aspirations to be a CEO, some that don't

And, you know, a lot of them that do want a part of it, as soon as they get there, they realize they're better suited or they'd rather be in the CFO or COO seat. I'm just curious, like, as to your journey, right? It's been recent, but also pretty cool ride, I imagine. Pretty, you know, full of lots of ups and downs. What was it that made you want to get into the CEO seat, especially for this company, for carparts.com, but also...

that has you excited to stay in it.

Yeah, it's funny, I got the opportunity, our board of directors asked me to step in and become the CEO, so I'm lucky enough that I didn't have to ask for it or lobby, but it's a fantastic journey, it's a lot of change, it's a big transformation. The requirements of the company and the business for a COO are quite different than they are for a CFO and quite different than they are for a CEO, so it took me a little time to kind of understand

Nobody's ever ready to become a first-time CEO. And looking back 18 months, I don't even understand how I got the job because I was not ready. There's so many things that you don't know, but there's a lot of things out there, there's a lot of people out there that I've spoken to. Our board has been a great ally and a great partner, so I'm always looking to learn, and so I took it with an open mind, and what are the needs of the business? What are the requirements of the job?

What do I need to do? Why do I need to change to be an effective CEO? And then, you know, try things. The other thing that I really decided to do early on is to stay myself. Everyone has this idea of like, this is what the CEO is supposed to look like and sound like. And I'm like, that's not me. I just want to be me. So I'll be kind of a different version of David, but it's still David. So, you know, I like my style. I like who I am. And so I'm just having fun doing it. And I put in the work. So...

I haven't taken a day off in the last seven years and I don't intend on taking time off. I just, I love what I do. I love the team, I love the business, I love our strategy. And I think we have a lot of great things that we're working on. And my plan is that in the next three to five years, the company becomes unrecognizable. I just wanna make sure that when I leave the company, whenever that is, I leave the company significantly better off than when I found it. For me, for the team, for the shareholders.

Are there any?

Are there any one or two things that, you know, you go back 18 months, you do different?

It's hard to say there's just so many decisions that I've made and some good ones and some small ones. You know, I think I would be, there's some things that I did that I was very happy about. You know, I'll tell you what I did is as soon as I became the CEO, I spent a lot of time and I've always spent a lot of time with our people, our vendors, to get a lot of the information. What I find is, you know, we have 1800 people in our company and we have a lot of smart, talented, committed and passionate people. And so a lot of the information.

about how to build a strategy, how to make the company better, what opportunities to attack was already out there. I didn't come up with anything. I just went out and I got the information from our people. I think what I would do differently is I would try to go faster. A lot of the stuff that I learned, I'm still putting into effect today because some of the decisions were difficult. It's going to cost money. It's going to take a long time. It took me a while to kind of find my voice, my CEO voice. I knew exactly who I was when I was a COO.

you put on the CEO hat and it's overnight, right? You're supposed to be a different person, it's a different job, but there's no job description. So, if I could, I would go faster, but you know what? I'm very happy with where we are. The business is doing great. The team is fantastic. And so I'm happy with most of the decisions that I made.

Yeah, no, that's great, David. I'm curious, how has your leadership style evolved since you took on the role of the CEO?

You know, the one thing that I changed a lot is I listen more than I talk. You know, as a COO, I'm always very hands-on and I spend a lot of time with our vendors, with our customers, with our partners. You know, I'm in the field. I believe that you can't run a company from behind a desk. So I'm a big believer in that leadership style. So that hasn't changed. But, you know, as a COO or CFO, I was always expected to speak first. And so the biggest change is I try to be the one speaking last.

Mm-hmm.

or not speaking at all. So I'll sit in a meeting with a team that I was able to build and recruit, and I think we have exceptionally talented people, so a lot of times I don't have anything to add. So I'll just listen. So I have one mouth and two ears, and so I try to use my ears a lot more, even though it's not really in my nature. It's active listening. I have to force myself to like, I'm surrounded by really smart people. If I don't say anything, things will get done, and we are going to succeed as a company. So that's one.

The other thing is on the time management piece is that there are certain meetings and certain decisions where I'm no longer involved. I used to think that I needed to be involved in every single decision and now I don't and things are much faster, much smoother and I think as a company we're actually making better decisions now that I'm not in every single decision. So it's been a good journey and I'm enjoying it.

Yeah.

Are there any pivotal moments or decisions that significantly impacted your journey as the CEO?

You know the team decisions are always tough You know, but you know a lot of decisions can be made without me and but there's a certain subset You know and usually it's one two three decisions a year Where I'm the only person in the company that has the authority to do that and these tend to be the most difficult ones And you know I have a team and I have a board and I have people that I can talk to but ultimately You know there's always multiple ways to skin the cat and I have to be the one

making that decision and then committing to it. So the team, when you're a company that's been around for 27 years and you have your eyes set on building a multi-billion dollar company, there's always difficult decision in terms of culture, team capabilities. That's always the hardest.

Yeah, yeah, it sure is. You know, the, um, the auto markets kind of interesting. Um, and, uh, you know, you obviously have your, your niche within it, but I'm, I'm curious in terms of, you know, the vast array of customers that you could target towards, and you mentioned, you've got a lot of, you know, come back customers, right, um, that, uh, that have enjoyed your services or your, your products for a long time. What, um,

Like how does your platform cater towards different segments and what are those segments?

That's a really good question because we've been thinking about our strategic priorities for the next, call it five years, and how do we grow the business? Option one is you sell more stuff to your existing customers. Option two is you find customers that are adjacent to your current cohort and figure out what experience and what products you can deliver to them to get more business. And we're doing both. So the first three or four years where I was at the company, we expended our assortment. We went from mostly collision.

to adding mechanical parts, but there's a lot of items, there's a lot of categories that historically we haven't played in that we're now really getting into. So it's more brands, it's more categories, it's more products, but to your point, you have to create a unique experience to target that specific customer. So part of our efforts and the investments that we're making, aggressive investments that we're making for next year, is digital transformation, is building a platform that is scalable, but also modular, where you can make changes.

to specifically target customers. So today, and I'm really glad you asked this question, we have 100 million visitors, but we have one experience. And the investments that we're making is, how do we take this platform and give ourselves the ability to target different customers that require a unique experience? So personalization is a big part of what we're doing.

Yeah, it's really, really interesting. One of my friends just bought a gas station with a car garage attached. He's a long time mechanic, right? Leaving Porsche, starting his own thing. And I just, I'm thinking of his journey versus the truck enthusiast's journey versus the stay at home mom who just needs to get her kids from one place to the other. And.

I think the key point is to make sure that, you know, companies like us, we try to think about, you know, customer avatars or customer cohorts. It's like, you know, you have to pick a few. You can't go after every single customer base with every single product line. You can't be everything to everyone. So I think part of what's made us successful over the last five years is that ability to focus and prioritize around, you know, one category, grow this category, make it profitable, and start adding additional categories. So...

I think that discipline in terms of inventory investments and marketing investments is also super important.

What are those categories or one of the categories that you guys have invested more in as a result of some of the knowledge you've gained?

Yeah, so the biggest category for us has been mechanical parts that require expert knowledge. So again, historically we've been very strong in easier jobs, lights, mirrors, bumpers, brake pads. We're starting to really push in rotors, suspension, a lot of things that require you to pop the trunk and really start digging in certain belts, certain transmission components. We're finding that our customer is...

also sophisticated in that they know exactly what they want, they understand the quality that they want, but they also want it at a competitive price. They don't want to go to a brick and mortar retailer and buy a part for $250 when they can buy it from us at 119 or 125. So we're expanding that category, and ultimately what we want is if you have a car, let's say you have the highest selling car in America, a top selling car, which is a Ford F-150, right? Can we have every single part that is required?

to fix, repair, and maintain a Ford F-150.

With obviously a lot of regulatory pushes and increasing popularity of electric cars or electric vehicles, how is the parts industry evolving for this change in the vehicle marketplace?

Yeah, that's a good question. It's evolving. About 80% to 90% of the parts are relatively the same, outside of the battery and some of the transmission components. But you still need collision parts. You still need lights and bumpers. You still need brakes and suspension. So we've been expanding our assortment to target certain EVs. Having said that, it's only 2% or 3% of the car population out there. It's a slow growth. And the other thing is the infrastructure in the United States has to catch up.

Right, right, yeah, how do we get anywhere? So the evolution or the integration of technology in vehicles has actually also been something I'm curious about your take on, because that's obviously been increasing rapidly along with the pace of technology change. How is carparts.com adapting to this evolving nature?

Exactly.

of due to advancements, you know, AI, IOT, whatever you want to, whatever tech you want to throw in there. Um, how, how is car parts.com adapting towards that?

Yeah, so interestingly enough, our sweet spot is really cars that are between 8 and 15 years old. So the cars that have a lot of IoT electronic stuff haven't really reached our sweet spot. But I actually think one of the most interesting questions that we're becoming a part of this conversation is on the data piece. So who owns that data? If I'm a car owner and I buy a car and it has all these bells and whistles, the data gets collected. But who owns it?

Okay.

So today, the car manufacturer owns them. As a customer, I wanna own my own data. I wanna control my own destiny. So some of the things that we're doing is, we're investing in the Right to Repair Act, for example, to allow customers to choose between OE parts and aftermarket parts. Educate the consumers out there that there's multiple solutions. I think the data piece is gonna be quite interesting. For me as a consumer, and this is my personal opinion, buy a car, it collects data.

Mm-hmm.

I want to own that data and I want to be able to upload it and share it with whoever I want. And over time, I actually think carparts.com could be an interesting part of that ecosystem where you could collect some of that data, upload it to us, and give you a specific recommendation as to what you need to do. That's where I think the dealers and the OE manufacturers are pushing back, because they want you to go to the dealer. I want you to be empowered to fix your car on your own if you want to, and I want you to be able to come to carparts.com so we can help you.

and just give you the information that you need. Whether or not you buy the parts from us, that's a side conversation. We wanna be a destination so we can help you fix your car and make better decisions.

Yeah, you know, there's a lot of research I've recently looked at around brand loyalty versus, you know, the call it influencer loyalty or, you know, basically away from the brand and more towards, you know, people that you idolize, right? Said differently. Are you seeing that in the car and truck marketplace where, you know, brand loyalty isn't quite what it used to be?

You know, I think for me, I like to think about, it's not so much about the brand or the influencer, is what are the company's values? What does the brand stand for? What is the emotional connection? What is the emotional reaction that you're trying to get? So, I've been buying Nike products for the last, call it 30 years. And when I think of Nike, I have this emotional reaction that it means more than just a brand. And so, that's kind of what we're trying to do with CarParts.com or JC Whitney. So, I think influencers come and go.

And you know, they're a tool in the toolbox, but ultimately for me, I try to think about, you know, what's our brand proposition? What is the best way to communicate it to our customers? But stay true to that brand. What is the brand voice? What is the best strategy? What is the emotional connection that we're trying to develop with our customers? That is really the most important thing. You know, influencer versus marketing is like, that's the tool.

Yeah. What, what, I'm curious, what is, what is the emotional reaction that you're looking to get from your average consumer at car parts.com?

What we're trying to do is instill this feeling of quality, of trust, and loyalty. Now, obviously, historically, our company was very good at competing on price. Now, we have a great supply chain. We source directly from Taiwan, or Europe, or Mexico. We bring the parts to our distribution centers, and we can offer those quality parts at a very attractive price. But ultimately, you don't want to be cutting prices over and over and just be the lowest price in the market.

Like that's not a long term proposition to generate free cash flow and build an exceptional business. So we've been really focused on trust, loyalty, and quality. That's the emotional reaction. The other thing too is there's a lot of friction and stress when it comes to auto repair, right? It's kind of like going to the dentist. Like if you have a weird noise in your car, you're like, oh, I gotta take it to the mechanic. I don't know how much it's gonna cost me. I don't know if it's gonna cost me $500 or $1,000.

Yeah.

What do I need to do? Like, I wanna be car parts, we want car parts to be, oh you know what, there is a place out there that can remove that friction, remove the stress, and maybe help me, kinda like a trusted friend. And kinda elevate the experience, and put you back on your journey, right? It's not about the parts, it's about the journey.

Yeah, and the content that you guys have produced, I gotta say, is top-notch in terms of, you know, do-it-yourselfers that are looking for an easy path towards doing it yourself. It's great stuff, man.

Yeah, we've been really focused on developing that content around that brand, which is here are the tools and here's the information that you need to fix your car. Now, if you wanna buy the parts from carparts.com, here's the link, we're a destination, we have very attractive shipping options and prices. But if you wanna buy the parts somewhere else, that's totally okay. We want carparts.com to be top of mind when it comes to empowering drivers to be on their journey. Don't think of us as a parts store or a parts supplier. No, we wanna be...

a trusted friend, an advisor, and then should you choose to decide to buy parts from us? Great. We'll take it. And we'll ship the parts very quickly at a very competitive price.

Yeah.

What in other industries, what advice would you give to other business owners that are undergoing a similar strategy, content first, in terms of drawing in additional consumers? Any lessons learned there in terms of content production, creation, flow through to marketing, anything along those lines?

Yeah, so for us, the big thing which we implemented this year is Start. So we just launched our podcast. It's called In the Garage Podcast. It's on YouTube, and we're already getting a ton of views. And so some founders, some companies will just go back and forth and think about the 10 different ways that they can to start a podcast. Our strategy was like, let's just launch it. Let's get to 100 podcasts, 100 episodes, and then over time, it'll get better. You cannot have a podcast that has 100 episodes that

doesn't work, that is not good. You're gonna find things. Now we're lucky in that we were able to produce it very quickly, great content, great information, entertaining, and it's getting a ton of views, but for me, it's just get started, right? Content marketing, retention marketing, branding, you gotta start somewhere. Like the train has to be on the tracks, and you have to start pushing the train. Even if it goes one mile per hour, it's moving forward. And eventually adding steam to it is easier.

But just being still and just waiting for the perfect moment, that doesn't work for us.

Yeah, well hopefully you don't have to push too many trains, but the analogy still sticks. That's good.

That's where strategy comes in. That's where strategic priorities come in. You know, I think I can push three trains at a time. That's about it. I certainly cannot push 89 trains at a time, which you see some companies come back with, these are 80 initiatives that I wanna do, and I'm gonna do all of them at once. Now we pick the top three, and we over-invest our capital, our resources, our effort, and our team, and we think that with three, we can take our business from where it is today to way beyond a billion dollars, and we can do it profitably.

Terrific. This has been super, super helpful. I think for those listening in, you know, I got one last question for you before we hop into our founder five, which is what has you the most excited about, you know, let's just say the next year about life, business, you know, whatever.

Well, I'm super excited about our team. You know, we've spent the last 18 months building an exceptional team with functional experts, people that work extremely hard, people that are extremely smart. I always told myself, if I walk into a meeting, I wanna make sure that everyone around me is smarter than me. And I think I've been able to do that. So the team is exceptional, super motivated, super passionate. We have a lot of car people. You know, if you go to our fulfillment centers, we have exceptional people there that, you know, they receive our product.

They store our product, they pick, pack, and ship. We have over a thousand associates. They do an exceptional job. They work 24 hours a day, seven days a week, even during holidays. So I'm always super excited about the team and the business that we're building because it takes people to do the job and our people are incredible.

That's awesome. That is incredible. This has been incredible. So let's close things off with the founder five, five quick hit questions about you, your growth and carparts.com's growth. The first one is what is the top KPI or metric that you are relentlessly focused on?

Sales, margin, free cash flow. Regardless of the business, regardless of the industry, regardless of the economic environment, there's only three that will always be my top three. Sales, margin, free cash flow.

Alright, you heard it here first. If you had to pick one, which one would it be? Free cash flow. Little bit of a trend going on in this podcast, I like it. Alright, second one, top tip for growth stage business owners like yourself.

Free cash flow.

Build an exceptional team, focus on the culture, and prioritize.

Favorite book or podcast that's helped you to grow?

Extreme Ownership by Jocko Willink. By far one of the best. The other one which I'm reading right now and is incredible, it's called Lincoln on Leadership. Really, really good book. Highly recommend it.

That's a good one.

Oh, I haven't, I haven't, I'll talk about that when I'm going out. And Daily Dad. Don't forget that.

and Daily Dad, of course, to be a great father.

Yes. All right. A piece of advice that counters what one would consider traditional wisdom.

Say no.

I think you build an exceptional business by saying no, not by saying yes.

Enough said. All right, last one. What is gonna be the title of your autobiography?

I don't think I'm going to deserve one. I think I'm just going to keep working.

All right, we're gonna call it, just keep working. How about that? You've given a ton to our listeners today, David. So time for a little bit of self-promotion. What can those, how can those listening help you out?

Ha ha ha!

The one thing that anybody can do right now is to go to jcwitney.com. It's our brand new website. We just launched it. It has a ton of content on a brand that's been around for 105 years. It is going to be the flagship brand of our business. It will become a half a billion dollar company within the next couple of years. So go to jcwitney.com and sign up for the newsletter.

All right, and on that note, how can those listening get in touch with you if they'd like to?

You can find me on Twitter, I'm at DavidMignon. You can find me on... Twitter is probably the best place to find me.

Okay, awesome David. Thanks for joining us on the dirt and this has been a real pleasure, man. Absolutely, yeah, you too.

Thanks for having me, Jim. Good to see you.